Tag: USD/CAD

FX Commentary – US Dollar Little Changed As Traders Wait For Clues

Nicholas

Market Talk
– The U.S. dollar was little changed to marginally higher on Wednesday as  the Federal Reserve’s mantra that interest rates will stay higher for longer overshadowed the notion that the U.S. central bank will soon pause its tightening cycle as the economy slows.

– Powell said rates might need to move higher if the U.S. economy remained strong, but reiterated “disinflation” is underway on Tuesday and Fed official echoed that dual message, with Governor Christopher Waller saying the battle to reach the Fed’s 2% inflation target will be a long fight.

– The euro was modestly lower at $1.0724 after falling to $1.0668 last Tuesday, after hawkish comments from two German officials from the ECB, supported the euro. Sterling rose to $1.2070, recovering from Tuesday’s one-month trough of $1.1960.

– The Aussie was back at 0.6927, having failed to clear resistance around 0.6996 overnight. The Aussie has found some support from a hawkish turn by the RBA which surprised many this week by signalling further rate increases ahead, quashing any talk of a pause in its tightening cycle.

– Gold prices fell slightly on Thursday as traders weighed hawkish signals on monetary policy from the Federal Reserve. Gold was trading at $1879.45 on Thursday while silver was last at $22.38.


Chart Focus USD/JPY

Key Points

1. Sell USD/JPY recommendation.

2. Sell USD/JPY at 131.40. Stop at 131.80 and profit target at 129.40.

3. Powell’s comment and a decline in US Treasury yields are both weighing on the US dollar.

4. A Flag chart pattern and the MACD indicator are both hinting at a price decline.

Fundamental Comments

1. Powell’s “disinflation” comment has put a cap on US interest rate hike and is likely to weigh on the US dollar.

2. A decline in US Treasury yields has aid the Japanese yen.

Technical Comments

1. A Flag chart pattern is hinting at a price decline.

2. MACD is also hinting at a price decline.



Key Levels

Support130.70130.20129.80
Resistance131.55132.25132.90









Technical Overview

USD/CHF – Price has been capped by the 20EMA for the past 2 days. We think that if price fails to move above 0.9235, are we likely to see a decline back to the previous low of 0.9070 in the next few days. A move below the previous day low at 0.9177 would confirm the decline for 0.9070. A move above 0.9240 would negate our bearish price view. Both MACD and 20EMA are hinting at a price decline.

Support0.91750.91250.9085
Resistance0.92150.92450.9285

EUR/USD – Price could be forming a bottoming process on the chart. Both the MACD and the stochastic indicators are supporting this view. If price can move above 1.0765, we are likely to see a price rally to the previous important chart point at 1.0805. However, should price fails to move above 1.0765, we are likely to see this base building process continues for another 24 hours. We favours the upside move.

Support1.07051.06701.0630
Resistance1.07451.07951.0835

GBP/USD – Price is currently testing its resistance point at 1.2110. If price can move above this point, it is likely to move higher to 1.2260 in the next few days. Both MACD and 20EMA are hinting that price is likely to break above this resistance and move higher to 1.2260. However, failure to move above 1.2110 could result in a decline back to the week’s low at 1.1960. We favour the rally to 1.2260.

Support1.20551.20051.1960           
Resistance1.21101.21801.2250

XAU/USD – Price has been consolidating in a range of $1860.65 to $1884.15 since the beginning of this week. We are likely to see price moves out of this range within the next 24 hours. We favour a move above $1884.15 to $1909. Stochastic is hinting at a price rally. MACD and 20EMA are turning around and hinting at a change from a price decline to a price rally. Failure to move above 1$884.15 would hint at a continuation of the range.

Support1873.401860.651843.60
Resistance1884.151896.551909.50

USD/CAD – We had a sell recommendation of this pair yesterday but our call was wrong. Price continues to move higher and we are close to the previous high at 1.3475. If price can move above this high, we are likely to see a rally to 1.3520. If price is unable to move above the high, we could see a decline back to 1.3300. 20EMA is hinting at a bullish trend but MACD and stochastic are hinting at a sideways movement.

