USD/CAD – Tick Insights

FX Commentary – Yen Weakened On BOJ Ultra-Easy Monetary Policy.

April 28, 2023April 28, 2023Nicholas

Market Talk
– The Japanese yen fell on Friday after the Bank of Japan (BOJ) stood pat on its ultra-easy monetary policy. The U.S. dollar was on track for a second straight monthly loss despite finding some support from data pointing to still-sticky inflation in the United States, which reinforced expectations for a 25-basis-point rate hike at next week’s FOMC meeting. .

– The Commerce Department reported on Thursday that U.S. economic growth slowed by more than expected in the first quarter, while a separate report from the Labour Department on Thursday showed initial claims for state unemployment benefits decreased 16,000. The labour report suggested a still-tight labour market and also underpinned next week’s rate increase expectations.

– In a closely watched decision, the BOJ on Friday announced it will maintain ultra-low interest rates, as expected, and made no tweaks to its yield curve control by a “unanimous vote”. However, the BOJ said it will remove forward guidance that pledges to keep interest rates at current or lower levels.

– The yen slid in volatile trade following the decision, and was last 0.5% lower against the dollar at 134.60. Sterling slipped 0.06% to $1.2492. The euro fell 0.1% to $1.1016, but remained near its recent one-year high.

– Gold prices fell slightly on Friday, extending losses into a third straight session as stronger-than-expected U.S. inflation and labour market data saw fears of more Federal Reserve rate hikes come back into focus.

– There will be no Forex Commentary for the next 3 weeks. Update will resume on 22 May.

Chart Focus USD/CAD

Key Points

1. Buy USD/CAD recommendation.

2. Buy USD/CAD at 1.3605. Stop at 1.3570 and profit target at 1.3725.

3. A Fed rate hike next week and declining crude oil prices are both weighing on the Canadian dollar.

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

Fundamental Comments

1. US labour overnight is suggesting a still-tight labour market and a likely rate hike in next week FOMC meeting.

2. The Canadian dollar is likely to be weighed down by a second weekly decline in crude oil price.

Technical Comments

1. Price is likely to be supported by the 20EMA line, which is also hinting at a bullish price trend.

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

Key Levels

Support	1.3570	1.3520	1.3475
Resistance	1.3645	1.3695	1.3730

Technical Overview

USD/JPY – We saw a price rally to a high of 134.92 this morning after Bank of Japan maintained its ultra-easy monetary policy after its monetary meeting. Stochastic is hinting at a continuation of this price rally. MACD and 20EMA are also hinting at a continuation of the price rally. If price can move above 135.13, we are likely to see a test of 137.90 in the next few days.

Support	134.70	134.35	132.80
Resistance	135.15	135.50	136.05

EUR/USD – We had a buy recommendation on Tuesday at 1.0995 and had recommended placing stop at 1.0960 and profit target at 1.1075. Our profit target was met when price reached a high of 1.1094 on Wednesday. A divergence at the price high is hinting at a price decline to 1.0985 in the next few days. Stochastic is also hinting at a price decline. However, MACD remains bullish and is hinting at a price rally.

Support	1.0990	1.0945	1.0910
Resistance	1.1035	1.1075	1.1095

GBP/USD – We had a sell recommendation on Wednesday but our call was wrong. Price went to a high of 1.2515 taking out our stop. MACD is hinting at a loss of momentum in the rally but stochastic is still pointing to a price rally. 20EMA is supporting the stochastic and calling for a price rally. However, we think price is likely to stay in a sideways range for the next 24 hours.

Support	1.2465	1.2425	1.2385
Resistance	1.2515	1.2545	1.2595

XAU/USD – Price failed to move higher and test its resistance at 2012.35 and we have seen price tested the support at $1973.95. Price has also moved below the 20EMA and we are likely to see another move to test the previous low at $1969.15 in the next couple of days. Stochastic is hinting at a price decline. Both MACD and 20EMA are hinting at a bearish price trend in the next few days.

Support	1969.10	1955.30	1949.65
Resistance	1984.75	1996.80	2003.70

EUR/AUD – Price reached a high of 1.6784 on Wednesday and the decline has reached a low of 1.6603 this morning. The low was supported by the 20EMA line and if this support holds, we are likely to see price test the previous high again at 1.6784 in the next few days. Stochastic is neutral but MACD is hinting at a bullish price trend. 20EMA is also hinting at a price rally. A Price move below 1.6525 would negate our bullish price view.

