Market Talk
– The U.S. dollar was up on Monday morning in Asia after Western nations announced a harsh set of sanctions over the weekend to punish Russia for its invasion of Ukraine, including curbs on the country’s currency reserves.
– Tensions over the Russian invasion of Ukraine continue to rise with Russian President Vladimir Putin putting nuclear-armed forces on high alert which added to the tensions considering that the forces wield nuclear weapons.
– The euro tumbled as much as 1.3% to $1.1120, before recovering a little to trade at $1.1165. The greenback even gained a fraction on the yen, which was at 115.58 per dollar. The U.S. dollar was down 0.7% versus the Swiss franc.
– The Australian dollar slid 0.68% to $0.7183 while the New Zealand’s dollar sank 0.72% to $0.6686. The British pound was slightly weaker at $1.3360. The Canadian dollar gained in tandem with a rally in crude oil price.
– Gold was up Monday morning in Asia, after rising more than 1% and set for its best monthly gain in nine months. Gold benefited from increased tension after Russian president Putin put his country’s nuclear deterrent on high alert.
Chart Focus NZD/USD
Key Points
1. Sell NZD/USD recommendation.
2. Sell NZD/USD at 0.6715. Stop at 0.6745 and profit target at 0.6600
3. War in Ukraine and expectation of a US rate hike are both likely to aid the U.S. dollar.
4. Price is likely to be capped by a strong resistance with MACD and Stochastic hinting at a bearish price trend.
Fundamental Comments
1. Ongoing war in Ukraine is likely to aid the safe haven U.S. dollar
2. Expectation of a rate hike in March is also aiding the U.S. dollar.
Technical Comments
1. Price is likely to be capped by the Fibonacci 50% correction point as well as the 20EMA.
2. Stochastic is turning down and MACD is bearish. Both are hinting at a bearish price trend.
Key Levels
| Support | 0.6670 | 0.6630 | 0.6590 |
| Resistance | 0.6715 | 0.6750 | 0.6780 |
Technical Overview
USD/JPY – Price was supported at 115.10 on Friday with the 20EMA as well as a previous resistance turned support line, providing the support. We saw a rally to 115.76 this morning and we are likely to see the rally continues towards 116.15 over the next couple of days. Stochastic is into the overbought zone but both MACD and 20EMA are hinting at a strong bullish price trend ahead.
| Support | 115.35 | 115.00 | 114.70 |
| Resistance | 115.75 | 116.15 | 116.45 |
EUR/USD – We had a sell recommendation on Friday at 1.1260, which was triggered when price reached a high of 1.1273 on Friday night. Price is currently trading at 1.1141. Our view remains unchanged and we would recommend keeping profit target at 1.1110 while lowering stop loss to 1.1195. Stochastic is near to the oversold zone but MACD remains bearish. 20EMA is bearish.
| Support | 1.1135 | 1.1105 | 1.1075 |
| Resistance | 1.1165 | 1.1195 | 1.1230 |
GBP/USD – Price was capped by the 20EMA line at 1.3445 and we are likely to see a re-test of 1.3330 again in the next 48 hours. Stochastic is moving down again after reaching its mid-range, hinting at a bearish price trend. 20EMA is pointing down with a steep slope, hinting at a strong bearish price trend. MACD remains bearish and is hinting at a bearish price trend. However, a move above 1.3490 would negate our bearish view for 1.3330.
| Support | 1.3330 | 1.3300 | 1.3255 |
| Resistance | 1.3380 | 1.3435 | 1.3485 |
XAU/USD – Price failed to hold above the 20EMA line last Friday and we saw a decline to $1883. As Friday’s low was above an important support level and we saw a bounce to $1919 this morning, there is a good chance we can see the rally continues towards $1940 in the next couple of days ahead. Stochastic is close to the oversold zone but both MACD and 20EMA remains bearish.
| Support | 1903.50 | 1889.50 | 1873.60 |
| Resistance | 1921.20 | 1934.70 | 1949.00 |
USD/CNH – We had a buy call at 6.3130 on Thursday which was filled when price declined to a low of 6.3060. On Friday, we had recommended keeping stop at 6.3030 and profit order at 6.3400. Price is currently at 6.3123. Our view remain unchanged and we would recommending keeping stop and profit order unchanged. Both Stochastic and MACD are hinting at a price rally but 20EMA remains bearish.
| Support | 6.3050 | 6.2850 | 6.2550 |
| Resistance | 6.3215 | 6.3320 | 6.3445 |