Tag: USD/JPY

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

Nicholas

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

Support1.35701.35201.3475
Resistance1.36451.36951.3730










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.

Support134.70134.35132.80
Resistance135.15135.50136.05

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.

Support1.09901.09451.0910
Resistance1.10351.10751.1095

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.

Support1.24651.24251.2385
Resistance1.25151.25451.2595

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.

Support1969.101955.301949.65
Resistance1984.751996.802003.70

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.

Support1.66001.65251.6485
Resistance1.66701.67301.6785

FX Commentary – Safe Havens Rose On Worries Of A Slower Global Economy

Nicholas

Market Talk
– The safe-haven U.S. dollar and yen rose on Tuesday as market sentiment turned risk-averse amid renewed worries about the U.S. banking sector and the outlook for the global economy, which knocked the euro off a nearly 10-month high.

– U.S. consumer confidence index fell to 101.3 – the lowest since July 2022 – from a revised 104.0 in March. The U.S. Richmond Fed manufacturing index was down at -10 in April, the fourth straight month of contraction. Both surveys negated strong U.S. housing data which beat estimates with a 9.6% rise in March to a one-year high of 683,000 after net revisions.

– The yen firmed 0.6% to 133.49 per dollar even as the BOJ’s new governor Kazuo Ueda signaled he was in no hurry to change monetary policy. The euro declined to $1.0969, having risen 1.2% so far in April. Sterling was down 0.6% at $1.2403, but was close to a 10-month high of $1.2545 reached earlier this month.

– The Australian dollar took a further knock on Wednesday, declining to $0.6614, the weakest level since mid-March after a downward surprise in core inflation lessened the pressure for another hike in interest rates next month.

– Gold prices rose to key levels on Wednesday, buoyed by safe haven demand as a string of weak U.S. company earnings and economic data fueled fears of a potential recession this year. Resurgent fears of a banking crisis also boosted safe haven demand


Chart Focus GBP/USD

Key Points

1. Sell GBP/USD recommendation.

2. Sell GBP/USD at 1.2435. Stop at 1.2470 and profit target at 1.2350

3. In increase in risk sentiment and interest rate differential are both in the US dollar favour.

4. Price is likely to be capped by the 20EMA and stochastic is hinting at a price decline.

Fundamental Comments

1. As market sentiment turned risk-averse, the US dollar is likely to be in demand.

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. Stochastic is moving lower and hinting at a continuation of the downtrend.



Key Levels

Support1.23851.23401.2275
Resistance1.24401.25051.2545









Technical Overview
USD/JPY – Price has moved below the previous week low and could be on its way to 133.10 in a bigger correction move. This is also the Fibonacci ABC formation price target as well. Stochastic is hinting at a price decline. Both MACD and 20EMA are also hinting at a price decline. Only a price move above 134.50 would negate this bearish price view over the next couple of days ahead.

Support133.35132.80132.50
Resistance133.90134.35134.95

EUR/USD – We had a buy recommendation yesterday at 1.0995, which was filled when price declined to a low of 1.0963. The low was just above our stop at 1.0960. Our view may be wrong with market turning to safe haven. We would recommend keeping stop at 1.0960 and profit target at 1.1075. Stochastic is still moving lower but MACD is hinting at a possible price rally. 20EMA is hinting at a price decline.

Support1.09451.09101.0875
Resistance1.09951.10351.1075

AUD/USD – Price reached a low of 0.6601 this morning. There was no divergence warning from the MACD indicator. It means price can continue to move lower to the next support level at 0.6560. Stochastic is hinting at a continuation of this current decline. 20EMA is hinting at a bearish price trend. We think price will move lower. Only a price move above 0.6670 will negate this bearish price move.

Support0.65800.65400.6515
Resistance0.66200.66650.6715

XAU/USD – A move towards safe haven has help to halt a decline in gold at $1975.95. We are likely to see price moves higher to test the important resistance at $2012.35. If price failed to move above this resistance, there could be another decline to $1969 but a move above will hint at price rally to $2048.45. Stochastic and 20EMA are both hinting at a price rally but MACD is hinting at a price decline.1971.

Support1992.851983.351971.40
Resistance2003.702012.352022.40

NZD/USD – Price has failed to move higher to test 0.6225 we had envisioned yesterday. Instead, price is near to the low of 0.6125 despite the divergence warning given by the MACD indictor. Stochastic is hinting at a continuation of this price decline. Both MACD and 20EMA are also hinting at a bearish price trend ahead. A break of 0.6125 is likely to send price down to 0.6080 in the next 24 hours.

Support0.61250.60800.6050
Resistance0.61850.62250.6265

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

Nicholas

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

Support1.10401.10001.0965
Resistance1.10751.11001.1135










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.

Support134.10133.55133.15
Resistance134.70135.15135.55

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.

