Tag: EUR/JPY

FX Commentary – US Dollar Stumbled On Weak ISM Data

Nicholas

Market Talk
– The U.S. dollar stumbled on Monday, surrendering earlier gains following unexpected oil output cuts from OPEC+, as data showed the U.S. economy continued to slow with declines in manufacturing and construction spending.

– Data on Monday added to the narrative that the Federal Reserve is near the end of its rate-hike cycle. The Institute for Supply Management data on Monday showed that manufacturing activity fell to the lowest in nearly three years in March as new orders continued to contract, with all sub-components of its manufacturing PMI below the 50 threshold for the first time since 2009.

– The euro fell to $1.0890, having gained more than 0.5% on Monday. Against the Japanese yen, the dollar rose 0.28% to 132.83. Sterling firmed 0.8% at $1.2422, while the dollar dipped 0.% against the Swiss franc to 0.912 francs.

– The Australian dollar slipped to 0.6770 on Tuesday after the Reserve Bank of Australia left its cash rate unchanged at 3.60%, as expected, with policymakers saying additional time was needed to “assess the impact of the increase in interest rates to date and the economic outlook”.

–  Gold prices fell slightly $1978 on Tuesday after rallying back to key levels in the prior session as markets considered the potential for more economic turmoil this year amid a manufacturing slowdown and rising fuel costs.


Chart Focus EUR/JPY

Key Points

1. Buy EUR/JPY recommendation.

2. Buy EUR/JPY at 144.40. Stop at 144.10 and profit target at 145.60.

3. Divergent monetary policy and interest rate differential are both in the Euro interest.

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

Fundamental Comments

1. Divergent monetary policy is in the Euro’s favour.

2. Interest rate differential is in the Euro’s favour

Technical Comments

1. Price is supported by the 20EMA which is also hinting at a bullish price trend.

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










Technical Overview

USD/JPY – Price had reached a high of 133.75 on Monday and that high was accompanied by a divergence warning from the MACD indicator, hinting at a possible price high. We are likely to see a price decline back to the Fibonacci 50% correction point of the rally at 132.15 over the next few days. Stochastic is also hinting at a price decline, 20EMA remains neutral. A price move above 133.75 would negate our bearish price view.

Support132.55132.10131.70
Resistance133.10133.70134.35

EUR/USD – Price remains nears a 5-week high at 1.0929 and looks likely to test the high again the next couple of days. 20EMA is hinting at a bullish price trend. MACD remains bullish and is hinting at a price rally. Stochastic is moving higher and is hinting at a price rally. A move above 1.0930 is likely to send price higher to 1.1032. A move below 1.0785 would negate our bullish price view.

Support1.08801.08451.0790
Resistance1.09251.09851.1035

GBP/USD – Price has moved above the previous week’s high at 1.2422 and looks like it will continue higher to 1.2595 in the next few days. 20EMA is pointing to a bullish price trend. Stochastic is also hinting at a continuation of this current rally. MACD is bullish and is hinting at a bullish price trend. Only a move below the 20EMA at 1.2365 would negate our bullish price view for the next few days.

Support1.23951.23351.2270
Resistance1.24501.25151.2575

XAU/USD – Price is consolidation in a big triangle chart pattern at the moment after reaching a high at $2009.75. Both MACD and Stochastic confirm the consolidation triangle chart outlook. 20EMA is neutral at the moment. We would prefer to see a break on the topside for a test to $2078 in the next few weeks. For the short term, watch out for the boundaries at $1991 and the downside at $1943. A break above would confirm our bullish view while a move below the lower boundary would negate our bullish view.

Support1973.101959.501943.85
Resistance1987.551999.552009.75

AUD/USD – A pause by the RBA in rate hike has brought the Aussie dollar down to 0.6755 from a high of 0.6793 earlier in the day before the RBA announcement. Stochastic is in the overbought zone and is hinting at a limited upside. MACD remains bullish and is hinting at a bullish price trend. 20EMA is also bullish. We think the correction should be supported at the 20EMA line at 0.6730 and from there we see another rally to 0.6850.

