Tag: EUR/AUD

FX Commentary – Yen Weakened On BOJ Ultra-Easy Monetary Policy.

Nicholas

Market Talk
– The Japanese yen fell on Friday after the Bank of Japan (BOJ) stood pat on its ultra-easy monetary policy. The U.S. dollar was on track for a second straight monthly loss despite finding some support from data pointing to still-sticky inflation in the United States, which reinforced expectations for a 25-basis-point rate hike at next week’s FOMC meeting. .

– The Commerce Department reported on Thursday that U.S. economic growth slowed by more than expected in the first quarter, while a separate report from the Labour Department on Thursday showed initial claims for state unemployment benefits decreased 16,000. The labour report suggested a still-tight labour market and also underpinned next week’s rate increase expectations.

– In a closely watched decision, the BOJ on Friday announced it will maintain ultra-low interest rates, as expected, and made no tweaks to its yield curve control by a “unanimous vote”. However, the BOJ said it will remove forward guidance that pledges to keep interest rates at current or lower levels.

– The yen slid in volatile trade following the decision, and was last 0.5% lower against the dollar at 134.60. Sterling slipped 0.06% to $1.2492. The euro fell 0.1% to $1.1016, but remained near its recent one-year high.

– Gold prices fell slightly on Friday, extending losses into a third straight session as stronger-than-expected U.S. inflation and labour market data saw fears of more Federal Reserve rate hikes come back into focus.

– There will be no Forex Commentary for the next 3 weeks. Update will resume on 22 May.


Chart Focus USD/CAD

Key Points

1. Buy USD/CAD recommendation.

2. Buy USD/CAD at 1.3605. Stop at 1.3570 and profit target at 1.3725.

3. A Fed rate hike next week and declining crude oil prices are both weighing on the Canadian dollar.

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

Fundamental Comments

1. US labour overnight is suggesting a still-tight labour market and a likely rate hike in next week FOMC meeting.

2. The Canadian dollar is likely to be weighed down by a second weekly decline in crude oil price.

Technical Comments

1. Price is likely to be supported 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

Support1.35701.35201.3475
Resistance1.36451.36951.3730










Technical Overview

USD/JPY – We saw a price rally to a high of 134.92 this morning after Bank of Japan maintained its ultra-easy monetary policy after its monetary meeting. Stochastic is hinting at a continuation of this price rally. MACD and 20EMA are also hinting at a continuation of the price rally. If price can move above 135.13, we are likely to see a test of 137.90 in the next few days.

Support134.70134.35132.80
Resistance135.15135.50136.05

EUR/USD – We had a buy recommendation on Tuesday at 1.0995 and had recommended placing stop at 1.0960 and profit target at 1.1075. Our profit target was met when price reached a high of 1.1094 on Wednesday. A divergence at the price high is hinting at a price decline to 1.0985 in the next few days. Stochastic is also hinting at a price decline. However, MACD remains bullish and is hinting at a price rally.

Support1.09901.09451.0910
Resistance1.10351.10751.1095

GBP/USD – We had a sell recommendation on Wednesday but our call was wrong. Price went to a high of 1.2515 taking out our stop. MACD is hinting at a loss of momentum in the rally but stochastic is still pointing to a price rally. 20EMA is supporting the stochastic and calling for a price rally. However, we think price is likely to stay in a sideways range for the next 24 hours.

Support1.24651.24251.2385
Resistance1.25151.25451.2595

XAU/USD – Price failed to move higher and test its resistance at 2012.35 and we have seen price tested the support at $1973.95. Price has also moved below the 20EMA and we are likely to see another move to test the previous low at $1969.15 in the next couple of days. Stochastic is hinting at a price decline. Both MACD and 20EMA are hinting at a bearish price trend in the next few days.

Support1969.101955.301949.65
Resistance1984.751996.802003.70

EUR/AUD – Price reached a high of 1.6784 on Wednesday and the decline has reached a low of 1.6603 this morning. The low was supported by the 20EMA line and if this support holds, we are likely to see price test the previous high again at 1.6784 in the next few days. Stochastic is neutral but MACD is hinting at a bullish price trend. 20EMA is also hinting at a price rally. A Price move below 1.6525 would negate our bullish price view.

