Tag: USD/SGD

FX Commentary – US Dollar Extended Its Gain Following Last Thursday Fed’s Remarks.

Nicholas

Market Talk
– The dollar extended its advance against a basket of currencies, building on the gains logged after the U.S. Federal Reserve surprised markets last week by signalling it would raise interest rates and end emergency bond-buying sooner than expected.

– Investors’ risk appetite took another hit after St. Louis Federal Reserve President James Bullard said on Friday that the U.S. central bank’s shift toward a faster tightening of monetary policy was a “natural” response to economic growth and particularly inflation moving quicker than expected as the country reopens from the coronavirus pandemic.

– The euro traded at 1.1872 on Monday, having hit a 2 1/2-month low of 1.1847 on Friday. The British pound fetched 1.3809, standing near Friday’s two-month low of $1.3791. The Australian dollar wobbled at 0.7503, having dropped to as low as 0.7478, a low last seen in December.

– The safe-haven yen held firmer as the Fed’s tilt hit risk asset prices. The greenback had slipped down to 109.95 yen pulling away from last Thursday’s 2 1/2-month high of 110.82. A decline in US benchmark 10-year yield has contributed to the greenback’s weakness.

– Gold struggled for traction in choppy trading on Monday after posting its biggest weekly loss in 15 months as the dollar extended its rally on the back of the U.S. Federal Reserve’s hawkish outlook.

Chart Focus AUD/USD
Key Points
1. Trading Buy AUD/USD recommendation.
2. Buy AUD/USD at 0.7480. Stop at 0.7445 and target at 0.7580.
3. A decline in benchmark 10-year Treasury yield and strong Aussie data are both likely to weigh on the US dollar.
4. Momentum indicators are hinting of a price correction before the decline resume again.

Fundamental Comments
1. US benchmark 10-year Treasury yield has declined and is likely to weigh on the US dollar.
2. Strong Aussie data last Friday is likely to halt the decline in the Aussie against the US dollar.

Technical Comments
1. Price is consolidating around the previous low which has managed to halt the decline.
2. Stochastic is oversold and MACD has a bullish crossover. Both momentum indicators are hinting of a price correction.



Key Levels

Support0.74700.74350.7405
Resistance0.75100.75600.7590

Technical Overview
USD/JPY – After reaching a high of 110.82 on Thursday, the decline which started on Friday has continued on Monday, breaking the 20EMA support as well as the previous support at 109.90. Price has reached a low of 109.70 on Monday morning but the decline looks like continuing lower to 109.20. Stochastic continues to decline and MACD is also declining and hinting of a bearish price trend ahead. Price has also moved below the 20EMA, changing the trend to a bearish trend.

Support109.60109.20108.90
Resistance109.90110.20110.50

EUR/USD – The decline continues and price reached a low of 1.1846 on Friday night. The decline might slow down but looks likely to continue lower. Stochastic is deep into the oversold extreme and could limit the downside to 1.1815.  MACD remains strong bearish. 20EMA is also pointing lower with a steep slope, hinting of a strongly bearish price trend ahead.

Support1.18451.18101.1785
Resistance1.18801.19251.1955

GBP/USD – Price continues its decline following the FOMC announcement, to reach a low of 1.3786 on Friday night. Price continues to be near the low at 1.3786 but the downside could be limited to 1.3750. Stochastic is deep in the oversold zone and is turning up. MACD remains bearish but could be turning up as well. 20EMA continues to show a strong bearish price trend ahead.

Support1.37851.37501.3715
Resistance1.38151.38601.3910

XAU/USD – Price reached a low of $1760 on Friday and if price can move above $1775, it could confirm a temporary low at $1760 and a price retracement to the 20EMA resistance at $1800. Stochastic is in the oversold extreme. MACD remains in the bearish zone but had a bullish crossover and is likely to pull price higher in a corrective move. 20EMA remains strongly bearish.

Support1760.701749.201732.45
Resistance1775.701786.901801.85

USD/SGD – Last Friday, we had a buy call at 1.3380 but price only reached a low of 1.3389 before a rally brought price higher to 1.3463. MACD remains bullish and rising, hinting of a bullish price trend. 20EMA is also rising with a steep trend, hinting of a strong bullish price trend. Stochastic is into the overbought zone. The strong trend is likely to bring price above the Fibonacci 127% price target at 1.3486 to the Fibonacci 161.8% price target at 1.3550.

Support1.34351.33901.3350
Resistance1.34851.35151.3550

FX Commentary – US Dollar Continues Its Rally Following FOMC Announcement

Nicholas

Market Talk
– The dollar was headed for its best week in nearly nine months on Friday as investors scrambled to price in a sooner-than-expected ending to extraordinary U.S. monetary stimulus in the days after a surprise shift in tone from the Federal Reserve.