Support1.34201.33701.3340
Resistance1.34601.35201.3570

FX Commentary – Powell’s Dovish Comments Send US Dollar Lower

Nicholas

Market Talk
– The U.S. dollar wobbled on Wednesday after Federal Reserve Chair Jerome Powell failed to offer fresh signs of a hawkish pushback against a resilient labour market in the United States, leading investors to bet that interest rates may not rise much further.

– In an eagerly awaited speech earlier on Tuesday, the Fed’s Powell reiterated that disinflation has begun but warned that Friday’s eye-popping jobs report showed why the battle against inflation will “take quite a bit of time.”

– The euro was last at $1.0732, after falling to $1.0669 in the previous session, its lowest since Jan. 9. Sterling rose to $1.2057, rebounding from Tuesday’s one-month trough of $1.1961. The Japanese yen was flat at 131.08 per dollar on Wednesday morning, after surging 1.2% in the previous session.

– The Aussie continues to gain to $0.6967, after surging more than 1% on Tuesday aided by a 25 basis point hike from the Reserve Bank of Australia. The kiwi was 0.02% higher to $0.6326.

– Gold prices steadied at $1873 an ounce on Wednesday following somewhat mixed signals on monetary policy from the Fed. Bullion recovered from its recent low of $1860.31, as markets took a dovish view on overnight comments from U.S. Federal Reserve Chair Jerome Powell who did not revert to a hawkish stance after strong jobs data.


Chart Focus USD/CAD

Key Points

1. Sell USD/CAD recommendation.

2. Sell USD/CAD at 1.3400. Stop at 1.3430 and profit target at 1.3300

3. Fed Chair Powell’s dovish comment and an uptick in crude oil price are both aiding the Canadian dollar.

4. Price is likely to be capped by the 20EMA with stochastic and 20EMA both hinting at a continuation of the bearish price trend.

Fundamental Comments

1. Fed Chair Powell’s dovish comment is weighing on the U.S. dollar.

2. An uptick in crude oil price is aiding the Canadian dollar.

Technical Comments

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

2. Stochastic is hinting at a continuation of the bearish price trend.



Key Levels

Support1.33751.33451.3290
Resistance1.34051.34451.3475









Technical Overview

USD/JPY – Price had declined to a low of 130.48 overnight, lower than our expectation but we continue to be bullish on this pair. We think the next price move would be to the topside at 132.90 again in the next few days as long as price stays above the overnight low of 130.48. Indicators are mixed and not giving a good clue at the moment. We remain as price has stayed above the Fibonacci 50% support.

Support130.95130.45129.95
Resistance131.50132.25132.90

EUR/USD – We had a sell recommendation yesterday at 1.0795 but price only reached a high of 1.0766. Our entry order was not filled. Price has declined to a low of 1.0668 overnight. The trend remains bearish. However, stochastic is hinting there might be a rally before the decline resumes. We favour a rally to test the important resistance point at 1.0805 which could decide the next direction.

Support1.07051.06701.0630
Resistance1.07451.07951.0835

GBP/USD – Price was capped by the falling 20EMA at 1.2093 and there is a possibility of a decline back to the previous low at 1.1960 in the next few days. Both 20EMA and MACD are bearish and hinting at a bearish price trend. We are bearish on this pair despite Powell’s dovish comment. If price fails to move above 1.2093, we think price is likely to head lower to 1.1960. A move above 1.2093 will hint at a rally to 1.2220.

Support1.20001.19601.1925
Resistance1.20601.20951.2145

XAU/USD – Price has been consolidation in a range of $1860.65 to 1884.15 since the beginning of this week. We are likely to see price consolidates in this range for another 24 hours. Price will need to move above $1885 in order to regain its bullish impetus. Failure to move above this resistance is likely to send price lower $1843. Our view remains the same as yesterday and we are looking for a decline to $1843.

Support1873.401860.651843.60
Resistance1884.151896.551909.50

NZD/USD – Price was capped by the falling 20EMA line at 0.6348 and trend indicators are hinting at a bearish price trend. However, stochastic is hinting at a price rally. We remains bullish on the U.S. dollar and we see another decline to 0.6265 in the next 48 hours if price is capped at 0.6350. A move above 0.6350 would hint at a rally to 0.6410 in the next 24 hours.

