Market Talk
The dollar was up on Friday morning in Asia, clawing back some losses. The U.S. currency saw its biggest losses in ten days after disappointing U.S. labour data dented recent optimism for the country’s quick economic recovery from COVID-19.
– The greenback is slowly returning to its safe-haven asset role, as sentiment was soured by the unexpected 861,000 rise in the number of US jobless claims which is a potential harbinger of a second consecutive month of languid job growth which overshadowed the recent decline in new COVID-19 cases.
– The dollar was little changed against the safe-haven yen after two consecutive days of retreat from a five-month high hit on Wednesday even as benchmark US Treasury yields continued an upward trend.
– The pound was mostly flat in Asia morning after climbing to an almost three-year high during the previous session, the highest gains in more than a month, as the U.K. continues to roll out an ambitious COVID-19 vaccination program.
– Gold was down on Friday morning in Asia, hitting its lowest level in nearly three months and its worst week since late November 2020, with strengthening U.S. Treasury yields putting a dent in the yellow metal’s appeal.
Chart Focus USD/CHF
Key Points
1. Buy USD/CHF recommendation.
2. Buy USD/CHF at 0.8960. Stop at 0.8925 and target at 0.9035.
3. An increase in risk sentiment and a rise in Treasury yields are both supporting the US dollar.
4. Price is supported by a strong support point and MACD is hinting of a bullish price trend ahead.
Fundamental Comments
1. There is a move towards safe haven US dollar as sentiment soured over higher US jobless claims and sharp decline in equity markets.
2.A rise in benchmark Treasury yields is also supporting the US dollar.
Technical Comments
1. Price is supported by the Fibonacci 50% correction point as well as the rising 20EMA.
2. MACD remains bullish and is turning up hinting of a bullish price trend.
Key Levels
| Support | 0.8955 | 0.8915 | 0.8870 |
| Resistance | 0.8980 | 0.9015 | 0.9045 |
Technical Overview
USD/JPY – Our buy recommendation was filled at 105.65 when price declined to a low of 105.55 this morning. Our view remains unchanged. MACD remains bullish and its fast line is turning up from the zero line which is a hint of a bullish price trend ahead. Stochastic is approaching the oversold extreme, which is a hint of a possible price low. Keep stop at 105.25 and target at 106.60.
| Support | 105.55 | 105.20 | 104.95 |
| Resistance | 105.80 | 106.20 | 106.50 |
EUR/USD – Price reached only a low of 1.2023 and has turned around. Price is currently at 1.2095 and a move above 1.2115 would confirm the bottom at 1.2023. A move above 1.2115 is likely to see a test of the previous price high at 1.2169. Stochastic is rising towards the overbought zone after a bullish crossover in the oversold zone two days ago. However, MACD remains bearish while 20EMA is neutral.
| Support | 1.2080 | 1.2055 | 1.2020 |
| Resistance | 1.2120 | 1.2170 | 1.2225 |
GBP/USD – Price moved to a high of 1.3985 overnight, continuing the bullish trend and negating our bearish view from yesterday. Stochastic is near to the overbought zone but MACD remains bullish and is hinting of a bullish price trend ahead. 20EMA is pointing higher with a steep slope, hinting of a strong bullish price trend. We see price
| Support | 1.3950 | 1.3910 | 1.3875 |
| Resistance | 1.3985 | 1.4010 | 1.4060 |
XAU/USD – Price had reached a low of $1760.35 last night with both MACD and Stochastic hinting with a divergence of a possible market bottom. MACD remains bearish but has a divergence. Stochastic is in the oversold zone and has a divergence warning of a possible price low. 20EMA is pointing lower with a steep slope, hinting of a bearish price trend. We think price is likely to rally and test the 20EMA at $1785.
| Support | 1769.60 | 1760.35 | 1747.35 |
| Resistance | 1785.35 | 1796.90 | 1810.30 |
USD/CNH – Our buy call was filled when price dropped to a low of 6.4294 on Wednesday. Our view remains unchanged but we would recommend bringing stop to cost at 6.4390 and profit target at 6.4790. MACD remains bullish and 20EMA is rising and hinting of a bullish price trend. However, Stochastic is in the overbought zone and could be moving lower.
| Support | 6.4465 | 6.4350 | 6.4275 |
| Resistance | 6.4630 | 6.4800 | 6.4980 |