Tag: XAG/USD

FX Commentary – US Dollar Fell On Expectations Of A Less Aggressive Fed’s Hike Path.

Nicholas

Market Talk
– The U.S. dollar fell sharply on Thursday after U.S. consumer prices rose less than expected in October to suggest underlying inflation is cooling, data that Wall Street cheered as it may allow the Federal Reserve to get less aggressive with interest rate hikes.

– U.S.CPI rose 0.4% in October to match the prior month’s increase, the Labour Department said. The annualized increase in headline inflation slid below 8% for the first time in eight months. Excluding volatile food and energy components, the CPI increased 0.3% on a month-over-month basis after gaining 0.6% in September.

– The U.S. Treasury market rallied, pushing down the yield on the benchmark 10-year note, which was on pace for its largest single day’s decline since March 2009. The Japanese yen climbed to its biggest single-day rise since 2008

– The euro rose 1.93% to $1.0221 while the British pound traded at $1.1714 and notched its biggest daily advance since 1985. The Canadian dollar also gained to 1.3306 on the back of a crude oil price increase as fears of a U.S. recession eased.

– Gold prices stuck to a 2-½ month high on Friday and were set for their best week in over eight months as signs of cooling U.S. inflation drove up hopes that the Federal Reserve will trim its pace of interest rate hikes in the coming months.


Chart Focus XAG/USD – Silver

Key Points

1. Sell Silver recommendation.

2. Sell Silver at $21.90. Stop at $22.15 and profit target at $21.00.

3. A slowdown in the China economy and a 16% price rally over two weeks periods are both likely to weigh on Silver.

4. Price could be forming a Rising Wedge chart pattern and MACD is warning of a possible price high with divergence.

Fundamental Comments

1. A slowdown in the China economy due to strict COVID regulation is likely to weigh on Silver

2. A 16% rally in Silver’s price over a two week period is likely to result in a price correction.

Technical Comments

1. Price could be forming a Rising Wedge chart pattern which is a hint of a possible price high.

2. MACD is warning with divergence of a possible price high.



Key Levels

Support21.4521.0520.50
Resistance21.8522.1022.45







Technical Overview
USD/JPY – Price declined to a low of 140.19 on the back of a decline in U.S. Treasury yields. Stochastic has yet to reach the oversold zone, hinting that price has more room to fall. 20EMA is pointing down with a steep slope, hinting at a strong bearish price trend. MACD is also hinting at a strong bearish price trend. We are likely to see a price decline again to test the overnight low at 140.19 after a short consolidation. 

Support141.30140.80140.20
Resistance142.00142.45143.15

EUR/USD – We had a buy call at 1.0015 yesterday but we were stop out of this trade at 0.9985 when price declined to a low of 0.9935. Price had moved up to a high of 1.0234 this morning on the back of a cooler inflation data. We are expecting the rally to continue higher to 1.0365 in the next few days. Stochastic is rising and has not reached the overbought zone. Both MACD and 20EMA are hinting at a bullish price trend.

Support1.01751.01251.0090
Resistance1.02351.02701.0320

GBP/USD – Price reached an overnight high of 1.1730 and is currently near to the overnight high. Stochastic is in the overbought zone, hinting at a limited upside. However, 20EMA is pointing up with a steep slope, hinting at a strong bullish price trend. MACD is also hinting at a strong bullish price trend. We are likely to see price break above the overnight high and a rally to 1.1875 in the next couple of days.

Support1.16451.15951.1530
Resistance1.17051.17601.1830

XAU/USD – Price reached a high of $1764.37 this morning. Price may have reached a high as stochastic is in the overbought zone. MACD indicator is also losing momentum and is hinting at a limited upside. However, 20EMA is pointing up with a steep slope and hinting at a strong bullish price trend. The next price resistance lies at $1771.70. We think this resistance may cap the rally and force a price correction lower to $1728 before the rally resumes again.

Support1752.401740.401729.05
Resistance1764.301771.701782.10

USD/CAD – We had a buy call Wednesday at 1.3435 which was filled and yesterday had recommended shifting stop higher to 1.3495 while keeping profit target at 1.3550. Price reached a high of 1.3561 before the U.S. CPI data. We are out of this position with a profit of 115 pips. Price reached a low of 1.3291 and MACD could be forming a divergence with price, hinting of a potential price low.