Support1.66001.65251.6485
Resistance1.66701.67301.6785

FX Commentary – U.S. Dollar Pinned Near 7-week Low After FOMC Decision

Nicholas

Market Talk
– The U.S. dollar was pinned near seven-week lows on Thursday after the U.S. Federal Reserve sounded close to calling time on interest rate hikes after announcing a 25 basis points hike, which markets think are more or less over.

– The US central bank raised its benchmark funds rate by 25 basis points, as expected, but dropped language about “ongoing increases” being needed in favour of “some additional” rises, as it watches how wobbling confidence in banks affects the economy.

– The euro touched a seven-week high of $1.0912 on Wednesday, while the yen, which closely follows U.S. yields, fell 0.7% to a six-week low of 130.50. The Australian and New Zealand dollars rose 0.7% and 0.8% respectively to track back toward Wednesday’s peaks.

– Sterling also hovered near a seven-week high as British inflation unexpectedly rose, leaving it at an eye-watering 10.4% and heaping pressure on the Bank of England to raise rates and sound hawkish at its meeting later in the global day.

– Gold prices rose on Thursday, hovering below the key $2,000 level amid expectations that the Federal Reserve will have limited headroom to hike interest rates further, which also pulled the dollar lower.


Chart Focus USD/CAD

Key Points

1. Sell USD/CAD recommendation.

2. Sell USD/CAD at 1.3690. Stop at 1.3720 and profit target at 1.3555.

3. An end of the Fed hike cycle is likely to weigh on the U.S. dollar.

4. A chart pattern and a bearish MACD are both hinting at a price decline ahead.

Fundamental Comments

1. With the U.S. Federal Reserve close to calling time on interest rate hikes, the US dollar is likely to be weak.

2. A decline in US Treasury yields is likely to weigh on the US dollar.

Technical Comments

1. Price could be forming a Descending Triangle chart pattern, which is a hint of a price decline ahead.

2. MACD is bearish and is hinting at a price decline.



Key Levels

Support1.36501.36001.3555
Resistance1.36901.37401.3790










Technical Overview

USD/JPY – Price had reached a low of 130.41 overnight, which was lower than Monday’s low of 130.53. This low was accompanied by a divergence warning from the MACD indicator hinting at a possible price low. However, 20EMA and stochastic indicator are both hinting at a continuation of this price decline. We think the downside is limited. We are looking at a bounce to 131.90 in the next 48 hours.

Support130.40129.80129.20
Resistance130.95131.45131.95

EUR/USD – Price continued its rally and had reached a high of 1.0929 at the point of this writing. Stochastic is deep in the overbought zone but expectation of a narrowing of an interest rate differential is likely to keep the bid strong and the market overbought. MACD and 20EMA are both hinting at a bullish price trend. We think the rally is likely to continue towards 1.1030 in the next few days.

Support1.08851.08501.0795
Resistance1.09301.09851.1030

GBP/USD – Price broke above last Monday’s high at 1.2284 to reach a high of 1.2334. Stochastic is rising and is hinting at a continuation of this rally. MACD is also hinting at a continuation of this price rally. 20EMA is hinting at a bullish price trend. We think the topside may be limited to 1.2405 in the 24 hours. Bank of England is likely to hike rates by 25 basis points which could have a big impact on the next directional move.

Support1.23201.22801.2230
Resistance1.23701.24051.2450

XAU/USD – The decline was halted at $1934 overnight and we have seen a rally up to 1983.58 at the point of this writing. We remain bearish and think this rally could be a corrective rally, especially if price cannot move above $1989. MACD had previously hinting at a possible price high with a divergence but both stochastic and 20EMA are currently hinting at a price rally. Above $1989 would negate our bearish view and calls for a test of the recent high at $2009.75.

Support1969.401951.901942.55
Resistance1988.302009.752030.25

EUR/AUD – We had a buy call yesterday at 1.6045 but price only fell to a low of 1.6053 and our entry order was not filled. Overnight, we saw price moved above our target to a high of 1.6353. We think this could be a temporary high and we see a decline back to 1.6000 in the next few days. MACD has a divergence warning of a potential price high and stochastic is also hinting at a price decline. 20EMA is hinting at a bullish price trend.