– Adding to indications of a continued rebound in the world’s largest economy, U.S. data on Thursday showed growing factory activity and easing layoffs, despite an unexpected rise in weekly jobless claims.

– In the two sessions since Fed officials projected possible rate hikes in 2023, the greenback has surged about 1.8% against the euro, while Sterling sat near a six-week low at $1.3936. The kiwi likewise perched at a two-month low at 0.6990.

– The Australian dollar parked at $0.7555, also near the two-month trough of $0.7540 that it hit overnight despite  upbeat Aussie data, with job creation beating expectations in May and unemployment diving to pre-pandemic lows.

– Gold prices, which plunged  following the Fed comments, edged higher after reaching a low of $1767.10 overnight but were still set on track for a more than 5% weekly loss, for their worst week since March 2020

Chart Focus USD/SGD
Key Points
1. Buy USD/SGD recommendation.
2. Buy USD/SGD at 1.3380. Stop at 1.3345 and target at 1.3485.
3. Exit from monetary stimulus and strong data showing a continued rebound in the US economy are both likely to strengthen the US dollar.
4. Price is likely to find support in the bullish price trend with MACD also hinting of a strong bullish price trend

Fundamental Comments
1. Sooner-than-expected exit to U.S. monetary stimulus is likely to strengthen the US dollar.
2. Strong US data showing a continued rebound in the world’s largest economy is likely to strengthen the US dollar.

Technical Comments
1. Price is likely to find support at Fibonacci 38% correction point and the 20EMA.
2. MACD remains bullish and is hinting of a strong bullish price trend ahead.

Key Levels

Support1.33901.33501.3325
Resistance1.34351.34851.3530

Technical Overview

USD/JPY – After reaching a high of 110.82, price has been declining and has reached a low of 110.00 at the point of this writing. Stochastic has a divergence warning but MACD does not have a divergence warning on the 4-hourly chart. 20EMA is flat and neutral at the moment. Price will need to hold above 109.80 or this bullish trend may have ended. We will wait for clearer direction.

Support109.90109.60109.30
Resistance110.20110.45110.80

EUR/USD – Price continues its decline after the FOMC announcement and has reached a low of 1.1890 overnight. The strong downtrend may not be over even though Stochastic is deep in the oversold zone. MACD is bearish and is hinting of a bearish price trend. 20EMA is pointing lower with a steep slope, hinting of a strong bearish price trend ahead. Look to short into rally higher.

Support1.18901.18551.1810
Resistance1.19251.19551.2005

GBP/USD – Price continues its decline following the FOMC announcement, reaching a low of 1.3880 at the point of writing. The strong downtrend may not be over even though Stochastic is deep in the oversold zone. MACD is bearish and is hinting of a strong bearish price trend. 20EMA is pointing lower with a steep slope, hinting of a strong bearish price trend ahead.

Support1.38601.38301.3800
Resistance1.39101.39601.4005

XAU/USD – Gold plunged following the Fed comments to reach a low of $1767.10 overnight. Stochastic is deep into the oversold extreme and we may see a pullback but any pullback is likely to be an opportunity to get into the short trade. Both 20EMA and MACD are hinting of a strong bearish price trend ahead. 20EMA is likely to cap rally for another decline to $1750.

Support1778.801767.101755.95
Resistance1786.901801.851818.85

NZD/USD – We had a sell recommendation at 0.7100 yesterday for this pair. Unfortunately, price only reached a high of 0.7090 and our order was not filled. Price has declined to 0.6980 this morning and looks likely to continue lower. MACD remains bearish but Stochastic is into the oversold zone. 20EMA is pointing lower with a steep slope, hinting of a strong bearish price trend.

Support0.69700.69400.6905
Resistance0.70000.70350.7075

FX Trading Idea – USD/SGD

Nicholas

Strategy
Buy 1.3160 with a stop below 1.3000 for 1.3530

Technical View
After reaching a high at 1.4645 in March 2020, price has been on a decline. The decline had reached a low of 1.3155 on January 2021 and a second attempt to test the low also managed to hold above this support. The second test recently could be a sign that the 12 months downtrend could be coming to an end. This could be a base building process. Ability to hold above this low is likely to lead to a rally that could bring price to 1.3530.

Stochastic is almost into the oversold zone, hinting of a limited downside. MACD is bearish at the moment but is close to the zero line, which is a hint of a weak downtrend. 20EMA is near to price and its gradient is also not steep. This is also a sign that the downtrend has become weak. A move above the 20EMA could bring higher to test 1.3530.

