Tag: USD/CAD

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 – US Dollar Weakened On Easing Of Inflation

Nicholas

Market Talk
– The U.S. dollar weakened on Friday after U.S. labour data for February showed slower wage growth, suggesting an easing of inflation pressures may keep the Federal Reserve’s pace of interest rate hikes modest and thereby reduce the greenback’s appeal.

– The U.S. economy added jobs at a brisk clip in February, but slower wage growth and a rise in the unemployment rate prompted financial markets to dial back expectations for a 50-basis point rate hike when Fed policymakers meet in two weeks.

– The yield on benchmark 10-year Treasury notes fell more than 22 basis points to under 3.70% in the biggest single-day drop in four months, on news of the closing of SVB Financial group, largest bank failure since the financial crisis. The Japanese yen strengthened 1.01% to 134.79 per dollar.

– The euro was up 0.86% to $1.0731, hovering near the one-month high of $1.0737 it scaled earlier. Sterling was trading at $1.2139, up 0.92% on the day. The Australian dollar surged 1.41% to $0.667, while the kiwi gained 1% to 0.6200.

– Gold prices hit a one-month high on Monday at $1,878.92 an ounce, recovering sharply from recent losses as markets bet that a burgeoning banking crisis in the U.S. will push the Federal Reserve into softening its hawkish rhetoric in the coming days.


Chart Focus EUR/USD

Key Points

1. Buy EUR/USD recommendation.

2. Buy EUR/USD at 1.0700. Stop at 1.0670 and profit target at 1.0795

3. Expectation of a hike by the ECB and improved risk sentiment are both likely to weigh on the U.S. dollar.

4. A Double Bottom chart pattern and MACD are both hinting at a price rally.

Fundamental Comments

1. Expectation of a rate hike by ECB this Thursday is aiding the Euro.

2. Capping the fallout from SVB and Signature Bank has improved risk sentiment and weigh on the U.S. dollar.

Technical Comments

1. A Double Bottom chart pattern is hinting at a price rally.

2. MACD is bullish and hinting at a price rally ahead.



Key Levels

Support1.06951.06451.0610
Resistance1.07401.08001.0850

Technical Overview

USD/JPY – We saw a decline to 133.52 this morning as result from SVB and Signature Bank failure.  The yen is likely to take a breather as the US Fed moved to cap the fall out. We may see another attempt in the next 24 hours to test the low at 133.52. A break of this low is likely to send price lower to 132.90 Stochastic is hinting at a limited downside but both MACD and 20EMA are both hinting at a price decline.

Support134.15133.55133.15
Resistance134.65135.15135.80

AUD/USD – Price has moved out of a Double Bottom chart pattern which is hinting at a price rally. Stochastic is hinting at a price rally. Both 20EMA and MACD are also hinting at a price rally. We think price is likely to move up to 0.6700 in the next 48 hours. A move above this resistance is likely to send price higher to 0.6775. However, failure to move above 0.6700 is likely to send price lower to 0.6560.

Support0.66350.65950.6560
Resistance0.66750.67050.6755

GBP/USD – Since reaching a low at 1.1802 last week, we have seen price rallied to a high at 1.2140 this morning. There is a strong resistance at 1.2145 and price will need to move above this resistance to continue its rally. Failure is likely to send price lower to 1.1980. Stochastic is hinting at a limited upside. However, MACD and 20EMA are hinting at a price rally. We see price moving above the resistance to 1.2265 in the next 48 hours.

Support1.20701.20151.1980           
Resistance1.21401.21851.2220

XAU/USD – Price reached a high of $1893.35 this morning after the failure of 2 US banks raised risk sentiment, aiding the yellow metal. However, two Shooting Star candlesticks are hinting at a price decline ahead. Stochastic is also hinting at a possible price high and a decline ahead. However, MACD and 20EMA are both showing a bullish price trend. We see price moving lower to $1850 in a corrective decline in the next two days.

Support1870.301858.801846.40
Resistance1882.101893.351900.40

USD/CAD – Price had made a top at 1.3861 last week as price has currently moved below the 20EMA as well as moved below an important support level. We are expecting the decline to continue towards 1.3645 in the next couple of days. Stochastic is hinting at a price decline. Both MACD and 20EMA are also hinting at a price decline. Only a move above 1.386 will negate our bearish view for the next few days.

