Tag: XAG/USD

FX Commentary – Strong US Data Sent The Greenback Higher Against Its Peers

Nicholas

Market Talk
– The U.S. dollar eased on Tuesday after rallying overnight as strong U.S. economic data reinforced expectations that the Federal Reserve will hike interest rates again in May, while China’s economic recovery gathered pace in the first quarter.

– Confidence among single-family homebuilders improved for a fourth consecutive month in April, while manufacturing activity in New York State increased for the first time in five months. Recent hawkish comments from Fed officials saw markets pricing in a greater chance of a rate hike in May, and brewed uncertainty over whether the central bank will pause in June.

– The euro was at $1.09320, easing away from the one-year high of $1.1075 it touched last week. Sterling was last trading at $1.2381, on the day ahead of employment data that could potentially cause some volatility in the pound if the report shows that the labour market is not cooling.

– The Japanese yen weakened to 134.52 per dollar, hovering around the one-month peak of 134.57 it touched on Monday. The Australian dollar rose to $0.6720 after the minutes of the last Reserve Bank of Australia meeting showed that the central bank considered an 11th-consecutive rate hike in April before deciding to pause.

– Gold prices hovered below key levels in early Asian trade on Tuesday, coming under pressure from a firmer dollar and Treasury yields as markets reconsidered expectations for an imminent pause in the Federal Reserve’s interest rate hikes following recent strong US data and hawkish Fed officials’ comments.


Chart Focus GBP/USD

Key Points

1. Sell GBP/USD recommendation.

2. Sell GBP/USD at 1.2435. Stop at 1.2475 and profit target at 1.2285.

3. Strong US data and interest rate differential are both in the US dollar favour.

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

Fundamental Comments

1. Strong US data overnight is aiding the US dollar.

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. MACD is hinting at a bearish price trend.



Key Levels

Support1.23501.23051.2375
Resistance1.24101.24601.2505










Technical Overview

USD/JPY – Price reached a high of 134.70 this 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 in the overbought zone and is hinting at a price decline ahead. However 20EMA and MACD are both hinting at a bullish price trend. We see price moving lower to 133.25 in the next 48 hours.

Support134.05133.35132.85
Resistance134.70135.10135.80

EUR/USD – Price reached a low of 1.0908 overnight and we have seen a rally to 1.0950 this morning. However, the rally is likely to be capped by the 20EMA at 1.0970 and we could see another decline to 1.0865 in the next 48 hours. Stochastic is in the oversold zone and is hinting at a limited downside. Both stochastic and 20EMA are hinting at a bearish price trend. We are in favour of the bearish price move.

Support1.09051.08751.0830
Resistance1.09651.10001.1060

XAG/USD – Price had reached a high of $26.07 last week and we have seen a corrective decline lower to $24.79 on Monday. We are likely to see a rally to the Fibonacci 62% correction point at $25.58 in the next 24 hours. We think this is the second part of a 3-part correction. There should be another decline in the next few days to $24.45. Stochastic is hinting at a price rally while both MACD and 20EMA are hinting at a price decline.

Support24.9524.5524.15
Resistance25.3025.6025.95

XAU/USD – Price reached a high last week at $2048.45 last night following a divergence with MACD. Price reached a low at $1980.95 overnight. A Hammer candlestick price pattern is also hinting at a possible temporary low. We are likely to see a rally to $2015 in the next 24 hours but this rally is likely the second part of a 3 part corrective decline process following the high at $2048.45.

Support1991.851980.951966.00
Resistance2002.952014.952031.70

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. Stochastic is reaching the overbought level and is hinting at a limited upside. MACD remains bearish and is hinting at a bearish price trend. 20EMA is also hinting at a bearish price trend. We see price moving lower to 1.3299 in the next few days.

Support1.33401.32901.3260
Resistance1.33851.34201.3470

FX Commentary – U.S. Dollar Tumbled On Imminent End To Rate-Hike Cycle

Nicholas

Market Talk
– The U.S. dollar tumbled to a one-year low against a basket of currencies on Friday while the euro hit a one-year peak, as traders ramped up expectations of an imminent end to the U.S. Federal Reserve’s rate-hike cycle on signs of cooling inflation.