Support1.32901.32601.3215
Resistance1.33201.33601.3395

FX Commentary – U.S. Dollar Eased After A Decline In U.S. PMI Data

Nicholas

Market Talk

– The U.S. dollar eased against major peers on Tuesday, after the sharp decline in the U.S. service sector PMI stoked hopes that the Federal Reserve will slow its pace of rate hikes while Sterling gained after Rishi Sunak was set to become Britain’s next prime minister, seeking to restore stability to a country reeling from years of political and economic turmoil.

– The latest U.S. business activity report signalled that the U.S. Federal Reserve’s rate rises have started to take effect, and that the Fed might hike rates by less than the 75 basis points previously expected at its Nov 1-2 policy meeting.

– The Chinese yuan tumbled for the third straight session to trade close to its December 2007 lows after Xi Jinping’s new leadership team raised worries that a more powerful Party leadership will increasingly prioritize the state at the cost of the private sector.


– Sterling fell to 1.1279 against the greenback but remains well above its all-time low of $1.0327 seen last month. The euro was last up 0.18% at $0.9880. The Japanese yen was little changed at 148.85 after Friday BOJ intervention.

– Gold prices were pressured near key support levels on Tuesday as the dollar steadied from recent losses amid growing uncertainty over the path of U.S. monetary policy. While hopes of a potential dovish tilt by the Federal Reserve somewhat benefited gold prices last week, markets are still pricing at 75 basis points hike in next week.

Chart Focus XAU/USD – Gold

Key Points

1. Buy Gold recommendation.

2. Buy Gold at $1645. Stop at $1637 and profit target at $1682.

3. Expectation of a dovish Fed and a slower pace of rate hike are both likely to weight on the U.S. dollar.

4. Price is supported by the 20EMA and Fibonacci 50% correction point with MACD hinting at a bullish price trend.

Fundamental Comments

1. Latest US data is pointing to the Fed slowing its pace of rate hikes, which is likely to weigh on the US dollar.

2. A dovish tilt by the Fed is also likely to benefit gold

Technical Comments

1. Price is supported by the 20EMA as well as the Fibonacci 50% correction point.

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



Key Levels

Support1643.601634.451625.10
Resistance1654.901670.601682.50









Technical Overview

USD/JPY – Price reached a high of 151.94 last Friday before a suspected BOJ intervention send price crashing to a low of 145.31. Price has recovered to 148.90 but is still below the 20EMA line. MACD remains bearish and is hinting at a price decline. Stochastic is in the middle of its range and is neutral at the moment. We are expecting price to move above the 20EMA and later in the week, back to test the previous high of 151.94.

Support148.65148.20147.60
Resistance149.05149.70150.30

EUR/USD – Price reached a high of 0.9898 this morning. The high was also the edge of the downtrend channel that started in early Feb of 2022. If price stays below 0.9898, we are likely to see a price decline to 0.9795 in the next 24 hours. Above 0.9898, price is likely to target 1.0000. Stochastic is in the overbought zone but both MACD and 20EMA are hinting at a bullish price trend.

Support0.98550.98050.9750
Resistance0.99000.99600.9995

GBP/USD – Price is currently sitting on the 20EMA after reaching a high of 1.1407 on early Monday morning. A break of the 20EMA is likely to send price lower to 1.1060. An ability to stay above 1.1270, we are likely to see a rally to 1.1407 again. Stochastic is near to the overbought zone and both MACD and 20EMA are bullish and hinting at a price rally in the next 48 hours.

Support1.12701.12251.1170
Resistance1.13251.13801.1410

XAG/USD – Price is currently near to the 20EMA after reaching a high of $19.46 on early Monday morning. If price can stay above the 20EMA, we are likely to see a continuation of the rally to $19.95 in the next 24 hours. If price falls below the 20EMA, it is likely to test the previous low at $18.20. Stochastic and 20EMA are both hinting at a bullish price trend. MACD remains bullish and we are in favour of a test to the previous high.