Support1.37101.36651.3620
Resistance1.37601.38151.3865

FX Commentary – US Dollar Bolstered By Strong Economic Data

Nicholas

Market Talk
– The US dollar clung to modest gains against its major peers on Thursday, bolstered by strong economic data that continues to suggest the U.S. Federal Reserve’s monetary policy tightening could be extended if it is to bring down the highest inflation in decades.

– On Thursday, the Labour Department said the number of Americans filing new claims for unemployment benefits unexpectedly fell last week, reflecting tight labour market conditions while U.S. GDP increased 2.7% in the fourth quarter showing the economy grew solidly in the fourth quarter.

– The euro reached a low of $1.0576 in late New York trading while Sterling also eased to $1.1991. The yen was last trading at 134.66, as the incoming head of Japan’s central bank soothed fears of an early end to super-easy monetary policy, nudging bond yields lower globally.

– The Aussie nudged back up to $0.6822, after touching a trough of $0.6783 overnight. The kiwi dollar rose to $0.6236, benefiting from a steep rise in domestic bond yields. The RBNZ had raised interest rate by 50 basis points on Wednesday.

– Gold prices rose slightly on Friday to $1823.84, but were set for a fourth consecutive week of decline amid growing uncertainty over U.S. monetary policy. Investors are waiting for more cues from the Core PCE Price Index, a reading on the Federal Reserve’s preferred inflation gauge, later in the day.


Chart Focus GBP/USD

Key Points

1. Sell GBP/USD recommendation.

2. Sell GBP/USD at 1.2035. Stop at 1.2075 and profit target at 1.1930

3. Strong U.S. economic data continues to suggest the Federal Reserve’s monetary policy tightening could be extended and interest rate differential are both aiding the U.S. dollar.

4. Price is likely to be capped by the Fibonacci 50% correction point and the 20EMA with MACD hinting at a bearish price trend.

Fundamental Comments

1. Strong U.S. economic data continues to suggest the Federal Reserve’s monetary policy tightening could be extended is aiding the US dollar.

2. Interest rate differential is in the U.S. dollar favour.

Technical Comments

1. Price is likely to be capped by the Fibonacci 50% correction point and the 20EMA.

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



Key Levels

Support1.19901.19601.1910
Resistance1.20351.20751.2145










Technical Overview

USD/JPY – Price reached a high of 135.22 on Tuesday and seems to have lost its upward momentum. We saw a price decline to 134.07 this morning and we are expecting the decline to continue lower to 133.60 in the next 24 hours. The 20EMA line at 134.65 is likely to cap any rally. Currently, the stochastic, the MACD and 20EMA are all hinting at a price decline. Above 134.95 would negate our bearish price view.

Support134.50134.05133.60
Resistance134.90135.25135.95

EUR/USD – Price reached a new low at 1.0576 overnight and again there was a divergence warning from the MACD hinting at a possible price low. Stochastic is also hinting at a possible price low but 20EMA is still hinting at a price decline. We think the price decline is likely to be limited and we are looking at a price rally to 1.0665 in the next 48 hours.

Support1.05751.05401.0485
Resistance1.06151.06651.0705

USD/CAD – Price reached a high of 1.3580 on Thursday but this high was accompanied by divergence warnings from both the stochastic and MACD indicators, hinting at a possible price high. 20EMA is hinting at a bullish price trend but we think price may have reached a high. If price falls below the 1.3525, we are likely to see price 1.3440 in the next few days ahead.

Support1.35401.35001.3460
Resistance1.35801.36201.3665

XAU/USD – We had a buy recommendation yesterday at $1825.50. However price went below our stop at $1818.00 to a low of $1817.43, triggering our stop order. Stochastic and MACD are both hinting at a possible price low and a price rally ahead. 20EMA remains bearish and is hinting at a bearish price trend. We are expecting price to stay above the previous day’s low and move higher to $1847.55 in the next few days.

Support1817.451803.701791.10
Resistance1827.751838.701847.45

AUD/USD – Price reached a low of 0.6780 overnight and this low was accompanied by a divergence warning from the MACD indicator, hinting at a possible price low. Stochastic is also hinging at possible price low but 20EMA is hinting at a bearish price trend. We favour a price rally to 0.6920 in the next 72 hours. However, failure to move above the falling 20EMA line at 0.6380 is likely to send price lower to 0.6750 in the next 24 hours.

