Tag: NZD/JPY

FX Commentary – Euro Slipped to a 20-Year Low On Energy Supply And Economic Worries.

Nicholas

Market Talk
– The U.S. dollar held firm on Tuesday on safe haven flows, while the euro languished around a two-decade low as investors braced for a hard winter in Europe as it grapples with energy supply and broader economic growth concerns.

– The euro touched its lowest since late 2002 at $0.9926 overnight and was last barely higher at $0.9939. Russia will halt natural gas supplies to Europe via the Nord Stream pipe for three days at the end of the month, the latest reminder of the precarious state of the continent’s energy supply.

– The pound was also dragged to a new 2.5-year low overnight, and hobbled near that level at $1.1758 in early Asia trade ahead of flash manufacturing PMI readings out later in the day, which will provide further clarity on the growth trajectory for the UK economy.

– The Japanese yen steadied at 137.30 against the greenback, after touching a one-month low of 137.70.  The Aussie was last up 0.15% to $0.6689, while the kiwi gained 0.18% to $0.6183.

– Gold prices rose 0.1% to $1,738.62 an ounce on Tuesday after seven straight sessions of losses, but remained under pressure as growing expectations of a hawkish Federal Reserve boosted the greenback and treasury yields.


Chart Focus EUR/JPY

Key Points

1. Sell EUR/JPY recommendation.

2. Sell EUR/JPY at 136.35. Stop at 136.70 and profit target at 135.05.

3. Rise in natural gas prices and risk of a recession in Europe are weighing on the euro.

4. A Double Top chart pattern and bearish MACD and 20EMA are all hinting at a bearish price trend.

Fundamental Comments

1. Natural gas prices hitting a record closing high is adding to inflationary pressure.

2. The risk of recession in Europe due to war and inflation is weighing on the single currency.

Technical Comments

1. Price has broken below a Double Top chart pattern, hinting at a bearish price trend.

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



Key Levels

Support135.90135.40134.90
Resistance136.40136.85137.30

Technical Overview

USD/JPY – Since reaching a low last Wednesday at 133.90, price has moved up to 137.71 this morning and the rally looks exhausted. Our price target remains unchanged at 139.40 but there is likely to be a price correction first before another rally to 139.40. Stochastic has been in the overbought zone for a prolong period of time and MACD is showing a divergence. However, 20EMA is hinting at a strong bullish price trend. We see a correction to 135.75.

Support137.05136.65136.25
Resistance137.45137.95138.35

EUR/USD – The decline continues and price has reached a low of 0.9912 at the point of this writing. The decline is also showing no signs of stopping due to worries of natural gas stoppage for 3 days at the end of the month. Stochastic is in the oversold zone but 20EMA is hinting at a strong bearish price trend. MACD is also hinting at a strong bearish price trend. The next support level comes in at 0.9855.

Support0.98750.98300.9785
Resistance0.99250.99550.9990

GBP/USD – The decline continues and price has reached a low of 1.1716, which is a 2.5 year low, at the point of this writing. The decline could be coming to a temporary low as MACD is starting to show a divergence. Stochastic is also in the oversold zone but 20EMA is hinting at a strong bearish price trend.

Support1.17101.16601.1635
Resistance1.17601.17901.1840

XAU/USD – Price reached a low of $1727.70 on Monday and we have seen a price bounce to $1740 this morning. However, this could be a corrective bounce and we think price is likely to be capped at the resistance at $1745. From this resistance point, we see another decline to $1700 in the next few days. Stochastic is rising from the oversold zone hinting at a price rally. But 20EMA and MACD are hinting that the rally is likely to be a corrective rally.

Support1727.701713.351698.80
Resistance1740.201757.951771.30

NZD/JPY – Yesterday, we had a buy call at 84.65 but it was not filled. Price had dropped to a low of 84.63 but that was the bid price. The lowest offer price was 84.67 and that was why our order was not filled. Stochastic continues to rise and to hint at a bullish price trend. However both MACD and 20EMA has turned neutral at the moment. We remains bullish for 86.00 but a break of 84.35 would negate our bullish view for the next few days.

