Market Talk
– The US dollar hovered near recent lows on Tuesday as traders braced for a slew of central bank meetings from Australia to Europe and Canada this week, looking for any signs that they are making progress towards policy normalization.
– Investors are betting the U.S. Federal Reserve is likely to delay beginning asset tapering after the jobs report released last Friday missed estimate by a big margin. NFP showed the labour market is recovering but is still weak.
– The Reserve Bank of Australia left rate unchanged at 0.10% in its decision earlier this afternoon. RBA also maintains its tapering plans and extends purchase period until February 2022. The Australian dollar fetched 0.7467 on the announcement, but saw its gain eroded as the US dollar gains in strength before London opening.
– After touching a one-month high in the wake of disappointing U.S. labour data on Friday, the euro has been unable to hold above 1.19 and last bought 1.1881. The Japanese yen was firm at 109.76 per dollar and sterling was steady at 1.3848.
– Gold was down on Tuesday morning in Asia but remained above the $1,800 mark and near its highest in the past two and a half month as the US dollar weakened and investors increased bets that the U.S. Federal Reserve will delay beginning asset tapering.
Chart Focus XAG/USD – Silver
Key Points
1. Buy Silver recommendation.
2. Buy Silver at $24.45. Stop at $24.15 and target at $25.15
3. Investors’ bet to a delay in asset tapering and a disappointing labour data are both likely to keep the US dollar weak.
4. Price is likely to be supported by the 20EMA as well as the Fibonacci 38% correction point with MACD and 20EMA both hinting of a bullish price trend.
Fundamental Comments
1. A disappointing labour data from last Friday is still weighing on the US dollar, keeping it weak.
2. Investors are betting the U.S. Federal Reserve is likely to delay beginning asset tapering, which is likely to weigh on the US dollar.
Technical Comments
1. Price is likely to be supported by the 20EMA as well as the Fibonacci 38% correction point.
2. MACD remains bullish and is hinting of a bullish price trend.
Key Levels
| Support | 24.45 | 24.20 | 23.80 |
| Resistance | 24.85 | 25.15 | 25.50 |
Technical Overview
USD/JPY – Price had reached a low of 109.58 last Friday and was able to hold above this low so far this week. As long as price stays above this low, there is a chance of another rally back to 110.45. Stochastic is rising but both MACD and 20EMA remain bearish and is hinting of a bearish price trend. We prefer to forecast price moving within a range over the next few days until there is a break of its 100 pips range. We see the upper range at 110.50 and the lower band at 109.50.
| Support | 109.60 | 109.30 | 109.10 |
| Resistance | 110.00 | 110.45 | 110.80 |
EUR/USD – Price is currently supported by the 20EMA at 1.1865. Since hitting a high at 1.1909, price has been unable to make any gain and has looked weak. Stochastic continues to decline and hints of a bearish price trend. MACD remains bullish. If price fails to hold above the 20EMA at 1.1865, we see price going lower to 1.1780. Above 1.1910, we see price going to 1.1950.
| Support | 1.1855 | 1.1815 | 1.1780 |
| Resistance | 1.1885 | 1.1910 | 1.1945 |
GBP/USD – Since reaching a high last Friday at 1.3890, price has managed to find support at 1.3815. However if price were to break this support, we are likely to see a price decline to 1.3740. Stochastic is declining and is hinting of a bearish price trend. MACD and 20EMA both remain bullish at the moment. However, 20EMA and MACD are both on their edge and could turn bearish.
| Support | 1.3815 | 1.3785 | 1.3730 |
| Resistance | 1.3855 | 1.3890 | 1.3935 |
XAU/USD – Price reached a high of $1833.80 last Friday after a Triangle chart pattern breakout. We think this could be the high and a bearish trend is likely over the next few days. Stochastic has bearish crossover and is declining. MACD has given a divergence warning of a possible price high and price has now moved below the 20EMA, which is another hint of a bearish price trend.
| Support | 1812.65 | 1804.75 | 1790.85 |
| Resistance | 1821.20 | 1833.80 | 1844.50 |
AUD/USD – Yesterday, we had a buy recommendation 0.7405 but price only reached a low of 0.7410. Our entry order was not filled. This morning price had reached a high of 0.7468 and was unable to move above the previous high at 0.7477. Stochastic is declining and is hinting of a price decline. MACD and 20EMA are both bullish but that could reverse soon if price were to fall further. Price will need to hold above 0.7410 or the trend will turn bearish if this support breaks.
| Support | 0.7410 | 0.7385 | 0.7355 |
| Resistance | 0.7440 | 0.7475 | 0.7505 |