Market Talk
– The U.S. dollar traded at its highest in over a year to the euro and near a five-year high against the yen as a hawkish tilt by Federal Reserve policymakers, buoyed by strong U.S. data, contrasted to more dovish monetary outlooks in Europe and Japan.
– Various Fed policymakers said they would be open to speeding up the taper of their bond-buying programme if high inflation held, and move more quickly to raise interest rates, minutes of the central bank’s Nov. 2-3 policy meeting showed on Wednesday.
– As Thursday is a U.S. Thanksgiving holiday, minutes from the European Central Bank’s Oct. 28 meeting are due for release at 8.30pm tonight could be an event to shake up the currency market.
– The New Zealand dollar gained 0.25% to 0.6889, stabilizing after a slide to a three-month low of 0.6856 the previous day, when the country’s Reserve Bank raised the key rate by a quarter of a percentage point to 0.75%, disappointing bulls hoping for a half point increase.
– Gold prices edged up on Thursday as robust U.S. economic data lifted the dollar and Treasury yields. Comments from U.S. Federal Reserve policymakers suggesting the central bank could accelerate stimulus tapering weighed on the metal and kept it well below the key $1,800 mark.
Chart Focus Gold
Key Points
1. Sell Gold recommendation.
2. Sell Gold at $1802. Stop at $1812 and profit target at $1779.
3. A rising US Treasury yields and hawkish tilt are likely to lead to higher interest rate and weigh on Gold price.
4. Price is likely to be capped by the 20EMA line with MACD hinting at a strong bearish price trend.
Fundamental Comments
1. A hawkish tilt by Federal Reserve policymakers is likely to lead to higher U.S. interest rate sooner than expected.
2. Rising US Treasury yields are bearish for Gold.
Technical Comments
1. Price is likely to be capped by the 20EMA which is hinting at a strong bearish price trend.
2. MACD remains bearish and is hinting at a strong bearish price trend.
Key Levels
| Support | 1788.20 | 1778.15 | 1770.40 |
| Resistance | 1796.40 | 1811.85 | 1822.15 |
Technical Overview
USD/JPY – Price continues to move higher, making a new higher high at 115.52. Our view for 115.70 remains unchanged but price may be close to a swing high. We remain bullish but are cautious of price close to a swing high and a possible reversal. Stochastic is deep in the overbought zone. MACD is bullish but has given a divergence warning of a possible high in the making. 20EMA remains bullish and is hinting at a bullish price trend.
| Support | 115.25 | 114.95 | 114.50 |
| Resistance | 115.55 | 115.85 | 116.15 |
EUR/USD – The decline continues overnight. Price hit a 17-month low overnight at 1.1186 after German business confidence slumped for a fifth straight month. 20EMA is pointing down with a steep slope, hinting at a strong bearish price trend. However, both Stochastic and MACD have given a divergence warning of a potential price low. Stochastic is deep in the oversold zone while MACD remains bearish. We prefer to wait for clearer confirmation of a reversal.
| Support | 1.1185 | 1.1140 | 1.1100 |
| Resistance | 1.1225 | 1.1250 | 1.1285 |
GBP/USD – We had a short position from Wednesday and had place stop at 1.3415 and profit order at 1.3300 yesterday. Price declined to a low of 1.3315 overnight before bouncing up to 1.3351 this morning. For today, we would recommend bringing stop lower to 1.3390 and raising profit target higher to 1.3320. Stochastic is moving up from the oversold extreme, hinting that price may have reached a low. MACD and 20EMA remains bearish.
| Support | 1.3315 | 1.3280 | 1.3250 |
| Resistance | 1.3355 | 1.3390 | 1.3440 |
XAG/USD – Price continues its decline to another new low at $23.25 overnight. The bounce off the low is likely to be capped by the 20EMA at $23.85. We see another decline below $23.25 after the rally. Stochastic is deep in the oversold extreme but 20EMA is pointing down with a steep slope, hinting at a strong bearish price trend. MACD remains bearish and is hinting of a strong bearish price trend.
| Support | 23.45 | 23.25 | 23.00 |
| Resistance | 23.70 | 24.05 | 24.30 |
USD/CAD – We had a buy call at 1.2670 yesterday, which was filled when price declined to a low of 1.2648. Our view remains unchanged. Stochastic continues to move lower, hinting at a price correction. MACD remains bullish and is hinting at a bullish price trend. 20EMA is neutral at the moment. We would recommend placing stop at 1.2635 and profit target at 1.2745.
| Support | 1.2645 | 1.2615 | 1.2580 |
| Resistance | 1.2675 | 1.2710 | 1.2740 |