Support	1.6600	1.6525	1.6485
Resistance	1.6670	1.6730	1.6785

FX Commentary – Jitters in Bank Arouse Talk Of A Fed Pause

April 25, 2023Nicholas

Market Talk
– The U.S. dollar was on the back foot while the euro climbed on Tuesday, as regional bank jitters in the U.S. had traders expecting U.S. interest rate cuts before long. However, in Europe a 50 basis point hike remains a live option at next week’s central bank meeting.

– News overnight of plunging deposits at First Republic Bank in the U.S. served as a reminder that stability risks have not entirely died down and prompted traders to renew expectations that the Fed shifts quickly from hiking to cutting. Interest rate futures market has also factored in roughly 50 bps of rate cuts by the end of the year

– The euro rose above $1.10 overnight and was still going at $1.1062 early in the Asia session. European Central Bank board member Isabel Schnabel told Politico that a 50 bp rate hike was not off the table and would depend on data – notably inflation figures due two days before May’s meeting.

– The Japanese currency struggled amid remarks from new Bank of Japan governor Kazuo Ueda, that he was not in a hurry to shift policy. The greenback rose versus the Japanese currency, and was last 134.27 yen. This week’s BOJ meeting, which concludes on Friday, is his first in charge.

– Gold prices rose 0.3% to $1,995.57 an ounce, on Tuesday, extending a recovery into a third straight session as the greenback fell amid bets that the Federal Reserve could pause its rate hike cycle by as soon as June. Worsening economic conditions, which increase the safe haven appeal of the yellow metal, also aided the yellow metal.

Chart Focus EUR/USD

Key Points

1. Buy EUR/USD recommendation.

2. Buy EUR/USD at 1.0995. Stop at 1.0960 and profit target at 1.1075

3. A potential 50 basis point hike and divergent monetary policy is aiding the Euro dollar.

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

Fundamental Comments

1. A potential 50 basis point hike in Euro interest rate is aiding the Euro dollar.

2. Divergent monetary policy between the Euro and US is aiding the Euro dollar.

Technical Comments

1. Price is likely to be 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.

Key Levels

Support	1.1040	1.1000	1.0965
Resistance	1.1075	1.1100	1.1135

Technical Overview

USD/JPY – Price has been moving in a 100 pips range for the past 48 hours and looks like it would stay range bound for the next 24 hours. Stochastic is in the middle of its range and both MACD and 20EMA are hinting at a sideways range trading scenario. We think price may have reached a top at 135.13 last week. We see price going down to 133.10 in a correction over the next few days.

Support	134.10	133.55	133.15
Resistance	134.70	135.15	135.55

USD/CAD – Price has reached a high of 1.3566 which was also a previous high from 2 weeks ago. Price will need to move above this high to test another important high at 1.3700. Stochastic remains near to the overbought zone and is hinting at a limited upside. However, 20EMA is hinting at a strong bullish price trend. MACD is also hinting at a bullish price trend. We see price moving higher unless price moves below 1.3445.

Support	1.3510	1.3470	1.3445
Resistance	1.3565	1.3620	1.3650

GBP/USD – Price reached a high of 1.2506 this morning and we may see a correction lower to 1.2450 in the next 24 hours. Stochastic has reached the overbought zone and is hinting at a possible price decline. MACD is hinting at a mild bullish trend. Only 20EMA is hinting at a strong bullish price trend. We see price going lower to 1.2350 in the next couple of days.

Support	1.2460	1.2410	1.2375
Resistance	1.2505	1.2555	1.2600

XAU/USD – We think price has reached a low of $1969.13 last week and we are likely to see a bounce back up to $2012.35 in the next couple of days. If price failed to move above $2018, there could be another decline to $1969 but a move above will hint at $2048.45. Stochastic is rising and is hinting at a price rally. MACD has turned bullish and is hinting at a price rally as well. 20EMA is neutral at the moment.

Support	1988.65	1969.15	1959.95
Resistance	2000.80	2018.15	2031.70

NZD/USD – Price has reached a low of 0.6125 on Monday but this low was accompanied by a divergence warning from the MACD indicator, hinting at a possible price low in place. Stochastic is moving higher and is hinting at a price rally. 20EMA has turned bullish and is hinting at a bullish price trend. We see price testing its previous high of 0.6225 in the next 48 hours. A price move below 0.6125 would negate our bullish view.

