Tag: USD/CNH

FX Commentary – Safe Havens Advanced On Credit Suisse’s Woe

Nicholas

Market Talk
– Safe haven currencies like the U.S. dollar and the yen were in bid on Thursday on renewed fears of a global banking crisis, after contagion from the implosion of U.S.-based Silicon Valley Bank had spread across the Atlantic to Swiss bank Credit Suisse.

– The euro was nursing deep losses in early Asia trade at $1.0582, after tumbling 1.4% in the previous session ahead of ECB monetary policy decision later today. Traders’ bets on a 50-basis-point rate hike have evaporated as the rout in Credit Suisse shares fanned concerns about the health of Europe’s banking sector.

– Sterling gained 0.18% to $1.2077, having fallen close to 0.9% on Wednesday. The yen jumped about 0.5% in early Asia trade and last stood at 132.73 per dollar, extending Wednesday’s 0.6% gain.

– The Aussie was last at $0.6634, after Australian data showed employment rebounded by a strong 64,600 in February, while the jobless rate fell back to 3.5%. Upbeat result would have added to the case for the RBA to hike interest rates again at its next meeting in April.

– Gold solidified its hold on the $1,900 perch on Wednesday, hitting a new six-week high at $1937.03, as the U.S. banking crisis that began with California’s Silicon Valley Bank turned global with a heightened focus on the troubled finances of leading European investment banker Credit Suisse.


Chart Focus GBP/USD

Key Points

1. Sell GBP/USD recommendation.

2. Sell GBP/USD at 1.2080. Stop at 1.2110 and profit target at 1.2005.

3. Credit Suisse’s woe and interest rate differential are both weighing on the pound.

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

Fundamental Comments

1. Credit Suisse’s woe is likely to weigh on the pound.

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

Technical Comments

1. Price is likely to be capped by the 20EMA line.

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



Key Levels

Support1.20451.20001.1950
Resistance1.20851.21351.2190










Technical Overview

USD/JPY – Price reached a high of 135.10 yesterday which was just shy of the Fibonacci 62% correction point at 135.20. This was followed by another decline below the previous low at 132.27 to a low of 132.20. MACD had given a potential divergence warning hinting at a potential price low. Stochastic is also hinting at a possible price low. However, 20EMA is hinting at a strong bearish price trend.

Support132.65132.20131.75
Resistance133.05133.80134.65

EUR/USD – Price reached a low of 1.0517 overnight and we have seen a rally to a high of 1.0615 at the point of this writing. We are expecting the 20EMA line at 1.0640 to cap this rally. We are looking at another decline to 1.0517 again. Stochastic is hinting at a price rally but MACD and 20EMA are hinting at a price decline. However, tonight ECB monetary policy meeting could have a strong bearing on the next direction.

Support1.05901.05551.0515
Resistance1.06351.06851.0725

AUD/USD – Price was capped by the 20EMA line at 0.6715 and is currently close to the low at 0.6563. 20EMA and MACD remain bearish and are hinting at a bearish price trend. Stochastic is hinting at a price rally. We think if price can stay above the previous day’s low, we are likely to see a rally back to 0.6780 in the next few days. A move below 0.6563 would negate our bullish price view.

Support0.65900.65600.6520
Resistance0.66450.66750.6720

XAU/USD – Price reached a new six-week high at $1937.03 overnight but this high was accompanied by a divergence warning from the MACD indicator, hinting at a possible price high. Stochastic is also hinting a possible price decline. 20EMA is hinting at a continuation of the bullish price trend. We think price is likely to move lower today to the previous support level at $1885. A move above the 6-week high would negate our bearish view.

Support1907.351895.951885.15
Resistance1920.101937.101949.15

USD/CNH – We had a sell recommendation at 6.9225 yesterday but price only reached a high of 6.9140 and our entry order was not filled. Indicators are hinting that the upward correction may not be over and we could see a price higher to 6.9260 in the next 24 hours. However a price move above 6.9410 would negate our bearish price view and hinting at a bigger rally to 7.00 in the near future.

