Tag: NZD/USD

FX Commentary – Greenback Boosted By Position Squaring Ahead of NFP

Nicholas

Market Talk
– The U.S. dollar advanced on Wednesday, recovering from two-month lows hit in the previous session, as investors lightened their short positions to book profits ahead of the all-important U.S. non-farm payrolls report on Friday.

– Overnight, the ADP National Employment report showed U.S. private employers hired fewer workers than expected in March, suggesting a cooling labour market. The jobs data supported the view that the Federal Reserve may not need to raise rates much further.

– The greenback posted its third daily loss against the yen to 131.15 as Treasury yields extended their decline. The euro edged up to 1.0970 while sterling was last trading at 1.2455, down 0.35% on the day.

– The New Zealand dollar rose 0.1% versus the greenback to $0.6316, rallying by as much as 1.1% to a two-month high of $0.6379 after the Reserve Bank of New Zealand unexpectedly raised interest rates by 50 bps to a more than 14-year high of 5.25%.

– Gold touched its highest in one year as recent U.S. economic data fanned fears of a slowdown and spurred bets the Federal Reserve may ease up on rate hikes. Gold was last trading at $2013.50.

Chart Focus USD/CHF

Key Points

1. Sell USD/CHF recommendation.

2. Sell USD/CHF at 0.9090. Stop at 0.9125 and profit target at 0.9005

3. Weak US job data and views that the Fed is near the end of its monetary tightening cycle is likely to weigh on the US dollar.

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

Fundamental Comments

1. Weak US job data is likely to weigh on the U.S. dollar.

2. Views that the Federal Reserve is near the end of its monetary tightening cycle is likely to weigh on the US dollar

Technical Comments

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

2. MACD is bearish and is hinting at a price decline










Technical Overview

USD/JPY – We had a sell recommendation yesterday at 132.10 but price did not reached our entry price. Price only reached a high of 131.77 and declined to 130.59 overnight. The low was below the Fibonacci 62% correction point of the rally from 129.63 to the high at 133.75.  Stochastic and MACD are both hinting at a price rally. However, 20EMA is hinting at a strong bearish price trend. We think there could be a corrective rally to 131.70 in the next 24 hours.

Support130.95130.60130.05
Resistance131.50132.20132.85

EUR/USD – The overnight decline off the high at 1.0972 had moved below the 20EMA line, hinting at a bearish price trend. However, price is currently being supported by a previous support level. If price can hold above this support level, we can see a test back to the previous high at 1.0972. If price fails to hold above this support, we are likely to see a price decline to 1.0785. We prefer the bullish view.

Support1.08851.08451.0785
Resistance1.09301.09751.1030

GBP/USD – Price had reached a high of 1.2524 on Tuesday and declined to the 20EMA support at 1.2435 overnight. MACD is hinting at a price rally in the next 24 hours. 20EMA is also hinting at a price rally. However, stochastic is hinting that the decline may not be over as yet. We prefer to go with the MACD and we think price is likely to be support at 1.2435 and we are likely to see a rally to 1.2525 again in the next 24 hours.

Support1.24351.23801.2330
Resistance1.24851.25251.2580

XAU/USD – Price broke out of a triangle chart pattern on Tuesday and reached a overnight high of $2032.16. We think price is likely to continue higher but in the next 24-48 hours, we are likely to see a corrective decline back to the 20EMA line $2003 or the Triangle support at $19935. Stochastic is hinting at a price decline but both MACD and 20EMA are hinting at a bullish price trend.

Support2003.20.1990.451976.80
Resistance2021.202032.202049.70

NZD/USD – Price had risen to a high of 0.6375 yesterday after an unexpected 50 basis points hike by the RBNZ. The rally failed to sustain and we have seen a price decline below the 20EMA at 0.6295. We are likely to see a continuation of this decline to 0.6205 in the next 48 hours. Stochastic is hinting at a price decline. MACD is also hinting at a possible price decline while 20EMA has already turned down.

Support0.62700.62350.6180
Resistance0.63050.63500.6375

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 – US Dollar Was Little Changed As Investors Weigh Inflation Against Banking Fallout.

Nicholas

Market Talk
– The U.S. dollar traded little changed on Tuesday after strong consumer price data revived the likelihood that the Federal Reserve will hike interest rates next week as fears of turmoil spreading in the banking sector faded.