Support0.67450.67150.6665
Resistance0.67950.68500.6895

FX Commentary – U.S. Dollar Jumped On Upbeat U.S. Labour Data

Nicholas

Market Talk
– The U.S. dollar jumped on Friday after upbeat economic data from the United States lessened the risk of recession, but also suggested the Federal Reserve would have to hike interest rate further and keep rates up for longer.

– The Labour Department’s closely watched employment report showed that nonfarm payrolls surged by 517,000 in the previous month. The department revised December data higher to show 260,000 jobs added instead of the previously reported 223,000. Average hourly earnings also rose for the second consecutive month, boosting the U.S. dollar.

– The greenback extended its rally on the yen to a three-week top of 132.60 on Monday amid reports the Japanese government had offered the job of central bank governor to the current deputy, Masayoshi Amamiya, who is considered by markets to be more dovish than some other contenders.

– The euro was huddled at $1.0791 after shedding 1.1% on Friday. Sterling fell 1.39% to $1.2055, the lowest since Jan. 6 and its worst day since Dec. 15. The Aussie was struggling at $0.6923, after slumping 2.2% on Friday while the kiwi dollar was hovering at $0.6320.

– Gold prices were muted on Monday, after plummeting 2.5% on Friday. A stronger-than-expected U.S. employment data ramped up fears that the Federal Reserve could keep hiking interest rates sending gold prices lower to $1860.45.


Chart Focus USD/CAD

Key Points

1. Buy USD/CAD recommendation.

2. Buy USD/CAD at 1.3370. Stop at 1.3340 and profit target at 1.3470.

3. A strong US labour data and a decline in crude oil prices are both likely to keep the U.S. dollar strong.

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

Fundamental Comments

1. A strong US labour data is hinting that the Fed is likely to hike rates further, keeping the dollar strong.

2. A decline in crude oil price is likely to keep the Canadian dollar weak.

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 also hinting at a bullish price trend.



Key Levels

Support1.33901.33351.3295
Resistance1.34301.34751.3520










Technical Overview

USD/JPY – We had a sell recommendation from last Thursday at $128.95 and on Friday, we had shifted stop to cost at 128.95 and kept profit order at 127.80. Price went up above our stop last Friday and we are out of this position without a loss. Price will need to move above 132.86. If price is unable to move above this resistance, we see price going lower to 130.00 in the next 24 hours. We are in favour of the bearish price trend.

Support131.55131.05130.55
Resistance132.00132.40132.90

EUR/USD – Price has declined below last week low of 1.0801, triggering a bearish price trend. We are likely to see a continuation of this bearish price trend to 1.0710 in the next 48 hours. Trend indicators, MACD and 20EMA confirm this bearish price trend but Stochastic is hinting at a limited downside. We favour the bearish price and only a move above 1.0930 would negate our bearish view.

Support1.07651.07051.0650
Resistance1.08051.08551.0890

GBP/USD – Price reached a low of 1.2030 this morning but looks like it may have reached a low. Both stochastic and MACD are hinting that price has reached a low. However, 20EMA is hinting at a strong bearish price trend. We tend to favour the stochastic and MACD. We think price is likely to move up today to 1.2145 or to 1.2185. From this location, we see the start of another decline.

Support1.20301.19851.1935
Resistance1.20751.21251.2185

XAU/USD – Price has declined below last week low of $1900.55, triggering a bearish price trend. We are likely to see a continuation of this bearish price trend to $1843 in the next few days. However, Stochastic is hinting at a price rally to $1900 to go short. Trend indicators are hinting at a bearish price trend. We have the same view as the stochastic indicator and would prefer to get into a short position on a rally towards the 20EMA line at $1900.

Support1872.101860.651843.60
Resistance1882.201900.551918.85

EUR/JPY – Last Friday, we had a sell call on this pair but our call was wrong. Price has moved up higher to the previous high at 142.85. If price cannot move above this resistance, we are likely to see a decline back to 141.20 in the next 48 hours. However, if price moves above the previous high at 142.85, we are likely to see a move to 143.90. We favour the bearish side and see a decline to 141.20 for the next 24 hours.

Support141.85141.25140.75
Resistance142.35142.85143.30

FX Commentary – US Dollar Stayed Near Eight-Month Low Ahead of FOMC.

