Tag: EUR/AUD

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

FX Commentary – Euro Rose On Strong Spanish Inflation Data.

Nicholas

Market Talk
– Currency trading was subdued in the lead up to Wednesday’s Fed rate decision with the U.S. dollar facing a fourth monthly loss on Tuesday. Investors’ view of a peak in U.S. interest rates could swing into view as soon as this week’s Federal Reserve meeting.

– Interest-rate futures indicate market expectations for a 25 basis point hike from the Federal Reserve to take the Fed funds rate window to 4.5%-4.75%. Pricing suggests two more 25 basis point hikes are expected, before cuts arrive later in the year.

– The euro rose as far as 1.0913 after data showed Spanish inflation running surprisingly hot in January, before the broader mood reeled it back to 1.0851. The common currency is up 1.3% this month and is loitering near a nine-month peak ahead of European Central Bank rate decisions on Thursday.

– The Aussie slipped to $0.7050 after data showed retail spending took a shock 3.9% tumble in December， far exceeding forecast of a 0.3% dip, which is a likely dragged on economic growth and trimming expectations for how much further interest rates might have to rise.

– Gold prices retreated to $1922.10 on Tuesday, coming under pressure from a stronger dollar as caution kicked in ahead of a Federal Reserve meeting this week, where the Fed is widely expected to raise interest rate by 25 basis points.


Chart Focus EUR/AUD

Key Points

1. Buy EUR/AUD recommendation.

2. Buy EUR/AUD at 1.5360. Stop at 1.5325 and profit target at 1.5480

3. A sharp drop in Aussie retail spending and a likely hike in Euro interest rate are both weighing on the Aussie dollar.

4. A Cup and Handle chart pattern and MACD are both hinting at a price reversal.

Fundamental Comments

1. Expectation of a 50 basis points hike by the European Central Bank is likely to aid the Euro.

2. A sharp drop in Aussie retail spending is weighing on the Aussie dollar.

Technical Comments

1. A Cup and Handle chart pattern is hinting at a price low and a price reversal.

2. MACD is hinting at a possible price low with divergence warning.



Key Levels

Support1.53851.53451.5305
Resistance1.54251.54851.5520










Technical Overview

USD/JPY – Price is consolidating in the range of 129.10 and 131.10 and looks likely to continue till FOMC announcement. Stochastic is moving higher and hinting at a price rally but both MACD and 20EMA are flat and neutral. Both trend indicators are hinting at a sideways trend. Unless price can move above 131.10 or go below 129.10, we are expecting price to stay within this range in the next 24 hours.

Support130.00129.60129.10
Resistance130.55130.90131.55

EUR/USD – We had a buy recommendation at 1.0840 which was filled when price declined to a low of 1.0838.  Stochastic is still declining and hinting at a further decline in price. MACD and 20EMA are also bearish and hinting at a bearish price trend. If price were to move below 1.0820, it could be heading lower to 1.0765. However, if it can hold above 1.0830, we have a chance to see 1.0930 again in the next couple of days.

Support1.08251.07801.0735
Resistance1.08751.09301.0960

GBP/USD – Price reached a high of 1.2416 on Monday and has been on a decline since that high. We think the decline is likely to continue lower to 1.2280 in the next 48 hours. Stochastic is declining and has yet to reach the oversold zone, hinting at more declines ahead. Both MACD and 20EMA are hinting at a bearish price trend. Only a price move above 1.2380 would negate our bearish view for the next 48 hours.

Support1.23301.22801.2245
Resistance1.23701.24151.2450

XAU/USD – Price reached a high of $1934.10 on Monday and has been on a decline. We think the decline can continue and we see price decline to $1900 in the next 24 hours. Stochastic is declining and is hinting at a price decline. Both MACD and 20EMA are also hinting at a price decline. A MACD divergence is also hinting at a possible price high. A move below $1900 would confirm a high and a move to $1886 in the next few days.

Support1911.301896.551886.55
Resistance1925.301934.701949.15

USD/CAD – We had a buy recommendation at 1.3330 last Friday and yesterday, we had left stop at 1.3295 and profit order at 1.3410. Price reached a high of 1.3414 this morning and our profit order was filled. We are out of this position with a profit of 80 pips. Stochastic is rising and 20EMA is also pointing to a bullish price trend. If price can go above 1.3425, it could move up to 1.3515 in the next few days.

