– The U.S. dollar fell across the board on Wednesday, weighed down by firmer commodity currencies that benefited from China’s strong manufacturing activity data. U.S. manufacturing activity contracted for a fourth straight month in February, adding weight on the US dollar.
– China’s yuan rose after data showed Chinese manufacturing activity and non-manufacturing activities expanded at its fastest pace in a decade. The Kiwi surged 1% to $0.6248, while the Aussie rose to 0.6752.
– The euro climbed 0.8% to $1.0660, boosted by the German inflation report. German consumer prices rose more than anticipated and pushed up European Central Bank rate hike expectations after the data pointed to no let-up in stubborn cost pressures.
– Sterling traded little changed on the day at $1.2016, after Bank of England Governor Andrew Bailey said it was possible the central bank had already come to the end of its rate-rising cycle. The Japanese yen was little changed at $136.20.
Gold prices hovered at an over one-week high on Thursday as a February rally in the U.S. dollar appeared to have run out of steam, benefiting the yellow metal. Spot Gold hovered around $1837.35 an ounce.
Chart Focus NZD/USD
1. Buy NZD/USD recommendation.
2. Buy NZD/USD at 0.6210. Stop at 0.6180 and profit target at 0.6310.
3. A strong China PMI data and a weak U.S. manufacturing activity are aiding the Kiwi.
4. Price is likely to be supported by the 20EMA line with MACD hinting at a bullish price trend.
1. A strong China PMI is aiding the Kiwi.
2. A weak U.S. manufacturing activity is weighing on the US dollar.
1. Price is likely to be supported by the 20EMA line.
2. MACD remains bullish and is hinting at a bullish price trend.
USD/JPY – Price reached a low of 135.22, which was just below the support at 135.35. Price is likely to test the previous high at 136.90 and a move above this point is likely to send price higher to 137.70. Stochastic is hinting at a price rally but MACD is warning of a potential price high in the making. 20EMA is hinting at a price rally. We think price is likely to move up to 137.70 in the next couple of days.
EUR/USD – Price reached a high of 1.0691 overnight and has been on a decline. 20EMA line has a support at 1.0620 and if price can stay above this line, we are likely to see another rally to the previous high at 1.0691. However, a move below this support is likely to send price lower to 1.0560 in the next couple of days. Stochastic is hinting at a price decline but both MACD and 20EMA are hinting at a price rally.
GBP/USD – The overnight rally was capped by the falling 20EMA line at 1.2020 and we are likely to see a continuation of the decline to 1.1920 in the next 1-2 days. Stochastic is hinting at a price decline. 20EMA and MACD are both hinting at a bearish price trend. All the 3 indicators are supporting the bearish price view. A move above the 20EMA line at 1.2020 would negate our bearish view.
XAU/USD – Price is currently moving back towards the 20EMA line at $1828.55 after reaching a high of $1844.20 in the previous trading day. Stochastic is hinting at a price decline but both MACD and 20EMA are hinting at a bullish price trend. We think price should be able to stay above the 20EMA line support at $1828.30 and test the overnight high of $1844.20 in the next 48 hours. Below $1828.30 would hint at a move to $1804.50.
USD/CNH – Price reached a low of 6.8630 overnight and we are currently seeing a rally towards the 20EMA line at 6.9175. Price is likely to be capped by either the 20EMA line or the Fibonacci 50% correction point at $6.9260. We are likely to see a decline from this location back to 6.8630 or lower to 6.8540. Stochastic is hinting at a price rally but both 20EMA and MACD are hinting at a price decline.