Support6.88406.86156.8485
Resistance6.91406.93856.9635

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

Nicholas

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

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

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

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

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


Chart Focus USD/CNH

Key Points

1. Sell USD/CNH recommendation.

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

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

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

Fundamental Comments

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

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

Technical Comments

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

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



Key Levels

Support6.87106.84256.8190
Resistance6.90306.92906.9465










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

Support134.40133.95133.25
Resistance134.90135.35135.80

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

Support1.07251.06801.0635
Resistance1.07651.08051.0850

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

Support1.21351.20951.2050
Resistance1.22001.22651.2305

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

Support1894.801880.901870.75
Resistance1903.151914.601927.50

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

Support0.62100.61600.6120
Resistance0.62750.63100.6385

FX Commentary – Aussie Dollar Gained On China’s Strong PMI Reading

Nicholas

Market Talk
– The U.S. dollar fell across the board on Wednesday, weighed down by firmer commodity currencies that benefited from China’s strong manufacturing activity data. U.S. manufacturing activity contracted for a fourth straight month in February, adding weight on the US dollar.

– China’s yuan rose after data showed Chinese manufacturing activity and non-manufacturing activities expanded at its fastest pace in a decade. The Kiwi surged 1% to $0.6248, while the Aussie rose to 0.6752.

– The euro climbed 0.8% to $1.0660, boosted by the German inflation report. German consumer prices rose more than anticipated and pushed up European Central Bank rate hike expectations after the data pointed to no let-up in stubborn cost pressures.

– Sterling traded little changed on the day at $1.2016, after Bank of England Governor Andrew Bailey said it was possible the central bank had already come to the end of its rate-rising cycle. The Japanese yen was little changed at $136.20.

Gold prices hovered at an over one-week high on Thursday as a February rally in the U.S. dollar appeared to have run out of steam, benefiting the yellow metal. Spot Gold hovered around $1837.35 an ounce.

Chart Focus NZD/USD

Key Points

1. Buy NZD/USD recommendation.

2. Buy NZD/USD at 0.6210. Stop at 0.6180 and profit target at 0.6310.

3. A strong China PMI data and a weak U.S. manufacturing activity are aiding the Kiwi.

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

Fundamental Comments

1. A strong China PMI is aiding the Kiwi.

2. A weak U.S. manufacturing activity is weighing on the US dollar.

Technical Comments

1. Price is likely to be supported by the 20EMA line.

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



Key Levels

Support0.62050.61700.6130
Resistance0.62450.62750.6310










Technical Overview

USD/JPY – Price reached a low of 135.22, which was just below the support at 135.35. Price is likely to test the previous high at 136.90 and a move above this point is likely to send price higher to 137.70. Stochastic is hinting at a price rally but MACD is warning of a potential price high in the making. 20EMA is hinting at a price rally. We think price is likely to move up to 137.70 in the next couple of days.

Support136.45135.95135.35
Resistance136.90137.35137.75

EUR/USD – Price reached a high of 1.0691 overnight and has been on a decline. 20EMA line has a support at 1.0620 and if price can stay above this line, we are likely to see another rally to the previous high at 1.0691. However, a move below this support is likely to send price lower to 1.0560 in the next couple of days. Stochastic is hinting at a price decline but both MACD and 20EMA are hinting at a price rally.

Support1.06201.05801.0535
Resistance1.06551.06901.0735

GBP/USD – The overnight rally was capped by the falling 20EMA line at 1.2020 and we are likely to see a continuation of the decline to 1.1920 in the next 1-2 days. Stochastic is hinting at a price decline. 20EMA and MACD are both hinting at a bearish price trend. All the 3 indicators are supporting the bearish price view. A move above the 20EMA line at 1.2020 would negate our bearish view.

Support1.19651.19201.1865
Resistance1.20151.20651.2105

XAU/USD – Price is currently moving back towards the 20EMA line at $1828.55 after reaching a high of $1844.20 in the previous trading day. Stochastic is hinting at a price decline but both MACD and 20EMA are hinting at a bullish price trend. We think price should be able to stay above the 20EMA line support at $1828.30 and test the overnight high of $1844.20 in the next 48 hours. Below $1828.30 would hint at a move to $1804.50.

