Category: Uncategorized

Sterling Rallied For a Second Day on BoE Gilts Purchase

Nicholas

Market Talk
– The U.S. dollar was little changed against a basket of major currencies on Friday, as jitters in currency and bond markets persisted aiding the safe haven dollar. Hawkish talk from Fed officials, worries about global recession and rising geopolitical risk also aided greenback.

– Data showed the number of Americans filing new claims for unemployment benefits fell to a five-month low last week as the labour market remains resilient despite the Fed’s aggressive interest rate hikes. A strong labour market gives the Fed more leeway to hike rate.

– The British pound posted its largest one-day percentage gain since March 2020 in volatile trading on Thursday, rallying from record lows hit on Monday, after the Bank of England conducted a second day of bond buying to stabilize financial markets.

– The euro reached a high of 0.9808 on Friday, after German inflation jumped to 10.9% in September which was higher than expectation, reinforcing the case for another 75 basis-point increase at the next European Central Bank policy meeting.

– Gold prices were largely flat on Friday Asian trades, as elevated Treasury yields and concerns over the U.S. Federal Reserve’s aggressive monetary policy pressured the yellow metal, but a drop in the U.S. dollar supported the precious metal.


Chart Focus USD/CHF

Key Points

1. Buy USD/CHF recommendation.

2. Buy USD/CHF at 0.9750. Stop at 0.9720 and profit target at 0.9850

3. U.S. Federal Reserve’s aggressive monetary policy and interest rate differential are both in the greenback favour.

4. A potential Double Bottom and a bullish MACD are both hinting at a possible price low.

Fundamental Comments

1. U.S. Federal Reserve’s aggressive monetary policy is likely to support the greenback

2. Interest rate differential is in the US dollar favour.

Technical Comments

1. A potential Double Bottom chart pattern is hinting at a price rally.

2. MACD is turning up and is hinting at a possible price bottom.



Key Levels

Support0.97350.96950.9655
Resistance0.97800.98050.9855

Technical Overview

USD/JPY – Price moved in a tight range for the past 24 hours, supported by rising US Treasury yields but capped by fears of a BOJ intervention again. We are likely to see price move in a tight range for today as well with the topside at 144.75 and the support at 143.90. Stochastic is in the middle of its range and MACD remains bullish. 20EMA is also hinting at a bullish price trend.

Support144.40143.80143.30
Resistance144.90145.35145.90

EUR/USD – Price rallied to a high of 0.9843 after reaching a low of 0.9535 on Wednesday after a divergence warning from the MACD indicator of a potential price low. If price holds above the support at 0.9760, we are likely to see a rally to the Fibonacci 161.8% price projection target at 0.9885. Stochastic is in the overbought zone but both MACD and 20EMA are hinting at a bullish price trend.

Support0.97600.97150.9670
Resistance0.98250.98600.9910

GBP/USD – Price reached a high of 1.1208 overnight and there is possibility to a price move to 1.1360 if price can hold above 1.0920. There is also a strong resistance at 1.1260 and a break of this level is the first sign of a rally to 1.1360. Although stochastic is in the overbought zone, 20EMA is hinting at a strong bullish price trend. MACD is also hinting at a bullish price trend. We prefer a move to 1.1360.

Support1.11151.10601.1030
Resistance1.11801.12301.1270

XAU/USD – Price has rallied to a high of $1674 at the point of this writing and we think price can continue on this rally to the Fibonacci 161.8% price projection target at $1692.15 in the next 48 hours. Stochastic is in the overbought zone and is hinting at a limited upside. However, both MACD and 20EMA are hinting at a bullish price trend. There is also strong resistance at $1684.95 which may cap this rally.

Support1662.451652.551642.75
Resistance1675.101684.851692.15

USD/CAD – We had a buy recommendation at 1.3675 yesterday which was filled when price declined to a low of 1.3655. Our view remains unchanged for today and we would recommend keeping stop at 1.3640 and profit order at 1.3790. Stochastic has moved off the oversold zone and is hinting at a price rally. MACD remains bullish. 20EMA is also hinting at a bullish price trend. All 3 indicators are hinting at a bullish price trend.

Support1.36751.36351.3595
Resistance1.37351.37751.3820

CFD Trading – Buy Xinyi Glass (868.HKE) at $18.58. Stop at $17.50 and Target at $20.93

Shueh Ting Wong

XINYI GLASS   Stock Code 0868.HKE

Outlook

Price managed to stay above the cloud during a correction after the breakout, keeping the uptrend intact. Conversion line is moving up and a bullish Conversion and Base lines crossover could be likely. MACD is bullish and there is a bullish MACD crossover that hints at increased upward momentum. We are likely to see price continuing its strength to move higher.

Strategy                  

$18.58                Buy

$20.93                Price Target

$17.50                Risk Management Stop

2 weeks              Trade Duration

Where Did Russian Crude Oil Flow To After EU Ban.

Nicholas


Sharing from Reuters. 31 May 2022

Here is the response by countries and companies regarding purchases of Russian oil since the war in Ukraine started on Feb. 24.

Australia, Britain, Canada and the United States have imposed outright bans on Russian oil purchases, while Group of Seven (G7) nations, including Japan, committed to ban or phase out imports of Russian oil on May 8.

The European Union agreed on May 30 to ban seaborne imports of Russian oil with a phase-in period of six months for crude oil and eight months for refined products.

The ban excludes oil supplied via the Druzhba pipeline thus allowing refineries in Eastern Europe and Germany to continue imports. Poland and Germany, however, said they would phase out all purchases via the pipeline by the end of 2022.

That would in total cover about 90% of Russian oil imports to the EU.

Even before the adoption of the ban, at least 26 major European refiners and trading companies have voluntarily suspended spot purchases or announced plans to phase out a combined 2.1 million barrels per day (bpd) of Russian imports, according to JP Morgan.

Meanwhile, China and India, which have refused to condemn Russia’s actions, are benefiting from discounts on Russian crude. India has received 34 million barrels of discounted Russian oil since Moscow invaded Ukraine, according to Refinitiv Eikon data, and is set to receive about 28 million barrels in June, according to Refinitiv Eikon oil flows

What used to flow into EU is now flowing into India and China!

CFD Trading – Buy ThaiBev (Y92.SGX) @ $0.690. Stop @ $0.670 and Target @ $0.725.

Nicholas

ThaiBev Stock Code Y92.SGX

Outlook

Price broke above the cloud but did not manage to close above the cloud in the previous trading session. However, the price correction earlier was supported by the cloud, keeping the uptrend intact. Lagging Span is below price of 26 days ago but is above the cloud. MACD is bearish with both its lines below the zero line but MACD is about to have a bullish crossover, hinting at a bullish price trend. If price stays above the cloud, we are likely to see a rally to the previous high at $0.725 in the next 2-3 weeks.

Strategy

$0.690                Buy

$0.725                Price Target

$0.670                Risk Management Stop

3 weeks Trade Duration