Market Talk
– The U.S. dollar was up on Wednesday morning in Asia while the euro held on to overnight gains, having jumped on reports that some Russian forces had moved away from the Ukraine border, though, with tensions still elevated, the common currency failed to make further progress.
– The Russian Defence ministry on Tuesday published footage to demonstrate it was returning some troops to base after exercises, however, U.S. President Joe Biden said the United States had not verified the move.
– The Euro was steady at $1.1356 on Wednesday, having jumped 0.45% the day before. The Australian rose 0.37% on Tuesday, before steadying at 0.7155. By contrast, the safe haven yen softened slightly and was last at 115.65 per dollar, having briefly touched 114.99 on Monday, when tensions were higher.
– Rate hikes are also supporting the British pound, which was at $1.3543. Nearly two-thirds of respondents to a Reuters poll of economists, expect the Bank of England to raise rates by a further 25 basis points at its March meeting. That would be the first time the Bank has raised rates at three meetings in a row since 1997.
– Gold was down on Wednesday morning in Asia, coming down from an eight-month high hit during a volatile previous session. Easing fears of a Russian invasion of Ukraine negated the support to the yellow metal from weaker bond yields.
Chart Focus Silver
Key Points
1. Buy Silver recommendation.
2. Buy Silver at 23.20. Stop at 22.75 and profit target at 23.95
3. An easing of tensions in Europe and rising inflation are both likely to support Silver.
4. Price is supported by the Fibonacci 50% correction point with MACD hinting at a bullish price trend.
Fundamental Comments
1. Easing of tensions along the Russia-Ukraine border is likely to weigh on the US dollar as a safe haven.
2. Rising inflation is likely to support commodities price, including Silver.
Technical Comments
1. Price was supported by the Fibonacci 50% correction point, which is a hint of a bullish price trend.
2. MACD remains bullish and is hinting at a bullish price trend.
Key Levels
| Support | 23.05 | 22.75 | 22.35 |
| Resistance | 23.45 | 23.75 | 24.00 |
Technical Overview
USD/JPY – Price broke above the upper range at 115.75 but only managed to reach a high of 115.87 before declining back into the range. MACD is bearish and hinting at a bearish price trend but Stochastic is rising and hinting at a price rally. 20EMA is neutral at the moment. We prefer the long side and see a rally back to 116.10 in the next few days ahead. A price move below 115.25 would negate our bullish price view.
| Support | 115.45 | 115.05 | 114.70 |
| Resistance | 115.75 | 116.15 | 116.40 |
EUR/USD – Price reached a low of 1.1279 on Monday and we have seen a rally to 1.1368 last night. 20EMA is capping price at the moment at 1.1360 and if price can move above this point we are likely to see a move to 1.1410. However, if price is unable to move past 1.1370, we are likely to see a decline to test the previous low at 1.1279. MACD is hinting at a bearish price trend but Stochastic is hinting at a bullish price trend. 20EMA is neutral at the moment. Watch the reaction at 1.1370 for clue to the next direction.
| Support | 1.1330 | 1.1280 | 1.1235 |
| Resistance | 1.1370 | 1.1410 | 1.1460 |
GBP/USD – The British pound stayed above its support but moved within a tight range last night. Although price broke above the upper range at 1.3550, it only reached a high of 1.3565 before moving back into the range. Stochastic is rising from the oversold zone but MACD remains flat and neutral. 20EMA is also flat and neutral. Our advice would be to watch the break of 1.3490 or 1.3550 for clue. A move above 1.3550 would call for 1.3627 while a break of 1.3490 would send price to 1.3360.
| Support | 1.3520 | 1.3485 | 1.3445 |
| Resistance | 1.3565 | 1.3595 | 1.3640 |
XAU/USD – Price fell overnight on easing of tensions on the Russia-Ukraine border to the 20EMA support at $1850. Stochastic is declining from the overbought zone. MACD remains bullish and is hinting at a bullish price trend. If price can stay above the 20EMA line, we may see another test of the previous high at $1879.40 in the next couple of days. A price move below $1841 would negate our bullish view.
| Support | 1844.40 | 1829.35 | 1813.50 |
| Resistance | 1857.05 | 1866.25 | 1877.00 |
USD/CAD – Yesterday we had a sell order at 1.2750, which was filled when price went to a high of 1.2773. Our view remains unchanged. Stochastic has declined into the oversold zone but MACD remains bearish and is hinting at a bearish price trend. 20EMA is also hinting at a bearish price trend. We would recommend lowering stop at 1.2775 while keeping profit order unchanged at 1.2650.
| Support | 1.2695 | 1.2665 | 1.2635 |
| Resistance | 1.2725 | 1.2755 | 1.2795 |