Tag: USD/SGD

FX Commentary – US Dollar At A 2-Year High

Nicholas

Market Talk


– The U.S. dollar rose to its highest in almost 2 years aided by the prospect of aggressive U.S. rate hikes and on safe-haven flows fanned by slowing growth in China due to COVID-19 lockdown and in Europe, due to the Russia-Ukraine war.

– The yen has also benefited from the flight to safety, and the Japanese currency pulled up from recent lows at 129.35 to a one-week high at 126.93 on concern about Chinese growth with the financial hub of Shanghai having been under strict lockdown to fight COVID-19 for around a month.

– The euro fell below its COVID-19 lows to $1.0635 in early trade, or a five-year low. Concerns are growing about energy security and economic growth in Europe after Russia said it would halt gas supplies to Poland and Bulgaria later in the day.

– The pound has dropped more than 2% against the dollar in the week to date after worse-than-expected retail sales data prompted a re-think of the U.K.’s interest rates outlook. It hit a fresh 21-month low on early Wednesday morning at 1.2559.

– Gold was up on Wednesday morning in Asia as investors sought cover from fears of stalling global economic growth and soaring inflation. However, gains were limited with the greenback at its strongest level in almost 2 years.


Chart Focus USD/JPY

Key Points

1. Buy USD/JPY recommendation.

2. Buy USD/JPY at 127.65. Stop at 127.20 and profit target at 129.10

3. Expectation of a US rate hike and interest rate differential are both in the US dollar favour.

4. Price is supported with stochastic and MACD indicator hinting at a bullish price trend.

Fundamental Comments

1. Expectation of a US hike rate is likely to aid the US dollar.

2. Interest rate differential and bond yields spread are both in the US dollar favour.

Technical Comments

1. Price is supported by a previous resistance turned support line.

2. Stochastic and MACD are both hinting at a bullish price trend with bullish crossovers.



Key Levels

Support127.65127.30126.90
Resistance128.15128.55128.95

Technical Overview

USD/SGD – Price broke above a 5-month high and is there is an important resistance at 1.3800. If price can breach this resistance, it could be heading to 1.40. However, there is a divergence warning by the MACD indicator, hinting at a possible price high. Stochastic is also in the overbought zone while 20EMA is bullish. We think price is likely to be capped below 1.3800 and we could see a decline back to 1.3690 in the next few days.

Support1.37651.37301.3695
Resistance1.37951.38351.3870

EUR/USD – The decline continues with price reaching a low of $1.0616 at the point of this writing. There is still no sign of a reversal as MACD is not showing any divergence. Stochastic is in the oversold zone but remains weak. 20EMA is pointing down with a steep slope hinting at a strong bearish price trend. The next price support lies at 1.0570. We see a decline to this level in the next 24 hours.

Support1.06151.05701.0525
Resistance1.06551.06951.0735

GBP/USD – Price declined to a fresh new low at $1.2569 this morning and we think price may have reached a temporary low. If price is halted by the 20EMA, we may see another decline to 1.2559 but this could be the buying opportunity. Stochastic is starting to turn up from the oversold zone and the decline of the 20EMA is also slowing down, hinting at a possible price low.

Support1.25551.25151.2480
Resistance1.25951.26351.2680

XAU/USD – After reaching a low of $1891.40 overnight, price managed to pull up to $1911.15 but the rally seems to be running out of gas. MACD is below the zero line and is turning down again, hinting at a price decline. 20EMA is also hinting at a bearish price trend. Stochastic is near to the oversold zone but a bearish crossover is hinting at a price decline. We think price is likely to make a marginal low below $1891.40 before a reversal.

Support1890.051877.801867.75
Resistance1901.701911.151921.10

USD/CAD – We had a buy call at 1.2655 yesterday but price only reached a low of 1.2683 overnight, missing our entry order. Price has moved higher to 1.2828 overnight and MACD is showing a divergence, hinting at a possible price high. Stochastic is also in the overbought zone, hinting at a price decline. However, 20EMA remains bullish. We think price may have reached a temporary high and a corrective decline to 1.2665 is likely in the next few days.

Support1.27751.27301.2695
Resistance1.28101.28401.2870

FX Commentary – US Dollar Supported By US Treasury Yields Rising To 2-Year High.

Nicholas

Market Talk
– The dollar was down on Tuesday morning in Asia against a basket of currencies as recent employment data prompted some Wall Street banks to raise their estimates for how quickly the Federal Reserve will raise interest rates this year.

– The benchmark U.S. 10-year Treasury yield rose to its highest level in almost two years, as investors increasingly expect a tight labour market and rising inflation fuel expectations the Fed will become more aggressive in raising rates and tapering its balance sheet.

