FX Commentary – U.S. Dollar Declined On Powell Dovish Comments

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

FX Commentary – U.S. Dollar Little Changed Ahead Of Powell’s Speech

Market Talk
– The U.S. dollar was little changed on Wednesday morning as investors’ awaited guidance on the Federal Reserve’s interest rate hiking path, with hopes that U.S. interest rate hikes are likely to slow in the coming months.

– Data on Tuesday showed that U.S. consumer confidence slipped to a four-month low in November, with households less keen to spend on big-ticket items over the next six months amid high inflation and rising borrowing costs, heightening the risks of a recession next year

– The Australian dollar bounced back on Tuesday to 0.6684 as investors hoped China would ease COVID restrictions after Chinese health officials discussed speeding up COVID vaccinations for elderly people.

– The euro fell 0.15% against the U.S. currency to $1.0324, while sterling was last trading at $1.1951, down 0.06% on the day. The yen strengthened against the dollar to 138.63 per dollar.

– Gold prices were little changed on Wednesday, with investors largely focusing on Federal Reserve Chair Jerome Powell’s speech for insights into the U.S. central bank’s monetary policy path. But the outlook for gold still remains muted, given that the Fed is likely tighten monetary policy further amid at a slower pace.


Chart Focus USD/CAD

Key Points

1. Buy USD/CAD recommendation.

2. Buy USD/CAD at 1.3535. Stop at 1.3495 and profit target at 1.3640

3. Hawkish remarks from a Fed official and a slowdown in China due to COVID-19 are likely to weigh on the Canadian dollar.

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

Fundamental Comments

1. Hawkish remarks from James Bullard is likely to aid the U.S. dollar.

2. Current COVID-19 cases and restriction in China are likely to weigh on crude oil and the Canadian dollar

Technical Comments

1. Price is likely to be supported by the 20EMA line as well as a previous support zone.

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



Key Levels

Support1.35551.35051.3460
Resistance1.35951.36451.3680










Technical Overview

USD/JPY – Price declined to a low of 137.85 overnight, missing our entry order at 137.80. Price is currently capped by the 20EMA at 138.75 and will need to move above this resistance in order to move up to our target at 139.75. Stochastic is rising and is hinting at a bullish price trend. However, both MACD and 20EMA remain bearish and are hinting at a bearish price trend. We favour the upside to 139.75.

Support138.05137.65137.10
Resistance138.75139.60139.95

EUR/USD – Price has decline from a high of 1.0496 on Monday to a low of 1.0318 last night. We are likely to see price moving lower to 1.0220 in the next couple of days as MACD had given a divergence warning of a possible price high. 20EMA is also hinting at a price decline ahead. However, stochastic is inside the oversold zone and is hinting at a limited downside. Tonight Powell’s speech could decide the next price direction.

Support1.03151.02801.0220
Resistance1.03601.03951.0430

GBP/USD – Price was capped by the 20EMA overnight and if it stays below the 20EMA, we could see a price decline to 1.1760 in the next few days. A move above the 20EMA is likely to send price higher to 1.2165. Stochastic is in the oversold zone but is still moving lower. Stochastic is hinting at a limited downside but 20EMA remains bearish. MACD is also bearish. We prefer the downside to 1.1770.

Support1.19351.18701.1825
Resistance1.19801.20251.2075

XAU/USD – Price has been caught in a range from $1738 to $1763 for the past 5 trading days. We are likely to see price continues inside the range for the next 24 hours. Stochastic rising and is hinting at a bullish price trend but MACD remains bearish and is hinting at a sideways range. 20EMA is neutral and is also hinting at a sideways range. Watch the range boundaries for clues to the next price direction.

Support1747.451731.351721.35
Resistance1763.351773.251786.25

XAG/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 $22.10. Price declined to a low of 20.85 overnight and has bounced up to $21.25. Stochastic is rising but MACD is bearish. 20EMA is neutral at the moment. The chart outlook is currently mixed. We would recommend keeping stop at $20.80 while lowering profit order to $21.75.

Support21.1520.8020.55
Resistance21.4021.7522.00

FX Commentary – U.S. Dollar Boosted By Hawkish Fed Officials’ Comments

Market Talk
– The U.S. dollar clawed back from earlier losses as a hawkish Federal Reserve official laid out the case for further rate hikes. Rumours about a loosening in COVID-19 restrictions with report that Chinese health officials would hold a news conference capped gains in the greenback.

