Market Talk
– The U.S. dollar was up on Monday morning in Asia while the yen slid to a new five-year low after Russian President Vladimir Putin said there had been some progress in talks between Moscow and Ukraine.
– U.S. Deputy Secretary of State said Russia is showing signs it might be willing to have substantive negotiations over Ukraine, weighs on the yen and fellow safe haven the Swiss franc. Fighting, however, continued to rage on in Ukraine.
– The benchmark 10-year Treasury yield held near 2%, with expectations largely set that the Federal Reserve will raise interest rates on Wednesday. This sent the greenback as high as 117.61 yen, its highest level since January 2017, extending gains from the previous week.
– The euro traded at $1.0935, with hopes of an end to the conflict in Ukraine giving it a small boost. However, the conflict’s impact on Eurozone growth continues to weigh on the single currency. Commodity-linked Aussie dollar retreated after hitting multi-year highs in March due to surging oil, grain, and metals prices.
– Gold retreated, as safe-haven appeal for the metal dimmed after Russian President Vladimir Putin said there had been progress in talks with Ukraine, with the likelihood of a looming U.S. rate hike next Wednesday adding pressure to bullion.
Chart Focus NZD/USD
Key Points
1. Sell NZD/USD recommendation.
2. Sell NZD/USD at 0.6790. Stop at 0.6820 and profit target at 0.6715.
3. War in Ukraine and expectations of a U.S. rate hike are aiding the U.S. dollar.
4. Price has moved below an important support with both 20EMA and MACD hinting at a bearish price trend.
Fundamental Comments
1. War in Ukraine is aiding the US dollar as a safe haven.
2. Upcoming FOMC meeting where the Fed is likely to hike interest rate is also aiding the US dollar.
Technical Comments
1. Price has moved below an important support with 20EMA hinting at a bearish price trend.
2. MACD is bearish and is hinting at a bearish price trend.
Key Levels
| Support | 0.6760 | 0.6715 | 0.6675 |
| Resistance | 0.6795 | 0.6830 | 0.6875 |
Technical Overview
USD/JPY – Price has exceeded our target of 117.05 and looks like it will continue higher to 118.05 in the next 24 hours. MACD remains bullish and 20EMA is also bullish. Both MACD and 20EMA are hinting of a strong bullish price trend. However, Stochastic is in the overbought zone and is hinting at a limited upside. We see price moving higher to 118.05 but a move below 117.10 would negate our bullish view.
| Support | 117.45 | 117.10 | 116.75 |
| Resistance | 117.90 | 118.10 | 118.60 |
EUR/USD – Price failed to hold above the 20EMA and has declined to a low of 1.0900 this morning. The decline is likely to continue towards the previous low at 1.0805 in the next couple of days. Stochastic is still declining but is near to the oversold zone. MACD is turning bearish and 20EMA is hinting at a bearish price trend ahead. Price will have to move above 1.1005 to negate our bearish view.
| Support | 1.0900 | 1.0870 | 1.0840 |
| Resistance | 1.0935 | 1.0980 | 1.1010 |
GBP/USD – Price declined below last Friday low at 1.3026 to a new low at 1.3008 this morning but this low was accompanied by a divergence warning from the MACD indicator, hinting at a possible price low. This is the second time that the MACD indicator has given a divergence warning. Stochastic is in the oversold zone but 20EMA is hinting at a strong bearish price trend.
| Support | 1.3005 | 1.2970 | 1.2920 |
| Resistance | 1.3050 | 1.3080 | 1.3125 |
XAU/USD – Price moved to a low of $1958.30 on Friday but this low was accompanied by a divergence warning from the MACD indicator on the 4-hourly chart, hinting at a possible price low. Stochastic has also started to move higher, hinting at a price rally. However, 20EMA remains bearish and is hinting at a bearish price trend. We think if price can hold above $1951, there is also a possibility of a test to $2009 but below $1951, we risk a decline to $1913.
| Support | 1970.40 | 1958.30 | 1946.90 |
| Resistance | 1980.95 | 1994.75 | 2009.00 |
EUR/AUD – We had a sell call on this pair last Friday but we were wrong. We lost 50 pips on this trade. Stochastic has a bullish crossover and is moving higher from the oversold zone. MACD has turned bullish and is hinting at a bullish price trend. 20EMA is flat and neutral at the moment. As long as price stays above the 20EMA, we think price is likely to push higher to 1.5155 in the next 24 hours.
| Support | 1.5030 | 1.4980 | 1.4940 |
| Resistance | 1.5085 | 1.5120 | 1.5160 |