Support0.62950.62650.6210
Resistance0.63300.63600.6410

FX Commentary – U.S. Dollar Hovered Near 1-Month High Amid Expectations Of Higher U.S. Rates

Nicholas

Market Talk
– The U.S. dollar hovered near a one-month peak on Tuesday as traders raised their forecasts of U.S. Federal Reserve interest rate levels needed to tame inflation, as a stubbornly resilient labour market remains largely immune to aggressive rate hikes.

– U.S. Treasury yields have risen on the back of higher rate expectations with benchmark 10-year yields last at 3.6305%, sending the Japanese yen pinned near Monday’s one-month low of 132.90 per dollar.

– The British pound tumbled to a one-month low of $1.2006 in the previous session. It was last 0.09% higher at $1.2033. The euro gained 0.06% to $1.0733, having slid to $1.0709 in the previous session, the lowest since Jan. 9.

– Reserve Bank of Australia raised its cash rate 25 basis points to a decade-high of 3.35% on Tuesday and reiterated that further increases would be needed, a more hawkish policy tilt than many had expected. The Aussie shot up to 0.6940, recouping overnight losses.

– Gold prices steadied at $1873 per ounce, near a one-month low on Tuesday amid continued pressure from strength in the greenback and rising Treasury yields. Focus is turning to economic cues from a talk by Federal Reserve Chair Jerome Powell later in the day after stronger-than-expected U.S. jobs data saw markets broadly shift their expectations for interest rate hikes by the Fed.


Chart Focus EUR/USD

Key Points

1. Sell EUR/USD recommendation.

2. Sell EUR/USD at 1.0795. Stop at 1.0825 and profit target at 1.0705.

3. Expectations of more interest rate hikes from the Fed and rising yield are aiding the U.S. dollar.

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

Fundamental Comments

1. Expectations of more interest rate hikes from the Fed are aiding the U.S. dollar.

2. Rising US Treasury yield is weighing on the Euro dollar.

Technical Comments

1. Price is likely to be capped by the previous support turned resistance line and the 20EMA line.

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



Key Levels

Support1.07051.06701.0630
Resistance1.07451.07951.0835










Technical Overview

USD/JPY – Price was unable to move above 132.90 and we have seen a price decline to 132.13 at the point of this writing. We are likely to see the decline continues to 131.55 in the next 24 hours. Stochastic and MACD are both hinting at a price decline after reaching an extreme level. 20EMA continues to hint at a bullish price trend. We favour a decline to 131.55 before a rally takes price higher above 133 in the next few days ahead.

Support131.95131.55131.05
Resistance132.40132.90133.30

USD/CAD – We had a buy call yesterday at 1.3370 but price only declined to a low of 1.3400 and our entry order was not filled. Price had reached a high of 1.3475 overnight and has turned down. Stochastic and MACD are both also hinting that price could move lower. However, 20EMA is hinting at a bullish price trend. We think any price decline could be supported at 1.3375 and we can see another rally in the next few days to 1.3520.

Support1.33951.33451.3295
Resistance1.34451.34801.3520

GBP/USD – Price reached a low of 1.2005 overnight and the decline has stopped for the moment with price hovering around the overnight low. We think this pause in decline is only temporary and a decline to 1.1900 is likely in the next few days. Trend indicators, both MACD and 20EMA are hinting at a bearish price trend. Price will need to move above 1.2130 to negate this bearish price trend for the next few days.

Support1.20051.19501.1905
Resistance1.20751.21251.2180

XAU/USD – Price has declined below last week low of $1900.55, reaching an overnight low of $1860.65. We are likely to see a continuation of this bearish price trend to $1843 in the next 48 hours. While both trend indicators are confirming the bearish price trend, stochastic is hinting at a corrective price rally to get into a short position. The corrective rally can bring price higher to $1881.70. From this price level, we see a decline to $1843.

Support1871.601860.651843.60
Resistance1881.701896.551909.50

AUD/USD – Price has declined to a low of 0.6854 overnight. A 25 basis points hike by the RBA has lifted price to 0.6950 this morning. Price is likely to face a strong resistance at 0.6975. We do not think price can move above this resistance. We think price is likely to decline back to 0.6855 again in the next few days. Both MACD and 20EMA are hinting at a strong bearish price trend. Stochastic is hinting at a price rally to 0.6975 to get into a short position.

