Tag: USD/CHF

U.S. Dollar Found Support From A Strong U.S. Inflation Data

Nicholas

Market Talk
– The U.S. dollar found some support on Wednesday after stubbornly high U.S. inflation suggested interest rates are going to remain high for longer than investors had expected. Remarks from central bank officials also have investors worried about interest rate going to be higher for longer.

– Headline U.S. CPI was 0.5% in January mostly due to higher rental and food costs. That was in line with forecasts, though the annual figure of 6.4% was a bit more than expected and traders busily unwound bets on rate falling toward the end of 2023.

– The U.S. dollar climbed to a six-week high of 133.30 yen and sat not far below that at 132.73 early in the Asia session.  The euro was bumpy but ultimately unable to advance on the greenback and stayed at $1.0734. Sterling was boosted overnight by strong wages data and last bought $1.2178.

– The Aussie edged back to $0.6949, having been as far as $0.7030 at one stage overnight. The RBA’s recent hawkish turn has seen markets scramble to re-price the risk of several more hikes, with the cash rate, currently at 3.35%, now seen peaking around 4.20% compared to 3.60% a month ago.

– Gold prices was little changed on Wednesday at $1850.20 as mixed inflation data for January brewed some uncertainty over the U.S. economy and the path of monetary policy, with the dollar also showing a muted reaction to the readings.


Chart Focus EUR/USD

Key Points

1. Sell EUR/USD recommendation.

2. Sell EUR/USD at 1.0730. Stop at 1.0760 and profit target at 1.0655.

3 U.S. inflation data overnight has suggested interest rates are going to remain high which is likely to keep the U.S. dollar strong, together with interest rate differential.

4. Price had failed to move above a resistance point with MACD hinting at a bearish price trend ahead.

Fundamental Comments

1. U.S. inflation overnight has suggested interest rates are going to remain high for longer than investors had expected, keeping the U.S. dollar strong.

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

Technical Comments

1. Price had failed to move above a resistance point and is likely to test the bottom of the range.

2. MACD has turned bearish and is hinting at a bearish price trend ahead.










Technical Overview

USD/JPY – Our view yesterday was wrong. Price has moved above 133.00 negating our bearish view. Price is likely to proceed higher but the upside is likely to be limited as indicated by the stochastic indicator. The MACD indicator is also hinting at a weak uptrend. Only 20EMA is hinting at a strong bullish uptrend. We believe the upside could be limited to 134.75 in the next couple of days.

Support133.10132.55132.00
Resistance133.60134.05134.55

USD/CHF – Price reached a low of 0.9137 overnight, and we have seen a rally to 0.9246 at the point of this writing. We think price is likely to proceed higher to the previous week’s high at 0.9290 in the next 24 hours. A move above this resistance would be bullish and hint at a move to 0.9315. However, inability to move above 0.9290 would hint at a decline in price back to 0.9125 again. We prefer the up move.

Support0.92150.91800.9135
Resistance0.92600.92900.9360

GBP/USD – Price had move below the 20EMA after reaching an overnight high at 1.2268. The decline is likely to continue to initially 1.2032 and subsequently to 1.1960 in the next few days. Stochastic is hinting at a price decline. Trend indicators, 20EMA and MACD, are also hinting at a price decline. Only a price move above 1.2218 would negate our bearish view.

Support1.20751.20251.1960
Resistance1.21251.21651.2220

XAU/USD – Price declined to a low of $1850.40 yesterday and has moved below this low at the point of this writing. The current low at $1841.84 has also negated the MACD divergence given yesterday. With 20EMA and stochastic indicator, hinting at a bearish price trend as well, we are expecting price to move lower to the next support point at $1823.55 in the next few days.

Support1840.451825.051814.15
Resistance1853.151865.801878.70

AUD/JPY – We had a buy call yesterday at 91.60 but price only declined to a low of 91.72 and our entry order was not filled. Price rallied overnight to a high of 93.02 and the rally may be over. Stochastic has given a divergence warning of a possible price high. However, 20EMA and MACD are still hinting at a bullish price trend. If price stays above the 20EMA, we may see another test of the high at 93.02.