Support1828.201818.901804.50
Resistance1838.351847.551860.05

USD/CNH – Price reached a low of 6.8630 overnight and we are currently seeing a rally towards the 20EMA line at 6.9175. Price is likely to be capped by either the 20EMA line or the Fibonacci 50% correction point at $6.9260. We are likely to see a decline from this location back to 6.8630 or lower to 6.8540. Stochastic is hinting at a price rally but both 20EMA and MACD are hinting at a price decline.

Support6.89956.86306.8415
Resistance6.91706.93356.9610

FX Commentary – US Dollar Slipped After Recent Gains

Nicholas

Market Talk
– The US dollar fell, tracking a slide in U.S. Treasury yields, as investors consolidated gains after the greenback’s recent rise and looked ahead for the release of jobs data and consumer prices for February later in the week.

– The British pound held steady on Tuesday, retaining gains overnight after Britain struck a new trade deal with the European Union, which brightened the outlook for the post-Brexit UK economy and signalled improved relations between London and the bloc.

– Sterling jumped on the back of the news to clock a 1% gain in the previous session, and rose to a high of $1.2069 on Tuesday. The euro similarly got a lift and was last 0.05% higher at $1.0614, after rising 0.6% on Monday.

– The Japanese yen steadied at 136.23. Incoming Bank of Japan (BOJ) Governor Kazuo Ueda has thus far offered few clues on whether the BOJ could exit its massive stimulus imminently, although he indicated that he had ideas on such a move.

– Gold prices kept to a tight range on Tuesday after recovering slightly from their weakest level this year, as concerns over rising interest rates and anticipation of key U.S. economic readings this week kept traders largely to the sidelines.

Chart Focus USD/CNH

Key Points

1. Buy USD/CNH recommendation.

2. Buy USD/CNH at 6.9475. Stop at 6.9310 and profit target at 6.9880.

3. Recent strong U.S. data and rising U.S. interest rate outlook are both aiding the U.S. dollar.

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

Fundamental Comments

1. Rising U.S. interest rate outlook is likely to aid the U.S. dollar.

2. Recent strong US data are aiding the U.S. dollar.

Technical Comments

1. Price is likely to be support 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

Support6.94506.92706.9080
Resistance6.96756.98957.0020










Technical Overview

USD/JPY – Price reached a high of 136.55 on early Monday morning despite earlier divergence warnings from the MACD indicator. Since the high, price has been moving in a tight range from 135.85 to 136.55. Stochastic is hinting at a price decline but both MACD and 20EMA are hinting at a price rally. We think price is likely to continue in this range with no market moving news on this pair for the next 48 hours.

Support135.85135.35134.75
Resistance136.55136.90137.35

EUR/USD – Price continued its decline to a low of 1.0532 on Monday morning and we saw a rally to a high of 1.0619 on Monday night. Is this a confirmation of a low in place and a reversal in trend? We do not think so as price failed to move above a previous price low. This is hinting at another attempt to the Monday’s low at 1.0532. Stochastic is hinting at a price rally but both MACD and 20EMA are both hinting at a price decline.

Support1.05751.05351.0490
Resistance1.06201.06651.0705

GBP/USD – Price reached a low of 1.1921 and rallied on the back of a trade deal with the EU to a high of 1.2067. Stochastic is hinting at a limited upside but both 20EMA and MACD are hinting at a continuation of this rally. If price can stay above the 20EMA at 1.2015, we see a rally to 1.2145. A failure to move above 1.2015 could result in a return to the previous low at 1.1920 in the next 48 hours.

Support1.20151.19701.1920
Resistance1.20651.21051.2150

XAU/USD – Price reached a low of $1806.29 overnight and stochastic is hinting at a price rally. However, both MACD and 20EMA are hinting at a continuation of this price decline. We think price may have reached a temporary bottom. If price can move above the 20EMA at $1820, it could hint at a possible price low and a rally to $1847. Failure to surpass this resistance could result in a slow grind to test $1800.

