Market Talk
– The U.S. dollar was down on Tuesday morning in Asia, but remained near a 21-month high hit last week against the euro as investors eyed Russia-Ukraine peace talks, while major central bank meetings this week kept large moves in foreign exchange market in check.
– Months of speculation about a new wave of interest-rate hikes looks to be coming to a head on Wednesday, when the U.S. central bank is expected to begin tightening to rein in decades-high inflation, which is being exacerbated by surging commodity prices.
– The yen was at 118.37 per dollar on Tuesday morning, after tumbling sharply in recent sessions as the contrast between rising benchmark rates in the United States and low rates in Japan becomes ever more apparent as the Fed begins to tighten.
– The Aussie was under pressure at $0.7190, having tumbled 1.5% on Monday, hurt by a halt to the surge in commodities prices which sent it higher earlier in the month and bruised by the latest lockdowns in China following new COVID-19 outbreaks,
– Gold was little changed at $1,951.09 an ounce on Tuesday morning, after declining 1.9% Monday. Peace talks between Russia and Ukraine together with a rise in bond yields ahead of a key Federal Reserve meeting weigh on the yellow metal.
Chart Focus Silver
Key Points
1. Sell Silver recommendation.
2. Sell Silver at $25.15. Stop at $25.45 and profit target at $24.00
3. Expectation of a rate hike and a halt to a surge in commodities prices are weighing on Silver.
4. A chart pattern together with MACD and 20EMA are hinting at a bearish price trend.
Fundamental Comments
1. Expectation of a U.S. rate hike is weighing on Silver.
2. A halt in the surge for commodities price is weighing on Silver.
Technical Comments
1. A Head and Shoulder chart pattern is hinting at a price decline.
2. MACD and 20EMA are hinting at a bearish price trend.
Key Levels
| Support | 24.50 | 24.25 | 23.90 |
| Resistance | 24.85 | 25.20 | 25.50 |
Technical Overview
USD/JPY – The rally continued and price moved past the resistance at 118.05 to a high of 118.45 this morning. The next resistance lies at 118.65. The trend may be bullish but Stochastic is hinting at a much overbought market condition which is in need to a correction. Both MACD and 20EMA are hinting at a strong bullish price trend. MACD has yet to show a divergence warning.
| Support | 118.20 | 117.90 | 117.45 |
| Resistance | 118.65 | 118.90 | 119.35 |
EUR/USD – Price seems to be consolidating at the moment, waiting for a conclusion to peace talk and FOMC meeting. The topside of the range lies at 1.1120 while the lower end is at 1.0805. Stochastic is rising from the oversold zone but MACD remains bearish. MACD had a divergence warning earlier. 20EMA is neutral at the moment. We think price may have reached a temporary bottom and we are likely to see a price move to test 1.1120, where a break can lead price to 1.1265 in the next couple of weeks.
| Support | 1.0935 | 1.0900 | 1.0855 |
| Resistance | 1.0995 | 1.1035 | 1.1070 |
GBP/USD – Price reached a low of 1.2991 overnight but this low was accompanied by a divergence warning from the MACD indicator. This could be a hint of a possible price low being formed at 1.2991. Stochastic is also rising from the oversold zone, hinting at a price rally. However, 20EMA is hinting at a bearish price trend. A price move above 1.3080 would hint at a rally to 1.3270.
| Support | 1.3020 | 1.2990 | 1.2965 |
| Resistance | 1.3080 | 1.3125 | 1.3160 |
XAU/USD – Price broke below the support at $1951 and we are likely to see a price decline to $1913 over the next couple of days. MACD has turned bearish and 20EMA is hinting at a strong bearish price trend. However, Stochastic is in the oversold zone and is hinting at a price rally ahead. We see price likely to be capped at $1951 and a decline to $1913 over the next 48 hours
| Support | 1924.75 | 1913.75 | 1901.30 |
| Resistance | 1939.20 | 1950.20 | 1967.70 |
NZD/USD – Yesterday, we had a sell call at 0.6790 which was filled when price rose to a high of 0.6805. Price has declined to a low of 0.6727 this morning and we are expecting the decline to continue lower to 0.6700. We would recommend lowering stop to 0.6760 and profit target at 0.6700. Stochastic is already in the oversold zone but both MACD and 20EMA are hinting at a strong bearish price trend.
| Support | 0.6725 | 0.6695 | 0.6650 |
| Resistance | 0.6760 | 0.6795 | 0.6830 |