Fundamental View
The number of coronavirus cases continues to decline in the US and successful vaccine rollout is one of the reasons that have led to a re-opening of the US economy. The re-opening of the US economic has led to sentiment improving as the economy recover from the COVID-19 pandemic. In fact, the US economy is recovering at its fastest pace in the past 40 years and inflation is a big worry for the investing public as well as the central bank. While this week FOMC is too early for the Federal Reserve to announce a tapering, it is likely that an earlier than expected tapering is likely. This is likely to lead to US bond yields rising and a stronger US dollar.

With the US recovering, with the number of unemployed numbers being reduced as the economic recovery picked up pace, the US central bank may not be able to hold off hiking interest well into 2022 as has been promised and the investing public has come to accept. An earlier end of ultra-easy monetary policy is likely to lead to a stronger US dollar. With the IMF upgrading global economic growth for a second time in 3 months to 6%, it is more likely we will see a hike in interest rate than we have come to expect and led to believe by the US central bank.

A recent increase in the number to coronavirus cases in Singapore had led to a second phrase of lockdown in Singapore which is likely to affect its economic performance. This could lead to the Singapore dollar losing its strength gained over the past 12 months. While there is improvement in the fight against the virus in Singapore, there are still no signs when the lockdown could be fully lifted which could drag its economic growth lower.

FX Commentary – Tapering Talks Helped US Dollar Regain Ground

Nicholas

Market Talk

– The dollar found support on Thursday from emerging views the Federal Reserve is slowly but surely edging towards a discussion about tightening monetary policy, and as traders await crucial U.S. inflation data this week.

-The yen has been boxed in its tightest range against the dollar since December 2019 as investors continue to monitor how the U.S. Federal Reserve is going to change its policy in light of possible runaway inflation, even if Fed officials have reiterated any inflation is transitory.

-The Kiwis edged up to 0.7289 and had pushed up to as high as 0.7316 after hints of a 2022 rate hike by the Reserve Bank of New Zealand. The Aussie inched down to 0.7738, as Australia’s second-most populous state of Victoria entered a week-long lockdown to curb its latest COVID-19 outbreak.

-The offshore yuan strengthened to 6.3861 as U.S. Trade Representative Katherine Tai and Chinese Vice-Premier Liu He had a “candid” first phone conversation. The phone call was one of the few top-level meetings between the two countries since U.S. President Joe Biden took office in January 2021.

-Gold hit a four-and-a-half month high at $1912.56 overnight after US Treasury yield had declined in the previous trading session.  Gold slipped on Thursday morning in Asia after the dollar and Treasury yields edged up.

Chart Focus GBP/USD
Key Points
1. Sell GBP/USD recommendation.
2. Sell GBP/USD at 1.4120. Stop at 1.4155 and target at 1.4010.
3. Talks of tapering and an increase in US benchmark Treasury yield are both aiding the US dollar.
4. A bearish chart pattern and bearish momentum are both hinting of a bearish price trend for the British pound.

Fundamental Comments
1. Talks of tapering by Fed’s officials are aiding the US dollar.
2. An increase in US benchmark Treasury yield is aiding the US dollar

Technical Comments
1. Chart could have made a Head and Shoulder chart pattern which is a hint of a reversal in price trend.
2. MACD has turned bearish and Stochastic is continuing to move lower. Both are hinting of a bearish price trend for the Sterling.

Key Levels

Support1.40951.40551.4005
Resistance1.41301.41701.4205

Technical Overview
USD/JPY – Price reached a low of 108.55 and has since bounced back up to 109.20. Price has been boxed in its tightest range against the dollar since December 2019. The top side of this range lies at 109.75 while the bottom of the range lies at 108.35. We are now expecting price to stay within this range. Wait for the breakout of this range to provide a clue to the next direction.

Support109.00108.60108.30
Resistance109.30109.50109.75

EUR/USD – While we were right on Friday’s pivot low at 1.2160 and were expecting a test of 1.2285, price only reached a high of 1.2266. Price has since declined to a low of 1.2173. We are expecting price to move below 1.2160 in the next few days to 1.2050 which is also the Fibonacci 38% of the rally from 1.1703 to the recent high. MACD remains bullish but has warned with a divergence. Stochastic is also declining from the overbought position.

Support1.21701.21251.2095
Resistance1.22151.22451.2285

USD/SGD – Price has reached a high of 1.3260 this morning but this could be the high and price could be about to move lower below 1.3200 over the next few days. MACD remains bearish and is hinting of a bearish price trend. Stochastic is weak and 20EMA is pointing lower with a steep slope, which is a hint of a strong bearish price trend. A move above 1.3275 would negate our bearish view for the next few days.

Support1.32251.31951.3155
Resistance1.32601.33001.3330

XAU/USD – Price had reached a 4-month high at $1912.55 on Wednesday night but MACD had warned with a divergence, hinting that a high could be near and a reversal is imminent. As Stochastic is turning up, we may see one more push to $1912 before the decline set in. MACD is also bullish and hinting of a bullish price trend.  A break below $1890 would confirm the high in place.

