Market Talk
– The U.S. dollar fell against a basket of currencies for a second straight day on Tuesday on easing worries about a banking crisis after First Citizen Bancshares agreed to buy all of failed lender Silicon Valley Bank’s deposits and loans revived investors’ appetite for riskier currencies.
– The greenback found little support from data on Tuesday that showed the US trade deficit in goods widened modestly in February as exports declined, potentially setting up trade to be a drag on economic growth in the first quarter.
– The euro climbed to a five-day high of 1.0844 against the greenback as euro zone government bond yields rose on Tuesday. The British pound was hovered around a two-month high as the Bank of England said Britain was not experiencing stress linked to the demise of Silicon Valley Bank and Credit Suisse.
– The yen rallied with analysts pointing to a pickup in flows ahead of the end of Japan’s fiscal year on Friday. The dollar fell as low as 130.415 yen, and was last off 0.60 % at 130.795 as the Japanese currency rose. The Australian dollar was at $ 0.67025 after getting a lift from better-than-expected retail sales data – Gold prices fell in Asian trade on Wednesday, coming under pressure from an overnight surge in Treasury yields and as regulators further down played concerns over a widespread U.S. banking crisis.
Technical Overview
USD/CHF – Price has moved above a recent high at 0.9216 and we are likely to see a continuation of this move higher to 0.9265 in the next few days. Stochastic is supporting this view. Stochastic is moving up and is not near to the overbought zone as yet. MACD is bullish and is hinting at a price rally. 20EMA is also point to a rising price trend. Only a move below 0.9155 would negate our bullish price view.
| Support | 0.9185 | 0.9115 | 0.9070 |
| Resistance | 0.9220 | 0.9255 | 0.9290 |
EUR/USD – The rally off the low at 1.0712 has stalled at the Fibonacci 62% correction point, which could be a hint of a price decline ahead. If price failed to move above the Fibonacci point at 1.0850, we are likely to see a decline back to 1.0712. However, a move above 1.0850 is likely to hint at a rally to 1.0928. Stochastic and MACD are both hinting at a price decline but 20EMA is hinting at a price rally. We would recommend watching the important point at 1.0850.
| Support | 1.0805 | 1.0765 | 1.0715 |
| Resistance | 1.0850 | 1.0885 | 1.0930 |
GBP/USD – Price reached a new high at 1.2348 yesterday but this high was accompanied by a divergence warning from the MACD indicator, warning of a potential new high. Stochastic has a bearish crossover and is moving lower, hinting at a bearish price trend. However, both MACD and 20EMA are hinting at a bullish price trend. We think price has reached a high and a decline back to 1.2190 in the next 48 hours.
| Support | 1.2295 | 1.2240 | 1.2185 |
| Resistance | 1.2350 | 1.2395 | 1.2445 |
XAU/USD – Price could be forming a symmetrical triangle on the 4-hourly chart. We are expecting sideways movement inside this triangle for the next 24-48 hours. Stochastic is hinting at a price rally but MACD and 20EMA are both hinting at a price decline. Watch out for the breakout at either $1955 or $1995 and we would recommend following in the direction of the breakout. We favour the upside break.
| Support | 1958.55 | 1943.85 | 1934.20 |
| Resistance | 1975.30 | 1988.85 | 1998.40 |
AUD/USD – Price has been moving in a range for the past 7 trading days. The upper boundary lies at 0.6758 while the lower boundary lies at 0.6625. We are likely to see a continuation of the range for the next 48 hours. Stochastic is hinting at a price decline but MACD and 20EMA are both hinting at a bullish price trend. We would prefer to wait out this sideways range movement for the next 24 hours.
| Support | 0.6660 | 0.6620 | 0.6585 |
| Resistance | 0.6710 | 0.6750 | 0.6780 |