– St. Louis Fed President James Bullard said the U.S. central bank needs to raise interest rates quite a bit further and then hold them there throughout next year and into 2024 to gain control of inflation and bring it back toward the Fed’s 2% goal boosted the dollar.

– The euro was up 0.38% at $1.0379, after surging to a five-month peak of $1.0497 overnight before falling back after European Central Bank President Christine Lagarde hinted at a series of interest rate hikes to fight inflation. Sterling edged 0.36% higher to $1.2001.

– The Aussie, often used as a liquid proxy for the yuan, rose 0.77% to $0.6704. The kiwi similarly gained 0.71% to $0.6204. The dollar dipped to 138.65 yen, after briefly touching a three-month trough of 137.50 overnight.

– Gold prices slipped from a more than one-week high below a key support, as the dollar rose from session lows on hawkish comments from members of the U.S. Federal Reserve reiterating their fight against inflation.


Chart Focus USD/JPY

Key Points

1. Buy USD/JPY recommendation.

2. Buy USD/JPY at 137.80. Stop at 137.50 and profit target at 139.75.

3. Hawkish remarks from a Fed official and yield differential are likely to aid the U.S. dollar.

4. Price has a Double Bottom chart pattern with MACD also hinting at a price bottom.

Fundamental Comments

1. Hawkish remarks from James Bullard is likely to aid the U.S. dollar.

2. A big yield differential between the US bond and Japanese bond is likely to aid the U.S. dollar.

Technical Comments

1. Price could be forming a Double Bottom chart formation, which is a hint of a possible price low.

2. MACD has given a divergence warning of a possible price bottom.



Key Levels

Support138.05137.65137.10
Resistance138.75139.60139.95










Technical Overview

USD/CAD – Price reached a high of 1.3504 on Monday and we saw a correction down to 1.3415. This is where the 20EMA support lies as well. Stochastic is declining from the overbought zone, hinting at a price decline but both MACD and 20EMA are hinting at a bullish price trend. If price can stay above the 20EMA at 1.3410, we are likely to see a test of Monday’s high again in the next 24 hours.

Support1.34101.33701.3315
Resistance1.34601.35051.3540

EUR/USD – Price has decline from a high of 1.0496 on Monday to a low of 1.0329 last night. We are likely to see price moving lower to 1.0220 in the next few days as MACD had given a divergence warning of a possible price high. 20EMA is also hinting at a price decline ahead. Stochastic is also declining and hinting at a price decline. Only a move above 1.0496 would negate our bearish view.

Support1.03301.02951.0220
Resistance1.03701.04301.0495

GBP/USD – We had a buy call yesterday at 1.2030 yesterday but our call was wrong. Price declined to a low of 1.1939 taking out our stop at 1.1995. Stochastic is in the oversold zone and MACD is also hinting at a possible price rally. However, 20EMA is hinting at a bearish price trend. A three and a half week rally from 1.1142 to 1.2152 could have ended and a correction to the Fibonacci 38% of the rally at 1.1765 is likely in the next few days.

Support1.19801.19251.1870
Resistance1.20201.20751.2125

XAU/USD – Price reached a low of $1731.35 overnight for the third time in the past 7 days. Stochastic is also near to the oversold zone and is turning up, hinting at a price rally. MACD and 20EMA are neutral at the moment. If price can hold above the strong support at $1731, we are likely to see a test of the recent high at $1763.60. However a break of the support is likely to send price lower to $1700.

Support1744.351731.351721.35
Resistance1754.951763.401773.25

XAG/USD – Last Friday, we had a buy call at $21.15 which was filled when price fell to a low of $21.03 on Monday morning. Price reached a high of $21.61 before a declined to a low of $20.82. We would recommend keeping stop at $20.80 and profit target at $22.10. Stochastic is near to the oversold zone, hinting at a limited downside. However both MACD and 20EMA are hinting at a bearish price trend.