Support0.67800.67500.6715
Resistance0.68250.68650.6900

FX Commentary – US Dollar Stayed Strong, Supported By Strong U.S. Data

Nicholas

Market Talk

– The U.S. dollar held on to modest gains against its peers on Tuesday, supported by strong U.S. economic data. Renewed concerns over more hawkish moves by the Fed, especially after stronger-than-expected inflation readings for January.

– Business activity in the United States in February unexpectedly rebounded to an eight-month high, increasing to 50.2 from a final reading of 46.8 in January, according to a survey. It follows recent robust data on retail sales, the labour market and manufacturing production, suggesting solid momentum in the economy at the start of the year.

– The euro fell to $1.0648 after data showed euro zone manufacturing activity deteriorated. The British pound extended gains against the greenback to $1.2106 after data showed an unexpected bounce in British business activity, suggesting a smaller risk of recession.

– New Zealand’s central bank raised interest rates by 50 basis points to a more than 14-year high of 4.75% on Wednesday. RBNZ said it expects to keep tightening further as inflation remains too high, a hawkish signal but the kiwi was muted.

– Gold prices hovered slightly above a six-week low on Wednesday with markets remaining cautious ahead of the minutes of the Federal Reserve’s February meeting, after some stronger-than-expected U.S. economic data further supported the dollar.


Chart Focus GBP/USD

Key Points

1. Sell GBP/USD recommendation.

2. Sell GBP/USD at 1.2120. Stop at 1.2150 and profit target at 1.2050.

3. Strong US data and interest rate differential are both aiding the U.S. dollar.

4. Price may have reached a high and stochastic is hinting at a price decline.

Fundamental Comments

1. Stronger than expected business activity is likely to aid the U.S. dollar.

2. Interest rate differential is in the U.S. dollar favour.

Technical Comments

1. Price may have reached a high and is likely to decline lower.

2. Stochastic is hinting at a price decline.



Key Levels

Support1.20901.20501.1990
Resistance1.21201.21601.2210








Technical Overview

USD/JPY – Price only reached a low of 134.30 yesterday and our entry order at 134.10 was not filled. Overnight, price had rallied to a high of 135.22, which was higher than the previous week’s high at 135.10. There was also a divergence warning from the MACD indicator, hinting at a possible price high. 20EMA is still bullish and stochastic is also hinting at a price rally. However, we think price may have reached a peak and a decline to 133.60 is likely within the next few days.

Support134.50133.90133.55
Resistance134.90135.25135.95

EUR/USD – We had a buy recommendation on Monday at 1.0665 and had recommended placing stop at 1.0655 and profit order at 1.0785. Our stop was triggered as price moved below 1.0655 to a low of 1.0636. Both MACD and 20EMA are hinting at a bearish price trend. MACD is hinting at a rising price trend. We think price is likely to move sideways with technical indicators mixed at the moment.

Support1.06101.05701.0540
Resistance1.06651.07051.0755

USD/CAD – Price reached a high of 1.3548 overnight but this high was accompanied by a divergence warning from the MACD indicator, hinting at a possible price high. However, both 20EMA and stochastic are hinting at a price rally. If price fails to move above the overnight high at 1.3548, we are likely to see a decline back to 1.3435 in the next 48 hours. Above 1.3548, the upside could also be limited with stochastic hinting at a limited upside.

Support1.35151.34851.3435
Resistance1.35451.35901.3620

XAU/USD – Price reached a low of $1818.85 last Friday and this could be a temporary low. MACD has also given a divergence warning of a possible price low. Stochastic and 20EMA are currently hinting at a price decline but price has moved sideways in the past 24 hours.  We may see a continuation of this movement in the next 24 hours. Watch the price move at $1846 or $1818 and follow in the direction of the break.

Support1836.601818.701803.70
Resistance1847.351860.051871.95

NZD/USD – Price has reached a low of 0.0.6193 on Friday. There was a rally to 0.6260 but the rally was been halted by the declining 20EMA line. Price failed to move above this resistance and had declined to an overnight low of 0.6202. This could be a base building and we see price moving higher in the next 48 hours to 0.6310. Stochastic and MACD are both supporting this bullish view but 20EMA is hinting at a price decline.

Support0.62250.61900.6155
Resistance0.62600.62950.6325

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