– U.S. data released overnight showed the Consumer Price Index rose 0.4% last month after accelerating 0.5% in January. In the 12 months through February, the CPI increased 6.0%, a slower pace than the 6.4% annualized gain in January, but still far off the Fed’s 2% target.

– The euro edged up to $1.0739, ahead of a ECB monetary policy meeting on Thursday, which is expected to hike interest rate by 50 basis point.  Sterling was down 0.05% at $1.2175 after jumping 1.22% on Monday. Data on Tuesday showed UK pay growth slowed in the three months to January.

– The Japanese yen weakened to 134.13 per dollar. The Australian and New Zealand dollars were buoyant on Wednesday after China’s latest economic data confirmed activity was recovering from pandemic damage

– Gold prices edged lower on Wednesday after falling from a six-week high in the prior session, as a mixed reading on U.S. inflation brewed some uncertainty over the Federal Reserve’s stance on monetary policy, while concerns over a banking crisis in the country persisted, helping to limit bullion loss.


Chart Focus USD/CNH

Key Points

1. Sell USD/CNH recommendation.

2. Sell USD/CNH at 6.9225. Stop at 6.9490 and profit target at 6.8320.

3. A strong Chinese Industrial Output data and a reduction in hike expectation by the Fed are both likely to weigh on the U.S. dollar.

4. Price is likely to face a strong resistance with MACD hinting at a bearish price trend.

Fundamental Comments

1. A strong Chinese Industrial Output data is likely to aid the CNH

2. A reduction in hike expectation by the Federal Reserve is likely to weigh on the U.S. dollar.

Technical Comments

1. Price is likely to be capped by the 20EMA as well as the Fibonacci 62% correction point.

2. A MACD divergence is hinting at a price high and a decline in price.



Key Levels

Support6.87106.84256.8190
Resistance6.90306.92906.9465










Technical Overview
USD/JPY – Price continued its recovery from Monday’s low of 132.27 and is approaching the Fibonacci 62% correction point of the decline from 136.99 to the low at 132.27. Stochastic is hinting at a price rally but both MACD and 20EMA are hinting at a possible price decline. We think price is likely to be capped by the Fibonacci 62% correction point at 135.20. We see a decline from here to 132.30 again in the next few days.

Support134.40133.95133.25
Resistance134.90135.35135.80

EUR/USD – Price could be forming a Rising Wedge chart pattern which is a hint of a possible price top. Stochastic is also hinting at a limited upside. However, 20EMA is hinting at a strong bullish price trend. MACD is also bullish and hinting at a price rally. We think price could be forming a high and the upside could be limited to 1.0805 and from there we are likely to see a decline to 1.0650 in the next few days.

Support1.07251.06801.0635
Resistance1.07651.08051.0850

GBP/USD – Price reached a high of 1.2203 overnight. Stochastic is also hinting at a possible price high but both 20EMA and MACD are hinting at a continuation of the price rally. We think price is likely to have a mini correction to 1.2140 and from here, we could see another rally to 1.2265 in the next few days. However, a decline below 1.2100 could hint at a bigger corrective decline to 1.1955.

Support1.21351.20951.2050
Resistance1.22001.22651.2305

XAU/USD – Price reached a high of $1914.60 on Monday and we have seen a decline which is likely to continue towards the 20EMA at $1885.15 in the next few days. From there, we are likely to see another rally that is likely to take price higher above $1914.60. Stochastic is in the overbought zone and is hinting at a price correction. MACD and 20EMA are hinting at a continuation of the bullish price trend.

Support1894.801880.901870.75
Resistance1903.151914.601927.50

NZD/USD – Yesterday, we had a buy call at 0.6175 but price only reached a low of 0.6179, missing our entry price. Overnight, price had rallied to a high of 0.6263. The rally target may have been reached and if this is the case, we are likely to see a decline to 0.6145 in the next 48 hours. Stochastic is hinting at a price decline but both MACD and 20EMA are both hinting at a bullish price trend.

Support0.62100.61600.6120
Resistance0.62750.63100.6385

FX Commentary – US Dollar Weakened On Expectation Of A Pause By The Fed in Rate Hike.