– The dollar was little changed at $115.23 yen after bouncing off a one-week low of $115.04 overnight. The Australian dollar added 0.17% to $0.7186, getting support from local retail sales data that came in much higher than economists forecast.

– The euro was about flat at $1.1332, stuck in the middle of its trading range since mid-November. Sterling was stable at $1.3582 after easing back from Monday’s two-month high of $1.3602.

– Gold was up on Tuesday morning in Asia, with a weaker US dollar lending support to the yellow metal. Investors are focused on key inflation data due later this week that could underpin faster rate hikes by the U.S. Federal Reserve.

Chart Focus USD/CAD

Key Points

1. Buy USD/CAD recommendation.

2. Buy USD/CAD at 1.2645. Stop at 1.2605 and profit target at 1.2720.

3. Rising US Treasury yields and rising number of coronavirus cases are both likely to aid the US dollar against the Canadian dollar.

4. Fibonacci 62% support is hinting that price is in a correction and MACD support the bullish view with its bullish hint.

Fundamental Comments

1. Rising US Treasury yields will be an aid to the US dollar.

2. Rise in number of coronavirus cases globally is aiding the safe haven US dollar.

Technical Comments

1. Price is supported above the Fibonacci 62% correction point, which is a hint that the decline is a correction.

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



Key Levels

Support1.26401.26051.2565
Resistance1.26701.27001.2730

Technical Overview

USD/JPY – The overnight rally was capped by the 20EMA line at 115.35 and price could be heading lower to the Fibonacci 127% price projection target at 114.83. MACD remains bearish and is turning down, hinting at a bearish price trend. Stochastic is near to the overbought zone. 20EMA remains bullish. A price move above 115.50 would negate our bearish view for the next couple of days.

Support115.20114.90114.65
Resistance115.50115.95116.35

EUR/USD – Price tested the bottom end of the range at 1.1275 but stayed above the range last night. Price has moved up to 1.1342 this morning and we are expecting the rally to continue towards the top end of the range at 1.1385 in the next 48 hours. MACD remains bullish and is hinting at a bullish price trend. However, Stochastic is inside the overbought zone and is hinting at a limited upside.

Support1.13151.12751.1230
Resistance1.13451.13851.1430

GBP/USD – Price tested the topside at 1.3600 on Friday and Monday as well as this morning. On those three occasions, price has failed to move above the 1.3600 barrier. Price may also be forming a Rising Wedge chart pattern on the 4-hourly chart, which is a bearish sign. Stochastic is now in the overbought zone. MACD remains bullish but is turning down. 20EMA remains bullish. If price cannot move above 1.3600 soon, it is likely to decline to 1.3460 in the next few days.

Support1.35551.35151.3480
Resistance1.36051.36601.3700

XAU/USD – Yesterday, we had a sell call on this pair but price reached a high of $1809, triggering our stop loss at $1807.50. We are out of this trade with a loss of $9.50. MACD remains bearish but Stochastic is rising from the oversold zone. 20EMA is bullish, which tips the scale on the bullish side. A price move above $1811.80, which is the Fibonacci 62% correction point, would confirm the bullish price trend.

Support1799.701783.151773.55
Resistance1811.801822.101830.15

USD/SGD – Last Friday, we had a sell call at 1.3590 and yesterday, we had placed stop at 1.3565 and profit order at 1.3535. Price rose to a high of 1.3578 overnight and our stop was triggered. We still managed to make 25 pips on this trade. Price has reached the previous low 1.3535 last night and currently both MACD and Stochastic are turning up, which is a hint of a bullish price trend ahead.

Support1.35301.35001.3470
Resistance1.35701.36151.3665

FX Commentary – Softer NFP Failed To Derail Rate Hike Expectation.

Nicholas

Market Talk
– The US dollar fell on the heels of the December U.S. jobs report that missed expectations, but it was still viewed as good enough to keep the Federal Reserve on track to raise interest rates at its March meeting.

– The Labour Department said non-farm payrolls rose by 199,000 last month, well short of the 400,000 estimate. However, analysts noted underlying data in the report appeared sturdier, with the unemployment rate falling to 3.9% against expectations of 4.1% while earnings rose by 0.6%, indicating tightness in the labour market.

– The Japanese yen strengthened 0.22% versus the greenback at 115.59 per dollar. The yen has taken the brunt of the damage while the greenback has strengthened recently, with the dollar hitting a five-year high versus the yen earlier this week.

– Sterling was also marginally weaker on the dollar, rallying with bets that the Bank of England (BOE) is likely to be hiking in tandem with the Fed. The euro was up to $1.1361 as it strengthened against the greenback in the wake of the payrolls report.