Support	0.6125	0.6080	0.6050
Resistance	0.6185	0.6225	0.6265

FX Commentary – Expectations of Another Fed Rate Hike Boosted U.S. Dollar.

April 19, 2023Nicholas

Market Talk
– The U.S. dollar steadied on Wednesday after it seesawed with bond market volatility as investors scrutinized U.S. economic indicators, Federal Reserve commentary and corporate earnings for clues about the path for interest rates.

– The euro rose to $1.0968 after two consecutive daily declines of more than 0.5%. The greenback gained 0.17% to 134.31 yen, recovering from a 0.29% retreat on Tuesday on the back of a rise in US 2-year Treasury yields, which reached an almost one month high of 4.231% overnight.

– Sterling was last trading at $1.2427, up 0.43% on the day. The British pound jumped despite an unexpected rise in the unemployment rate in the three months to February as pay growth stayed higher than forecast, which could prompt the Bank of England to hike its interest rate again in May.

– The Australian dollar rose against the greenback to $0.6730 after Reserve Bank of Australia minutes yesterday, showed the central bank considered an 11th consecutive rate hike in April before deciding to pause. The RBA, however, said it was ready to tighten further if inflation and demand failed to cool.

– Gold prices fell slightly in Asian trade on Wednesday but stayed above US$2000 level as markets awaited more cues on U.S. monetary policy from a string of upcoming Federal Reserve speakers and reports. But further gains were held back by growing uncertainty over the path of U.S. interest rates, with recent hawkish signals from Fed speakers having spooked markets.

Chart Focus Gold

Key Points

1. Sell Gold recommendation.

2. Sell Gold at $1999. Stop at $2013 and profit target at $1965.

3. Expectations of a other 25bp Fed hike and easing worries of a global recession are both weighing on Gold.

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

Fundamental Comments

1. Expectations of another interest rate hike by the Fed is weighing on Gold.

2. A good China data overnight is easing worries of a global recession, which is likely to weigh on Gold.

Technical Comments

1. Price is capped by the 20EMA which is hinting at a bearish price trend

2. MACD is hinting at a bearish price trend.

Key Levels

Support	1980.95	1966.00	1949.65
Resistance	1998.85	2011.70	2022.65

Technical Overview

USD/JPY – Price reached a high of 134.70 on Tuesday morning but this high was accompanied by a divergence warning from the MACD indicator, hinting at a possible price high. A Spinning top candlestick price pattern is also hinting at a possible price high and a reversal ahead. Stochastic is hinting at a price decline but both MACD and 20EMA are hinting at a bullish price trend. We are expecting a rally to test the 134.70 in the next 24 hours before the decline kicks in.

Support	133.95	133.35	132.85
Resistance	134.70	135.10	135.80

EUR/USD – Price reached a low of 1.0908 on Monday and we have seen a rally to 1.0983. However, the rally is capped by the 20EMA and we could see a decline to 1.0865 in the next 24 hours. MACD is hinting at a price decline. 20EMA is also hinting at a price decline. However, Stochastic is hinting at a price rally. We think price is likely to be capped by the 20EMA and we see a decline to 1.0865.

Support	1.0940	1.0905	1.0865
Resistance	1.0985	1.1020	1.1075

GBP/USD – We had a sell order which was filled at 1.2435 when price reached a high of 1.2449 overnight. Our view remains unchanged from yesterday and we are looking at a price move to 1.2285 in the next 48 hours. Stochastic is rising but both MACD and 20EMA are hinting at a bearish price trend. We recommend keeping stop at 1.2475 and profit target unchanged at 1.2285.

Support	1.2405	1.2355	1.2305
Resistance	1.2450	1.2505	1.2545

USD/CAD – Price had reached a low at 1.3299 last week and we have seen a rally to 1.3419 yesterday. The rally was capped by the previous low turned resistance. If price is unable to move above this resistance, we are likely to see a decline to 1.3299. A move above 1.3420 would hints at a move to 1.3455. All 3 technical indicators, MACD, stochastic and 20EMA are all hinting at a price rally.

Support	1.3360	1.3300	1.3260
Resistance	1.3420	1.3455	1.3490

AUD/USD – The rally off the low at 0.6680 was capped by the Fibonacci 50% of the decline from 0.6805 to 0.6680. If price is unable to move above this resistance, we are likely to see a decline to 0.6615 in the next 48 hours. Stochastic is hinting at a price rally but both MACD and 20EMA are hinting at a price decline. A move above 0.6760 would negate our bearish view and hints at a rally to 0.6805.