Support20.8020.5520.10
Resistance21.1521.3521.70

FX Commentary – US Dollar Declined On The Fed Perceived Dovish Tilt

Market Talks

– The U.S. dollar stood close to a three-month low on Friday morning as the prospect of the Federal Reserve slowing monetary policy tightening as soon as December, following the release of November’s FOMC meeting minutes, dominated investors’ minds.

– Minutes from the Fed’s November meeting released on Wednesday showed that a “substantial majority” of policymakers agreed it would “likely soon be appropriate” to slow the pace of interest rate hikes.

– Sterling rose more than 0.5% overnight and last stood at $1.2112, close to its over three-month high of $1.2153 hit in the previous session and on track for a nearly 2% weekly gain. The euro slipped to $1.0404, but remained close to $1.0481, its highest level in over four months hit last week.

– The Japanese yen jumped roughly 0.7% overnight and last bought 138.60 per dollar. The Aussie slipped to $0.6753, after rising more than 0.4% overnight. The kiwi eased 0.19% to $0.6252, but that was not far off its three-month peak hit in the previous session.

– Gold prices firmed on Friday, gaining 0.3% to $1760.15 en route to a weekly gain, buoyed by the dollar’s retreat on a perceived dovish tilt in the U.S. Federal Reserve’s interest rate hike strategy. Silver eased to $21.46 but was still up about 2.7% for the week.


Chart Focus XAG/USD

Key Points

1. Buy silver recommendation.

2. Buy silver at $21.15. Stop at $20.80 and profit target at $22.10.

3. A perceived dovish tilt in the U.S. Federal Reserve’s interest rate hike strategy and a decline in U.S. Treasury yields are both weighing on the U.S. dollar.

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

Fundamental Comments

1. A perceived dovish tilt in the U.S. Federal Reserve’s interest rate hike strategy is weighing on the U.S. dollar.

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

Technical Comments

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

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



Key Levels

Support21.1020.9020.55
Resistance21.4021.7022.05









Technical Overview

USD/JPY – In our last update on Wednesday, we had a buy call at 141.45 but our call was wrong and we got stop out at 140.85. Price has since declined to 138.01 overnight. There could be more downside ahead as MACD has not given a divergence warning as yet. Stochastic is in the oversold zone but 20EMA is hinting at a bearish price trend. The next support lies at 137.70 and price could be heading to this support in the next 24 hours.

Support138.35137.70137.15
Resistance138.80139.20139.60

EUR/USD – Price has reached a high of 1.0448 overnight and the rally looks like it can continue higher to the previous high at 1.0480 in the next 24 hours. Stochastic is in the overbought zone but MACD remains bullish and is hinting at a bullish price trend. 20EMA is also hinting at a bullish price trend. Only a price move below 1.0345 would negate our bullish view for the next 24 hours.

Support1.03951.03401.0295
Resistance1.04451.04801.0535

GBP/USD – Price reached a high of 1.2153 overnight and the rally looks like it can continue higher in the next 24 hours as MACD remains bullish and is hinting at a bullish price trend. 20EMA is also hinting at a bullish price trend. Stochastic is in the overbought zone and hinting at a limited upside. As long as price stays above the 20EMA at 1.2020, we are likely to see a rally to the next high at 1.2295 in the next few days.

Support1.20901.20501.1990
Resistance1.21301.21551.2195

XAU/USD – Price managed to rally after it had reached a low of $1731.45 on Wednesday. MACD remains bullish and is hinting at a price rally. 20EMA is also hinting at a bullish price trend. However, stochastic is in the overbought zone and is hinting at a limited upside. Price is currently just below the Fibonacci 62%. At this moment price could move in either direction but we prefer the upside.

Support1751.201743.101731.45
Resistance1760.801770.801785.60

NZD/USD – Price broke above its previous high at 0.6205 to a high of $0.6288 overnight. MACD remains bullish and is hinting at a price rally. 20EMA is also hinting at a bullish price trend ahead. However, stochastic is in the overbought zone and is hinting at a limited upside. We are looking at a small pullback to the 20EMA line at 0.6205 and if price can stay above this support, we are looking at a rally to 0.6380 in the next few days.