Nicholas

Market Talk
– The U.S. dollar distanced itself from an eight-month low on Monday ahead of a slew of central bank meetings later in the week, though gains were capped by dovish re-pricing of the U.S. Federal Reserve’s rate-hike expectations as compared to more hawkish counterparts.

– The euro rose to $1.0874, drawing support from continued hawkish rhetoric by ECB policymakers and ebbing fears of a deep recession, ahead of policy meetings from the Fed and the European Central Bank (ECB). Sterling was at $1.2405 ahead of a Bank of England (BoE) later this week.

– The Australian dollar fell 0.3% to $0.7088 but was on track for a monthly gain of nearly 4%, after the shock that Australia’s inflation rate shot up to a 33-year high in the previous quarter, caused traders to ramp up bets that the RBA will have to tighten interest rates further.

– The Japanese yen jumped close to 0.2% to 129.62 per dollar. Core consumer prices in Japan’s capital for the month of January marked the fastest annual gain in nearly 42 years, data on Friday showed, keeping the Bank of Japan under pressure to phase out its economic stimulus.

– Spot gold was steady at $1931.25 per ounce on Monday ahead of the U.S. Federal Reserve’s rate decision later in the week, where Fed policymakers are expected to hike US interest rate by 25 basis points.


Chart Focus EUR/USD

Key Points

1. Buy EUR/USD recommendation.

2. Buy EUR/USD at 1.0840. Stop at 1.0810 and profit target at 1.0925

3. A divergent monetary policy between the ECB and the Fed is likely to aid the Euro dollar.

4. Price is likely to be supported by the previous week’s low with stochastic hinting at a price rally.

Fundamental Comments

1. The ECB is expected to hike rate by 50 basis points while the Fed is expected to hike rate by 25 basis points

2. This narrowing of interest rate differential is likely to aid the Euro.

Technical Comments

1. Price is likely to be supported by the previous week’s low.

2. Stochastic is near to the oversold zone and is hinting at a price rally ahead.



Key Levels

Support1.08351.07901.0760
Resistance1.08751.09301.0960










Technical Overview

USD/JPY – Price is consolidating in the range between 129.10 and 131.10. Stochastic is in the middle of its range and is neutral at the moment. MACD is also neutral but looks weak at the moment. Price has moved below the 20EMA, hinting at a possible bearish price 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.

Support129.10128.70128.35
Resistance129.60129.95130.30

USD/CAD – We had a buy recommendation at 1.3330 last Friday was filled when the price reached a low of 1.3298. Stochastic is in the oversold zone and is hinting at a limited downside. 20EMA is bearish and is hinting at a bearish price trend. However, MACD showing a divergence warning of a possible price low. We would recommend keeping stop at 1.3295 and profit order at 1.3410.

Support1.32951.32601.3220
Resistance1.33501.34001.3430

GBP/USD – Price moved to a low at $1.2339 last Friday but was supported by 20EMA. Stochastic is moving lower and hinting at a price decline. Price has moved up above the 20EMA and MACD has remained above the zero line. Both trend indicators are hinting at a possible bullish price trend. Currently, the price is in a sideway trend, ranging from 1.2260 to 1.2446. Unless price can move above this range, we are expecting price to trade sideways within the range in the next 24 hours.

Support1.23601.23151.2260
Resistance1.24251.24551.2490

XAU/USD – Price reached a low of $1916.59 last Friday and moved to a high at $1934.09 this morning. Stochastic is rising and hinting at a price rally. MACD is pointing up and hinting at a bullish price trend. Price has moved above the 20EMA, hinting at a change in trend. As long as the price stays above the 20EMA at $1930, we are likely to see a rally back to $1949.15 again in the next couple of days. A break below $1909.65 is likely to negate our bullish view.

Support1923.551911.301896.55
Resistance1934.701949.151958.30

EUR/JPY – We had a buy recommendation at 141.10 last Thursday which was filled. Last Friday, we had recommended lifting stop higher to 140.85 while keeping our profit order at 142.70. Price moved to a low of 140.54 this morning and triggered our stop. Stochastic is moving lower and hinting at a price decline. Price has moved below the 20EMA and MACD has remained below the zero line which both hinting at a possible bearish price trend.