Nicholas

Market Talk
– The U.S. dollar languished near a multi-week low on Tuesday as fears of a broader systemic crisis following the collapse of a U.S. tech-focused lender left traders speculating that the Federal Reserve could pause its aggressive rate-hiking cycle.

– Over the weekend, U.S. authorities launched emergency measures to shore up banking confidence in the wake of the sudden collapse of Silicon Valley Bank (SVB) and Signature Bank. The fallout sent traders scaling back their bets on how much further the Fed would continue raising interest rates sending the U.S. dollar tumbling.

– The greenback was marginally higher against the Japanese yen at 133.42 on Tuesday morning, having slid 1.4% on Monday. Sterling edged down to $1.2159, though it remained near its one-month peak of $1.2200 hit in the previous session. The euro fell to $1.0719, but was likewise not far from Monday’s one-month top of $1.0748.

– The Aussie fell 0.29% to $0.6648, reversing some of its 1.3% jump in the previous session, while the kiwi shed 0.18% to stand at $0.6209, having similarly surged 1.4% on Monday.

– Gold prices stuck to a near six-week high above $1900 on Tuesday as concerns over a U.S. banking crisis saw investors scramble for traditional safe havens, with focus now turning to upcoming inflation data later in the global day for more cues on monetary policy.


Chart Focus NZD/USD

Key Points

1. Buy NZD/USD recommendation.

2. Buy NZD/USD at 0.6175. Stop at 0.6145 and profit target at 0.6260.

3. A banking crisis is likely to delay a Fed hike and is likely to weigh on the US dollar.

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

Fundamental Comments

1. A U.S. banking crisis is likely to weigh on the U.S. dollar.

2. A US banking crisis may also delay the Fed hike cycle which is likely to weigh on the US dollar.

Technical Comments

1. Price is likely to be supported by the 20EMA line as well as a previous resistance turned support line.

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



Key Levels

Support0.61950.61600.6120
Resistance0.62300.62750.6310










Technical Overview

USD/JPY – We saw a decline to 133.27 on Monday as result from SVB and Signature Bank’s failure.  Price took a breather this morning as the Federal Reserve moved to cap the fall out, moving up to 134.06 this morning. We think price is likely to be capped by the 20EMA at 134.60 and we are likely to see price decline to 132.27 again in the next 48 hours. While MACD and 20EMA are both hinting at a bearish price trend, stochastic is hinting at a limited downside.

Support133.25132.60132.25
Resistance133.95134.60135.05

EUR/USD – We had a buy call yesterday at 1.0700 which was filled when price declined to a low of 1.0650. Unfortunately, the decline also triggered our stop at 1.0670. After the dip, price had a rally to 1.0748 but has moved lower this morning. We are expecting a decline to the 20EMA line at 1.0655. From there we could see a rally to 1.08 again in the next few days. However, this view will also depend on the inflation data that will be released later tonight.

Support1.06651.06351.0590
Resistance1.07051.07451.0790

GBP/USD – Price moved above the resistance high of 1.2145 overnight to reach a high of 1.2199. We are likely to see price supported at 1.2140 and a rally to follow in the next 48 hours to 1.2265. Stochastic is in the overbought position and is hinting at a limited upside. MACD and 20EMA are both hinting at a bullish price trend. We see price moving higher to 1.2265. Only a price move below 1.2020 would negate our bullish view.

Support1.21401.20801.2040
Resistance1.21951.22401.2270

XAU/USD – Price broke above the Shooting Star candlestick’s high yesterday and continued the rally to a high of $1914.60. Stochastic is in the overbought zone and is hinting at a price decline. However, MACD and 20EMA are both hinting at a strong bullish price trend. We remain cautious and see a limited upside to $1921.50. Tonight inflation data will also play a big role in the next price movement.

Support1900.351885.561871.30
Resistance1914.601927.301942.05

USD/CAD – Price had made a high at 1.3861 last week and a price decline had sent price lower to 1.3676 overnight. We think the current corrective rally in price is likely to be halted by the 20EMA line at 1.3755 and from here are we likely to see a decline to 1.3620 in the next 48 hours. Stochastic is close to the oversold zone and is hinting at a limited downside but 20EMA and MACD are both hinting at a bearish price trend ahead.

Support1.37101.36751.3620
Resistance1.37551.38001.3860

FX Commentary – U.S. Dollar Rallied On Hawkish Powell’s Testimony.

