Tag: EURJPY

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 – U.S. Dollar Pushed To New Highs on Back Of Fed’s Hike and Hawkish Message.

Nicholas

Market Talk
– The U.S. dollar pushed to a fresh two-decade high versus major peers on Thursday, propelled by the Federal Reserve’s hawkish outlook for interest rates and Russian President Vladamir Putin’s mobilization of more troops for the war in Ukraine.

– The Fed issued new projections showing rates peaking at 4.6% next year with no cuts until 2024 after raising its target interest rate range by another 75 basis points overnight to 3.00%-3.25%, as was widely expected.

– The Bank of Japan maintained ultra-low interest rates and dovish policy guidance on Thursday, as it seeks to reassure markets that it will continue to swim against a global tide of central banks tightening monetary policy to combat soaring inflation.

– The euro weakened to a new 20-year trough of $0.9807, weighed down by hawkish Fed and Putin announcement on calling up reservists to fight in Ukraine and said Moscow would respond with the might of its entire vast arsenal if the West pursued what he called its “nuclear blackmail” over the conflict there.

– Sterling fell to a fresh 37-year low of $1.1225, and last changed hands at $1.1233, a 0.3% decline from the previous session. The Bank of England also announces policy on Thursday, with markets split on whether a 50 or 75 basis point hike is in the offing.

– Spot Gold fell 0.3% to $1,659.56 an ounce, weighed down by an interest rate hike and hawkish message from the Federal Reserve.

– There will be no FX commentary tomorrow. Update will resume on Monday, 26 September.

Chart Focus EUR/JPY

Key Points

1. Sell EUR/JPY recommendation.

2. Sell EUR/JPY at 142.95. Stop at 143.30 and profit target at 141.60.

3. A prolong war in Ukraine is likely to weigh on the euro and aid the safe haven yen.

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

Fundamental Comments

1. Putin threat and a prolong war in Ukraine is likely to weigh on the Euro.

2. War in Ukraine is likely to benefit the safe haven yen.

Technical Comments

1. Price is likely to be capped by the 20EMA.

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


Key Levels

Support142.30141.75141.05
Resistance142.95143.55144.00

Technical Overview

USD/JPY – Price broke above the high at 144.99 and moved to 145.38. Price has since moved back towards 144.95 and we think this support is likely to hold and another test of the high at 145.38 is likely in the next 24 hours. Stochastic is in the overbought zone but 20EMA is hinting at a strong bullish price trend. MACD is also bullish and hinting at a bullish price trend. Only a move below 144.40 would negate our bullish view.

Support144.40143.95143.40
Resistance145.00145.40146.00

EUR/USD – Price broke below the previous low at 0.9865 and moved to a low of 0.9807. Stochastic is in the oversold zone and is hinting at a limited downside. However, 20EMA is pointing down with a steep slope and hinting at a strong bearish price trend. MACD is also bearish and hinting at a bearish price trend. As long as price stays below 0.9865, we are likely to see another test of the low at 0.9807 and a possible decline to 0.9765.

Support0.98050.97650.9705
Resistance0.98650.99050.9955

GBP/USD – Price broke below previous low yesterday and moved to a new 37-year low at 1.1225. We are likely to see the decline continues to the next price support at 1.1150 in the next 1-2 days.  A move above 1.1355 would negate our bearish view. Stochastic is in the oversold zone but 20EMA is pointing down with a steep slope and is hinting at a strong bearish price trend. MACD remains bearish and is hinting at a bearish price trend.

Support1.11901.11501.1100
Resistance1.12551.13051.1350

XAU/USD – Price tested the previous week’s low at $1653.90 overnight and managed to hold above this support. However, MACD is hinting at a bearish price trend. 20EMA is also hinting at a bearish price trend. Stochastic is neutral at the moment. We think price is likely to break below the previous week’s low at $1653.90 in the next few days. We see price going lower to $1643.90 in the next 48 hours.

Support1653.901643.901631.80
Resistance1664.251680.201692.25

USD/CHF – We had a buy call at 0.9655 overnight but price declined to a low of 0.9618 overnight and our stop was triggered. We lost 35 pips on this trade. However, our view remains unchanged. We are looking for a rally to 0.9750 in the next few days. Stochastic is rising and is hinting at a price rally. 20EMA is also supporting price and hinting at a price rally. MACD is also bullish.