Support84.6584.1083.75
Resistance85.1585.5085.95

FX Commentary – US Dollar At 5-Week High On Hawkish Fed Officials Comments

Nicholas

Market Talk
– The US dollar index hit a five-week high as hawkish comments from several Fed officials suggested that the central bank was likely to commit to raising interest rates at a sharp clip to combat overheated inflation.

– The greenback climbed as high as 137.40 yen, the strongest since July 27 after benchmark 10-year U.S. Treasury yields rose above 3% in Tokyo trading on Monday for the first time since July 21. The U.S. dollar rose as high as 6.8308 yuan in onshore trading after the People’s Bank of China cut the one- and five-year loan prime rates.

– The euro was struggling at $1.0030 after losing 2.2% last week. The single currency sank to a new five-week trough after Russia announced a three-day halt to European gas supplies via the Nord Stream 1 pipeline at the end of this month, exacerbating the region’s energy crisis.

– Sterling fell to $1.1805, nearing Friday’s five-week low of $1.1791. The Aussie was little changed at $0.6876 after sliding to $0.6859 on Friday for the first time since July 19. The kiwi was flat at $0.6170 after declining to $0.6167 at the end of last week, also a first since July 19.

– Gold prices slipped further on Monday to $1747.50 as uncertainty over the Federal Reserve’s path of monetary tightening persisted as the bullion’s appeal waned with a stronger dollar and more U.S. interest rate hikes on the horizon.

Chart Focus NZD/JPY

Key Points

1. Buy NZD/JPY recommendation.

2. Buy NZD/JPY at 84.65. Stop at 84.35 and profit target at 86.10.

3. Divergent monetary policy and interest rate differential are both against the Japanese yen.

4. Price is supported by the Fibonacci 50% correction point with MACD hinting at a bullish price trend.

Fundamental Comments

1. Interest rate differential is in the New Zealand dollar’s favour.

2. Divergent monetary policy between the two central banks are likely to increase the interest rate differential between the two countries.

Technical Comments

1. Price has reached the Fibonacci 50% correction point with a divergence, hinting at a possible low at the Fibonacci 50% correction point.

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



Key Levels

Support84.8084.4584.10
Resistance85.1585.5085.95

Technical Overview
USD/JPY – Price rallied past previous high at 135.55 on Friday and has reached a high of 137.43 this morning. Stochastic is in the overbought zone and is hinting at a limited upside. MACD and 20EMA are both bullish and are hinting at a bullish price trend. As long as price stays above the previous high at 135.55, price could be on its way to 139.40 but we could see a corrective decline to 135.95 first before the rally.

Support136.95136.40135.85
Resistance137.45137.95138.40

EUR/USD – Price reached a low of 1.0222 and this low was accompanied by a divergence warning from the MACD indicator. Stochastic is in the oversold zone but both MACD and 20EMA are hinting at a strong bearish price trend. There was also a bullish Engulfing candlestick price pattern on the 4-hourly chart. We think there could be a corrective rally ahead with price likely to move higher to the 20EMA resistance at 1.0090.

Support1.00200.99900.9950
Resistance1.00551.00951.0125

GBP/USD – Price reached a low of 1.1791 on Friday and this could be a temporary low. Stochastic is in the oversold zone but both MACD and 20EMA are hinting at a strong bearish price trend. We could see a corrective rally to 1.1900 before another decline below 1.1791 in the next couple of days ahead. Only a move above the 20EMA resistance line at 1.1925 would negate our bearish view.

Support1.17901.17501.1700
Resistance1.18401.18951.1925

XAU/USD – Price was capped by the 20EMA at $1782 last Wednesday and we saw a decline to the low this morning to at $1742.50. Price has moved past the Fibonacci 50% correction point of the previous rally from rally from $1680 to $1807. We are likely to see price move lower to the Fibonacci 62% correction point at $1730 in the next 24 hours. Stochastic is in the oversold zone but both 20EMA and MACD are both hinting at a strong bearish price trend.

Support1730.251718.951705.70
Resistance1745.051759.051772.55

EUR/JPY – Last Friday, we had a buy call at 137.30 which was filled. Price had also dipped to a low of 136.85, triggering our stop at 136.95. We lost 35 pips on this trade. However our view remains bullish. Price is back near to last Friday’s high and we are expecting price to break above this high to 138.30 in the next couple of days.  MACD and 20EMA remains bullish while stochastic is neutral at the moment.

