Market Talk
– The dollar continued to benefit from a strong non-farm payrolls report for March, rising for three straight sessions, as civilian killings in north Ukraine and the prospect of increased sanctions pushed investors to seek safety in the greenback.
– U.S. and Europe were planning new sanctions to punish Moscow over civilian killings in Ukraine, and President Volodymyr Zelenskiy warned more deaths were likely to be uncovered in areas seized from Russian invaders.
– The Aussie jumped to a nine-month high on Tuesday after the country’s central bank signalled higher interest rates were closer, while the euro languished near a one-week low amid talk of more sanctions against Russia.
– Bank of Japan Governor Haruhiko Kuroda said on Tuesday that Japan joined a chorus of policymakers who have warned that sharp falls in the currency could hurt the country’s import-reliant economy as the yen’s recent moves were “somewhat rapid,”
– Gold inched lower on Tuesday as the U.S. dollar held firm on rising prospects of more Russian sanctions, and bigger interest-rate hikes by the Federal Reserve to rein in inflation.
Chart Focus GBP/USD
Key Points
1. Buy GBP/USD recommendation.
2. Buy GBP/USD recommendation at 1.3100. Stop at 1.3050 and profit target at 1.3260.
3. Interest rate is in Sterling’s favour and further Fed tightening may have already been factored in.
4. Price is going to break above its 20EMA with bullish Stochastic and MACD.
Fundamental Comments
1. Interest rate is in Sterling’s favour.
2. Expectation that the Fed will further tighten its monetary policy may have already been factored in.
Technical Comments
1. Price is currently consolidating and is going to break above the 20EMA.
2. Both MACD and Stochastic are rising and bullish.
Key Levels
| Support | 1.3085 | 1.3050 | 1.2995 |
| Resistance | 1.3180 | 1.3225 | 1.3270 |
Technical Overview
EUR/USD – Euro is currently trading near to its previous low support zone of 1.0945. Stochastic is at the oversold zone and a bullish crossover is likely, hinting at a limited downside. MACD histogram is giving potential divergence warning. Price could have a rebound towards 20EMA at 1.1025 if it able to maintain at its support zone.
| Support | 1.0945 | 1.0900 | 1.0845 |
| Resistance | 1.0985 | 1.1025 | 1.1075 |
USD/JPY – Price is currently hovering around the 20EMA. It is moving within a tight consolidation range between 123.05 to 122.25. A violation of lower end of 122.25 will bring price lower towards 121.30. Stochastic is near to the overbought region. MACD is near to the zero line and had a bearish crossover that hints at possible downside.
| Support | 122.25 | 121.30 | 120.95 |
| Resistance | 123.05 | 124.30 | 125.10 |
USD/CHF – Price could have formed a base low at 0.9195. It is currently moving within a consolidation range. 20EMA is flat, confirming the sideway movement. With both MACD and Stochastic are bullish, we are likely to see price breaking above the upper end to move higher
| Support | 0.9240 | 0.9220 | 0.9195 |
| Resistance | 0.9280 | 0.9300 | 0.9330 |
XAU/USD – Price reached a low at $1915.45 yesterday. This low may be a bottom. Price moved above 20EMA. rising Both Stochastic and MACD are bullish and rising, hinting at increased upward momentum. We see price moving higher to $1970 in the next few days.
| Support | 1915.50 | 1907.30 | 1890.00 |
| Resistance | 1936.80 | 1949.70 | 1966.10 |
NZD/USD – Price is moving higher after forming a low at 0.6895. It is going to test its overhead price resistance at 0.6995 for a fourth occasions. It has to penetrate above this strong resistance for further rally, or we see price correcting back towards its previous low again. Stochastic is near to the overbought region but MACD is rising.
| Support | 0.6940 | 0.6900 | 0.6875 |
| Resistance | 0.6995 | 0.7045 | 0.7075 |