Support19.0018.6018.20
Resistance19.3519.6519.95

NZD/USD – Price is sitting just above the 20EMA and if it can stay above this support, we are likely to see another rally to test the previous high at 0.5800 again. However, a decline below the 20EMA support is likely to send price down to 0.5550. MACD remains bullish and is hinting at a bullish price trend. 20EMA is also hinting at a bullish price trend. Stochastic is neutral at the moment.

Support0.56900.56550.5595
Resistance0.57250.57650.5800

FX Commentary – US Dollar Climbed On Rising US Treasury Yields.

Nicholas

Market Talk
– The U.S. dollar continued to climb against its major peers on Thursday as U.S. Treasury yields rose to its highest level since the mid-2008, while the yen slid to a fresh 32-year low and kept markets on high alert for any signs of an intervention.

– The Japanese yen hit a fresh trough of 149.96 per dollar, its lowest since August 1990, and last bought 149.92. It has been on a losing streak for 11 straight sessions as of Wednesday’s close, and has renewed 32-year lows for six sessions now.

– Sterling fell 0.2% to $1.1201, even as data released on Wednesday showed that the biggest jump in food prices since 1980 and pushed British inflation into double digits. The euro was down 0.1% to $0.9762.

– Data on Thursday showed that Australia’s jobless rate stayed near five-decade lows at 3.5% in September, though there was a potential sign of loosening in the very tight labour market as employment rose by much less than expected.  The Aussie fell 0.2% to $0.6258, while the kiwi was 0.36% lower at $0.5656.

– Gold prices fell to an over three-week low on Thursday to $1,627.80 an ounce  as expectations of more Federal Reserve interest rate hikes pushed up U.S. Treasury yields and caused a steep selloff in metal markets.


Chart Focus GBP/USD

Key Points

1. Sell GBP/USD recommendation.

2. Sell GBP/USD at 1.1245. Stop at 1.1280 and profit target at 1.1145.

3. A rise in Treasury yields and expectations of more rate hikes are aiding the U.S. dollar.

4. A potential flag pattern and a divergence in MACD are both hinting at a price decline.

Fundamental Comments

1. Expectation of more rate hikes by the Fed is aiding the U.S. dollar.

2. A rise in US benchmark Treasury yields is aiding the U.S. dollar.

Technical Comments

1. A potential flag pattern is hinting at a bearish price trend.

2. A divergence in MACD is hinting at a price high and a bearish price trend.



Key Levels

Support1.11851.11401.1080
Resistance1.12551.13201.1360









Technical Overview
USD/JPY – Price reached a fresh high at 149.95 this morning and price is hovering close to this high. Stochastic is in the overbought zone but MACD remains bullish but is hinting at a price high with a divergence warning. 20EMA is pointing up with a steep slope, hinting at a strong bullish price trend. The next target lies at 150.00. We remain bullish but are cautious of BOJ intervention.

Support149.50149.05148.65
Resistance150.00150.50151.00

EUR/USD – The decline continues after a false break above 0.9660 on Tuesday at the previous support turned resistance line. The decline is likely to continue towards 0.9700 initially and later to 0.9665 in the next few days. Stochastic is declining and is hinting at a price decline. MACD remains bullish and is hinting at a bullish price trend while 20EMA is bearish. Only a move above 0.9875 would negate our bearish view.

Support0.97500.97050.9665
Resistance0.98000.98550.9895

AUD/USD – Price has declined past the 20EMA and we are likely to see a continuation of the decline to 0.6190 in the next 48 hours. Stochastic is approaching the oversold zone but 20EMA is bearish and hinting at a bearish price trend. MACD is neutral at the moment. Ability to move above the 20EMA could send price higher to 0.6340. Watch the 20EMA for clue to the next direction.

Support0.62300.61900.6170
Resistance0.62750.63050.6345

XAU/USD – Price reached a low of $1622.35 this morning and price may have reached a temporary low. A bullish Engulfing candlestick price pattern is hinting at a potential price low. MACD is also hinting at a possible price low with a divergence warning. Stochastic is also hinting at a limited downside. If price can stay above $1622.35, we are likely to see a corrective rally to $1642 in the next 48 hours.

Support1622.351614.551606.40
Resistance1634.881646.651658.55

XAG/USD – We had a sell call on this pair yesterday at $18.70 but price only reached a high of $18.66 and our entry order was not filled. Price has declined to a low of $18.21 this morning. We think the 20EMA resistance is likely to cap price and we are likely to see a test of the previous low at $18.05 in the next 24 hours. Stochastic is in the oversold zone but 20EMA is bearish. MACD is neutral at the moment.