Support137.45136.85136.35
Resistance137.95138.40138.75

FX Commentary – Talks Of Higher Interest Rate Send US Dollar Higher.

Nicholas

Market Talk

– The dollar was up on Wednesday morning in Asia as it tried to extend a rally on Wednesday as chatter about the possibility of higher U.S. interest rates and a sell-off in tech stocks soured risk sentiment to the benefit of the safe-haven US dollar.

– One drag for the dollar was the U.S. trade deficit, which expanded to a record $74.4 billion in March. Investors await economic data like U.S. PMI and ADP National Employment Report, both due later in the day for clues to the greenback direction.

– Trade was limited in Asia with the Japanese and Chinese markets closed for a holiday. A selloff in tech stocks overnight soured risk appetite and gave the safe-haven U.S. currency an additional boost.

– The New Zealand dollar was boosted by stronger-than-expected local employment data, including employment change that grew 0.6% quarter-on-quarter during the first quarter of 2021.

– Gold was down on Wednesday morning in Asia as investors digested U.S. Treasury Secretary Janet Yellen’s comments that interest rate hikes might be needed to stop the economy overheating due to U.S. President Joe Biden’s spending plans.

Chart Focus USD/JPY
Key Points
1. Buy USD/JPY recommendation.
2. Buy USD/JPY 109.20. Stop at 108.85 and target at 109.95.
3. Talks of higher U.S. interest rates and a sell-off in tech stocks has soured risk sentiment to the benefit of the safe-haven US dollar.
4. Price is supported by a bullish 20EMA line and momentum indicators are hinting of a bullish price trend ahead.

Fundamental Comments
1. Talk of higher U.S. interest rates is aiding the US dollar.
2. A sell-off in tech stocks soured risk sentiment and is aiding the safe-haven US dollar.

Technical Comments
1. Price has been supported by the 20EMA and is likely to be supported by the 20EMA line.
2. MACD remains bullish and Stochastic has a bullish crossover and is hinting of a bullish price trend.

Key Levels

Support109.20108.85108.45
Resistance109.50109.95110.40

Technical Overview

XAU/USD – Yesterday, we had a buy call at $1780 but price only reached a low of $1780.57 before moving higher to $1798.70. Price had a sharp decline from the high and dropped to a low $1770.69, filling our entry order and taking out our stop as well. MACD is bearish and 20EMA is also hinting of a bearish price trend. Stochastic is near to the oversold zone. We think the 20EMA is likely to cap price at $1780 and we are likely to see a return to $1755 again in the next few days ahead.

Support1770.701755.901747.20
Resistance1783.651798.701813.45

EUR/USD – Price had again declined to 1.2000 support zone, which forms a critical support zone from 1.1990 to 1.2000. If price fails to hold this support zone, we are likely to see 1.1945 in the next couple of days. Ability to hold above this support zone is likely to keep the uptrend intact and call for a test of 1.2150. Watch the support zone for clue to the next direction.

Support1.19901.19451.1915
Resistance1.20351.20751.2115

GBP/USD – Since last Friday’s decline, price has been in a large consolidation with 1.3800 as the base and the high of 1.3930 acting as a resistance. Stochastic has reached the oversold zone and MACD is flat and neutral near to the zero line. 20EMA is also not showing a trend. We think this range consolidation is likely to continue again for today. Watch the range breakout for clue.

Support1.38801.38401.3800
Resistance1.39201.39501.3980

USD/CAD – We had a buy recommendation at 1.2280 from Friday and yesterday, we had shifted stop higher to 1.2260 while keeping profit order unchanged at 1.2365. Yesterday we saw a price rally to 1.2350 but price was unable to sustain and had declined to 1.2283. MACD is turning bullish but 20EMA is flat and neutral. We would keep our stop and profit orders unchanged for another day.

Support1.22601.22001.2145
Resistance1.23151.23501.2385

NZD/JPY – We had a buy call on this pair on Monday but yesterday, price turned lower and our stop at 78.05 was triggered. We lost 35 pips was a result. Stochastic has a bullish crossover and is turning higher but both MACD and 20EMA are hinting of a bearish price trend ahead. If price is unable to move above the 20EMA resistance at 78.40, we are likely to see another test of 77.70.