Support0.69050.68550.6790
Resistance0.69500.69950.7045

FX Commentary – U.S. Dollar Jumped On Upbeat U.S. Labour Data

Nicholas

Market Talk
– The U.S. dollar jumped on Friday after upbeat economic data from the United States lessened the risk of recession, but also suggested the Federal Reserve would have to hike interest rate further and keep rates up for longer.

– The Labour Department’s closely watched employment report showed that nonfarm payrolls surged by 517,000 in the previous month. The department revised December data higher to show 260,000 jobs added instead of the previously reported 223,000. Average hourly earnings also rose for the second consecutive month, boosting the U.S. dollar.

– The greenback extended its rally on the yen to a three-week top of 132.60 on Monday amid reports the Japanese government had offered the job of central bank governor to the current deputy, Masayoshi Amamiya, who is considered by markets to be more dovish than some other contenders.

– The euro was huddled at $1.0791 after shedding 1.1% on Friday. Sterling fell 1.39% to $1.2055, the lowest since Jan. 6 and its worst day since Dec. 15. The Aussie was struggling at $0.6923, after slumping 2.2% on Friday while the kiwi dollar was hovering at $0.6320.

– Gold prices were muted on Monday, after plummeting 2.5% on Friday. A stronger-than-expected U.S. employment data ramped up fears that the Federal Reserve could keep hiking interest rates sending gold prices lower to $1860.45.


Chart Focus USD/CAD

Key Points

1. Buy USD/CAD recommendation.

2. Buy USD/CAD at 1.3370. Stop at 1.3340 and profit target at 1.3470.

3. A strong US labour data and a decline in crude oil prices are both likely to keep the U.S. dollar strong.

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

Fundamental Comments

1. A strong US labour data is hinting that the Fed is likely to hike rates further, keeping the dollar strong.

2. A decline in crude oil price is likely to keep the Canadian dollar weak.

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 also hinting at a bullish price trend.



Key Levels

Support1.33901.33351.3295
Resistance1.34301.34751.3520










Technical Overview

USD/JPY – We had a sell recommendation from last Thursday at $128.95 and on Friday, we had shifted stop to cost at 128.95 and kept profit order at 127.80. Price went up above our stop last Friday and we are out of this position without a loss. Price will need to move above 132.86. If price is unable to move above this resistance, we see price going lower to 130.00 in the next 24 hours. We are in favour of the bearish price trend.

Support131.55131.05130.55
Resistance132.00132.40132.90

EUR/USD – Price has declined below last week low of 1.0801, triggering a bearish price trend. We are likely to see a continuation of this bearish price trend to 1.0710 in the next 48 hours. Trend indicators, MACD and 20EMA confirm this bearish price trend but Stochastic is hinting at a limited downside. We favour the bearish price and only a move above 1.0930 would negate our bearish view.

Support1.07651.07051.0650
Resistance1.08051.08551.0890

GBP/USD – Price reached a low of 1.2030 this morning but looks like it may have reached a low. Both stochastic and MACD are hinting that price has reached a low. However, 20EMA is hinting at a strong bearish price trend. We tend to favour the stochastic and MACD. We think price is likely to move up today to 1.2145 or to 1.2185. From this location, we see the start of another decline.

Support1.20301.19851.1935
Resistance1.20751.21251.2185

XAU/USD – Price has declined below last week low of $1900.55, triggering a bearish price trend. We are likely to see a continuation of this bearish price trend to $1843 in the next few days. However, Stochastic is hinting at a price rally to $1900 to go short. Trend indicators are hinting at a bearish price trend. We have the same view as the stochastic indicator and would prefer to get into a short position on a rally towards the 20EMA line at $1900.

Support1872.101860.651843.60
Resistance1882.201900.551918.85

EUR/JPY – Last Friday, we had a sell call on this pair but our call was wrong. Price has moved up higher to the previous high at 142.85. If price cannot move above this resistance, we are likely to see a decline back to 141.20 in the next 48 hours. However, if price moves above the previous high at 142.85, we are likely to see a move to 143.90. We favour the bearish side and see a decline to 141.20 for the next 24 hours.

Support141.85141.25140.75
Resistance142.35142.85143.30

FX Commentary – Euro Rose On Strong Spanish Inflation Data.