Support140.50139.95139.55
Resistance140.95141.30141.75

FX Commentary – Greenback Edged Higher On Stronger U.S. GDP Data

Nicholas

Market Talk
– The U.S. dollar edged higher against the euro on Thursday after data showed the U.S. economy maintained a strong pace of growth in the fourth quarter, backing the case for the U.S. Federal Reserve to maintain its hawkish stance for longer.

– US Q4 GDP data came in better than expected, expanding by an annualized 2.9%, down from the year-on-year expansion of 3.2% in the third quarter, but still higher than Wall Street economists’ forecasts for a 2.6% growth. This is a double-edged sword for investors, as it could embolden the Fed to keep key interest rates at restrictive levels for longer.

– The Australian dollar held hefty weekly gains on Friday as markets priced in higher interest rates by the RBA. The Aussie stood at $0.7125, having gained 2.2% on the week so far to reach highs not seen since June at $0.7142. The next bull target is $0.7282, with support at $0.7063.

– The euro was 0.23% lower at $1.08895, but not far from the nine-month high of $1.09295 touched on Monday. Sterling was about flat on Friday morning against the U.S. dollar at 1.2378. Against the yen, the dollar was up 0.54% at 130.275 yen.

– Gold prices came within a hair’s breadth of $1,950 an ounce, reaching an overnight high of $1949.15, before retreating on Thursday, as bulls in the game appeared to be conserving energy for another crack at the key resistance if U.S. inflation data due in the next 24 hours turns out to be tamer than thought.

Chart Focus USD/CAD

Key Points

1. Buy USD/CAD recommendation.

2. Buy USD/CAD at 1.3330. Stop at 1.3295 and profit target at 1.3410

3. A strong set of US data and interest rate differential are both in the US dollar favour.

4. A reversal candlestick pattern and MACD are both showing signs of a potential price reversal in the making.

Fundamental Comments

1. A strong set of US data could embolden the Fed to keep key interest rates at restrictive levels for longer, aiding the US dollar.

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

Technical Comments

1. Price made a low on the 4-hourly chart with a Long Legged Doji, hinting at a possible price bottom.

2. MACD is showing divergence and hinting that price may have made a potential low.



Key Levels

Support1.33201.32751.3225
Resistance1.33551.34001.3430










Technical Overview

USD/JPY – Price reached a low of 129.10 and has bounced back up to 130.60. Stochastic is also moving higher and is hinting at a price rally. However, both MACD and 20EMA are hinting at a neutral price trend. This is supporting our view that price is likely to continue in a sideways consolidation in the next 48 hours. Unless price can move above 131.10 or go below 129.10, we are expecting price to stay within this range.

Support129.70129.10128.70
Resistance130.25130.60131.10

EUR/USD – Price continues its rally and made a new overnight high at 1.0929. However, this high was accompanied by a divergence warning from the MACD indicator, warning about a potential high in the making. Price has since declined below the 20EMA. Stochastic is declining and is hinting at a price decline ahead. MACD is neutral. We think price may have reached a high and a corrective decline to 1.0780 is likely in the next few days.

Support1.08551.08101.0765
Resistance1.08951.09301.0980

GBP/USD – Price reached a high of 1.2447 on Monday but this high was accompanied by a divergence warning from both the MACD and the stochastic indicator. After a decline to 1.2262, price has climbed up higher to 1.2430. Stochastic is near to the overbought zone and is hinting at a limited upside. Both MACD and 20EMA are neutral. We think price could be moving lower to 1.2260 again in the next few days.

Support1.23601.23151.2280
Resistance1.24051.24551.2490

XAU/USD – After reaching a high of $1949.15 overnight, price has been declining. The price decline has also broken below a rising trend channel starting from 29 Dec. Price has also moved below the 20EMA. If price fails to move above the trend channel and the 20EMA at $1932, price could be heading lower to $1900 in the next few days. A move above $1932 would negate our bearish view and hints at a price rally to $1950.

Support1919.401911.301896.55
Resistance1931.101942.101958.30

EUR/JPY – We had a buy recommendation yesterday at 141.10, which was filled when price declined to a low of 141.07 this morning. Stochastic has reached a low and has turned up, hinting that price may have reached a low and is moving higher. However, both MACD and 20EMA are weak. Price can go in either direction. We would recommend lifting stop higher to 140.85 while keeping profit target at 142.70.