Support0.96200.95850.9555
Resistance0.96650.96950.9730

FX Commentary – Yen Strengthened On Talks Of Intervention.

Nicholas

Market Talk
– The US dollar stood near recent peaks on Thursday as markets increased bets the Fed has more work to do in its aggressive tightening streak to curb red-hot inflation, while wariness of intervention kept the yen steady.

– U.S. producer prices fell for a second straight month in August as the cost of gasoline declined further, data showed on Wednesday, though that seemed cold comfort after Tuesday’s data already dashed hopes of cooling consumer prices.

– The Japanese currency hovered at 143.02 in Asia riding a boost from the strongest hints yet of possible market intervention by Japanese authorities. The kiwi jumped 0.2% to $0.6012, as official data showed gross domestic product (GDP) rose 1.7% in the June quarter, beating forecasts of a 1.0% gain

– The euro slipped 0.06% to $0.9972 despite some help from European Central Bank policymaker Francois Villeroy de Galhau who said on Wednesday that the bank’s neutral rate, estimated as below or close to 2% in nominal terms, could be reached by the end of the year. Sterling was down 0.05% to $1.1536.

– Gold prices slipped below the key $1,700 per ounce level, as expectations for steep rate hikes from the U.S. Federal Reserve took some sheen off the non-yielding precious metal.


Chart Focus GBP/USD

Key Points

1. Sell GBP/USD recommendation.

2. Sell GBP/USD at 1.1540. Stop at 1.1575 and profit target at 1.1460.

3. Expectation of an aggressive tightening by the Fed and an increase in US Treasury yields are both aiding the US dollar

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

Fundamental Comments

1. Expectation of an aggressive tightening by the Fed is aiding the US dollar.

2. An increase in US Treasury yield is also aiding the US dollar.

Technical Comments

1. Price is likely to be capped by the 20EMA, which is also hinting at a bearish price trend.

2. MACD is turning down which is a hint of a bearish price trend.



Key Levels

Support1.15001.14601.1405
Resistance1.15451.15751.1620

Technical Overview

USD/JPY – Price was again capped by the resistance at 144.99 and turned lower overnight. The decline reached 142.54 and we think this could be a low. Another rally is likely to bring price up to 144.99 again in the next 48 hours. 20EMA is hinting at a bullish price trend. Stochastic is turning up and is hinting at a bullish price trend. MACD is also bullish. Only a move below 142.50 would negate our bullish view for the next 1-2 days.

Support143.25142.75142.20
Resistance143.90144.40144.95

EUR/USD – The rally overnight was capped by the 20EMA and price has turned down again, reaching the lowest point this week at 0.9954. We think price will break below this support. We think price will go lower to the previous week low at 0.9863 again in the next 1-2 days. Stochastic is in the oversold zone but 20EMA is hinting at a strong bearish price trend. MACD is also hinting at a bearish price trend.

Support0.99500.99100.9865
Resistance1.00001.00551.0085

AUD/USD – Price reached a low of 0.6704 overnight, just above the previous week’s low of 0.6698. We are expecting price to be capped by the resistance at 0.6770. From this resistance, we are expecting price to decline past the previous week low of 0.6698 to 0.6647 in the next few days. Stochastic is rising from the oversold zone but is weak. Both 20EMA and MACD are hinting at a strong bearish price trend.

Support0.67350.66950.6650
Resistance0.67700.68150.6860

XAU/USD – Price broke below the low of 1 September 2022 at $1688.50 this morning. We are expecting the decline to continue lower to the 3 July low at $1674.75 in the next 48 hours. Stochastic is in the oversold zone but 20EMA is hinting at a strong bearish price trend. MACD is also hinting at a bearish price trend. We prefer to go with the trend indicators. Only a move above $1708 would negate our bearish view.

Support1680.701674.751665.15
Resistance1697.351708.251719.95

EUR/JPY – We had a sell call yesterday at 143.75 but price only reached a high of 143.56 and our entry order was not filled. Price declined to a low of 142.28 overnight and there was a Hammer candlestick price pattern hinting at a possible price low. Stochastic is also turning up from the oversold zone but both 20EMA and MACD are both hinting at a bearish price trend. We think price is likely to rally to 143.50 again in the next 24 hours.

