USD Aggressively Sold On Weak U.S. Data
The significantly weaker-than-expected expansion in the US ISM non-manufacturing component triggered an aggressive sell-off in the USD, pushing the EUR/USD to 1.1263 in New York. The rally could be a good sell-the-top for the European Central Bank (ECB) doves into Thursday’s monetary policy meeting. On an hourly basis, the golden cross (the 50-hour moving average crossing above the 200-hour moving average) provides support for a further upside attempt, yet gains are expected to remain limited at 1.1265 (Sep 7th high) and 1.1290 (minor 76.4% retrace on Aug 8th – Aug 31st decline). Clearing the 1.1122-support (Aug 31st low), the EUR/USD is expected to extend weakness to 1.1045 (Aug 4thlow) before 1.1000.
The USD/JPY tanked to 101.21 on the combination of less dovish expectations on Bank of Japan (BoJ) and less hawkish expectations on Federal Reserve (Fed). The USD/JPY stepped in the short-term bearish consolidation zone after breaking the 102.71, the major 38.2% retracement on post-Jackson Hole rally. The pair is gathering enough momentum to target the 100 level in the continuation of the current sell-off. Intra-day resistances are eyed at 102.20 (Fibonacci 50% level) and 102.70 / 102.75 (major 38.2% retrace / 200-hour moving average).
The GBP/USD extended gains to 1.3444 on the back of a soft US dollar. There is room for a further recovery to 1.3500 (psychological resistance) and 1.3640 (major 38.2% retracement on post-Brexit sell-off, mid-term resistance to the post-Brexit bearish trend). Intraday support is seen at 1.3352 (minor 23.6% retracement on Aug 29th – Sep 2nd advance) and 1.3296 (major 38.2% retrace).
The AUD/USD advanced to 0.7689 on broad based USD sell-off. As the Aussie gains positive momentum, the AU/US rate differential becomes more appealing and could enhance fresh carry inflows into the AUD for a further push toward 0.7700/0.7750 area. Intra-day support is presumed at 0.7587 (38.2% retrace on Aug 16th – Aug 31st decline) and 0.7573 (200-hour moving average).
Gold took away the 50-day moving average ($1337), and extended rally to $1352.75 in Asia. Fading Fed expectations should give a further support to gold for a recovery to $1355 and $1374 / 1400 zone. The $1305 / 1297 (100-day moving average / minor 23.6% retracement on Dec’15 – Jul’16 rise) is seen as a solid mid-term support.
Crude oil treads water at about the $45/barrel. Intra-day support is seen at $44.45 (23.6% retrace on Aug 18th – Sep 2nd decline), before $42-95 (Sep 1st low). On the upside, the $45.63 (200-hour moving average) is where the buyers would bump into sellers. More resistance is eyed at $46.14 (50% level) and $46.89 (major 61.8%).