Market Talk
– The U.S. dollar was up on Thursday morning in Asia, while the euro held onto most of its overnight gains as risk appetite returned to financial markets as crude oil price declined after the United Arab Emirates said it would support increasing output.
– The U.S. will release its consumer price index later in the day, which could further guide expectations for the Federal Reserve’s meeting next week. The U.S. Federal Reserve is due to hand down its latest policy decision on Mar. 16.
– The euro was at $1.1047 after climbing 1.6% on Wednesday, the single currency’s best day since June 2016 ahead of ECB monetary policy decision later this evening. Traders now await European Central Bank for any signs of how Russia’s invasion of Ukraine will affect monetary policy.
– The British pound was steady at $1.3163 having jumped 0.65% overnight along with the euro, while the safe-haven yen was at 116.09 per dollar, its lowest in a month. Commodity prices cooled their rally on Wednesday and the Aussie dollar down 0.7% to 0.7307.
– Gold was slightly higher on Thursday morning in Asia, having declined about 3% in the previous session, the worst daily decline since January 2021. Investors retreated from the safe-haven yellow metal as U.S. Treasury yields rose and easing oil prices took some of the recent panic out of markets.
Chart Focus Gold
Key Points
1. Buy Gold recommendation.
2. Buy Gold at $1979.50. Stop at $1970.10 and profit target at $2020.00
3. War in Ukraine and rise in global inflation are both likely to aid the safe haven yellow metal.
4. Price is supported by a strong support with both Stochastic and MACD hinting at a price rally.
Fundamental Comments
1. War in Ukraine is likely to aid the safe haven yellow metal.
2. Global inflation is likely to aid gold as a hedge against inflation.
Technical Comments
1. Price has turned up from a resistance turned support line.
2. Stochastic is turning up from the oversold zone with MACD hinting at a possible low with divergence
Key Levels
| Support | 1977.20 | 1960.70 | 1950.65 |
| Resistance | 1989.85 | 2002.25 | 2020.50 |
Technical Overview
USD/JPY – Price dipped overnight to a low of 115.55 but managed to bounce up from this low to above 115.80, keeping the uptrend intact. Price reached a high of 116.19 this morning and we should be on the way to 116.35. Stochastic is in the overbought zone but MACD remains bullish and is hinting at a bullish price trend. 20EMA is also hinting at a bullish price trend. Above 116.35, the next resistance lies at 116.85 while a decline below 115.55 is likely to send price down to 114.70.
| Support | 115.95 | 115.50 | 115.20 |
| Resistance | 116.35 | 116.85 | 117.10 |
EUR/USD – We had a sell call yesterday but our call was wrong. We lost 30 pips on this trade. Price has risen overnight to a high of 1.1095 and Stochastic is already in the overbought zone. However, MACD has turned bullish and is hinting at a bullish price trend. 20EMA is also hinting at a bullish price trend. There is a strong resistance at 1.1105 which we think is likely to determine whether the trend remains bearish or turned bullish if price can move above this resistance.
| Support | 1.1030 | 1.0995 | 1.0950 |
| Resistance | 1.1075 | 1.1105 | 1.1145 |
GBP/USD – Price reached a low of 1.3081 on Tuesday and we have seen a rally to 1.3189. Stochastic continues to rise and is hinting of more price upsides. However, MACD remains bearish. 20EMA is neutral at the moment. We remain bearish. We think price is likely to be capped by the resistance at 1.3270 and from there we are likely to see another decline to 1.3080 in the next few days ahead.
| Support | 1.3140 | 1.3085 | 1.3040 |
| Resistance | 1.3190 | 1.3230 | 1.3270 |
AUD/USD – From a high of 0.7440 on Monday, price has declined to a low of 0.7244. Price has also managed to stay above an important support at 0.7240, keeping the uptrend intact. Our view remains unchanged from yesterday. If price can stay above 0.7240, we are looking at a rally to 0.7440 again in the next few days ahead. Stochastic continues to rise, hinting at a price rally. Both 20EMA and MACD are neutral at the moment.
| Support | 0.7305 | 0.7260 | 0.7235 |
| Resistance | 0.7345 | 0.7375 | 0.7425 |
USD/CAD – Price has been supported by the 20EMA as well as a former resistance turned support line at 1.2790. As long as price holds above this support, we are likely to see another test of the previous high at 1.2899 in the next 48 hours. A move below 1.2790 is likely to send price lower to 1.2680. MACD remains bullish but Stochastic continues to decline from the overbought zone. We favour the upside.
| Support | 1.2790 | 1.2755 | 1.2710 |
| Resistance | 1.2840 | 1.2900 | 1.2935 |