The euro remains under pressure heading into the European Central Bank (ECB) meeting. The EUR/USD extended weakness to 1.0955 on dovish ECB expectations. The event risk is high and traders should stand ready for two-sided volatility. The key Fibonacci resistance, at 1.1078 (major 38.2% retracement) should distinguish between a short-term bullish reversal to 1.1200/1.1280, and a further fall to 1.0910 (Jun 23rd low), before 1.0880/1.0850 area.
The USD/JPY rebounded from 103.17 yesterday and traded in a tight range of 103.35/103.78 in Tokyo. The lack of conviction weighs on the positive momentum, yet a sudden attempt toward 105.00, max 105.50 could still not be ruled out. Critical short-term resistance is eyed at 103.00 / 102.89 (major 38.2% retracement), if broken, should suggest a short-term bearish reversal.
Even the combination of a solid inflation and labour data couldn’t give the GBP/USD the momentum it needed for a positive breakout. The pair trades rangebound a touch higher than 1.2240/1.2275 area, including the 50, 100 and 200-hour moving averages. The next resistance is eyed at 1.2440 (Fibonacci 50% retracement on Sep 28th to Oct 7th crash), while support is eyed at 1.2155 (one-week ascending channel base).
The AUD/USD sharply reversed trend after hitting 0.7734 mid-term resistance in Sydney. Profit-taking and tactical shorts sent the pair back to 0.7655, a touch higher than 0.7647 (major 38.2% retracement on Oct 13th to Oct 20th rise). Holding support at this level, we could expect a re-test of 0.7730/0.7750, while breaking below should encourage a deeper correction to 0.7620 (50% level) and 0.7608 (200-hour moving average).
Gold extended gains to $1270 and is preparing to test the mid-term resistance at $1277, the 200-day moving average, for a further advance to $1297 (minor 23.6% retrace). Failure to clear the $1275/1277 resistance should trigger a minor fall to $1255/ 1250 (major 38.2% retracement on Dec 16th to Jun 5th rise).
The WTI is testing the $52 resistance for the second time in two weeks, suggesting that appositive breakout could encourage a surge toward the $53/$55 mid-term resistance. The key support is eyed at $50.18 (minor 23.6% retracement on Sep 20th to Oct 20th rise) and $48.94 (major 38.2% retrace).