Market Talk
– The US dollar was up on Friday morning in Asia as persistent fears that the Delta variant of COVID-19 could delay the global economic recovery, continues to curb risk appetite and gave the safe-haven asset a boost.
– Data showed that the number of Americans filing new claims for unemployment benefits fell to a 17-month low last week, pointing to another month of robust job growth aiding expectation of a U.S. taper by the Federal Reserve later in the year.
– Investors will now look ahead to the Fed’s Jackson Hole symposium, taking place from Aug. 26 to 28, for more clues to an asset tapering and interest rate hike timetable.
– The Canadian dollar dropped to a fresh six-month low of 1.2832 amid a plunge in oil prices on economic growth worries as the Delta strain continue its relentless uptick, with the U.S. reporting the most deaths since February 2021.
– Gold prices eased as a stronger dollar and bets over an early policy tapering by the U.S. Federal Reserve weighed on sentiment, although losses for the safe-haven metal were limited by concerns that rising COVID-19 cases will slow global growth.
Chart Focus NZD/USD
Key Points
1. Sell NZD/USD recommendation.
2. Sell NZD/USD at 0.6895. Stop at 0.6930 and profit target at 0.6810.
3. Fears that the Delta variant could delay the global economic recovery and expectation of a US tapering are both supporting the safe haven US dollar.
4. A strong price resistance with bearish MACD is a strong hint of a bearish price trend ahead.
Fundamental Comments
1. Fears that the Delta variant could delay the global economic recovery have curbed risk appetite, weighing on the Kiwi.
2. Expectation of a US tapering is aiding the US dollar.
Technical Comments
1. Price is likely to be capped by a strong resistance point provided by the 20EMA as well as the Fibonacci 38% correction point.
2. MACD remains bearish and is hinting of a bearish price trend ahead.
Key Levels
| Support | 0.6805 | 0.6780 | 0.6750 |
| Resistance | 0.6850 | 0.6895 | 0.6935 |
Technical Overview
USD/JPY – Yesterday, we had remained bearish for 109.10 unless price goes above 110.35 as Stochastic was already in the overbought zone and MACD was turning down from its extreme point. Both had turned down from their extreme point and price has declined to an overnight low of 109.49. We are expecting the decline to continue over the next couple of days to 109.10.
| Support | 109.55 | 109.10 | 108.70 |
| Resistance | 109.90 | 110.30 | 110.55 |
EUR/USD – After reaching a low of 1.1665 on Thursday, a rebound was capped at the resistance point of 1.1700. If price stays below 1.1710, we are likely to see the decline continues to 1.1600 over the next few days. However, Stochastic is rising from the oversold zone and MACD is also rising. 20EMA is neutral and flat at the moment. There is a possibility that 1.1665 could be the low if price is able to move above 1.1710.
| Support | 1.1665 | 1.1635 | 1.1600 |
| Resistance | 1.1700 | 1.1735 | 1.1780 |
GBP/USD – Price broke below the Fibonacci 62% correction point yesterday and the hint was that this decline may not be the correction but a bear trend instead. The bear trend was confirmed with price declining to a low of 1.3617. We believe this decline is likely to continue to 1.3570, which was the previous low, over the next couple of days ahead. Stochastic is into the oversold zone but MACD remains bearish. 20EMA is also pointing lower with a steep slope, which is a hint of a strong bearish price trend.
| Support | 1.3615 | 1.3570 | 1.3520 |
| Resistance | 1.3655 | 1.3710 | 1.3760 |
XAU/USD – We had a sell recommendation yesterday at $1782 with a stop at $1791. Unfortunately, price reached a high of $1792.30 and we are out with a loss of $9. MACD is flat and around the zero line and 20EMA is flat as well. Both indicators are hinting of non-trending move at the moment. We are likely to see a price consolidation in the next 24-36 hours. Watch the breakout of the high at $1795.50 or 1770.70 for breakout clue for the next directional move.
| Support | 1782.25 | 1770.70 | 1764.40 |
| Resistance | 1795.50 | 1805.70 | 1814.75 |
USD/CHF – Yesterday, on the 4-hourly chart, a bearish Engulfing candlestick price pattern formed, and send price lower to 0.9144. If price is capped below 0.9210, we are likely to see a decline to 0.9100 or 0.9060 in the next few days. However, Stochastic has reached the oversold zone. MACD is neutral while 20EMA is bearish. We prefer the downside for 0.9100.
| Support | 0.9145 | 0.9095 | 0.9060 |
| Resistance | 0.9170 | 0.9210 | 0.9240 |