Nicholas

Market Talk


– The U.S. dollar hit a three-month high against a basket of currencies on Tuesday after Federal Reserve Chair Jerome Powell said the U.S. central bank is likely to raise rates more than previously expected and warned that the process of getting inflation back to 2% has “a long way to go.”

– Fed officials in December had forecast that rates would increase to between 5.00% and 5.25% this year. Traders are now pricing for the Fed rate to peak at 5.64% in September 2023 after Powell’s testimony. Fed funds futures traders are now pricing in a roughly 60% probability that the Fed will hike rates by 50 basis points at its March 21-22 meeting.

– The greenback reached 137.17 Japanese yen, up around 0.9% on the day and the highest since 20 Dec. after the yield on two-year Treasury notes which best reflects short-term rate expectations, hit 5% for the first time since July 2007.

– The Australian dollar slid 2.2% to $0.6585, its lowest since Nov 11 after the Reserve Bank of Australia raised its cash rate by 25 basis points to the highest in more than a decade, as expected, but suggested it might be nearly done tightening.

– Gold was down more than US$30 on Tuesday after Federal Reserve Chair Jerome Powell warned that U.S. rate hikes could end up being a lot higher than once imagined. Gold was last trading at $1811, while silver was trading at $19.91 on Wednesday morning.


Chart Focus AUD/JPY

Key Points

1. Buy AUD/JPY recommendation.

2. Buy AUD/JPY at 90.40. Stop at 90.05 and profit target at 91.25

3. Divergent monetary policy and interest rate differential are in the Aussie dollar favour.

4. A strong candlestick and stochastic are both hinting at a price rally.

Fundamental Comments

1. Interest rate differential is in the Aussie dollar favour.

2. Divergent monetary policy is likely to aid the Aussie dollar.

Technical Comments

1. A strong candlestick is hinting at a price bottom.

2. Stochastic is hinting at a price rally.



Key Levels

Support90.4590.1089.85
Resistance90.9091.3091.75









Technical Overview

USD/JPY – Price broke above the previous day’s high at 137.17, which was the highest since 20 Dec. The rally has continued to a high of 137.81 at the point of this writing. Price is likely to continue higher to 138.15 in the next 24 hours. Stochastic is hinting at an overbought situation and limited upsides. However, 20EMA and MACD are both hinting at a bullish price trend. We are also looking at a test of 138.17 and a move above this resistance.

Support137.15136.65136.15
Resistance137.85138.20138.60

EUR/USD – Price broke the low of 1.0532 and it looks like the decline will continue lower to 1.0480 in the next 24 hours. 20EMA is hinting at a bearish price trend. MACD is also hinting at a bearish price trend. Stochastic is turning and is hinting at a bearish price trend. Only a price move above the 20EMA at 1.0695 will negate our bearish view for the next few days.

Support1.05251.04801.0440
Resistance1.05551.06051.0645

GBP/USD – Price broke below the previous low of 1.1915 and declined to a low of 1.1818 at the point of this writing. 20EMA and MACD are both hinting at a strong bearish price trend but stochastic is hinting at a limit downside. We are bearish and we are looking at a price decline to 1.1640 in the next few days. Only a price move above the 20EMA at 1.2040 would negate our bearish view.

Support1.18101.17601.1710
Resistance1.18501.19051.1980

XAU/USD – We had a buy call on Gold at $1845 yesterday but we were wrong on this call. Price has declined to low of $1811.25 this morning and the decline is likely to continue to the previous week low at $1804.50. Both MACD and 20EMA are hinting at a continuation of the price decline. Stochastic is hinting at a limited downside. We would prefer to watch the reaction at the previous low of $1804.50 for further clue.

Support1804.501796.951784.75
Resistance1815.951831.701842.50

NZD/USD – We had a buy recommendation on Monday at 0.6205 which was filled. Yesterday, we had recommended keeping stop at 0.6170 and profit target at 0.6305. Our stop was triggered yesterday. The decline had taken out the previous week’s low at $0.6130, hinting at a bearish price trend. Stochastic, MACD and 20EMA are hinting at a bearish price trend. We see price moving lower to 0.6020 in the next 24 hours.

Support0.60800.60400.5995
Resistance0.61050.61600.6305