Market Talk
- The dollar rose on Wednesday morning in Asia, but moves were small as investors await the latest U.S. Fed policy decision, where it is expected to hike interest rates aggressively by 50 basis points. The central bank is also expected to detail plans for the reduction of its balance sheet.
- The European Union is expected to outline oil sanctions against Russia later in the day for the latest response to the Russian invasion of Ukraine on Feb. 24. That war is now entering its tenth week, with Russian forces pounding targets in eastern Ukraine.
- The kiwi inched up 0.05% to 0.6440 as data released earlier in the day showed that the employment change grew 0.1% quarter-on-quarter, while the unemployment rate was at 3.2%, in the first quarter of 2022.
- Aussie jumped after the Reserve Bank of Australia raised its cash rate by a surprisingly large 25 basis points to 0.35%, the first hike in over a decade, and flagged more to come as it pulls down the curtain on massive pandemic stimulus.
- Gold prices slid on Wednesday as higher U.S. Treasury yields and a looming interest rate hike announcement by the Fed dented demand for zero-yield bullion.
Chart Focus
Key Points
- Buy NZD/USD recommendation.
- Buy NZD/USD recommendation at 0.6455. Stop at 0.6380 and profit target at 0.6590.
- Australia’s interest rates hike and high U.S. job openings figures are in Aussie’s favour.
- Price could have reached a temporary bottom and indicators are hinting at a price low.
Fundamental Comments
- Interest rates hike by Australia’s central bank was in favour of the Aussie.
- High U.S. job openings economic figures may pressure on the dollar.
Technical Comments
- Price is currently consolidating and it may have reached a temporary bottom.
- Both Stochastic and MACD are giving divergence warning that hints at a possible rebound.
Key Levels
| Support | 0.6410 | 0.6375 | 0.6330 |
| Resistance | 0.6460 | 0.6490 | 0.6535 |
Technical Overview
USD/JPY – Price retraced and stabilized after a one-day sharp rally on 28 April. It remains strong above the 20EMA support and there is no divergence warning given from MACD. Price could resume its rally if it maintain above the 129.30. A violation of 129.30 will violate the 20EMA support and hints for deeper correction.
| Support | 129.70 | 129.30 | 128.90 |
| Resistance | 130.95 | 131.25 | 131.80 |
EUR/USD – Price is currently consolidating after reaching a low at 1.0471 on 28 April. MACD starts to show a bullish divergence that hints at a possible rebound. We think price may have reached a temporary bottom and we are likely to see a corrective rally to 1.0700 in the next couple of days if price breaks above 1.0590.
| Support | 1.0500 | 1.0470 | 1.0425 |
| Resistance | 1.0535 | 1.0595 | 1.0650 |
GBP/USD – Price declined to a fresh low at $1.2411 on 28 April and we think price may have reached a temporary low. As long as price stays above 1.2470, we see a corrective rebound towards 1.2690 in the next couple of days. Stochastic is falling now but MACD is showing divergence warning.
| Support | 1.2470 | 1.2410 | 1.2335 |
| Resistance | 1.2500 | 1.2565 | 1.2615 |
XAG/USD – Our long entry was filled on 29 April but unfortunately, it hit our stop on the same day as price made a u-turn and violated its low of $1871.79. A new low was created at $1850.34 last night, and this may be the temporary price low. Price has to breakthrough the 20EMA resistance point at $1875.55 for further rally.
| Support | 1861.45 | 1850.30 | 1823.75 |
| Resistance | 1865.70 | 1878.00 | 1888.50 |
EUR/JPY – Price has been resisted by the Fibonacci 62% resistance point since 4 days ago. It is currently hovering around the 20EMA support. A violation of the recent support of 136.50 will hint for a deeper correction to 135.00. Stochastic is weak and is turning down. MACD is hovering at the zero line.
| Support | 136.50 | 136.00 | 135.00 |
| Resistance | 137.10 | 137.40 | 138.00 |