– Gold prices edged up from three-week lows after data showed U.S. jobs growth was slower than expected last month even as the Federal Reserve signalled faster rate hikes. A rise in the US Treasury yield to a 2-year high capped the yellow metal rally.

Chart Focus Gold

Key Points

1. Sell Gold recommendation.

2. Sell Gold at $1798. Stop at $1807.50 and profit target at $1783.50

3. A rise in US Treasury yields and expectations of an interest rate hike are both likely to weigh on Gold.

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

Fundamental Comments

1.  A rise in the US Treasury yields to a 2-year high is likely to weigh on Gold.

2. Expectations that the Federal Reserve is on track to raise interest rates at its March meeting is likely to weigh on Gold.

Technical Comments

1. Price is likely to be capped by the 20EMA line which is also indicating a bearish trend.

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



Key Levels

Support1783.151773.551762.40
Resistance1798.551808.401820.05

Technical Overview

USD/JPY – Price went into a correction after hitting a high at 116.35 on 4 January. The correction managed to stay above the Fibonacci 62% of the rally from 114.94 to the high at 116.35, keeping the bullish trend intact. Stochastic is turning up from the oversold zone while MACD is also turning up from below the zero line. Both indicators are hinting at a bullish price trend. We see price going up to test the high of 116.35 again over the next few days.

Support115.50115.20114.90
Resistance115.95116.35116.65

EUR/USD – Price has stayed within a range of 1.1275 to 1.1385 for the past 4 days and price is likely to stay within this range until there is a breakout. Stochastic is in the overbought zone and has a bearish crossover, hinting at a bearish price trend. MACD and 20EMA are both bullish and hinting at a bullish price trend. Watch the breakout of either range for clues. We prefer the downside.

Support1.13151.12701.1230
Resistance1.13601.13901.1430

GBP/USD – Price again tested the previous high at 1.3600 but was unable to move above 1.3600. Stochastic is near to the overbought zone and MACD is also hinting of a bearish price trend. If price is unable to move above 1.3605, we will stick to our bearish view. Price may also be forming a Rising Wedge chart pattern, which is also a sign of a market top in the process of forming.

Support1.35551.35151.3480
Resistance1.36051.36601.3700

NZD/USD – The rally off the low at 0.6732 was capped by the 20EMA at 0.6770. If price is unable to move above this level, we are likely to see another test of the low at 0.6730 in the next 48 hours. Stochastic is near to the overbought zone and MACD is turning down. Both indicators are hinting of a bearish price trend. 20EMA is also hinting of a bearish price trend. A price move above 0.6790 would negate our bearish call.

Support0.67550.67300.6700
Resistance0.67850.68200.6855

USD/SGD – We had a sell call last Friday at 1.3590 which was filled when price reached a high of 1.3603. Price had declined on Friday night to a low of 1.3539 which was just above our profit target at 1.3535. Our view remains the same. We would recommend moving stop lower to 1.3565 while keeping profit target at 1.3535. Stochastic is in the oversold zone but 20EMA is hinting at a bearish price trend.

Support1.35401.35051.3470
Resistance1.35701.36151.3665

FX Commentary – USD/JPY Set For A 5th Consecutive Weekly Gain

Nicholas

Market Talk
– The dollar was down on Friday morning in Asia but is set for a fifth consecutive weekly gain on the Japanese yen. This rally could be extended if the latest U.S. jobs report justifies early Federal Reserve interest rate hikes.

– Benchmark 10-year yields rose to 1.7530%, the highest since March 2021, and were last up slightly on the day to 1.7246%. U.S. 2-year yields, which track near-term rate expectations, rose to the highest since early March 2020 at 0.8820%.

– The dollar hit a five-year high against the yen at 116.35 on Tuesday but has since fallen back somewhat. The U.S. currently is up about 0.7% on the yen this week and about 2.7% over five weeks, over expectations that the Fed will start hiking interest rates several times in 2022, beginning in March that drove a bond market selloff and a rise in yields.

– The Aussies fell through support around $0.7184 on Thursday and last bought $0.7159. It has lost 1.5% for the week so far. The kiwi sat near a two-week low at $0.6751 on Friday and is down 1.4% for the first trading week of 2022.

– Gold was up on Friday morning in Asia but remained close to a two-week low hit during the previous session on the back of rising US Treasury yields and expectation of a faster global rate hikes.