Support142.75142.30141.75
Resistance143.15143.75144.45

FX Commentary – US Dollar Stronger On Imminent US Rate Hikes

Nicholas

Market Talk
– The US dollar was up on Thursday morning in Asia, hitting multi-week highs against other major currencies after U.S. Federal Reserve chair hinted at imminent interest hikes beginning in March after the Fed left interest rate unchanged at 0.25% in its FOMC meeting last night.

– Powell signaled a sustained battle to curb high inflation, saying there was “quite a bit of room to raise interest rates without threatening the labour market” and that the Fed would likely begin hiking interest rates in March 2022.

– The euro was sold to a six-week low of $1.1215. The yen inched a fraction lower to 114.74 per dollar on Thursday. Sterling is testing support at $1.3454, as investors keep an eye on the turmoil enveloping Prime Minister Boris Johnson, who is under pressure after attending parties during lockdowns.

– The Australian dollar fell about 0.4% to a seven-week trough of $0.7076. The New Zealand dollar headed for a sixth consecutive session of selling and touched an almost 15-month low of $0.6626, despite data showing inflation there running at a 30-year high.

– Gold extended losses, falling the most in two months as the US dollar and Treasury yields bounced after U.S. Federal Reserve Chairman Jerome Powell signalled a shift away from pandemic-era economic support measures, with the central bank on course for a March interest rate hike.

Chart Focus EUR/JPY

Key Points

1. Buy EUR/JPY recommendation.

2. Buy EUR/JPY at 128.70. Stop at 128.40 and profit target at 129.40.

3. An improvement in risk sentiment and interest rate differential are both weighing on the safe haven yen.

4. Price was supported at an important level with an MACD divergence warning of a potential low.

Fundamental Comments

1. An improvement in risk sentiment is weighing on the safe haven yen.

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

Technical Comments

1. Price correction was supported by the Fibonacci 62% correction point, hinting at an end of the correction.

2. MACD has a divergence warning of a potential price low and a reversal.



Key Levels

Support128.50128.20127.80
Resistance129.00129.45129.75

Technical Overview

USD/JPY – A possible Double Bottom chart pattern could be forming after price hit a low of 113.47 for a second time on Monday. Price is moving higher and this morning, we saw price hit a high of 114.78. Confirmation of this chart pattern will come if price were to move above 115.05. Stochastic is in the overbought zone. MACD and 20EMA are both bullish and hinting at a continuation of the price rally.

Support114.45114.10113.80
Resistance114.80115.10115.45

EUR/USD – Price reached an overnight low of 1.1262 on the back of the FOMC meeting and Powell’s comments. Stochastic is still declining and hinting at a bearish price trend. MACD remains bearish and is hinting at a bearish price trend. 20EMA is pointing lower with a steep slope, which is a hint of a strong bearish price trend. We think the decline could continue lower to 1.1185 in the next 24 hours.

Support1.11851.11451.1100
Resistance1.12251.12651.1315

GBP/USD – Yesterday, we had a sell call at 1.3530 but the entry order was not filled as price only reached a high of 1.3524, missing our entry by 6 pips. Price had declined to 1.3430 this morning and we are like to see a continuation of the decline to 1.3390. Stochastic is declining, hinting at a price decline. MACD remains bearish but could be developing a divergence warning. 20EMA is pointing lower with a steep slope, which is a hint of a strong bearish price trend.

Support1.34051.33501.3295
Resistance1.34451.34901.3525

XAU/USD – After reaching a high of $1853 on Tuesday, price has been on a decline. We have reached a low of $1811.75 this morning and the decline is likely to continue to $1805.60 in the next 24 hours. Stochastic is still on the decline, confirming our view of a price decline. MACD remains bearish and is hinting at a bearish price trend. 20EMA is bearish and hinting at a bearish price trend as well.

Support1805.601794.101783.15
Resistance1816.201828.051838.55

AUD/USD – We had a sell order which was filled on Tuesday at 0.7165 and yesterday, we had left stop at 0.7195 and profit order at 0.7090. Our profit order was filled this morning and we are out of this position with a profit 75 pips. Stochastic is declining after a bearish crossover, which is a hint of a bearish price trend ahead. MACD and 20EMA remain bearish and hinting at a bearish price trend.

Support0.70500.69900.6950
Resistance0.70900.71300.7170