The Bank of England (BoE) Governor Carney’s will for a lengthy Brexit transition weighed on the recent pound recovery, sending Cable below the 200-hour moving average (1.2428) from a two-week high. The EUR/GBP is expected to defend gains above 0.8420 (Fib 50% retracement on post-Brexit rise) for a further recovery toward the 100-day moving average, 0.8668, on renewed GBP-sales across the board.
Though improved against the pound, the appetite in the euro deteriorated as the European Central Bank (ECB) President Mario Draghi said he aims to maintain the current level of monetary stimulus at the much-expected December meeting. The solid bearish momentum in EUR/USD hints at a drawback to 1.0518 (Nov 24th low), before a further slide to 1.0500/1.0490 and 1.0460 (Dec’15 dip). Sellers are touted at 1.0600/1.0700.
The USD/JPY remains bid above its 200-hour moving average (111.50), yet the positive momentum is not strong enough to clear the 103.00-resistance. Light option barriers trail below 103.00 at today’s expiry. We expect light bids into 111.50, yet limited upside pre-112.65/113.00 (daily Ichimoku cloud top / optionality).
The Aussie extended gains against a softer US dollar; the 50-hour moving average (0.7460) provides a temporary support to the fragile upside move in AUD/USD toward 0.7528 (200-day moving average). Key intraday support is eyed at 0.7420/0.7410 (one-week ascending channel base / 200-hour moving average).
Oil and commodities remain soft, while the hourly MACD indicator in gold is marginally positive hinting at a further recovery to $1210 (minor 23.6% retrace on post-Trump retreat) before $1234 (major 38.2% retrace).
Finally, oil traders remain seller on rallies before tomorrow’s OPEC meeting. The death cross on the WTI hourly chart (50-hour moving average crossing below 200-hour moving average) should encourage a retracement toward $45.30, the critical 200-day moving average. A large drop in oil prices should hit the market if the OPEC fails to seal a deal tomorrow.