Market Talk
– The dollar was down on Friday morning in Asia but is set for a fifth consecutive weekly gain on the Japanese yen. This rally could be extended if the latest U.S. jobs report justifies early Federal Reserve interest rate hikes.
– Benchmark 10-year yields rose to 1.7530%, the highest since March 2021, and were last up slightly on the day to 1.7246%. U.S. 2-year yields, which track near-term rate expectations, rose to the highest since early March 2020 at 0.8820%.
– The dollar hit a five-year high against the yen at 116.35 on Tuesday but has since fallen back somewhat. The U.S. currently is up about 0.7% on the yen this week and about 2.7% over five weeks, over expectations that the Fed will start hiking interest rates several times in 2022, beginning in March that drove a bond market selloff and a rise in yields.
– The Aussies fell through support around $0.7184 on Thursday and last bought $0.7159. It has lost 1.5% for the week so far. The kiwi sat near a two-week low at $0.6751 on Friday and is down 1.4% for the first trading week of 2022.
– Gold was up on Friday morning in Asia but remained close to a two-week low hit during the previous session on the back of rising US Treasury yields and expectation of a faster global rate hikes.
Chart Focus USD/SGD
Key Points
1. Trading Sell USD/SGD recommendation.
2. Sell USD/SGD at 1.3590. Stop at 1.3620 and profit target at 1.3535
3. Positional adjustment ahead of non-farm payroll and after a 5-day rally, price could be due for a decline.
4. Candlestick price pattern and indicators are hinting of a possible price high and a likely reversal.
Fundamental Comments
1. A 5-day rally could be close to exhaustion, hinting at a price decline.
2. Positional adjustment ahead of non-farm payroll could see trades sell the US dollar
Technical Comments
1. A Hanging Man candlestick price pattern is hinting of a possible price high and a reversal ahead.
2. MACD and Stochastic are both hinting of a possible price high and a likely reversal.
Key Levels
| Support | 1.3570 | 1.3535 | 1.3495 |
| Resistance | 1.3615 | 1.3655 | 1.3690 |
Technical Overview
USD/JPY – Given the hawkish FOMC minutes and rising US Treasury yields, we foresee price moving higher in the next couple of days but tonight non-farm payroll may alter our bullish scenario. Currently, price is consolidating ahead of the NFP in a triangle chart pattern. This is usually a hint that there could be another price rally ahead. MACD and 20EMA are both bullish. Stochastic is near to the oversold zone. All these 3 indicators are hinting of a price rally in the near future.
| Support | 115.60 | 115.20 | 114.90 |
| Resistance | 115.95 | 116.35 | 116.65 |
EUR/USD – For the past 3 days, price has been caught in a range of 1.1270 to 1.1345. We are likely to see this range until tonight NFP at 2130 SG time. Stochastic is near to the oversold zone. MACD is flat and near to the zero line, which is a hint of a sideways trend ahead. 20EMA is also flat and neutral at the moment. We would recommend watching the range (1.1270 to 1.1345) for clue to the next directional move.
| Support | 1.1270 | 1.1230 | 1.1185 |
| Resistance | 1.1315 | 1.1360 | 1.1390 |
GBP/USD – Our view remains unchanged from yesterday. We are bearish and are looking for 1.3400 over the next few days. We think the topside should be capped at 1.3605. Currently MACD remains bullish and is hinting of a bullish price trend. Stochastic has a bullish crossover near the oversold zone and is hinting at a bullish price trend. 20EMA remains bullish.
| Support | 1.3515 | 1.3480 | 1.3430 |
| Resistance | 1.3555 | 1.3605 | 1.3660 |
XAU/USD – Our view remains unchanged from yesterday. We are looking at $1777, which is also the Fibonacci 127% price projection target. Price has declined overnight to a low of $1785.70 and we are expecting this decline to continue towards $1777. A bearish Flag chart pattern could be forming. This is usually a sign of a price decline ahead. Stochastic is near to the oversold zone and is hinting at a limited downside. MACD and 20EMA remain bearish.
| Support | 1785.70 | 1777.75 | 1764.10 |
| Resistance | 1798.30 | 1808.90 | 1818.20 |
NZD/USD – Yesterday, we had a sell call on this pair at 0.6765. However, price did not reach our entry price and our order was not filled. Overnight, price has declined to a low of 0.6730. Stochastic is in the oversold zone and is hinting at a limited downside. MACD remains bearish. 20EMA is pointing down with a steep slope, hinting at a strong bearish price trend ahead.
| Support | 0.6730 | 0.6700 | 0.6670 |
| Resistance | 0.6770 | 0.6800 | 0.6835 |