JPY depreciates despite oversold market

The EURUSD retreated to 1.0667 in New York and consolidated at the tight range of 1.0689/1.0715 in Asia. Trend and momentum indicators remain comfortably negative for an extension of the downtrend toward 1.0524 (Dec 2rd, 2116 low). The intra-day resistances are eyed at 1.0725 (50-hour moving average), 1.0765 (100-hour moving average), 1.0815 (minor 23.6% retracement in Nov 9th to Nov 16thsell-off), 1.0885 (200-hour moving average), max 1.0907 (major 38.2% retrace).

The rising credibility of the Bank of Japan (BoJ) helps the USDJPY gathering upside momentum although the pair has been trading in the overbought area for the fourth straight session. A minor support is eyed at 110.00 level, yet the market remains broadly buyer in USDJPY for a further rise to 110.80/111.00, before 112.00. Downside corrections are expected to see support at 108.15 (100-hour moving average),107.74 (minor 23.6% retracement on Nov 9th to Nov 16th), max 106.49 (major 38.2% retracement).

The GBPUSD treads water following three consecutive sessions of sell-off. The negative momentum on hourly basis flattened, signalling that 1.2375 (ascending channel base since Oct 7th flash crash) could form a base for a renewed upside attempt. The 50-day moving average, 1.2495, shelters the first line of offers, if broken, could pave the way for a rise toward 1.2575 (minor 23.6% retracement on June 23rd to Oct 7th decline).

The AUDUSD remains offered as recovery in global yields dent the carry appetite. The negative trend is expected to extend toward0.7440/0.7420 mid-term resistance. Option barriers stand at 0.7540 for today’s expiry, yet turn supportive of the AUD above 0.7550.

There is little action in the gold market as the majority of market moves are seen on risk assets. Decent option expiry at $1255 and $1263 could delay a further recovery to $1241 (minor 23.6% retracement on Nov 9th to Nov 14th sell-off). Key support is presumed at $1221 (weekly resistance) before $1210/1200.

Appetite in WTI is easing on the back of the rising US crude inventories and the OPEC uncertainties. A potential downside correction could bring the $45 (minor 23.6% retracement on Oct 19th to Nov 9th fall, 200 and 100-hour moving average) back on the radar. Traders are expected to sell the rallies into $46.80, $47.50 (50% level), before $48.60 (major 61.8% retrace).