Support92.0091.5590.95
Resistance92.5092.8093.30

FX Commentary – US Dollar Surged Bets On Prolong Fed Tightening.

Nicholas

Market Talk
– The U.S. dollar hovered near a five-week high against major peers on Monday on rising bets for prolonged Federal Reserve policy tightening ahead of a crucial consumer price report that is scheduled for Tuesday at 8.30pm New York time.

– The yen slipped with the government set to nominate a candidate who backs the current policy settings as the new Bank of Japan governor on Tuesday. The Japanese yen slipped to a low of 132.20 on Monday morning in Asian trading.

– The euro eased 0.06% to $1.0669 on Friday and continues its decline on Monday morning to a low of $1.0654. The British pound was last trading at $1.2044, down 0.12% on the day and below the low of last Friday.

– The risk-sensitive Australian and New Zealand dollars eased with Asian equities on worries that higher U.S. rates will choke global growth. The Aussie fell 0.13% to $0.6910, having been largely flat in the previous week.  The New Zealand’s kiwi lost 0.08% to $0.6306.

– A rally in gold prices, which started in the beginning of the year, cooled over the past two weeks as markets reassessed their outlook for U.S. monetary policy and awaited more cues on the U.S. economy from key inflation data due this week.

Chart Focus GBP/USD

Key Points

1. Sell GBP/USD recommendation.

2. Sell GBP/USD at 1.2075. Stop at 1.2110 and profit target at 1.1965.

3. Rising bets for a prolonged Federal Reserve policy tightening and a higher US bond yields are both aiding the US dollar.

4. Price has moved below the 20EMA, with both the MACD and 20EMA hinting at a bearish price trend.

Fundamental Comments

1. Rising bets for a prolonged Federal Reserve policy tightening is aiding the U.S. dollar.

2. A higher US bond yields is also aiding the US dollar.

Technical Comments

1. Price has moved below the 20EMA, which is hinting at a bearish price trend.

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



Key Levels

Support1.20051.19601.1920
Resistance1.20651.21101.2140










Technical Overview

USD/JPY – Price reached a low of 129.80 and we have seen a bounce back up to a high of 132.20 at the point of this writing. Both MACD and 20EMA are pointing up, hinting that price is likely to go higher. Stochastic is also hinting that price has room to go higher. The choice of the new BOJ governor is also likely to see yen weaken. We see price testing its previous high of 132.90 in the next 48 hours.

Support132.25131.70131.30
Resistance132.90133.35134.05

EUR/USD – Price reached a new low of 1.0654 this morning. However this new low was accompanied by a divergence warning from the MACD indicator, hinting at a possible price low. Stochastic is also hinting that price is near to its low. The 20EMA is hinting at a bearish price trend.  We think price may have reached a low and is likely to move up to 1.0785 again in the next few days. A move below 1.0654 would negate our bullish view.

Support1.06501.06201.0585
Resistance1.06951.07451.0795

USD/CHF – Price was capped by the 20EMA and declined to a low of 0.9159 on Thursday. Since this low, price has recovered and has reached a high of 0.9259 this morning.  We are likely to see a continuation of the rally to 0.9290 in the next 24 hours. The next direction will depend on the reaction at the 0.9290 high. Stochastic, 20EMA and MACD are hinting that the rally might not be able to move above the next resistance.

Support0.92200.91600.9120
Resistance0.92500.92900.9355

XAU/USD – We had a buy call on last Friday at $1858 after price declined to a low of $1852.68. Both MACD and 20EMA are hinting at a continuation of the price decline. MACD is also turning down and below the zero line, hinting at a price decline. Stochastic is hinting that price may have reached a bottom. We would recommend keeping stop at $1851 and profit order at $1885. There is a risk that our stop may be hit today.

Support1852.651843.551831.40
Resistance1868.551878.701890.15

AUD/USD – Fibonacci ratio is hinting that price is likely to move lower to 0.6850. Only a price move above 0.7045 will negate this bearish price view. 20EMA and MACD indicator are both supporting this bearish view. Both are hinting at a price decline as well. However, Stochastic is hinting at a price movement higher. We favour the bearish move as suggested by the trend indicators.

