Market Talk
– Optimistic comments from Europe on Brexit pushed back the safe-haven yen and lifted the British pound and euro early on Friday morning. Sterling reached a 2-week high against the Euro on hopes of a Brexit solution.
– Irish Prime Minister Leo Varadkar said on Thursday a Brexit deal could be clinched by the end of October to allow the United Kingdom to leave the European Union in an orderly fashion, after what he called a very positive meeting with Boris Johnson
– U.S. consumer prices were unchanged in September and underlying inflation retreated, supporting expectations the Federal Reserve will cut interest rates in October for a third time in 2019. Fed’s Chairman Powell had hinted of a possible rate cut on Tuesday.
– Top U.S. and Chinese negotiators wrapped up a first day of trade talks in more than two months on Thursday, as investors expressed optimism the two economic powerhouses might be able to avoid a trade war and a delay in U.S. tariff hike scheduled for next week.
– Hopes of progress in U.S.-China trade talk renewed appetite for riskier assets and weighed on the safe-haven yen and U.S. Treasury prices, while oil stayed firm on comments about possible supply cuts from the head of OPEC. Gold declined back below $1500.
Chart Focus USD/SGD
Key Points
1. Buy USD/SGD recommendation
2. Buy USD/SGD at 1.3725. Stop at 1.3690 and target at 1.3800
3. Singapore dollar has strengthened for the past 2 week and could be overdone as its GDP is still weaker than the US.
4. Price is approaching the Fibonacci 127% price target with Stochastic in the extreme oversold zone and little room for decline
Fundamental Comments
1. Singapore Q3 GDP came in at a decade low
2. Singapore dollar has strengthened over the past 2 weeks despite a weak GDP number
Technical Comments
1. Price is approaching a recent low and Fibonacci 127% projection point
2. Stochastic is into the oversold extreme
Key Levels
| Support | 1.3730 | 1.3700 | 1.3660 |
| Resistance | 1.3765 | 1.3805 | 1.3835 |
Technical Overview
USD/JPY – Price may have moved higher to 108.12 but the rally does not seem completed. We think there is a good chance of price moving higher to test the 108.45 high again in the next 24 hours. Stochastic is in the overbought extreme but Stochastic is still looking strong. MACD is still rising and bullish at the moment.
| Support | 107.75 | 107.30 | 106.95 |
| Resistance | 108.10 | 108.45 | 108.75 |
EUR/USD – Price reached a high of 1.1033 overnight and we are out of our Euro position. Yesterday, we had changed our stop to 1.0960 and our profit target to 1.1025. Stochastic is starting to warn of a possible bearish divergence and is moving down from overbought extreme. However MACD is still bullish.
| Support | 1.0995 | 1.0960 | 1.0940 |
| Resistance | 1.1030 | 1.1060 | 1.1090 |
GBP/USD – Sterling has managed to hold above the Fibonacci 62% correction point of 1.2195 and has rallied to 1.2460 on optimism of a successful Brexit deal. The momentum is strong and there is a possibility of price moving to test the previous high of 1.2580. Stochastic and MACD are both rising.
| Support | 1.2450 | 1.2415 | 1.2385 |
| Resistance | 1.2500 | 1.2535 | 1.2580 |
XAU/USD – Price has declined below $1500 but had stayed the previous low of 1486.60. MACD is getting flat and Stochastic is into the oversold extreme. Price could be caught within the range of 1486.60 to 1516.90. We could be in a flat correction. Wait for better trading opportunities.
| Support | 1493.60 | 1486.60 | 1474.30 |
| Resistance | 1500.70 | 1509.50 | 1519.45 |
AUD/USD – Price reached a low of 0.6746 yesterday, missing our buy call at 0.6740. Price has moved higher to 0.6775 and we are expecting this rally to continue towards 0.6800. Stochastic is still rising and has reached the overbought extreme, but could still support a price rally to 0.6800. MACD is also rising.
| Support | 0.6750 | 0.6710 | 0.6670 |
| Resistance | 0.6800 | 0.6835 | 0.6870 |
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