Support	0.6695	0.6645	0.6615
Resistance	0.6745	0.6780	0.6810

FX Commentary – Strong US Data Sent The Greenback Higher Against Its Peers

April 18, 2023Nicholas

Market Talk
– The U.S. dollar eased on Tuesday after rallying overnight as strong U.S. economic data reinforced expectations that the Federal Reserve will hike interest rates again in May, while China’s economic recovery gathered pace in the first quarter.

– Confidence among single-family homebuilders improved for a fourth consecutive month in April, while manufacturing activity in New York State increased for the first time in five months. Recent hawkish comments from Fed officials saw markets pricing in a greater chance of a rate hike in May, and brewed uncertainty over whether the central bank will pause in June.

– The euro was at $1.09320, easing away from the one-year high of $1.1075 it touched last week. Sterling was last trading at $1.2381, on the day ahead of employment data that could potentially cause some volatility in the pound if the report shows that the labour market is not cooling.

– The Japanese yen weakened to 134.52 per dollar, hovering around the one-month peak of 134.57 it touched on Monday. The Australian dollar rose to $0.6720 after the minutes of the last Reserve Bank of Australia meeting showed that the central bank considered an 11th-consecutive rate hike in April before deciding to pause.

– Gold prices hovered below key levels in early Asian trade on Tuesday, coming under pressure from a firmer dollar and Treasury yields as markets reconsidered expectations for an imminent pause in the Federal Reserve’s interest rate hikes following recent strong US data and hawkish Fed officials’ comments.

Chart Focus GBP/USD

Key Points

1. Sell GBP/USD recommendation.

2. Sell GBP/USD at 1.2435. Stop at 1.2475 and profit target at 1.2285.

3. Strong US data and interest rate differential are both in the US dollar favour.

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

Fundamental Comments

1. Strong US data overnight is aiding the US dollar.

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

Technical Comments

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

2. MACD is hinting at a bearish price trend.

Key Levels

Support	1.2350	1.2305	1.2375
Resistance	1.2410	1.2460	1.2505

Technical Overview

USD/JPY – Price reached a high of 134.70 this morning but this high was accompanied by a divergence warning from the MACD indicator, hinting at a possible price high. A Spinning top candlestick price pattern is also hinting at a possible price high and a reversal ahead. Stochastic is in the overbought zone and is hinting at a price decline ahead. However 20EMA and MACD are both hinting at a bullish price trend. We see price moving lower to 133.25 in the next 48 hours.

Support	134.05	133.35	132.85
Resistance	134.70	135.10	135.80

EUR/USD – Price reached a low of 1.0908 overnight and we have seen a rally to 1.0950 this morning. However, the rally is likely to be capped by the 20EMA at 1.0970 and we could see another decline to 1.0865 in the next 48 hours. Stochastic is in the oversold zone and is hinting at a limited downside. Both stochastic and 20EMA are hinting at a bearish price trend. We are in favour of the bearish price move.

Support	1.0905	1.0875	1.0830
Resistance	1.0965	1.1000	1.1060

XAG/USD – Price had reached a high of $26.07 last week and we have seen a corrective decline lower to $24.79 on Monday. We are likely to see a rally to the Fibonacci 62% correction point at $25.58 in the next 24 hours. We think this is the second part of a 3-part correction. There should be another decline in the next few days to $24.45. Stochastic is hinting at a price rally while both MACD and 20EMA are hinting at a price decline.

Support	24.95	24.55	24.15
Resistance	25.30	25.60	25.95

XAU/USD – Price reached a high last week at $2048.45 last night following a divergence with MACD. Price reached a low at $1980.95 overnight. A Hammer candlestick price pattern is also hinting at a possible temporary low. We are likely to see a rally to $2015 in the next 24 hours but this rally is likely the second part of a 3 part corrective decline process following the high at $2048.45.

Support	1991.85	1980.95	1966.00
Resistance	2002.95	2014.95	2031.70

USD/CAD – Price had reached a low at 1.3299 last week and we have seen a rally to 1.3419 yesterday. The rally was capped by the previous low turned resistance. Stochastic is reaching the overbought level and is hinting at a limited upside. MACD remains bearish and is hinting at a bearish price trend. 20EMA is also hinting at a bearish price trend. We see price moving lower to 1.3299 in the next few days.