Support141.05140.70140.45
Resistance141.50141.90142.30

FX Commentary – Gold Edged Higher On A Softer Greenback

Nicholas

Market Talk
– The U.S. dollar slipped against the euro on Wednesday, but its losses were capped as traders were hesitant to make any big bets ahead of next week’s central bank meetings, including the Federal Reserve and the European Central Bank.

– With much of Asia observing Lunar New Year holidays and a lack of any big U.S. data releases on Wednesday has contributed to sluggish trading conditions but there could be a big move tonight with the release of US 4Q GDP data.

– The euro edged higher at $1.0913, not far from the nine-month high of $1.0927 touched on Monday. Sterling advanced after data showed British manufacturers unexpectedly lowered their prices in December, which suggested inflation may be easing, ahead of next week’s Bank of England policy meeting.

– The greenback was down at 129.61 yen, having hit a near eight-month low of 127.21 on Jan. 16. The Australian dollar surged to a more than five-month high on Wednesday after inflation data came in hotter than expected, bolstering the case for further rate increases from the RBA. The Australian dollar was last up 0.76% to $0.7099.

– Gold reversed course to edge up on Wednesday as the greenback weakened and investors kept a close eye on a slew of upcoming U.S. economic data that could influence the Federal Reserve monetary policy meeting next week.


Chart Focus EUR/JPY

Key Points

1. Buy EUR/JPY recommendation.

2. Buy EUR/JPY at 141.10. Stop at 140.70 and profit target at 142.70

3. Divergent monetary policy and interest rate differential are both likely to aid the Euro.

4. Price is supported by the Fibonacci 38% correction point as well as the 20EMA line with MACD hinting at a bullish price trend.

Fundamental Comments

1. Divergent monetary policy is likely to aid the Euro.

2. Interest rate differential is in the Euro favour.

Technical Comments

1. Price is supported by the Fibonacci 38% correction point as well as the 20EMA line.

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



Key Levels

Support141.10140.70140.45
Resistance141.75142.25142.85










Technical Overview

USD/JPY – Price broke below the support at 129.60 but only reached a low of 129.10. Stochastic is in the oversold zone and is hinting at limited downside. MACD is also flat and neutral and is near to its zero line. The 20EMA line is also hinting at a weak price trend. Price may continue its sideways movement. There are also two strong supports at 128.00 and 127.15 that could support price and keep price inside a sideway consolidation for the next few days.

Support129.00128.40127.95
Resistance129.60130.10130.60

EUR/USD – Price continues its rally and is now close to the week’s high at 1.0927. We think price can move above this resistance to the next strong resistance at 1.1045 in the next 1-2 days. Stochastic is rising and is hinting at a price rally. The 20EMA is also hinting at a bullish price trend. However, MACD could be forming a divergence, warning of a potential price high. The rally to 1.1045 could be the final rally before a decline.

Support1.08951.08351.0790
Resistance1.09301.09801.1040

GBP/USD – Price reached a high of 1.2447 on Monday but this high was accompanied by a divergence warning from both the MACD and the stochastic indicator. After a decline to 1.2262, price has climbed up higher to 1.2417. The rally may continue higher to 1.2450 as stochastic is moving higher and hinting at a price rally. Both MACD and 20EMA are also bullish and hinting at a bullish price trend.

Support1.23801.23401.2280
Resistance1.24201.24551.2490

XAU/USD – We had a sell recommendation yesterday at $1935, but our call was wrong and we got stopped out overnight. Price rose to a high of $1949.15 and looks like it can continue to move higher. Stochastic may be in the overbought zone but is still rising and hinting at a price rally. MACD and 20EMA are both bullish and hinting at a bullish price trend. The next price resistance lies at $1958.30.

Support1939.601925.401911.30
Resistance1958.301972.501981.30

AUD/USD – Price reached a high of 0.7128 this morning but this high was accompanied by a divergence warning from the MACD indicator, hinting at a potential price high in the making. Stochastic is also in the overbought zone, hinting at a price decline. However, 20EMA remains bullish and is hinting at a bullish price trend.  We think price had reached a high and a move below 0.7055 would confirm the high and hint at a price movement to 0.6990 in the next few days.

Support0.70900.70600.7025
Resistance0.71300.71800.7230