Support1.61501.61051.6055
Resistance1.62051.62551.6295

FX Commentary – U.S. Dollar Pinned Near Low Ahead of FOMC

Nicholas

Market Talk
– The U.S. dollar was pinned near five-week lows on Wednesday ahead of the conclusion of the U.S. Federal Reserve’s policy meeting, with investors awaiting clarity on the path the central bank is likely to take in the wake of global banking turmoil.

– CME FedWatch tool showed markets are now pricing in about a 14% chance of the Fed not increasing rates, with a roughly 86% chance of a 25 basis point hike. The Fed will announce its decision on Thursday morning 2am Singapore time.

– The euro was at $1.0767, hovering around a five-week high of $1.0789 scaled overnight. The yen weakened 0.04% to 132.59 a dollar, whereas sterling was last trading at $1.2221, up 0.06% on the day.

– The Australian dollar was at $0.6684, after falling 0.7% to as low as $0.6650 overnight, despite a broad improvement in risk appetite. The kiwi dollar was changing hands at $0.6189, having also eased 0.8% as far as $0.6168 overnight.

– Gold prices moved in a tight range on Wednesday, stabilizing after a sharp drop in the prior session as markets hunkered down ahead of a Federal Reserve interest rate decision, while easing fears of a banking crisis spelt lesser safe haven demand for the yellow metal.


Chart Focus EUR/AUD

Key Points

1. Buy EUR/AUD recommendation.

2. Buy EUR/AUD at 1.6045. Stop at 1.6015 and profit target at 1.6190

3. A solution to Credit Suisse and an aggressive ECB are both likely to aid the euro.

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

Fundamental Comments

1. The end of Credit Suisse saga is likely to aid the euro.

2. With the ECB on a aggressive hike path, the interest differential is likely to narrow and favours the euro.

Technical Comments

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

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



Key Levels

Support1.60701.60051.5940
Resistance1.61251.61951.6225










Technical Overview

USD/JPY – Price had reached a low of 130.53 on Monday and this low was accompanied by a divergence warning from the MACD indicator hinting at a possible price low. 20EMA has also turned around and is hinting at a price rally. However, stochastic is in the overbought zone and is hinting at a limited upside. We think price is likely to be supported by the 20EMA and we see a rally to 133.80 in the next few days.

Support132.05131.60131.00
Resistance132.75133.20133.80

EUR/USD – Price continued its rally and had reached a high of 1.0787 overnight. However, stochastic is hinting at a limited upside and MACD is also hinting at a possible price high. Only the 20EMA is hinting at a bullish price trend. We think price has reached a temporary high at 1.0787. We see a decline in price back to 1.0575 in the next few days. A move above 1.0790 would negate our bearish view and calls for a test of 1.1030.

Support1.07551.07201.0670
Resistance1.07901.08451.0885

GBP/USD – Price had reached a high of 1.2284 last Monday and this high was accompanied by a divergence warning from the MACD indicator, hinting at a possible price high. Stochastic is declining from the overbought zone and is hinting at a price decline. However, both MACD and 20EMA are hinting at a bullish price trend. We think a high is in place and we see a decline to 1.2050 in the next few days. A move above 1.2284 would negate our bearish view.

Support1.22051.21651.2115
Resistance1.22501.22901.2345

XAU/USD – We think price has reached a high on Monday at $2009.75. A Spinning Top candlestick price pattern is also hinting at a possible price high. MACD on the 4-hourly chart is showing a divergence and is also hinting at a possible price high. Price has also moved below the 20EMA, adding to the bearish price trend. We see price going lower to $1885 in the next few days. Only a move above $1966 would negate our bearish price view.

Support1935.401922.251907.50
Resistance1952.051968.501983.15

NZD/USD – Price had reached a high of 0.6280 on Monday and a decline has seen price reached a low of 0.6166. Stochastic is in the oversold zone and is hinting at a price rally. MACD is about to crossover the zero line and is hinting at a price rally as well. 20EMA is currently hinting at a neutral price trend. We think price is likely to be capped at 0.6235 and we see a decline back to 0.6165 in the next 24 hours.