Support	1.3340	1.3290	1.3260
Resistance	1.3385	1.3420	1.3470

FX Commentary – U.S. Dollar Pinned Near 7-week Low After FOMC Decision

March 23, 2023Nicholas

Market Talk
– The U.S. dollar was pinned near seven-week lows on Thursday after the U.S. Federal Reserve sounded close to calling time on interest rate hikes after announcing a 25 basis points hike, which markets think are more or less over.

– The US central bank raised its benchmark funds rate by 25 basis points, as expected, but dropped language about “ongoing increases” being needed in favour of “some additional” rises, as it watches how wobbling confidence in banks affects the economy.

– The euro touched a seven-week high of $1.0912 on Wednesday, while the yen, which closely follows U.S. yields, fell 0.7% to a six-week low of 130.50. The Australian and New Zealand dollars rose 0.7% and 0.8% respectively to track back toward Wednesday’s peaks.

– Sterling also hovered near a seven-week high as British inflation unexpectedly rose, leaving it at an eye-watering 10.4% and heaping pressure on the Bank of England to raise rates and sound hawkish at its meeting later in the global day.

– Gold prices rose on Thursday, hovering below the key $2,000 level amid expectations that the Federal Reserve will have limited headroom to hike interest rates further, which also pulled the dollar lower.

Chart Focus USD/CAD

Key Points

1. Sell USD/CAD recommendation.

2. Sell USD/CAD at 1.3690. Stop at 1.3720 and profit target at 1.3555.

3. An end of the Fed hike cycle is likely to weigh on the U.S. dollar.

4. A chart pattern and a bearish MACD are both hinting at a price decline ahead.

Fundamental Comments

1. With the U.S. Federal Reserve close to calling time on interest rate hikes, the US dollar is likely to be weak.

2. A decline in US Treasury yields is likely to weigh on the US dollar.

Technical Comments

1. Price could be forming a Descending Triangle chart pattern, which is a hint of a price decline ahead.

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

Key Levels

Support	1.3650	1.3600	1.3555
Resistance	1.3690	1.3740	1.3790

Technical Overview

USD/JPY – Price had reached a low of 130.41 overnight, which was lower than Monday’s low of 130.53. This low was accompanied by a divergence warning from the MACD indicator hinting at a possible price low. However, 20EMA and stochastic indicator are both hinting at a continuation of this price decline. We think the downside is limited. We are looking at a bounce to 131.90 in the next 48 hours.

Support	130.40	129.80	129.20
Resistance	130.95	131.45	131.95

EUR/USD – Price continued its rally and had reached a high of 1.0929 at the point of this writing. Stochastic is deep in the overbought zone but expectation of a narrowing of an interest rate differential is likely to keep the bid strong and the market overbought. MACD and 20EMA are both hinting at a bullish price trend. We think the rally is likely to continue towards 1.1030 in the next few days.

Support	1.0885	1.0850	1.0795
Resistance	1.0930	1.0985	1.1030

GBP/USD – Price broke above last Monday’s high at 1.2284 to reach a high of 1.2334. Stochastic is rising and is hinting at a continuation of this rally. MACD is also hinting at a continuation of this price rally. 20EMA is hinting at a bullish price trend. We think the topside may be limited to 1.2405 in the 24 hours. Bank of England is likely to hike rates by 25 basis points which could have a big impact on the next directional move.

Support	1.2320	1.2280	1.2230
Resistance	1.2370	1.2405	1.2450

XAU/USD – The decline was halted at $1934 overnight and we have seen a rally up to 1983.58 at the point of this writing. We remain bearish and think this rally could be a corrective rally, especially if price cannot move above $1989. MACD had previously hinting at a possible price high with a divergence but both stochastic and 20EMA are currently hinting at a price rally. Above $1989 would negate our bearish view and calls for a test of the recent high at $2009.75.

Support	1969.40	1951.90	1942.55
Resistance	1988.30	2009.75	2030.25

EUR/AUD – We had a buy call yesterday at 1.6045 but price only fell to a low of 1.6053 and our entry order was not filled. Overnight, we saw price moved above our target to a high of 1.6353. We think this could be a temporary high and we see a decline back to 1.6000 in the next few days. MACD has a divergence warning of a potential price high and stochastic is also hinting at a price decline. 20EMA is hinting at a bullish price trend.

Support	1.6150	1.6105	1.6055
Resistance	1.6205	1.6255	1.6295