Tag: AUD/JPY

FX Commentary – U.S. Dollar Rallied On Hawkish Powell’s Testimony.

Nicholas

Market Talk


– The U.S. dollar hit a three-month high against a basket of currencies on Tuesday after Federal Reserve Chair Jerome Powell said the U.S. central bank is likely to raise rates more than previously expected and warned that the process of getting inflation back to 2% has “a long way to go.”

– Fed officials in December had forecast that rates would increase to between 5.00% and 5.25% this year. Traders are now pricing for the Fed rate to peak at 5.64% in September 2023 after Powell’s testimony. Fed funds futures traders are now pricing in a roughly 60% probability that the Fed will hike rates by 50 basis points at its March 21-22 meeting.

– The greenback reached 137.17 Japanese yen, up around 0.9% on the day and the highest since 20 Dec. after the yield on two-year Treasury notes which best reflects short-term rate expectations, hit 5% for the first time since July 2007.

– The Australian dollar slid 2.2% to $0.6585, its lowest since Nov 11 after the Reserve Bank of Australia raised its cash rate by 25 basis points to the highest in more than a decade, as expected, but suggested it might be nearly done tightening.

– Gold was down more than US$30 on Tuesday after Federal Reserve Chair Jerome Powell warned that U.S. rate hikes could end up being a lot higher than once imagined. Gold was last trading at $1811, while silver was trading at $19.91 on Wednesday morning.


Chart Focus AUD/JPY

Key Points

1. Buy AUD/JPY recommendation.

2. Buy AUD/JPY at 90.40. Stop at 90.05 and profit target at 91.25

3. Divergent monetary policy and interest rate differential are in the Aussie dollar favour.

4. A strong candlestick and stochastic are both hinting at a price rally.

Fundamental Comments

1. Interest rate differential is in the Aussie dollar favour.

2. Divergent monetary policy is likely to aid the Aussie dollar.

Technical Comments

1. A strong candlestick is hinting at a price bottom.

2. Stochastic is hinting at a price rally.



Key Levels

Support90.4590.1089.85
Resistance90.9091.3091.75









Technical Overview

USD/JPY – Price broke above the previous day’s high at 137.17, which was the highest since 20 Dec. The rally has continued to a high of 137.81 at the point of this writing. Price is likely to continue higher to 138.15 in the next 24 hours. Stochastic is hinting at an overbought situation and limited upsides. However, 20EMA and MACD are both hinting at a bullish price trend. We are also looking at a test of 138.17 and a move above this resistance.

Support137.15136.65136.15
Resistance137.85138.20138.60

EUR/USD – Price broke the low of 1.0532 and it looks like the decline will continue lower to 1.0480 in the next 24 hours. 20EMA is hinting at a bearish price trend. MACD is also hinting at a bearish price trend. Stochastic is turning and is hinting at a bearish price trend. Only a price move above the 20EMA at 1.0695 will negate our bearish view for the next few days.

Support1.05251.04801.0440
Resistance1.05551.06051.0645

GBP/USD – Price broke below the previous low of 1.1915 and declined to a low of 1.1818 at the point of this writing. 20EMA and MACD are both hinting at a strong bearish price trend but stochastic is hinting at a limit downside. We are bearish and we are looking at a price decline to 1.1640 in the next few days. Only a price move above the 20EMA at 1.2040 would negate our bearish view.

Support1.18101.17601.1710
Resistance1.18501.19051.1980

XAU/USD – We had a buy call on Gold at $1845 yesterday but we were wrong on this call. Price has declined to low of $1811.25 this morning and the decline is likely to continue to the previous week low at $1804.50. Both MACD and 20EMA are hinting at a continuation of the price decline. Stochastic is hinting at a limited downside. We would prefer to watch the reaction at the previous low of $1804.50 for further clue.

Support1804.501796.951784.75
Resistance1815.951831.701842.50

NZD/USD – We had a buy recommendation on Monday at 0.6205 which was filled. Yesterday, we had recommended keeping stop at 0.6170 and profit target at 0.6305. Our stop was triggered yesterday. The decline had taken out the previous week’s low at $0.6130, hinting at a bearish price trend. Stochastic, MACD and 20EMA are hinting at a bearish price trend. We see price moving lower to 0.6020 in the next 24 hours.

