Market Talk
– The U.S. dollar retreated against most currencies, including the euro, on Friday, as markets walked back some of the tumultuous moves from the previous day when Russia’s invasion of Ukraine sent investors scrambling into safe havens.
– Fighting continued on Friday as Russian troops advanced towards Kyiv, though markets were calmer than 24 hours previously, with stock markets rising in Asia, following gains on Wall Street overnight
– The United States, the European Union and some other countries responded with a wave of sanctions impeding Russia’s ability to do business in major currencies along with sanctions against Russian banks and state-owned enterprises.
– The euro was last at $1.1218, up 0.24%, having touched as low as $1.1106 on Thursday, its lowest since May 2020. The Australian dollar was 0.46% higher at $0.7195 while the yen was at 115.23 per dollar.
– Gold was down on Friday morning in Asia after a roller-coaster session the day before. Investors continue to re-assess the situation surrounding the Russian invasion of Ukraine on Thursday as well as further Western sanctions against Russia.
Chart Focus EUR/USD
Key Points
1. Sell EUR/USD recommendation.
2. Sell EUR/USD at 1.1260. Stop at 1.1295 and profit target at 1.1110
3. War in Ukraine and a shift of focus to US interest rate hike are both likely to aid the U.S. dollar.
4. Price is likely to be capped by a strong resistance point with MACD hinting at a bearish price trend.
Fundamental Comments
1. War in Ukraine is likely to weigh on the Euro.
2. Shift of focus to US interest rate hike in March is likely to aid the U.S. dollar.
Technical Comments
1. Price is likely to be capped by the 20EMA and the previous support turned resistance line.
2. MACD remains bearish and is hinting at a bearish price trend.
Key Levels
| Support | 1.1180 | 1.1145 | 1.1105 |
| Resistance | 1.1230 | 1.1275 | 1.1315 |
Technical Overview
USD/JPY – Price declined to a low of 114.40 overnight and we saw a bounce in price to a high of 115.69 this morning. Price is likely to be supported at 115.10 with the 20EMA as well as a previous resistance turned support line providing the support. MACD remains bullish and Stochastic is rising. Both are hinting at a price rally. 20EMA is also bullish and hinting at a bullish price trend.
| Support | 115.10 | 114.70 | 114.40 |
| Resistance | 115.45 | 115.70 | 116.15 |
AUD/USD – After reaching a overnight low 0.7093, we have seen a price rally to current 0.7200 handle. The 20EMA is providing resistance at this point and this could determine the direction of this pair. MACD is near to the zero line and is neutral. Stochastic is rising after a bullish crossover near the oversold zone. Above 0.7200, price is likely to move towards 0.7285 while a move below 0.7200 will target 0.7090.
| Support | 0.7170 | 0.7135 | 0.7090 |
| Resistance | 0.7210 | 0.7245 | 0.7285 |
GBP/USD – Price broke the support and the lower edge of a trading range at 1.3490 and declined to a low of 1.3331 overnight. We have seen a bounce to 1.3438 this morning. Price is likely to be capped by the previous low turned resistance at 1.3490. There is also a 20EMA line providing resistance at 1.3485. As long as price is below 1.3485, we are likely to see a re-test of 1.3330 again in the next 48 hours.
| Support | 1.3390 | 1.3355 | 1.3300 |
| Resistance | 1.3440 | 1.3485 | 1.3535 |
XAU/USD – Price reached a high of $1974.30 overnight before declining to a low of $1878.00. MACD remains bullish and 20EMA is providing support to price. As long as price stays above the overnight low, we are likely to see a re-test of the previous high at $1940, which is the Fibonacci 62% of the decline, in the next few days. Stochastic is declining but we favour the bullish side for the next 48 hours.
| Support | 1903.40 | 1889.50 | 1873.60 |
| Resistance | 1920.05 | 1934.70 | 1949.00 |
USD/CNH – We had a buy call at 6.3130 yesterday and this order was filled when price declined to a low of 6.3060. Our view remains unchanged. We would recommend keeping stop at 6.3030 and profit order at 6.3400. Stochastic is already in the oversold zone but MACD remains bearish at the moment. 20EMA is also bearish and is hinting at a bearish price trend ahead.
| Support | 6.3050 | 6.2825 | 6.2550 |
| Resistance | 6.3215 | 6.3320 | 6.3445 |