Support0.61950.61650.6135
Resistance0.62300.62800.6310

FX Commentary – Euro Declined After ECB Largarde Comment On Inflation.

Nicholas

Market Talk
– The euro and sterling slipped against the dollar on Friday as markets took a dovish cue from policymakers at the European Central Bank and the Bank of England, who said inflationary pressures in their economies have become more manageable.

– Focus will be on tonight Non-farm Payroll. Analysts expect 185,000 jobs were added last month, the lowest since January 2021, unemployment edged up to 3.6%, and hourly wage inflation to stay flat at 0.3% on a monthly basis, suggesting the strong labour market might have started to ease up.

– The pound slid to a more than two-week trough of $1.2203 in Asia trade. It had fallen 1.2% in the previous session despite a 50 basis point hike, after BoE comment’s that tide was turning in its battle against high inflation.

– The euro edged down to $1.0897, after tumbling 0.7% on Thursday to move further away from its 10-month peak of $1.1034. President Christine Lagarde acknowledged the euro zone outlook had become less worrisome for growth and inflation.

– Gold prices inched higher on Friday after pulling back sharply from nine-month highs in the prior session as the dollar rebounded in anticipation of key nonfarm payrolls data, while other economic readings showed some strength in the labour market.


Chart Focus EUR/JPY

Key Points

1. Sell EUR/JPY recommendations.

2. Sell EUR/JPY at 140.60. Stop at 140.95 and profit target at 139.70.

3. The European Central Bank has hinted at a potential pause in their rate hike which may weigh on the euro.

4. Price is likely to be capped by the previous support turned resistance line with both MACD and 20EMA also hinting at a bearish price trend.

Fundamental Comments

1. The European Central Bank hinted at a potential pause in their rate hike cycle this year which will mean less aggressive interest rate hikes.

2. A slower pace of rate hike will likely weigh on the Euro.

Technical Comments

1. Price has broken below its previous range support, hinting at a bearish price trend.

2. Both MACD and 20EMA are hinting at a bearish price trend.


Key Levels

Support140.10139.60139.15
Resistance140.60141.10141.60










Technical Overview

USD/JPY – We had a sell recommendation yesterday at $128.95, which was filled when the price moved to a high of $129.12. Price is below the 20EMA and MACD has remained below the zero line. Both trend indicators are hinting at a bearish price trend. However, stochastic currently is in the oversold zone and is hinting at a limited downside. Our view remains bearish and we would recommend moving stop to cost at $128.95 and the profit target remaining at $127.80.

Support128.40128.05127.75
Resistance128.85129.20129.85

EUR/USD – Price reached a low of $1.0884 overnight which is just above the Fibonacci 62% correction point of the rally from $1.0801 to the high at $1.1032. Stochastic is pointing downwards, hinting at a price decline. 20EMA is neutral at the moment while MACD remains bullish. If the price is able to sustain above the Fibonacci 62% correction point, at $1.0885, we are likely to see a rally back to the high at $1.1032 again in the next couple of days

Support1.08851.08451.0800
Resistance1.09301.09751.1030

GBP/USD – Price moved to a low at $1.2228 overnight but was supported by the lower trend line of the descending channel. Stochastic is moving lower and is hinting at a price decline. Price has moved below the 20EMA and MACD remained below the zero line. Both trend indicators are hinting at a possible bearish price trend. If the price is able to sustain within the descending channel, we may see a possible rebound in the price to $1.2335

Support1.22101.21701.2130
Resistance1.22551.22951.2335

XAU/USD – Price had a correction to a low of $1911.58 overnight after reaching a new fresh high at $1959.70 on the same day. Stochastic is declining and hinting at a price decline. MACD has a bearish crossover and is hinting at a possible bearish price trend. Price has moved below the 20EMA, hinting at a change in trend. Price could be on the way to this week’s low at $1900.27 and it is possible we could see this low tested in the next 48 hours.

Support1904.701892.101880.30
Resistance1923.001934.701942.10

EUR/ AUD – We had a buy recommendation at $1.5360 on Tuesday and yesterday, we recommended lifting stop higher at $1.5355 and a profit order at $1.5480. Unfortunately, the price move to a low of $1.5331 and triggered our stop at $1.5355. We are out of this position with a 5 pips loss. Stochastic is likely to turn up, hinting at a price rally. Price has moved above the 20EMA, hinting bullish trend. MACD remains bullish.