Support1806.251791.101783.90
Resistance1820.701833.801847.55

AUD/JPY – We had a buy call yesterday at 91.15 but price only reached a low of 91.31 and our entry order was not filled. Price has also rallied overnight to a high of 91.97. Stochastic is hinting at a continuation of this rising price trend but 20EMA is currently capping this rally. If price can move above the 20EMA line at 91.85, we are likely to see a rally to 92.95 but failure could result in a fall to 91.15.

Support91.5591.1590.45
Resistance91.9592.2593.00

FX Commentary – US Dollar Weakened Ahead of CPI Report

Nicholas

Market Talk
-The US dollar was broadly lower against its peers on Tuesday ahead of a keenly anticipated inflation report, while the yen strengthened as surprise pick Kazuo Ueda was nominated to be the next governor of Bank of Japan.

– Markets are looking to the U.S. consumer price index (CPI) data for further clues on Federal Reserve’s policy outlook, with the headline number expected to rise 0.5% in January, according to a Reuters poll, after falling 0.1% in December.

– The euro was up 0.14% at $1.0735, having risen 0.435% in the previous session. The British pound was last trading at $1.2147, up 0.10% on the day, after rising 0.68%.

– The Japanese yen strengthened 0.46% to 131.82 per dollar on Tuesday, having slipped 0.7% in the previous session. Market has already factored in the likely appointment of the new BOJ governor. The Australian dollar added 0.10% to $0.697, while the kiwi fell 0.06% to $0.6350.

– Spot gold was up 0.2% at $1,857.22 per ounce on Tuesday as the dollar retreated, with investors bracing for U.S. inflation data that could determine the Federal Reserve’s next moves in its monetary policy plans.

Chart Focus AUD/JPY

Key Points

1. Buy AUD/JPY recommendation.

2. Buy AUD/JPY at 91.60. Stop at 91.30 and profit target at 92.45

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

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

Fundamental Comments

1. Divergent monetary policy is aiding the Aussie dollar.

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

Technical Comments

1. Price is likely to be supported by the 20EMA line.

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












Technical Overview

USD/JPY – From a low of 129.80 and we have seen a bounce back up to a high of 132.90 on Monday. MACD and Stochastic are both hinting that price could have reached a high and a decline is likely in the days ahead. The 20EMA line at 131.65 is currently the first support for price. A break of this support is likely to send price lower to 130.30 in the next 24 hours. Only a price move above 133.00 would negate our bearish view.

Support131.60131.15130.60
Resistance132.35132.90133.35

EUR/USD – Price reached a new low of 1.0654 on Monday and this low was accompanied by a divergence warning from the MACD indicator, hinting at a possible price low. Stochastic is also giving the same hint. We think price is likely to move higher in the next 48 hours to 1.0790. An ability to move above 1.0790 is likely to send price higher to 1.0885 in the next few days. A move below 1.0660 would negate our bullish view.

Support1.07051.06601.0620
Resistance1.07501.07901.0850

GBP/USD – We had a sell call at 1.2075 yesterday but our call was wrong. Price had reached a low of 1.2030 and has bounced up higher to 1.2151 this morning. Stochastic is hinting at a price rally. 20EMA is also hinting at a price rally but MACD is hinting at a sideways movement. We think price is likely to continue its rally to 1.2190 in the next 24 hours. Above 1.2195, the next target would be 1.2230.

Support1.21101.20751.2030
Resistance1.21551.21901.2230

XAU/USD – We had a buy call last Friday at $1858 and yesterday we had recommended keeping stop at $1851 and profit order at $1885. Our stop loss order was triggered yesterday. Price declined to a low of $1850.40 yesterday. However, this low was accompanied by a divergence warning from the MACD, hinting at a possible price low. If price can hold above the previous day’s low we see price moving up to $1868 in the next 24 hours.

Support1850.451840.451825.05
Resistance1866.701878.701890.15

USD/CNH – Price has reached a high of 6.8386 on Monday and has been on a decline. We think the decline is likely to continue as both MACD and stochastic indicator are hinting at a possible price high with divergence warnings. We think price is likely to move lower to the 6.7730 in the next 48 hours. If price can move below this support, we are likely to see the decline continue to 6.7350 in the next few days.

Support6.81606.80406.7950
Resistance6.82806.83856.8525