– Data from the U.S. Labour Department on Thursday showed the producer price index (PPI) fell by the most in nearly three years last month, coming a day after inflation data pointed to moderation in consumer prices, reinforcing the view of end to interest rate hikes.

– The euro rose to a fresh one-year top of $1.1075, pushing past its previous high from Thursday. The British pound was similarly perched near a 10-month high and last at 1.2526. The Japanese yen rose marginally to 132.44 per dollar

– An unexpected surge in Chinese exports, kept the Australian dollar supported at around $0.6788 on Friday, after having surged 1.3% in the previous session. The New Zealand dollar similarly gained 0.13% to $0.6305 in Asia trade, after jumping 1.3% on Thursday.

– Gold was up at $2,044 an ounce after striking a one-year peak of $2,048.71 overnight, not far from its all-time top of $2,072. Signs of cooling inflation and worries about a possible recession are aiding the yellow metal.


Chart Focus XAU/USD – Gold

Key Points

1. Trading Sell Gold recommendation

2. Sell Gold at $2045. Stop at $2048.45 and profit target at $2020.50

3. Expectations of an imminent end to the U.S. Federal Reserve’s rate-hike cycle on signs of cooling inflation is aiding Gold

4. A price pattern and a divergence in MACD are both hinting at a possible price high.

Fundamental Comments

1. Expectations of an imminent end to the U.S. Federal Reserve’s rate-hike cycle is aiding Gold

2. A sharp drop in US PPI is reinforcing the view of end to interest rate hikes.

Technical Comments

1. A Hanging Man candlestick price pattern is hinting at a possible high in price.

2. A divergence warning from the MACD indicator is hinting at a possible price high.










Technical Overview

USD/JPY – Price had reached a high on Tuesday but has tumbled down to 132.01 overnight. Stochastic is near to the low and is hinting at a possible price rally. MACD and 20EMA remain bearish and are both hinting at a bearish price trend ahead. MACD had earlier warning of a possible price high with divergence, hinting at a possible price high. We think price is likely to move lower to 131.00 in the next few days.

Support132.00131.50131.00
Resistance132.65133.15133.75

EUR/USD – Price reached a fresh 12-month high at 1.1075 overnight but there was no divergence warning. This is a hint that price can continue to move higher. Both MACD and 20EMA are also hinting at a continuation of this rally. Stochastic is deep in the overbought zone. We think price can continue to move higher to 1.1185 in the next few days. A price move below 1.0975 would negate our bullish view.

Support1.10401.09951.0935
Resistance1.10751.11051.1155

GBP/USD – Price reached a fresh 10-month high at 1.2546 this morning and looks like it can continue to move higher. However, a possible divergence could be forming on the MACD indicator, warning of a possible price high in the marking. Stochastic is in the overbought zone and is hinting at a limited upside. 20EMA remains bullish. We think the upside could be limited and a correction to 1.2485 is likely before the uptrend resumes again.

Support1.24801.24101.2345
Resistance1.25551.25951.2660

XAG/USD – Price reached a high of $25.65 overnight but this high was accompanied by a bearish divergence warning from the MACD indicator, warning of a possible price high in the making. Stochastic is also hinting at a price decline but 20EMA is hinting at a strong bullish price trend. As long as price can stays above $25.10, we are likely to see a rally to $26.15 but a move below $25.10, it is a hint of a price high and a decline to $24.20.

Support25.0524.7024.20
Resistance25.6525.9026.20

NZD/USD – Price reached a high of 0.6314 this morning and the rally looks like it will continue higher to 0.6375 in the next few days. Stochastic is in the overbought zone and is hinting at a limited upside. However, both MACD and 20EMA are both hinting at a strong bullish price trend. We think there could be a small price correction to 0.6260 in the next 24 hours before the rally resumes for 0.6314 in a few days’ time.

Support0.62800.61350.6085
Resistance0.63150.63500.6375

FX Commentary – US Dollar Gained On February’s FOMC Meeting Minutes.

Nicholas

Market Talk
– The US dollar strengthened on Wednesday after U.S. Federal Reserve meeting minutes from the Federal Reserve’s February meeting added to expectations that further rate hikes are in the pipeline to squeeze inflation.  Minutes showed the Federal Reserve intents to use a slower pace of interest-rate hikes to tame persistently high inflation going forward.