Support0.60800.60400.5995
Resistance0.61050.61600.6305

FX Commentary – US Dollar Slipped After Recent Gains

Nicholas

Market Talk
– The US dollar fell, tracking a slide in U.S. Treasury yields, as investors consolidated gains after the greenback’s recent rise and looked ahead for the release of jobs data and consumer prices for February later in the week.

– The British pound held steady on Tuesday, retaining gains overnight after Britain struck a new trade deal with the European Union, which brightened the outlook for the post-Brexit UK economy and signalled improved relations between London and the bloc.

– Sterling jumped on the back of the news to clock a 1% gain in the previous session, and rose to a high of $1.2069 on Tuesday. The euro similarly got a lift and was last 0.05% higher at $1.0614, after rising 0.6% on Monday.

– The Japanese yen steadied at 136.23. Incoming Bank of Japan (BOJ) Governor Kazuo Ueda has thus far offered few clues on whether the BOJ could exit its massive stimulus imminently, although he indicated that he had ideas on such a move.

– Gold prices kept to a tight range on Tuesday after recovering slightly from their weakest level this year, as concerns over rising interest rates and anticipation of key U.S. economic readings this week kept traders largely to the sidelines.

Chart Focus USD/CNH

Key Points

1. Buy USD/CNH recommendation.

2. Buy USD/CNH at 6.9475. Stop at 6.9310 and profit target at 6.9880.

3. Recent strong U.S. data and rising U.S. interest rate outlook are both aiding the U.S. dollar.

4. Price is likely to be supported by the 20EMA line with MACD hinting at a bullish price trend.

Fundamental Comments

1. Rising U.S. interest rate outlook is likely to aid the U.S. dollar.

2. Recent strong US data are aiding the U.S. dollar.

Technical Comments

1. Price is likely to be support by the 20EMA line, which is also hinting at a bullish price trend.

2. MACD remains bullish and is hinting at a bullish price trend.



Key Levels

Support6.94506.92706.9080
Resistance6.96756.98957.0020










Technical Overview

USD/JPY – Price reached a high of 136.55 on early Monday morning despite earlier divergence warnings from the MACD indicator. Since the high, price has been moving in a tight range from 135.85 to 136.55. Stochastic is hinting at a price decline but both MACD and 20EMA are hinting at a price rally. We think price is likely to continue in this range with no market moving news on this pair for the next 48 hours.

Support135.85135.35134.75
Resistance136.55136.90137.35

EUR/USD – Price continued its decline to a low of 1.0532 on Monday morning and we saw a rally to a high of 1.0619 on Monday night. Is this a confirmation of a low in place and a reversal in trend? We do not think so as price failed to move above a previous price low. This is hinting at another attempt to the Monday’s low at 1.0532. Stochastic is hinting at a price rally but both MACD and 20EMA are both hinting at a price decline.

Support1.05751.05351.0490
Resistance1.06201.06651.0705

GBP/USD – Price reached a low of 1.1921 and rallied on the back of a trade deal with the EU to a high of 1.2067. Stochastic is hinting at a limited upside but both 20EMA and MACD are hinting at a continuation of this rally. If price can stay above the 20EMA at 1.2015, we see a rally to 1.2145. A failure to move above 1.2015 could result in a return to the previous low at 1.1920 in the next 48 hours.

Support1.20151.19701.1920
Resistance1.20651.21051.2150

XAU/USD – Price reached a low of $1806.29 overnight and stochastic is hinting at a price rally. However, both MACD and 20EMA are hinting at a continuation of this price decline. We think price may have reached a temporary bottom. If price can move above the 20EMA at $1820, it could hint at a possible price low and a rally to $1847. Failure to surpass this resistance could result in a slow grind to test $1800.

Support1806.251791.101783.90
Resistance1820.701833.801847.55

AUD/JPY – We had a buy call yesterday at 91.15 but price only reached a low of 91.31 and our entry order was not filled. Price has also rallied overnight to a high of 91.97. Stochastic is hinting at a continuation of this rising price trend but 20EMA is currently capping this rally. If price can move above the 20EMA line at 91.85, we are likely to see a rally to 92.95 but failure could result in a fall to 91.15.

