Market Talk
– The dollar was down on Wednesday morning in Asia ahead of an expected U.S. interest rate hike of another 75 basis points at the conclusion of its policy meeting on Wednesday from the U.S. Federal Reserve.
– U.S. consumer confidence dropped to the lowest in nearly 1-1/2 years this month amid persistent worries about increasing inflation and higher interest rates, which could undercut spending, pointing to slower economic growth at the start of the third quarter.
– The Aussie eased to $0.6922 and away from Tuesday’s five-week peak of $0.6984 on Wednesday as local inflation data proved not to be quite as white-hot as the market had wagered on, lengthening the odds on a super-sized rate hike and boosting bonds.
– Euro nursed losses on Wednesday after its sharpest drop in two weeks as a cut in Russian gas supply sent energy prices soaring. The yen was steady at 137.00 per dollar. Sterling crept 0.2% higher to $1.2053 and the kiwi was flat at $0.6230.
– Gold prices were little changed on Wednesday, as investors stayed away from taking big positions ahead of a U.S. Federal Reserve interest rate decision that could influence the outlook for bullion, amid growing worries over the state of the economy.
Chart Focus
Key Points
1. Sell NZD/USD recommendation.
2. Sell NZD/USD recommendation at 0.6240. Stop at 0.6270 and profit target at 0.6155.
3. Worries over soaring gas prices and interest rate hike will likely aid the safe haven U.S. dollar.
4. Price was capped by the resistance zone and MACD has turned bearish.
Fundamental Comments
1. Worries over soaring gas prices is likely to aid the safe haven U.S. dollar.
2. A possible rate hike of 75 basis points from U.S. Fed will likely to aid the greenback.
Technical Comments
1. Price was capped by the previous price high resistance zone for the fourth occasions.
2. MACD has turned bearish, hinting at potential downside ahead.
Key Levels
| Support | 0.6220 | 0.6190 | 0.6170 |
| Resistance | 0.6250 | 0.6275 | 0.6300 |
Technical Overview
USD/JPY – Price slightly penetrated the 20EMA today, but the rebound was capped by the Fibonacci 62% correction point. If price moves below the 20EMA again, we are likely to see price decline to its previous low support at 135.55. Stochastic is at the overbought region but MACD is bullish now.
| Support | 136.00 | 135.55 | 134.95 |
| Resistance | 137.15 | 137.95 | 138.85 |
AUD/USD – The Aussie was capped by the Fibonacci 50% correction point which comes in at 0.6980. Price tested this point twice, but both attempts are being rejected. It is currently testing the 20EMA support at 0.6930. A move below this 20EMA will bring price lower to 0.6830. Stochastic is heading lower and MACD has turned bearish.
| Support | 0.6920 | 0.6855 | 0.6810 |
| Resistance | 0.6945 | 0.6885 | 0.7045 |
GBP/USD – The pound rebounded after testing its previous low support zone, which is also our expected level of $1.2000. However, price unable to penetrate its resistance zone and we are likely to see price decline to $1.2000 again. Both MACD and Stochastic are weak at the moment.
| Support | 1.2020 | 1.1965 | 1.1920 |
| Resistance | 1.2090 | 1.2150 | 1.2210 |
XAU/USD – Price corrected to the Fibonacci 50% correction point. It is making an attempt to move above the 20EMA at $1,718.99 again violating it. If the gold price could not move above the 20EMA, we are likely to see price moving lower to $1,682 which is its previous low again.after
| Support | 1713.35 | 1708.50 | 1703.00 |
| Resistance | 1720.15 | 1727.80 | 1734.95 |
EUR/USD – Price broke below the consolidation zone between 1.0275 and 1.0155. There is a return move testing the lower boundary of the consolidation zone, which has now turned to resistance point. We are likely to see price moving lower from this resistance again to its previous low support zone at 0.9965.
| Support | 1.0105 | 1.0050 | 0.9955 |
| Resistance | 1.0155 | 1.0180 | 1.0250 |