– The minutes from the Fed’s Jan. 31 to Feb. 1 meeting said most of the officials supported the quarter-point increase because a slower pace “would better allow them to assess the economy’s progress” toward reducing inflation to their 2% target. But “a few” participants outright favoured a larger 50 bps increase at the meeting.

– The Aussie edged up 0.4% to $0.6833, recouping some of the 0.7% loss overnight to as low as $0.6795. The kiwi was also up 0.4% at $0.6247 as a hawkish Reserve Bank of New Zealand, which delivered a half-point hike a day before, offset fears tied to the Fed rate outlook.

– Sterling slipped down 0.58% to $1.2036, while the euro fell 0.44% to $1.0600. The Canadian dollar was lower against the greenback, dragged down by crude oil price, which declined to a 1-week low in the previous day.

– Gold prices moved little on Thursday at $1827.95, but were nursing losses for the week as the dollar hit a six-week high on fears of a hawkish Federal Reserve, with focus now turning to upcoming economic data for more cues on the U.S. economy and monetary policy.


Chart Focus XAU/USD – Gold

Key Points

1. Buy Gold recommendation.

2. Buy Gold at $1825.50. Stop at $1818.00 and profit target at $1847.50.

3. A stubborn US inflation could aid Gold as a hedge against inflation as the pace of interest rate slows.

4. Price has managed to bounce off a recent low, hinting at a strong price support and stochastic is hinting at a price rally ahead.

Fundamental Comments

1. The decline may have priced in the next Fed hike in March.

2. A stubborn US inflation could aid Gold as a hedge against inflation.

Technical Comments

1. Price has managed to bounce off a recent low, hinting at a strong price support.

2. Stochastic is hinting at a price rally ahead.



Key Levels

Support1829.601818.851803.70
Resistance1838.701847.451860.00










Technical Overview

USD/JPY – Price reached a high of 135.22 on Tuesday and seems to have lost its upward momentum. Price has been moving in a sideways manner for the past 48 hours. Stochastic and MACD are also hinting at a sideways movement. 20EMA is hinting at a price rally. We think price may have reached a temporary high and a price correction lower to 133.60 is likely in the next 48 hours.

Support134.55134.05133.60
Resistance134.95135.25135.95

EUR/USD – Price continues its decline and reached a low of 1.0598 overnight. However this low was accompanied by a divergence warning from the MACD indicator, hinting at a possible price low. As this is the second divergence warning, the chance of a turnaround in price is higher. We see price moving higher to 1.0705 in the next 48 hours. Stochastic and MACD are hinting at a price rally but 20EMA is still hinting at a bearish price trend.

Support1.05951.05401.0485
Resistance1.06351.06901.0725

GBP/USD – Yesterday we had a sell call at 1.2120, which was filled when price reached a high of 1.2127. Price had declined overnight to a low of 1.2033 and our profit order was filled. We are out of this position with a 70 pips profit. 20EMA is hinting at a price decline but MACD and stochastic are both hinting at a price rally ahead. Fibonacci ratio is also hinting that the price decline may be over. We think price may move higher to 1.2145 and above in the next 24 hours.

Support1.20301.19951.1955
Resistance1.20801.21201.2160

XAG/USD – Price reached a new weekly low at $21.43 overnight but this low was higher than the previous week’s low at $21.17. This could be a hint that the current decline is just a correction and we are likely to see a rally to $21.95 in the next 24 hours. We could also see a price move to $22.30 in the next few days. Stochastic and MACD are confirming the rising price trend but 20EMA remains bearish.

Support21.4521.1520.80
Resistance21.7022.0022.30

AUD/USD – Price reached a low of 0.6794 overnight and this low was accompanied by a divergence warning from the MACD indicator, hinting at a possible price low. A bullish Engulfing candlestick price pattern is also hinting at a possible price low. Stochastic is hinting at a rising price trend but 20EMA is hinting at a bearish price trend. We favour a price rally to 0.6920 in the next 72 hours.

Support0.67950.67500.6715
Resistance0.68400.68850.6935

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 – U.S. Dollar Declined On Powell Dovish Comments

Nicholas

Market Talk
– The U.S. dollar dipped on Wednesday after Federal Reserve Chairman Jerome Powell said that the U.S. central bank could scale back the pace of its interest rate hikes “as soon as December,” helping to put the dollar on track for its worst month since 2010.