Support91.5591.1590.45
Resistance91.9592.2593.00

FX Commentary – US Dollar Gained On US PCE Inflation Data

Nicholas

Market Talk
– The U.S. dollar was on the front foot on Monday, hovering near a seven-week peak after a slew of strong U.S. economic data reinforced the view that the Federal Reserve will have to raise interest rates further and for a longer.

– U.S. spending and inflation data on Friday depicted a U.S economy running too hot at the start of the year, increasing the urgency for the Fed to tighten further over coming months. The PCE price index shot up 0.6% last month after gaining 0.2% in December, while consumer spending was 1.8% last month.

– The euro was up 0.08% to $1.0554 on Monday morning, coming off the seven week low it hit on Friday. Sterling was last trading at $1.1959, up 0.13% on the day. The Japanese yen strengthened 0.15% to 136.26 per dollar, having slipped to more than two month lows of 136.58 earlier in the session.

– The Aussie was hovering at $0.6732, having plunged 1.2% on Friday as far as $0.6719, the lowest since Jan. The kiwi dollar was reeling at $0.6165, after tumbling 1.0% the previous session to as low as $0.6153, the weakest since late November.

– Gold prices were muted on Monday, hovering around a two-month low at $1811.37 an ounce amid concerns over high U.S. inflation and a hawkish response from the Federal Reserve after US data gave the central bank more impetus to keep hiking rates.


Chart Focus AUD/JPY

Key Points

1. Buy AUD/JPY recommendation.

2. Buy AUD/JPY at 91.15. Stop at 90.85 and profit target at 91.95.

3. A higher peak in Aussie cash rate and interest rate differential are both aiding the Aussie dollar.

4. Price is likely to find support at a previous low with stochastic and MACD both hinting at a possible price low.

Fundamental Comments

1. Strong Aussie data is hinting at a higher peak in Aussie cash rate, which is likely to aid the Aussie dollar.

2. Interest rate differential is in the Aussie dollar favour, aiding the Aussie dollar.

Technical Comments

1. Price is likely to find support at the previous low support.

2. Stochastic and MACD indicators are hinting at a possible price low in the making.



Key Levels

Support91.1590.8590.45
Resistance91.8592.2592.65










Technical Overview

USD/JPY – Price reached a high of 136.55 this morning despite earlier divergence warnings from the MACD indicator. Stochastic is hinting that price can continue to move higher. 20EMA is hinting at a bullish price trend. Price is likely to find support at 135.35 and we could see another test of this morning’s high at 136.55. Price could even move up to 137.45 in the next 48 hours. A move below 135.35 would negate our bullish view.

Support135.95135.35134.75
Resistance136.55136.90137.35

EUR/USD – Price continued its decline to a low of 1.0535 last Friday, despite earlier warning of divergences from the MACD indicator. MACD and 20EMA are both hinting at a continuation of this decline. Stochastic is hinting at a limited downside. Price may do a mini corrective rally towards the 20EMA at 1.0590 and from there we could see another decline to 1.0490 in the next few days.

Support1.05351.04901.0445
Resistance1.05751.06101.0665

GBP/USD – We have a sell call at 1.2035 last Friday which was filled when price moved up to a high of 1.2041. Price had declined to a low of 1.1928 on Friday just below our profit target at 1.1930. Both MACD and 20EMA are hinting at a continuation of the decline to test 1.1914. We think price is likely to test this support as well. The next direction is likely to be decided by the reaction at 1.1914.

Support1.19101.18651.1810
Resistance1.19651.20051.2075

XAU/USD – Price reached a low of $1808.55 last Friday and the decline continues with price reaching a low of $1806.30 at the point of this writing. MACD and 20EMA are both hinting that price will continue to decline. Stochastic is hinting at a limited downside. As long as price stays below 20EMA at $1822, we see price declining to $1787.90(Fibonacci 50% correction) in the next few days.

Support1803.701791.101783.90
Resistance1820.701834.501847.55

AUD/USD – Price failed to move above the falling 20EMA line at 0.6380 last Friday and we saw a decline in price lower to 0.6700 at the point of this writing. MACD and 20EMA are both hinting at a continuation of this decline. Stochastic is hinting at a limited downside. We are expecting this decline to continue lower to 0.6645 which is the Fibonacci 50% correction point of the rally from 0.6170 to 0.7156.

