The strong US dollar is driving the global currency markets, as the Federal Reserve (Fed) is expected to proceed with a 25 basis points hike at December meeting.
The EUR/USD extended weakness to 1.0525 in New York, a pip above the 1.0524-support (Dec 2nd 2015 low), and it is reasonable pursuing a further slide toward 1.0460 (March 2015 dip). Intra-day resistances are eyed at 1.0600 (100-hour moving average), 1.0664 (200-hour moving average), before 1.0708 (minor 23.6% retracement in Nov 9th to Nov 24th decline). Option markets are mixed today, decent put options trail below 1.0530 before the weekly closing bell.
The USD/JPY surged to 112.89 on the back of a stronger US dollar and rising US yields. Large 111.50/112.00-call expiries are expected to give a further support for a push to 113.50/114.00, and 114.80 (100-week moving average). Dip-buyers are presumed at 112.00, 111.55 (50-hour moving average), 111.16 (100-hour moving average), max 110.17/110.10 (minor 23.6% retracement on Nov 9th to Nov 23rd rise / 200-hour moving average).
The GBP/USD bounced lower from 1.2468 as UK’s Autumn Statement revealed soft fiscal giveaways, expectations for a larger budget deficit and slower growth post-Brexit. Cable shorts will likely limit the upside potential before 1.2450 (two-day downtrend top), 1.2487 (Fib 50% level on Nov 11st to Nov 18th decline), max 1.2531 (major 61.8% retrace). Decent 1.2400-calls should give a minor support at today’s expiry.
The recovery in the AUD/USD has been abruptly interrupted by a strong USD demand following the FOMC minutes. The bias turns negative with sellers building positions targeting a setback to 0.7310 (Nov 21st low), before a further slide to 0.7300/0.7280. Resistance is eyed at 0.7420 (minor 23.6% retracement on Nov 8th to Nov 21st rise), before 0.7442 (200-hour moving average).
Gold slipped below $1200 for the first time since February. Rising US yields should continue weighing on gold prices for a further slide to $1270 (major 61.8% retracement on Dec’15 to Jul’16 rise). Resistance is eyed at $1205/$1210/$1215 (area including 50, 100, 200-hour moving averages & Fib 50% on long-term Fib retracement, $1208), max 1219 (minor 23.6% retracement on Nov 9th to Nov 24th decline).
The WTI is flat around the $48/barrel, as OPEC uncertainties persist before Nov 30th Vienna meeting. Both long and shorts are on the sidelines. Intra-day supports are eyed at $47.45 (100-hour moving average), $46.75 (major 38.2% retracement on Nov 14th to Nov 22nd rise) and $46.30 (200-hour moving average). Solid offers stand at $50.00.