Support0.68850.68550.6790
Resistance0.69300.69700.7010

FX Commentary – A Decline In US Treasury Yields Dragged The U.S. Dollar Lower

Nicholas

Market Talk
– The U.S. dollar fell across the board on Thursday, moving in line with lower Treasury yields, as investors stuck to their views that the Federal Reserve does not need to raise interest rates any more than it should as inflation is starting to get under control.

– A higher-than expected U.S. jobless claims number further compounded the dollar’s losses, as the report suggested labour market weakness that can help bring down inflation. Initial claims rose 13,000 to a seasonally adjusted 196,000, above economists forecast of 190,000.

– The euro climbed 0.2% as well to $1.0733, while sterling rose 0.3% against the greenback to $1.2114, with both boosted by improving risk sentiment across markets. The dollar rose 0.1% against the Japanese yen to 131.57 yen.

– The Australian dollar, often seen as a proxy for risk sentiment, rose 0.8% to US$0.6973 as the safe-haven U.S. currency dipped in line with a rally in equities and other so-called “risk-friendly” assets, helped by strong company earnings.

– Gold prices hovered around a one-month low on Friday amid pressure from rising short-term yields, and were headed for a second consecutive weekly loss as markets reassessed their expectations of more interest rate hikes from the Federal Reserve.


Chart Focus XAU/USD – Gold

Key Points

1. Buy Gold recommendation.

2. Buy Gold at $1858. Stop at 1851.00 and profit target at 1885.

3. A weak US dollar and a decline in Treasury yields are both aiding the yellow metal.

4. A candlestick price pattern and a divergence in the MACD indicator is hinting at a possible price low being formed.

Fundamental Comments

1. A weak US dollar is aiding the yellow metal.

2. A decline in US Treasury yields is aiding gold with a lower holding cost.

Technical Comments

1. A possible Hammer candlestick pattern is hinting at a possible price low being formed

2. MACD is confirming a possible price low with a divergence.



Key Levels

Support1852.651843.551831.40
Resistance1866.251878.701890.15









Technical Overview

USD/JPY – We had a sell recommendation yesterday at 131.40 which was filled. Our stop at 131.80 was also filled when price reached a high of 131.88. Stochastic and 20EMA are both hinting at a price rally. Price is likely to face a stiff resistance at 131.85. If price can move above 131.85, we are likely to see a rally to 132.90 in the next 48 hours. However, failure to move above 131.85 is likely to send price back to 129.15.

Support131.30130.70130.20
Resistance131.85132.25132.90

EUR/USD – Price could be forming a bottoming process on the chart. Both the MACD and the 20EMA are supporting this view. If price can move above 1.0790, we are likely to see a price rally to the previous important chart point at 1.0875. However, should price fails to move above 1.0790, 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 reached a high of 1.2194 overnight and has retraced back to the 20EMA support at 1.2100. If price can stay above 1.2090, we are likely to see another test of the overnight high at 1.2195. However, failure to hold above 1.2090 would mean the high is in place and price is likely to decline to 1.1960 in the next few days. All three indicators are hinting at a decline to 1.1960. We are also in favour of 1.1960.

Support1.20901.20551.2005
Resistance1.21401.21951.2250

XAG/USD – Price may have reached a low at $21.82. MACD is hinting with divergence of a possible price low. Stochastic is also hinting of a possible price rally. We think price is likely to move higher to test the 20EMA line at $22.25. If price can move above this point, it is likely to confirm the low and hint at a low to 22.60 in the next few days. A move below 21.82 would negate our bullish view.

Support21.8021.4521.15
Resistance22.1522.4022.70

USD/CHF – Price was capped by the 20EMA and declined to a low of 0.9159 overnight. Price has managed to recover above the 20EMA line at 0.9210. If price can stay above the 20EMA line at 0.9210, it would hint at a low is in place and price is likely to test the high of 0.9290 again in the next 48 hours. However, failure to hold above 0.9210 would hint at a decline to 0.9060 in the next few days.