Support1.35101.34701.3445
Resistance1.35651.36201.3650

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.

Support1.24601.24101.2375
Resistance1.25051.25551.2600

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.

Support1988.651969.151959.95
Resistance2000.802018.152031.70

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.

Support0.61250.60800.6050
Resistance0.61850.62250.6265

FX Commentary – US Dollar Held Gains On Expectation Of Tight Monetary Policy.

Nicholas

Market Talk
– The U.S. dollar held gains on Thursday after strong U.S. banking results firmed up expectations that the Federal Reserve will keep monetary policy tight for a while longer while the New Zealand’s dollar slumped after cooler than expected inflation data.

– The Japanese yen weakened for a second day, losing 0.1% to at 134.85, after the yield on two-year Treasury notes rose 7 basis points to 4.269%, after hitting a one-month high of 4.286%. The greenback had briefly poked above 135 for the first time in a month in Wednesday’s trading.

– Sterling was last trading at $1.2440, up 0.13% on the day after hotter-than-expected UK inflation cemented expectations for more rate hikes by the Bank of England.

– New Zealand’s consumer price index for the first quarter came in below expectations on Thursday, but remained near historic highs. The kiwi slid 0.7% to $0.6154 after touching the weakest level since March 16.

– Gold prices traded below key levels on Thursday, coming under pressure from resurgence in the dollar and mounting expectations that major central banks across the globe will keep raising interest rates in the near-term.


Chart Focus USD/CHF

Key Points

1. Buy USD/CHF recommendation.

2. Buy USD/CHF at 0.8925. Stop at 0.8895 and profit target at 0.9050

3. Expectations of another 25bp Fed hike and an increase in US Treasury yields are both likely to aid the U.S. dollar.

4. Price is likely to be supported by the Fibonacci 50% correction point with MACD hinting at a bullish price trend.

Fundamental Comments

1. An increase in US Treasury yields is likely to aid the U.S. dollar.

2. Expectations of another interest rate hike by the Fed is likely to aid the U.S. dollar.

Technical Comments

1. Price is likely to be supported by the Fibonacci 50% correction point.

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



Key Levels

Support0.89350.88950.8855
Resistance0.89750.90050.9045










Technical Overview

USD/JPY – Price reached a high of 135.13 on Wednesday but this high was accompanied by a divergence warning from the MACD indicator, hinting at a possible price high. Stochastic is also hinting at a price decline ahead but 20EMA is hinting at a strong bullish price trend. We think price may have reached a high at 135.13 and we see a decline back to 133.80 in the next few days.

Support134.30133.95133.35
Resistance134.75135.15135.80

EUR/USD – Price has tested the support at 1.0905 on 2 occasions and both times, this support has managed to hold. We are likely to test a test of the top side at 1.1075. Stochastic is hinting at a price rally ahead. MACD and 20EMA are neutral at the moment. We think price is likely to move higher to 1.1020 in the next 48 hours as long as price can hold above 1.0945.

Support1.09401.09051.0865
Resistance1.09851.10201.1075

GBP/USD – Price has managed to hold around the 20EMA support level and if this support holds, price is likely to test the topside of 1.25 again in the next 48 hours. Stochastic is rising and is hinting at a bullish price trend. MACD is about to turn bullish while 20EMA is neutral at the moment. We favour the topside test but a move below 1.2390 would negate our bullish price view for the next 48 hours.

Support1.24051.23551.2305
Resistance1.24551.25051.2545

XAU/USD – Price only reached a high of $1998.50 overnight, missing our sell entry price at $1999. If price is capped by the 20EMA at $2000, we are likely to see another decline to $1965. If price can move above the $2000 level, we are likely to see a test back to $2022 in the next few days. MACD has a divergence and is hinting at a price rally. Stochastic is also hinting at a price rally but 20EMA is hinting at a price decline. We favour the upside test.

Support1980.951966.001949.65
Resistance1998.852011.702022.65

NZD/USD – Price reached a low this morning at 0.6148 but this low was accompanied by a divergence warning from the MACD indicator, hinting at a possible price low. Stochastic is hinting at continuation of this price decline. 20EMA is also hinting at a bearish price trend. We think price may have reached a low and we see a rally back to the previous high at 0.6225 in the next few days.

Support0.61450.60950.6060
Resistance0.61850.62250.6260

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

Nicholas

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

Support1980.951966.001949.65
Resistance1998.852011.702022.65










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.

Support133.95133.35132.85
Resistance134.70135.10135.80

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.

Support1.09401.09051.0865
Resistance1.09851.10201.1075

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.

Support1.24051.23551.2305
Resistance1.24501.25051.2545

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.

Support1.33601.33001.3260
Resistance1.34201.34551.3490

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.

Support0.66950.66450.6615
Resistance0.67450.67800.6810