Support0.66950.66450.6580
Resistance0.67400.67800.6825

U.S. Dollar Found Support From A Strong U.S. Inflation Data

Nicholas

Market Talk
– The U.S. dollar found some support on Wednesday after stubbornly high U.S. inflation suggested interest rates are going to remain high for longer than investors had expected. Remarks from central bank officials also have investors worried about interest rate going to be higher for longer.

– Headline U.S. CPI was 0.5% in January mostly due to higher rental and food costs. That was in line with forecasts, though the annual figure of 6.4% was a bit more than expected and traders busily unwound bets on rate falling toward the end of 2023.

– The U.S. dollar climbed to a six-week high of 133.30 yen and sat not far below that at 132.73 early in the Asia session.  The euro was bumpy but ultimately unable to advance on the greenback and stayed at $1.0734. Sterling was boosted overnight by strong wages data and last bought $1.2178.

– The Aussie edged back to $0.6949, having been as far as $0.7030 at one stage overnight. The RBA’s recent hawkish turn has seen markets scramble to re-price the risk of several more hikes, with the cash rate, currently at 3.35%, now seen peaking around 4.20% compared to 3.60% a month ago.

– Gold prices was little changed on Wednesday at $1850.20 as mixed inflation data for January brewed some uncertainty over the U.S. economy and the path of monetary policy, with the dollar also showing a muted reaction to the readings.


Chart Focus EUR/USD

Key Points

1. Sell EUR/USD recommendation.

2. Sell EUR/USD at 1.0730. Stop at 1.0760 and profit target at 1.0655.

3 U.S. inflation data overnight has suggested interest rates are going to remain high which is likely to keep the U.S. dollar strong, together with interest rate differential.

4. Price had failed to move above a resistance point with MACD hinting at a bearish price trend ahead.

Fundamental Comments

1. U.S. inflation overnight has suggested interest rates are going to remain high for longer than investors had expected, keeping the U.S. dollar strong.

2. Interest rate differential is in the U.S. dollar favour.

Technical Comments

1. Price had failed to move above a resistance point and is likely to test the bottom of the range.

2. MACD has turned bearish and is hinting at a bearish price trend ahead.










Technical Overview

USD/JPY – Our view yesterday was wrong. Price has moved above 133.00 negating our bearish view. Price is likely to proceed higher but the upside is likely to be limited as indicated by the stochastic indicator. The MACD indicator is also hinting at a weak uptrend. Only 20EMA is hinting at a strong bullish uptrend. We believe the upside could be limited to 134.75 in the next couple of days.

Support133.10132.55132.00
Resistance133.60134.05134.55

USD/CHF – Price reached a low of 0.9137 overnight, and we have seen a rally to 0.9246 at the point of this writing. We think price is likely to proceed higher to the previous week’s high at 0.9290 in the next 24 hours. A move above this resistance would be bullish and hint at a move to 0.9315. However, inability to move above 0.9290 would hint at a decline in price back to 0.9125 again. We prefer the up move.

Support0.92150.91800.9135
Resistance0.92600.92900.9360

GBP/USD – Price had move below the 20EMA after reaching an overnight high at 1.2268. The decline is likely to continue to initially 1.2032 and subsequently to 1.1960 in the next few days. Stochastic is hinting at a price decline. Trend indicators, 20EMA and MACD, are also hinting at a price decline. Only a price move above 1.2218 would negate our bearish view.

Support1.20751.20251.1960
Resistance1.21251.21651.2220

XAU/USD – Price declined to a low of $1850.40 yesterday and has moved below this low at the point of this writing. The current low at $1841.84 has also negated the MACD divergence given yesterday. With 20EMA and stochastic indicator, hinting at a bearish price trend as well, we are expecting price to move lower to the next support point at $1823.55 in the next few days.

Support1840.451825.051814.15
Resistance1853.151865.801878.70

AUD/JPY – We had a buy call yesterday at 91.60 but price only declined to a low of 91.72 and our entry order was not filled. Price rallied overnight to a high of 93.02 and the rally may be over. Stochastic has given a divergence warning of a possible price high. However, 20EMA and MACD are still hinting at a bullish price trend. If price stays above the 20EMA, we may see another test of the high at 93.02.

