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Pound’s Belated Rise Versus US Dollar

Published 11/11/2016, 03:14 AM
Updated 04/25/2018, 04:10 AM

The EUR/USD extended losses to 1.0865 in New York. The trend and momentum indicators remain comfortably bearish for a stern test of the 1.0855/1.0850 support, before the 1.0800 handle. The intra-day resistances are eyed 1.0967 (minor 23.6% retracement in Nov 9th to Nov 10th sell-off), 1.1030/1.1036 (major 38.2% retrace / 200-hour moving average), before 1.1082 (50% level & 50-day moving averages), max 1.1125 (100-day moving average).

The USD/JPY consolidates gains a touch below the 107.00 handle. The spectacular rise in US yields, combined to a rise in dovish Bank of Japan (BoJ) expectations should keep the US dollar in demand against the yen for a consolidation of gains in between 105.25 (200-day moving average) - 107.00, and could even encourage a further rise toward 107.50/107.90. The key support is eyed at a distant 104.75 (major 38.2% retracement on Nov 9th to Nov 10th rally).

The GBP/USD made a belated upside attempt, and reached the 50-day moving average for the first time in three weeks. The pair is gradually gaining a positive momentum to seize 1.2622 (Oct 7th pre-flash crash high). The key support stands at 1.2465 (minor 23.6% retrace on Oct 25th to Nov 10th rise), before 1.2392 (major 38.2% retrace), which should distinguish between a bullish consolidation and a short-term bearish reversal.

The AUD/USD hit 0.7560 in Sydney, on a renewed failure to clear 0.7725/0.7730 resistance. The rising US yields could dent the carry appetite and bring along further headwinds in the AUD/USD to the 0.7500/0.7490 area. Intra-day resistances are eyed at 0.7644 (major 38.2% retracement on Nov 8th to Nov 11th rise), before 0.7670 (50% level & 200-day moving average).

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The stabilisation in the US dollar and consolidation in US yields hit the gold prices. The precious metal is now testing $1250 (major 38.2% retracement on Dec’15 to Jul 16th rise), if broken, should suggest a mid-term bearish reversal toward the $1210 mid-term target. Solid resistance is building pre-200-day moving average, $1283.

The WTI sees resistance pre-200-hour moving average ($45.60), on the combination of USD appreciation and low conviction regarding a potential OPEC deal at next week’s meeting. A consolidation to $44.45 (200-day moving average) is considered before a further sell-off to $43.15/43.00, mid-term support. The key resistances is eyed at $46.80 (major 38.2% retracement on Oct 19th to Nov 9th decline), if surpassed, could suggest a shot-term bullish reversal.

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