Chart Focus USD/SGD

Key Points       

1. Trading Sell USD/SGD recommendation.

2. Sell USD/SGD at 1.3590. Stop at 1.3620 and profit target at 1.3535

3. Positional adjustment ahead of non-farm payroll and after a 5-day rally, price could be due for a decline.

4. Candlestick price pattern and indicators are hinting of a possible price high and a likely reversal.

Fundamental Comments

1. A 5-day rally could be close to exhaustion, hinting at a price decline.

2. Positional adjustment ahead of non-farm payroll could see trades sell the US dollar

Technical Comments

1. A Hanging Man candlestick price pattern is hinting of a possible price high and a reversal ahead.

2. MACD and Stochastic are both hinting of a possible price high and a likely reversal.



Key Levels

Support1.35701.35351.3495
Resistance1.36151.36551.3690

Technical Overview

USD/JPY – Given the hawkish FOMC minutes and rising US Treasury yields, we foresee price moving higher in the next couple of days but tonight non-farm payroll may alter our bullish scenario. Currently, price is consolidating ahead of the NFP in a triangle chart pattern. This is usually a hint that there could be another price rally ahead. MACD and 20EMA are both bullish. Stochastic is near to the oversold zone. All these 3 indicators are hinting of a price rally in the near future.

Support115.60115.20114.90
Resistance115.95116.35116.65

EUR/USD – For the past 3 days, price has been caught in a range of 1.1270 to 1.1345. We are likely to see this range until tonight NFP at 2130 SG time. Stochastic is near to the oversold zone. MACD is flat and near to the zero line, which is a hint of a sideways trend ahead. 20EMA is also flat and neutral at the moment. We would recommend watching the range (1.1270 to 1.1345) for clue to the next directional move.

Support1.12701.12301.1185
Resistance1.13151.13601.1390

GBP/USD – Our view remains unchanged from yesterday. We are bearish and are looking for 1.3400 over the next few days. We think the topside should be capped at 1.3605. Currently MACD remains bullish and is hinting of a bullish price trend. Stochastic has a bullish crossover near the oversold zone and is hinting at a bullish price trend. 20EMA remains bullish.

Support1.35151.34801.3430
Resistance1.35551.36051.3660

XAU/USD – Our view remains unchanged from yesterday. We are looking at $1777, which is also the Fibonacci 127% price projection target. Price has declined overnight to a low of $1785.70 and we are expecting this decline to continue towards $1777. A bearish Flag chart pattern could be forming. This is usually a sign of a price decline ahead. Stochastic is near to the oversold zone and is hinting at a limited downside. MACD and 20EMA remain bearish.

Support1785.701777.751764.10
Resistance1798.301808.901818.20

NZD/USD – Yesterday, we had a sell call on this pair at 0.6765. However, price did not reach our entry price and our order was not filled. Overnight, price has declined to a low of 0.6730. Stochastic is in the oversold zone and is hinting at a limited downside. MACD remains bearish. 20EMA is pointing down with a steep slope, hinting at a strong bearish price trend ahead.

Support0.67300.67000.6670
Resistance0.67700.68000.6835

Forex Trading Idea USD/SGD

Nicholas

Strategy

Buy 1.3600 with a stop below 1.3490 for 1.3810

Technical View
Price broke above the cloud recently changing the chart outlook from bearish to bullish. The breakout also has a larger candlestick than the candlesticks of the past few days, hinting of a genuine breakout. Conversion and Base lines had a bullish crossover, hinting of a bullish price trend. Lagging Span is above price of 26 days ago as well as above the cloud, confirming the bullish price trend. Going by the Fibonacci price projection, price could be moving to the 261.8% price projection target at 1.3810 if price can break above the immediate overhead resistance at 1.3690. MACD is bullish and both its lines are moving higher, which is a hint that price could be moving higher in immediate future.

Fundamental View

US 10-year Treasury yield has been rising and has reached a high of 1.56%, it’s highest in the past three month, aiding the US dollar and its rally against its major peers. The Singapore dollar is no exception and is expected to weaken further as yields continues to move higher. US Treasury yields are expected to move higher as the Federal Reserve reduced its asset purchases later in the year before raising interest rate in 2022.

Heightened worries about the global growth outlook is also lending support to the safe haven US dollar. Global growth seems to hit by inflation and supply shortage. With demand growing as the global economy recovers from the COVID-19 pandemic, as producers tried to ramp up production, a power and fuel shortage in China and Britain respectively is hitting supply chain hard. As a result, price increase can be attributed to inflation and not real growth.

US government has reached the limit on its debt ceiling and Congress is trying to raise this limit so that the Federal government will not go into a default. While the risk of a default is low, with Congress likely to pass a higher debt ceiling like it did in previous year, the risk is there and investors are taking cautions and are turning to the safe haven US dollar instead of riskier currencies.