Support92.0091.5590.95
Resistance92.5092.8093.30

FX Commentary – US Dollar Weakened Ahead of CPI Report

Nicholas

Market Talk
-The US dollar was broadly lower against its peers on Tuesday ahead of a keenly anticipated inflation report, while the yen strengthened as surprise pick Kazuo Ueda was nominated to be the next governor of Bank of Japan.

– Markets are looking to the U.S. consumer price index (CPI) data for further clues on Federal Reserve’s policy outlook, with the headline number expected to rise 0.5% in January, according to a Reuters poll, after falling 0.1% in December.

– The euro was up 0.14% at $1.0735, having risen 0.435% in the previous session. The British pound was last trading at $1.2147, up 0.10% on the day, after rising 0.68%.

– The Japanese yen strengthened 0.46% to 131.82 per dollar on Tuesday, having slipped 0.7% in the previous session. Market has already factored in the likely appointment of the new BOJ governor. The Australian dollar added 0.10% to $0.697, while the kiwi fell 0.06% to $0.6350.

– Spot gold was up 0.2% at $1,857.22 per ounce on Tuesday as the dollar retreated, with investors bracing for U.S. inflation data that could determine the Federal Reserve’s next moves in its monetary policy plans.

Chart Focus AUD/JPY

Key Points

1. Buy AUD/JPY recommendation.

2. Buy AUD/JPY at 91.60. Stop at 91.30 and profit target at 92.45

3. Divergent monetary policy and interest rate differential are both in the Aussie dollar favour.

4. Price is likely to be supported by the 20EMA line with MACD hinting at a bullish price trend.

Fundamental Comments

1. Divergent monetary policy is aiding the Aussie dollar.

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

Technical Comments

1. Price is likely to be supported by the 20EMA line.

2. MACD remains bullish and is hinting at a bullish price trend.












Technical Overview

USD/JPY – From a low of 129.80 and we have seen a bounce back up to a high of 132.90 on Monday. MACD and Stochastic are both hinting that price could have reached a high and a decline is likely in the days ahead. The 20EMA line at 131.65 is currently the first support for price. A break of this support is likely to send price lower to 130.30 in the next 24 hours. Only a price move above 133.00 would negate our bearish view.

Support131.60131.15130.60
Resistance132.35132.90133.35

EUR/USD – Price reached a new low of 1.0654 on Monday and this low was accompanied by a divergence warning from the MACD indicator, hinting at a possible price low. Stochastic is also giving the same hint. We think price is likely to move higher in the next 48 hours to 1.0790. An ability to move above 1.0790 is likely to send price higher to 1.0885 in the next few days. A move below 1.0660 would negate our bullish view.

Support1.07051.06601.0620
Resistance1.07501.07901.0850

GBP/USD – We had a sell call at 1.2075 yesterday but our call was wrong. Price had reached a low of 1.2030 and has bounced up higher to 1.2151 this morning. Stochastic is hinting at a price rally. 20EMA is also hinting at a price rally but MACD is hinting at a sideways movement. We think price is likely to continue its rally to 1.2190 in the next 24 hours. Above 1.2195, the next target would be 1.2230.

Support1.21101.20751.2030
Resistance1.21551.21901.2230

XAU/USD – We had a buy call last Friday at $1858 and yesterday we had recommended keeping stop at $1851 and profit order at $1885. Our stop loss order was triggered yesterday. Price declined to a low of $1850.40 yesterday. However, this low was accompanied by a divergence warning from the MACD, hinting at a possible price low. If price can hold above the previous day’s low we see price moving up to $1868 in the next 24 hours.

Support1850.451840.451825.05
Resistance1866.701878.701890.15

USD/CNH – Price has reached a high of 6.8386 on Monday and has been on a decline. We think the decline is likely to continue as both MACD and stochastic indicator are hinting at a possible price high with divergence warnings. We think price is likely to move lower to the 6.7730 in the next 48 hours. If price can move below this support, we are likely to see the decline continue to 6.7350 in the next few days.

Support6.81606.80406.7950
Resistance6.82806.83856.8525