Support1.33801.34351.3295
Resistance1.34251.34751.3520

FX Commentary – U.S. Dollar Weakened After NFP Data

Nicholas

Market Talk
– The U.S. dollar fell on Friday after U.S. jobs data showed a strong, but not blockbuster employment picture in December, while a separate report showed that U.S. services industry activity contracted for the first time in more than 2-1/2 years that month, offering more evidence that inflation was abating.

– Data showed on Friday that the U.S. economy added jobs at a solid clip in December, as the U.S. labour market remains tight, but Fed officials could draw some solace from a moderation in wage gains.

– The greenback extended losses after the Institute for Supply Management (ISM) said its non-manufacturing PMI dropped to 49.6 last month from 56.5 in November. It was the first time since May 2020 that the services PMI fell below the 50 threshold, which indicates contraction in the sector that accounts for more than two-thirds of U.S. economic activity.

– The euro gained 1.19% to $1.0645 and was on track for the biggest percentage daily increase since Nov. 11. The dollar fell 1.03% against the Japanese yen to 132.07. The British pound gained to a high of 1.2065.

– Gold prices edged higher to $1868.90 per ounce on Monday and hovered near a seven-month high, supported by a weaker dollar and hopes that the Federal Reserve might slow its pace of interest rate hike.


Chart Focus AUD/JPY

Key Points

1. Buy AUD/JPY recommendation.

2. Buy AUD/JPY at 91.05. Stop at 90.70 and profit target at 91.95.

3. The lifting of a coal ban and interest rate differential are both in the Aussie dollar favour.

4. Price is supported by a previous resistance turned support line with MACD also hinting at a bullish price trend.

Fundamental Comments

1. The lifting of a coal ban from China is aiding the Aussie.

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

Technical Comments

1. Price is likely to be supported by a previous resistance turned support line.

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



Key Levels

Support91.0090.5090.15
Resistance91.6092.0092.40









Technical Overview
USD/JPY – Price has declined to a low of 131.30 this morning which is just below the 62% Fibonacci correction point of the rally from 129.50 to 134.76. Stochastic is still declining and hinting at a price decline but MACD remains bullish. 20EMA is hinting at a bearish price trend. Watch out for the Fibonacci 62% point at 131.30. This point is likely to determine the next direction of this pair.

Support131.30130.70130.35
Resistance131.95132.30132.95

EUR/USD – Price has reached a low of 1.0480 on Friday but that low was accompanied by a divergence warning from the MACD indicator. We have seen a rally to 1.0688 this morning and we are likely to see this rally continue higher to 1.0712 in the next 24 hours. Stochastic is not in the overbought zone as yet and 20EMA and MACD are both hinting at a strong bullish price trend.

Support1.06751.06301.0590
Resistance1.07151.07851.0830

GBP/USD – Price reached a new low at 1.1842 on Friday but had rallied on the back of a weaker US dollar to a high of 1.2150 on Monday morning. Stochastic has yet to reach the overbought zone, hinting that this rally can continue. 20EMA is also hinting at a strong bullish price trend. MACD confirms the bullish price trend. The next price resistance could be at 1.2260.

Support1.21101.20701.2030
Resistance1.21651.22251.2260

XAU/USD – Price reached a high of $1879.20, exceeding our target at $1878. However, MACD is not showing any divergences at the moment, hinting that this price rally may continue. Stochastic is not yet in the overbought zone, hinting that price can continue its rally. 20EMA is also showing a strong bullish price trend. We think price can continue higher to $1900 in the next 48 hours. Below $1860 would negate our bullish price view.

Support1869.501856.901843.70
Resistance1885.701896.201916.45

EUR/AUD – We had a sell recommendation last Friday at 1.5585, which was filled when price moved to a high of 1.5592. Our profit order at 1.5415 was also filled when price reached a low of 1.5398 at the point of this writing. We made 170 pips out of this trade, covering the 3 losses we had in the first 3 trades of the year. MACD is starting to show divergence, hinting at a possible price low.

Support1.53751.53351.5275
Resistance1.54451.54951.5570