– Powell said at the Brookings Institution in Washington that “we think that slowing down at this point is a good way to balance the risks.” But Powell warned that U.S. interest rates will peak at much higher levels than previously expected, largely due to inflation remaining stubbornly high.

– The euro rose 0.95% against the U.S. currency to $1.0424. A European survey on Wednesday showed that euro zone inflation eased far more than expected in November, raising hopes that sky-high price growth is now past its peak and bolstering, sealing the case for a slowdown in European Central Bank rate hikes next month.

– The Australian dollar was up 1.67% at $0.6799, on hopes that China will ease stringent COVID restrictions which have raised concerns about global growth. The southern city of Guangzhou became the latest to announce an easing of curbs on Wednesday.

– Gold prices rose as the non-yielding asset races to end its best month since mid-2020 on slower U.S. rate hike expectations, further reinforced by Federal Reserve Chair Jerome Powell’s comments. Silver climbed to a high of $22.39 on Thursday.


Chart Focus USD/JPY

Key Points

1. Sell USD/JPY recommendation.

2. Sell USD/JPY at 137.40. Stop at 137.75 and profit target at 136.30

3. Powell’s comments about a slower pace of interest rate hike and a decline in US Treasury yields are weighing on the U.S. dollar.

4. Price is likely to face a strong resistance at the previous support turned resistance line with MACD hinting at a bearish price trend.

Fundamental Comments

1. Powell’s comments about a slower pace of interest rate hike starting in December 2022 is likely to weigh on the U.S. dollar.

2. A decline in US Treasury yields is also weighing on the U.S. dollar.

Technical Comments

1. Price is likely to face a strong resistance at the previous support turned resistance line.

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



Key Levels

Support136.45135.80135.40
Resistance137.00137.50138.10





Technical Overview

USD/CAD – We had a buy call at 1.3535 yesterday but our call was wrong. Price declined to a low of 1.3401 as well as below the 20EMA, hinting at a change to a bearish price trend. Stochastic is declining but has yet to reach the oversold zone, hinting at a continuation of the price decline. MACD and 20EMA are both hinting at a bearish price trend. Only a move above 1.3500 would negate this bearish view.

Support1.34051.33601.3315
Resistance1.34401.34851.3545

EUR/USD – Price reached a high this morning of 1.0447 following Powell’s comment. Stochastic is hinting price can go higher. MACD is also hinting that price can move higher. Price is also above the 20EMA which is hinting at a bullish price trend. We think price can go higher to the previous high at 1.0496 in the next 24 hours. There is a possibility of price going up to 1.0540 over the next 48 hours.

Support1.03951.03551.0310
Resistance1.04501.04951.0540

GBP/USD – Price continues to move higher after reaching a low of 1.1900 on 30 November 2022. We are likely to see price continues higher to the previous high at 1.2152 in the next 48 hours. Stochastic is hinting at a price rally. 20EMA is also hinting at a bullish price trend. MACD is mixed as both its lines are on different sides of the zero line. A move below the 20EMA at 1.2020 would negate our bullish view.

Support1.20601.20051.1940
Resistance1.21201.21551.2195

XAU/USD – Price move up to $1779.95 this morning and looks set to test the previous high of $1786.45 in the next 24 hours. This high is also the Fibonacci 161.8% of the rally from the low at $1725.35 to the high at $1763.55. A move above this resistance is likely to send price higher to $1800. Stochastic is rising and hinting at a price rally. MACD is bullish and is hinting at a bullish price trend.

Support1773.251763.351747.45
Resistance1786.851800.001807.75

XAU/USD – Last Friday, we had a buy call at $21.15 which was filled. Yesterday, we left orders for stop at $20.80 and profit order at $21.75. Price went above $22 and we are out of this position with a $0.60 profit. Stochastic is rising and is hinting at more price upsides ahead. MACD is also rising and hinting at a bullish price trend. 20EMA is hinting at a strong bullish price trend. Price has also taken out the previous high at$22.24. The next resistance lies at $22.45.

Support22.0021.7521.40
Resistance22.4522.9523.30