Support18.2017.9517.55
Resistance18.6018.9519.30

FX Commentary – US Dollar Climbed Again On Hawkish Fed Official’s Comments

Nicholas

Market Talk
– The U.S. dollar edged higher against a basket of currencies on Tuesday, shaking off some of the weakness of the previous session, but a revival in risk appetite in global financial markets kept a lid on the greenback’s gains.

– Data showed in September, the manufacturing sector remained on a reasonable footing despite the Federal Reserve’s efforts to limit demand through higher interest rates. Hawkish comments from Fed officials are also helping the greenback.

– The Japanese yen traded near a 32-year trough to the dollar at 149 yen, putting the major psychological barrier of 150 in focus and raising the possibility of the Bank of Japan doing more to support the battered currency after its first yen-buying intervention since 1998 on Sept. 22.

– The risk-sensitive New Zealand dollar rose about 0.63% to $0.5671, taking support from hotter-than-expected consumer inflation data which bolstered bets for further rate hikes. The Aussie edged up to $0.6320 and further away from its recent 2-1/2 year trough of $0.6170.

– Gold prices rose slightly on Wednesday, extending mild gains into a third session as pressure from the dollar abated, although hawkish signals from Federal Reserve officials prevented further gains.


Chart Focus XAG/USD – Silver

Key Points

1. Sell Silver recommendation.

2. Sell Silver at $18.70. Stop at 19.00 and profit target at $18.05

3. Expectations of rising U.S. interest rates and high inflation are both likely to aid the U.S. dollar

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

Fundamental Comments

1. Expectations of rising U.S. interest rates is likely to aid the U.S. dollar.

2. Data showed U.S. inflation will likely take much longer to cool than initially expected is also aiding the U.S. dollar

Technical Comments

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

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



Key Levels

Support18.5018.2517.95
Resistance18.8019.0519.30

Technical Overview
USD/JPY – Price reached a fresh high at 149.41 at the time of this writing and price is hovering close to this high. Stochastic is in the overbought zone but MACD remains bullish and is hinting at a bullish price trend. 20EMA is pointing up with a steep slope, hinting at a strong bullish price trend. The next target lies at 150.00. We remain bullish but are cautious of BOJ intervention.

Support149.05148.65147.90
Resistance149.50150.00150.50

EUR/USD – Price had a false break above the previous support turned resistance line at 0.9855 yesterday and has declined to a low of 0.9825 at the point of this writing. We are likely to see a test of the 20EMA support at 0.9810 in the next 24 hours. A break is likely to send price lower to 0.9675 in the next few days. Ability to hold above the support at 0.9810 is likely to send price higher to 0.9880. Stochastic is overbought but both 20EMA and MACD remain bullish.

Support0.98100.97550.9705
Resistance0.98550.98950.9925

GBP/USD – Price is currently testing the 20EMA line at 1.1285 after hitting a high of 1.1438 on Monday. If price break below the 20EMA support, price is likely to move lower to 1.1140. An ability to stay above the 20EMA support is likely to see another test of the high at 1.1438 again.  We prefer the downside. Stochastic is declining and MCAD had earlier given a divergence warning of a potential high in price.

Support1.12751.12251.1150
Resistance1.13301.13851.1440

XAU/USD – Price is currently testing the previous Friday’s low at $1639.95. A break of this support is likely to send price lower to $1614.55 in the next few days. Ability to stay above this support could send price higher to $1660 in the next 24 hours. Stochastic has a bearish crossover and is hinting at a price decline. MACD is bearish and is hinting at a bearish price trend. 20EMA is pointing down and is hinting at a bearish price trend.

Support1635.551626.501614.55
Resistance1646.651658.551668.15

NZD/USD – We had a buy call on this pair overnight but price declined below our stop at 0.5660. We are out of this position with a loss of  35 pips. Stochastic is in the overbought zone and is hinting at a bearish price trend. However, MACD and 20EMA are both hinting of a bullish price trend. We think price is likely to test the 0.5775 resistance in the next 48 hours. Only a move below 0.5640 would negate our bullish view for the next 48 hours.