Support0.92100.91600.9120
Resistance0.92500.92850.9315

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 – Aussie Dollar Gained On Lifting Of Coal Ban By China

Nicholas

Market Talk
– The greenback struggled to advance on Wednesday even though Federal Reserve policymakers reiterated their commitment last month to fighting inflation. The Aussie dollar rallied after China eased its restrictions on imports of Australian coal.

– Minutes of the Federal Reserve’s December meeting released last night showed that policymakers unanimously supported raising interest rates at a slower pace, offering some relief to markets battered by rising borrowing costs.

– The euro rose 0.54% to $1.0605 overnight after Euro zone business activity contracted less than initially thought at the end of last year, according to a survey, suggesting the bloc’s recession may not be as deep as expected. Sterling was last trading at $1.2057.

– The Australian dollar rallied 1.7% overnight on news that China’s state planner has allowed three central government-backed utilities and its top steel maker to resume coal imports from Australia, marking the first such move since Beijing imposed an unofficial ban on coal trade with Canberra in 2020.

– Gold prices held steady at $1854.90 per ounce on Thursday, hovering close to a near seven-month high scaled in the previous session, while market participants prepared for U.S. jobs data that could influence the Federal Reserve’s policy trajectory.


Chart Focus AUD/USD

Key Points

1. Buy AUD/USD recommendation.

2. Buy AUD/USD at 0.6800. Stop at 0.6765 and profit target at 0.6885

3. A slower pace of US interest rate hikes and the lifting of a coal ban are both aiding the Aussie dollar.

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

Fundamental Comments

1. A slower pace of U.S. interest rate hikes is weighing on the U.S. dollar.

2. The lifting of a coal ban by China is aiding the Aussie dollar.

Technical Comments

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

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



Key Levels

Support0.68000.67650.6720
Resistance0.68400.68850.6915









Technical Overview

USD/JPY – Price reached a low of 129.50 on Tuesday but this low was accompanied by a MACD divergence warning. Price has since rallied to a high of 132.71 last night. Stochastic is in the overbought zone but 20EMA is hinting at a bullish price trend. MACD is also turning bullish. We think price can continue to move higher despite the overbought condition. We think price can move up to 133.40 in the next 48 hours.

Support131.95131.45130.70
Resistance132.70133.35133.90

EUR/USD – The price rally off the low at 1.0518 was capped by the declining 20EMA line. Stochastic is in the middle of its range but is about to turn lower, hinting at a price decline. MACD remains bearish and is hinting at a bearish price trend. 20EMA is also hinting at a bearish price trend. We see price going lower to 1.0515 again in the next 24 hours. However, a move above 1.0635 would hint at a rally to 1.0715. We prefer the bearish price move for today.

Support1.05951.05601.0515
Resistance1.06351.06801.0715

GBP/USD – The rally off the low of 1.1899 was capped by a previous resistance point at 1.2085. Stochastic is also in the overbought zone and is about to have a bearish crossover, hinting at a price decline. MACD remains bullish. 20EMA is neutral. If price fails to move above 1.2085 today, we are likely to see 1.1900 tested again in the next 24 hours. Above 1.2085, price is likely to test the previous high of 1.2125.

Support1.20201.19551.1920
Resistance1.20851.21251.2190

XAU/USD – Price continued its rally from the previous week and reached a high of $1865.15 yesterday. Stochastic is the overbought zone and is hinting at a limited upside but 20EMA is hinting at a strong bullish price trend. MACD is also hinting at a bullish price trend. Our view remains the same as yesterday. We see price going up to $1878.45 in the next 24 hours. We may see a corrective decline but this decline should be supported by the 20EMA line at $1842.40.

Support1849.851838.401827.30
Resistance1858.901865.101878.45

USD/CHF – We had a buy recommendation yesterday at 0.9305. However, our call was wrong and we got stop out at 0.9270. Price reached a low of 0.9252 but MACD remains bullish and is hinting at a bullish price trend. Stochastic is near to the oversold zone and is about to have a bullish crossover. Stochastic is hinting at a price rally. 20EMA is flat and neutral. Our view remains the same as yesterday. We see a rally to 0.9400 in the next 48 hours.

Support0.92700.92250.9175
Resistance0.93150.93550.9400