Support1889.851872.351864.95
Resistance1903.251912.551927.40

NZD/USD – We had a buy call on Wednesday at 0.7205 but price only reached a low of 0.7209, missing our entry price. Price had moved higher and this morning had reached a high of 0.7316. If price can stay above the 20EMA support at 0.7250, there is still another chance of a test to 0.7316 as MACD remains bullish and is hinting of a bullish price trend ahead.

Support0.72750.72350.7200
Resistance0.73150.73500.7390

FX Commentary – USD Dollar Higher On Higher Treasury Yields

Nicholas

Market Talk

– The dollar was up on Tuesday morning in Asia as investors bet that rising inflation and surging commodity prices would erode the dollar’s value as the Federal Reserve maintains its loose monetary policy increasing concerns about runaway inflation.

– Traders are keenly awaiting the release of U.S. consumer price data on Wednesday to measure whether inflationary pressure is building, which could push Treasury yields higher and slow the dollar’s fall, some traders say.

– The British pound bought $1.4130, close to its strongest since Feb. 25 as investors cheered Britain’s progress in reopening its economy and as fear of a Scottish independence receded.

– The Australian dollar edged up to $0.7836, near an 11-week high while the Canadian dollar traded at C$1.2097, close to its strongest in more than three years on the back of surging crude oil and metal prices.

– Gold was down on Tuesday morning in Asia on the back of a slight rebound in the U.S.’ benchmark 10-year Treasury yield and a stronger dollar as investors weighed growing inflation risks and comments from Federal Reserve officials on the labour market for clues on monetary policy going forward

Chart Focus AUD/USD
Key Points
1. Buy AUD/USD recommendation.
2. Buy AUD/USD at 0.7815. Stop at 0.7780 and target at 0.7890
3. Rising inflation and surging crude oil and metal prices are likely to erode the dollar’s value as the Federal Reserve maintains its loose monetary policy.
4. A strong support coupled with bullish MACD is hinting of a bullish price trend.

Fundamental Comments
1. Investors are betting that rising inflation would erode the dollar’s value as the Federal Reserve maintains its loose monetary policy.
2. Surging crude oil and metal prices are aiding the Aussie currency.

Technical Comments
1. Price is likely to be supported by a previous resistance turned support line as well as the 20EMA.
2. MACD remains bullish and is hinting of a bullish price trend.

Key Levels

Support0.78150.77850.7740
Resistance0.78450.78900.7935

USD/JPY – From last Friday’s low of 108.33, we have seen a rally to 109.05 but 20EMA is acting as a resistance at this price point. From this price point, we could see another decline back down to 108.30 again in the next couple of days ahead. A price movement above 109.20 would negate our bearish view for the next couple of days.  MACD remains bearish and is hinting of a bearish trend. Stochastic is rising.

Support108.70108.45108.15
Resistance109.00109.45109.95

EUR/USD – Price managed to stay above the critical support zone from 1.1990 to 1.2000 and we had seen a rally which broke above the high from 2 week ago to another high at 1.2177. 20EMA remains strongly bullish. Stochastic has reached the overbought extreme and could be turning down. MACD is also bullish but is turning down from its extreme. We may see a price correction to 1.2115 which could offer a good buying opportunity for the next couple of days ahead.

Support1.21151.20751.2035
Resistance1.21501.21801.2220

GBP/USD – Price reached a high of 1.4158 last night which was also the 261.8% of the rally from 1.3800 to 1.3930. Stochastic and MACD are both turning down from overbought zone but MACD and 20EMA remain bullish. We see a price correction back to the 20EMA support at 1.4030 in the next few days and from this support, we see another rally above 1.4158.

Support1.40901.40451.3980           
Resistance1.41301.41601.4185

XAU/USD – Price continues its rally to a high of $1845.25 last night but Stochastic is already into the overbought zone. Stochastic and MACD remain bullish. However, Stochastic has a divergence warning of a potential price high. We may see a pullback in price to $1824 and from there we could see another rally to test the previous high of $1855.25 in the next few days.

Support1828.551818.351809.65
Resistance1838.601845.251855.25

USD/SGD – We had a sell call on this pair yesterday at 1.3290 but price only reached a high of 1.3272. Our view remains the same as yesterday. We see price capped by the 20EMA at 1.3290 and we are looking for another test of the low at 1.3230. MACD remains bearish and is hinting of a bearish trend but Stochastic is near to the bottom and hinting of a possible price bottom. 20EMA is also hinting of a bearish price trend.

Support1.32301.32051.3155
Resistance1.32701.33001.3335