Nicholas

Market Talk
– Currency trading was subdued in the lead up to Wednesday’s Fed rate decision with the U.S. dollar facing a fourth monthly loss on Tuesday. Investors’ view of a peak in U.S. interest rates could swing into view as soon as this week’s Federal Reserve meeting.

– Interest-rate futures indicate market expectations for a 25 basis point hike from the Federal Reserve to take the Fed funds rate window to 4.5%-4.75%. Pricing suggests two more 25 basis point hikes are expected, before cuts arrive later in the year.

– The euro rose as far as 1.0913 after data showed Spanish inflation running surprisingly hot in January, before the broader mood reeled it back to 1.0851. The common currency is up 1.3% this month and is loitering near a nine-month peak ahead of European Central Bank rate decisions on Thursday.

– The Aussie slipped to $0.7050 after data showed retail spending took a shock 3.9% tumble in December， far exceeding forecast of a 0.3% dip, which is a likely dragged on economic growth and trimming expectations for how much further interest rates might have to rise.

– Gold prices retreated to $1922.10 on Tuesday, coming under pressure from a stronger dollar as caution kicked in ahead of a Federal Reserve meeting this week, where the Fed is widely expected to raise interest rate by 25 basis points.


Chart Focus EUR/AUD

Key Points

1. Buy EUR/AUD recommendation.

2. Buy EUR/AUD at 1.5360. Stop at 1.5325 and profit target at 1.5480

3. A sharp drop in Aussie retail spending and a likely hike in Euro interest rate are both weighing on the Aussie dollar.

4. A Cup and Handle chart pattern and MACD are both hinting at a price reversal.

Fundamental Comments

1. Expectation of a 50 basis points hike by the European Central Bank is likely to aid the Euro.

2. A sharp drop in Aussie retail spending is weighing on the Aussie dollar.

Technical Comments

1. A Cup and Handle chart pattern is hinting at a price low and a price reversal.

2. MACD is hinting at a possible price low with divergence warning.



Key Levels

Support1.53851.53451.5305
Resistance1.54251.54851.5520










Technical Overview

USD/JPY – Price is consolidating in the range of 129.10 and 131.10 and looks likely to continue till FOMC announcement. Stochastic is moving higher and hinting at a price rally but both MACD and 20EMA are flat and neutral. Both trend indicators are hinting at a sideways trend. Unless price can move above 131.10 or go below 129.10, we are expecting price to stay within this range in the next 24 hours.

Support130.00129.60129.10
Resistance130.55130.90131.55

EUR/USD – We had a buy recommendation at 1.0840 which was filled when price declined to a low of 1.0838.  Stochastic is still declining and hinting at a further decline in price. MACD and 20EMA are also bearish and hinting at a bearish price trend. If price were to move below 1.0820, it could be heading lower to 1.0765. However, if it can hold above 1.0830, we have a chance to see 1.0930 again in the next couple of days.

Support1.08251.07801.0735
Resistance1.08751.09301.0960

GBP/USD – Price reached a high of 1.2416 on Monday and has been on a decline since that high. We think the decline is likely to continue lower to 1.2280 in the next 48 hours. Stochastic is declining and has yet to reach the oversold zone, hinting at more declines ahead. Both MACD and 20EMA are hinting at a bearish price trend. Only a price move above 1.2380 would negate our bearish view for the next 48 hours.

Support1.23301.22801.2245
Resistance1.23701.24151.2450

XAU/USD – Price reached a high of $1934.10 on Monday and has been on a decline. We think the decline can continue and we see price decline to $1900 in the next 24 hours. Stochastic is declining and is hinting at a price decline. Both MACD and 20EMA are also hinting at a price decline. A MACD divergence is also hinting at a possible price high. A move below $1900 would confirm a high and a move to $1886 in the next few days.

Support1911.301896.551886.55
Resistance1925.301934.701949.15

USD/CAD – We had a buy recommendation at 1.3330 last Friday and yesterday, we had left stop at 1.3295 and profit order at 1.3410. Price reached a high of 1.3414 this morning and our profit order was filled. We are out of this position with a profit of 80 pips. Stochastic is rising and 20EMA is also pointing to a bullish price trend. If price can go above 1.3425, it could move up to 1.3515 in the next few days.

Support1.33801.34351.3295
Resistance1.34251.34751.3520