Support78.1577.7077.45
Resistance78.4078.7579.15

FX Commentary – US Dollar Softer After ISM Data

Nicholas

Market Talk

– The dollar nursed losses on Tuesday after an unexpected slowdown in U.S. manufacturing growth prompted investors to trim bets that a booming U.S. economy that could boost the greenback.

– Data showed shortages of basic materials and transport snarls depressed the Institute for Supply Management manufacturing survey by 4.7 points to 64.7, sending the greenback tumbling from a three-week peak on the yen and a two-week high on the euro.

– Benchmark ten-year U.S. Treasury yields fell 2.5 basis points 1.578% on Monday following the ISM miss and  Powell’s comment that the U.S. economy is gradually recovering from the COVID-19, but is “not out of the woods yet.

– Sterling was perched near a week-high on the euro and had overnight punched through its 20-day moving average against the dollar to sit at $1.3905 as traders reckon the Bank of England may announce a slowdown of its bond purchases at its Thursday meeting.

– Gold was down on Tuesday morning in Asia, after hitting an over two-month high of $1797.75 during the previous session, as the dollar recovered and investors digested U.S. Federal Reserve Chairman Powell’s optimistic comments on the economy.

Chart Focus XAU/USD
Key Points
1. Buy Gold recommendation.
2. Buy Gold at $1780. Stop at $1770.90 and target at $1798.00.
3. Declining US benchmark yields and lower expectations of US economic growth are both likely to weigh on the US dollar.
4. Price is likely to be supported by the 20EMA and MACD is hinting of a bullish price trend

Fundamental Comments
1. Benchmark ten-year U.S. Treasury yields retreated on a weaker ISM data is likely to weigh on the US dollar.
2. Lower expectations of US economic growth is likely to weigh on the US dollar.

Technical Comments
1. Price is likely to be supported by the 20EMA as well as a previous support level.
2. MACD remains bullish and is hinting of a bullish price trend.

Key Levels

Support1783.651771.501755.90
Resistance1791.351797.951813.45

Technical Overview

USD/JPY – Price broke above to the Fibonacci 62% correction point at 109.63 to reach a high of 109.69 on Monday but has declined to 108.89. The decline was halted by the 20EMA and price has since moved higher to 109.26. As long as price stays above the 20EMA, we are likely to see a test of the previous high at 109.69 again. MACD and 20EMA remain bullish supporting our bullish view.

Support109.00108.70108.40
Resistance109.35109.70110.00

EUR/USD – Price had declined to 1.2010 on Monday morning which is near to a critical support zone from 1.1990 to 1.2000. Price managed to move above this support but the rally was capped by the 20EMA and Fibonacci 50% correction point at 1.2075. MACD and 20EMA remain bearish while Stochastic remains weak. We think price is likely to hold below 1.2075 and test the low of 1.1990 again in the next 48 hours.

Support1.20151.19901.1945
Resistance1.20451.20751.2115

GBP/USD – Price reached a low of 1.3800 on Monday morning and has since rallied to 1.3931. There is a possibility that 1.3800 could be part of a bigger correction as MACD remains bearish but Stochastic is rising after a bullish crossover. 20EMA is neutral at the moment. Price could go either way today and we would prefer to stay aside for today wait for a better and clearer direction.

Support1.38551.38001.3755           
Resistance1.38901.39351.3975

USD/CAD – We had a buy recommendation at 1.2280 from Friday and yesterday, we had shifted stop higher to 1.2260 while keeping profit order unchanged at 1.2365. We would recommend keeping order unchanged for today. MACD is moving higher but remains in the bearish zone. Stochastic is also trying to move higher from the oversold zone. 20EMA remains bearish.

Support1.22601.22001.2145
Resistance1.23151.23501.2385

NZD/JPY – Our buy call yesterday at 78.40 was filled when price declined to a low of 78.29. MACD has turned bearish but Stochastic has a bullish crossover and is moving higher, hinting of a bullish price trend ahead. 20EMA has turned bearish. Indicators we used are mixed at the moment and we will keep to our view as well as stop and profit orders from yesterday unchanged.