Support0.56750.56450.5595
Resistance0.57200.57600.5815

FX Commentary – Higher Crude Oil Prices Helped The Canadian Dollar.

Nicholas

Market Talk
– The dollar fought for a footing in choppy trade on Thursday, with support from upbeat U.S. data and hawkish policymaker comments, while the prospect of higher energy prices helped exporters’ currencies and weighed on those of importers.

– U.S. services industry posted another month of expansion in September. Data showed labour market figures were solid and the trade deficit narrowed. Hawkish comments from Fed officials who reiterated policymakers’ focus on inflation fighting and dismissed market hopes for rate cuts in 2023 also boosted the greenback.

– The euro has now made two unsuccessful attempts to regain parity this week but was last traded below parity at $0.9916. Sterling’s rebound from record lows has paused just below $1.15. Sterling last bought $1.1367.

– The yen, which has been held steady by the risk of further Japanese intervention, sat at 144.57 per dollar. The New Zealand dollar extended a post rate-hike bounce on Thursday and dragged its Australian cousin along for the ride.

– Gold prices were little changed on Thursday at $1720, pausing from a recent rally after hawkish comments from Federal Reserve officials and signs of strength in the U.S. economy dented expectations for a dovish pivot by the central bank.


Chart Focus EUR/USD

Key Points

1. Buy EUR/USD recommendation.

2. Buy EUR/USD at 0.9885. Stop at 0.9855 and profit target at 0.9995

3. Expectations of a jumbo rate hike and an improvement in risk sentiment are both aiding the Euro.

4. Price is supported by the 20EMA with both MACD and 20EMA hinting at a bullish price trend.

Fundamental Comments

1. Expectations of a jumbo rate hike later this morning are aiding the Euro.

2. An improvement in risk sentiment is weighing on the U.S. dollar.

Technical Comments

1. Price is 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

Support0.98950.98600.9825
Resistance0.99350.99951.0050

Technical Overview

USD/JPY – After a decline to the low at 143.51 on Tuesday, we have seen a price rally to 144.84 overnight. We think price is likely to continue higher to 145.00 again in the next 1-2 days ahead. However, fear of an intervention is likely to keep this pair in a range of 143.50 to 145.00 until the NFP on Friday. Stochastic is rising but both MACD and 20EMA are neutral and hinting at a sideways range movement.

Support144.40143.85143.45
Resistance144.85145.30145.90

XAG/USD – We had a buy call at 20.35 yesterday but price fell to a low of $19.93, taking out our stop at $19.95. Our view remains unchanged from yesterday. Price has since moved higher to $20.85 and we are expecting the rally to continue to $21.25 in the next 48 hours. Stochastic is neutral. MACD and 20EMA are hinting at a bullish price trend. Only a price move below $19.93 would negate our bullish view.

Support20.5020.1519.70
Resistance20.9021.2021.55

GBP/USD – Price reached a high of 1.1495 overnight but that high was accompanied by a divergence warning from the MACD indicator. This is a hint of a possible price peak and a decline ahead. The decline is currently supported by the 20EMA at 1.1285. Stochastic is declining and hinting at a price decline. Both MACD and 20EMA have yet to turn bearish. We think that price is likely to move lower to 1.1065 in the next few days.

Support1.13051.12701.1225
Resistance1.13601.14201.1465

XAU/USD – Price broke above a downtrend channel that has been in force since 8 March 2022 yesterday. This breakout is likely to send price to test the previous high resistance at $1734.85. Stochastic is close to the overbought zone and is hinting at a limited upside. However, both 20EMA and MACD are hinting at a strong bullish price trend. We are also looking at a test of $1734.85 but a move below $1700 would negate our bullish view.

Support1719.801702.551687.70
Resistance1729.001745.301758.20

USD/CAD – We have a sell recommendation at 1.3635 on Tuesday and yesterday, we had recommended lowering stop to cost at 1.3635 while keeping profit order at 1.3460. Price reached a high of 1.3695 overnight and our stop at cost was triggered. However, our view remains unchanged and we are looking at a price decline to 1.3500. Stochastic is rising but both MACD and 20EMA are bearish and hinting at a bearish price trend.

Support1.35551.35051.3455
Resistance1.36101.36501.3695