Support1.53851.53451.5305
Resistance1.54401.54851.5520

FX Commentary – Greenback Declined On Powell’s “Disinflationary” Process.

Nicholas

Market Talk

– The U.S. dollar extended losses despite a 25 basis points hike by the Fed. Federal Reserve Chair Jerome Powell said a “disinflationary” process was underway, boosting risk appetite and hopes that the U.S. central bank will soon end its monetary tightening streak. The U.S. central bank also warned of further monetary policy tightening.

– The U.S. central bank announced an expected 25 basis points interest rate increase after a year of larger hikes and said it had turned a key corner in the fight against a high inflation rate. But policymakers projected “ongoing increases” in borrowing costs would still be needed.

– The focus will now switch to European Central Bank and Bank of England meetings and the interest rate path the two central banks are likely to take. The euro was up at $1.1011 while sterling was last trading at $1.2372, ahead of central banks’ meeting later on Thursday.

– The Australian dollar rallied to an eight-month high on Thursday at $0.7158, its highest since early June 2022. The kiwi was hovering at $0.6523, having also jumped 1.1% overnight.

– Gold prices jumped to $1983.69 an ounce as the dollar fell even after the Federal Reserve raised its target interest rate by a quarter of a percentage point and continued to promise “ongoing increases” in borrowing costs as part of its battle against inflation.

Chart Focus USD/JPY

Key Points

1. Sell USD/JPY recommendation.

2. Sell USD/JPY at 128.95. Stop at 129.30 and profit target at 127.80

3. The Fed slower pace of hikes has boosted risk appetite and is weighing on the U.S. dollar

4.  Price has broken below its previous range support with MACD and 20EMA, both also hinting at a bearish price trend.

Fundamental Comments

1. Federal Reserve Chair Jerome Powell said a “disinflationary” process was underway, boosting risk appetite and is weighing on the U.S. dollar.

2. A slower pace of rate hike by the Fed is likely to weigh on the U.S. dollar.

Technical Comments

1. Price has broken below its previous range support, hinting at bearish price trend.

2. MACD and 20EMA are both hinting at a bearish price trend.

Key Levels

Support128.40127.95127.55
Resistance128.85129.20129.85









Technical Overview

EUR/USD – Price continued its overnight rally to reach a high of 1.1032 this morning. Stochastic is near to the overbought zone and is hinting at a limited upside. 20EMA is pointing up with a steep slope, hinting at a strong bullish price trend. MACD is also hinting at a strong bullish price trend. With the ECB expected to hike rate later today, we are expecting price to rally to a high of 1.1140 in the next 48 hours.

Support1.09901.09401.0910
Resistance1.10351.10701.1120

GBP/USD – Price reached a low of 1.2271 overnight and has bounced back up to 1.2401 this morning. We are expecting the rally to continue for today. Stochastic is rising from the oversold zone and is hinting at a bullish price trend. 20EMA is also turning up and hinting at a bullish price trend. MACD is also hinting at a bullish price trend after a bullish crossover. We see price moving to 1.2520 in the next 24 hours.

Support1.23701.23351.2270
Resistance1.24051.24451.2495

XAU/USD – Price reached a new fresh high at $1957.28 this morning. Stochastic is already in the overbought zone but 20EMA is pointing up with a steep slope, hinting at a strong bullish price trend. MACD is also hinting at a bullish price trend. There was also no MACD divergence warning on this fresh high, hinting that price can go higher. The next resistance is $1973.

Support1949.151934.701923.55
Resistance1957.301965.551981.30

EUR/AUD – We had a buy recommendation on Tuesday at 1.5360, which was filled when price declined to a low of 1.5356.  Our view remains unchanged but we would recommend bringing stop to 1.5355 while keeping profit target at 1.5480 unchanged. MACD and 20EMA are both bullish and hinting at a bullish price trend. Stochastic is likely to turn up, hinting at a price rally.

Support1.53851.53451.5305
Resistance1.54301.54851.5520