Support78.3077.9577.60
Resistance78.6578.9079.15

FX Commentary – US Dollar Stronger on Upbeat U.S. Consumption Data

Nicholas

Market Talk

– The dollar was up on Monday morning in Asia, making a cautious start to the week and the month of May, as investors await a slew of central bank decisions and U.S. economic data, to be released throughout the week, for clues on the global inflation outlook and policymakers’ responses.

– Trade was thinned by holidays in Japan and China, which kept a lid on volatility, leaving the greenback to trade where it settled after Friday’s leap based on strong US consumption data.

– Data on Friday showed U.S. consumer spending rebounded in March amid a surge in income as households received additional COVID-19 pandemic relief money from the government.

– The Chinese Yuan drifted lower to 6.4781 per dollar in offshore trade following hawkish remarks from U.S. Secretary of State Antony Blinken. The Aussie dollar inched up to 0.7720 after a better than expected Australian data.

– Gold was up on Monday morning in Asia, with a weaker US dollar giving the yellow metal a shine on the first trading day of May. Investors also await further U.S. economic data later in the week for clues to the next direction.


Chart Focus NZD/JPY
Key Points
1. Buy NZD/JPY recommendation.
2. Buy NZD/JPY at 78.40. Stop at 78.05 and target at 79.60.
3. An earlier recovery from coronavirus pandemic and interest rate differential are both aiding the NZ dollar.
4. A bounce from the Fibonacci 50% correction point and bullish momentum reading are both hinting of a bullish price trend ahead.

Fundamental Comments
1. The NZ economy has recovered earlier from the coronavirus pandemic compared to Japan and an earlier re-opening bode well for its economy.
2. Interest rate differential is against the Japanese yen.

Technical Comments
1. Price has bounced from the Fibonacci 50% correction point, hinting of a bullish price trend.
2. Stochastic and MACD are both about to turn up, hinting of a bullish price trend.

Key Levels

Support78.4078.0577.70
Resistance78.8079.1579.60

Technical Overview

USD/JPY – Price broke above to the Fibonacci 50% correction point at 109.20 on Friday and has reached the Fibonacci 62% correction point at 109.63. Stochastic has reached the overbought extreme but MACD remains bullish. However, MACD could be forming a divergence warning. 20EMA is also bullish and hinting of a bullish price trend. Inability to move above 109.70 is likely to send price lower to 107.50.

Support109.30108.95108.65
Resistance109.70109.95110.40

EUR/USD – Price has declined to 1.2010 this morning which is near to a critical support zone from 1.1990 to 1.2000. Stochastic is into the oversold zone and a bullish crossover could be forming. However MACD remains bearish and 20EMA is also hinting of a bearish price trend. We are likely to see a rally to 1.2060-1.2070 area but if price is capped at 1.2070, we could be heading lower to 1.1990 again

Support1.19901.19451.1910
Resistance1.20451.20901.2135

GBP/USD – We had a long position from last Monday at 1.3885 and on Friday, we had recommended to bring stop higher to 1.3920 while keeping profit target at 1.3995. Stop was triggered on Friday at 1.3920 but we still managed to make 35 pips on this trade. Price has declined to a low of 1.3799 this morning and we are expecting price to move lower to 1.3715 in the next few days.

Support1.37901.37551.3715
Resistance1.38351.38801.3920

XAU/USD – Last Friday, price moved within the previous Thursday’s range in an Inside Day chart pattern. For today, we are expecting price to stay within last Thursday’s range in a consolidation. Stochastic is close to the overbought extreme but MACD remains bullish and is hinting of a bullish trend. 20EMA is also hinting of a bullish price trend. Watch the breakout of Thursday’s range for clues to the next directional movement.

Support1765.351755.901748.80
Resistance1779.951788.901797.85

USD/CAD – We had a buy recommendation at 1.2280 which was filled when price declined to a low of 1.2265. Price has moved higher this morning above 1.2300 and our view remains unchanged. Stochastic is moving higher and MACD is bullish and moving higher as well. 20EMA has also turned bullish. We would recommend bringing stop higher to 1.2260 while keeping profit target at 1.2365.

Support1.22651.22401.2200
Resistance1.23151.23501.2385