Support0.62400.62000.6160
Resistance0.62900.63400.6380

FX Commentary – U.S. Dollar Slipped On Expectations Of Slower Fed Hikes

Market Talk
– The U.S. dollar lost ground against its peers on Tuesday as investor hopes for slower hikes were renewed by Fed Vice Chair Lael Brainard’s comments that it will likely slow its tightening pace soon as it figures out how high borrowing costs need to go and for how long in order to bring down inflation.

– The euro was down against the dollar at $1.0342, after earlier rising to a three-month high of $1.0368. ECB board member Fabio Panetta said on Monday that the central bank must keep raising rates but needs to avoid over tightening, as doing so could destroy productive capacity and deepen an economic downturn.

– Sterling fell ahead of British Chancellor Jeremy Gaunt’s autumn statement on Thursday when he is expected to set out tax rises and spending cuts. The pound was down 0.55% at $1.1770, having risen 4% in the previous two sessions, touching on Friday its highest level since late August.

– The Japanese yen slipped to 140.48 against the dollar after the world’s third-largest economy shrank at an annualized rate of 1.2% in the third quarter, as high inflation weighed heavily on business and consumer spending.

– Gold prices hovered near three-month highs at $1770.70 on Tuesday as mixed signals from Federal Reserve officials on the path of U.S. interest rates kept the dollar pinned to recent lows.

– There will be no Daily FX Commentary tomorrow. Commentary will resume on Thursday.


Chart Focus USD/JPY

Key Points

1. Sell USD/JPY recommendation.

2. Sell USD/JPY at 141.00. Stop at 141.40 and profit target at 138.75.

3. Fed Lael Brainard’s comments and a decline in US Treasury yield are both weighing on the U.S. dollar.

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

Fundamental Comments

1. Fed Vice Chair Lael Brainard’s comment about slowing the tightening pace is likely to weigh on the U.S. dollar.

2. A decline in US Treasury yield is aiding the Japanese yen.

Technical Comments

1. Price is likely to be capped by the 20EMA line, which is also hinting at a bearish price trend.

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



Key Levels

Support140.10139.60139.10
Resistance140.80141.65142.35









Technical Overview

NZD/USD – We had a buy recommendation yesterday at 0.6025 but price only declined to a low of 0.6060 and our entry order was not filled. Price has reached a high of 0.6120 this morning and we are likely to see this rally continues higher to the next resistance at 0.6160. Stochastic is in the overbought zone but both MACD and 20EMA are hinting at a strong bullish price trend. Only a price decline below 0.5950 would negate our bullish price view.

Support0.60950.60500.6015
Resistance0.61300.61650.6220

EUR/USD – Price is hovering near the previous week’s high at 1.0363 and 20EMA is hinting at a bullish price trend. There is a strong resistance line at 1.0365-70 level and if price can move above this resistance, we are likely to see 1.0485 in the next couple of days. Stochastic is in the overbought zone but MACD is bullish. If price is capped by the resistance line, we are likely to see a decline back to 1.0090 again.

Support1.03101.02701.0220
Resistance1.03651.04151.0450

GBP/USD – Price reached a high of 1.1854 last Friday and since that high, price has been consolidating with the 20EMA providing support at 1.1705. If price is supported above the 20EMA, we are likely to see another test of the high at 1.1854 but a decline below the support is likely to send price lower to 1.1595. Stochastic is hinting at a price decline but both 20EMA and MACD are hinting at a bullish price trend.

Support1.17701.17151.1650
Resistance1.18151.18551.1905

XAU/USD – Price reached a high of $1774.70 and has been holding around the high. However, stochastic is in the overbought zone for a prolong period of time now and is hinting at a price decline. MACD and 20EMA remain bullish and are hinting at a bullish price trend. We think price is likely to decline back to the 20EMA before another attempt at the resistance again. A break of $1774 is likely to send price higher to $1800.

Support1766.901753.201743.35
Resistance1774.701782.751799.15

XAG/USD – We had a sell recommendation at $21.90 last Friday and yesterday, we had recommended lowering stop to breakeven at 21.90 while keeping profit order at 21.00. Overnight price declined to a low of $21.28 but price has rallied to a high of $22.12 this morning. We are out of this position at our entry price. Stochastic is inside the overbought zone and both MACD and 20EMA are hinting at a bullish price trend. We think price can continue its rally to the next resistance at $22.49.

Support21.8521.3020.85
Resistance22.1522.5022.95