Tag: XAG/USD

FX Commentary – U.S. Dollar Slid Along With U.S. Treasury Yields

Nicholas

Market Talk
– The U.S. dollar slid against major currencies as the yield on the benchmark U.S. 10-year Treasury fell after U.S. data showed job openings fell in August by the most in nearly 2-1/2 years in August, in a sign the Fed’s mission to tame inflation by hiking rates was working to slow the economy.

– The kiwi leapt as much as 1.3% before falling back to flat at $0.5731 after the Reserve Bank of New Zealand lifted interest rates to a seven-year high and promised more pain to come as it struggles to cool red-hot inflation in an over-stretched economy.

– The hawkish commentary contrasted with a dovish turn by the Reserve Bank of Australia which down shifted to a quarter-point hike at its policy meeting on Tuesday. Rate rise in New Zealand poured cold water over hopes for a pause or slowdown in the U.S. Federal Reserve’s intentions for aggressive hikes.

– Sterling’s rally faltered as it fell 0.5% to $1.1425. Having recovered nearly 11% from week-ago record lows, sterling’s rally seems to be running out of steam. The euro fell 0.2% to $0.9963 but remained near a two-week high.

– Gold prices rose to a high of $1729.03 overnight, as the dollar and U.S. Treasury yields retreated, with investors hoping that the U.S. Federal Reserve could adopt a less aggressive approach to rate hikes.


Chart Focus XAG/USD – Silver

Key Points

1. Buy Silver recommendation.

2. Buy Silver at $20.35. Stop at $19.95 and profit target at $21.25

3. An improvement in risk sentiment and a decline in US Treasury yields are both weighing on the U.S. dollar.

4. Price is supported by the 20EMA as well as the Fibonacci 38% correction point with MACD hinting at a bullish price trend.

Fundamental Comments

1. A decline in benchmark 10-year yield is weighing on the U.S. dollar.

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

Technical Comments

1. Price is supported by the 20EMA as well as the Fibonacci 38% correction point of the rally.

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



Key Levels

Support20.6020.2519.90
Resistance20.9021.2021.55

Technical Overview

USD/JPY – Price had declined to a low of 143.51 overnight and could be moving lower to 142.95 in the next 48 hours if price remains capped by the 20EMA which is hinting at a bearish price trend. MACD has also turned bearish and is hinting at a bearish price trend. Stochastic is close to the oversold zone and is hinting at a limited downside ahead. Only a move above the 20EMA resistance at 144.55 would negate our bearish view.

Support143.85143.45142.95
Resistance144.30144.70145.30

EUR/USD – We have a buy recommendation at 0.9780 on Monday and yesterday we had left stop at at 0.9745 and profit order at 0.9880. Price rose to a high of 0.9999 overnight and we are out of this position with a 100 pips profit. Stochastic is in the overbought zone and is hinting at a limited upside. However both MACD and 20EMA are hinting at a strong bullish price trend. We see price moving higher to 1.0050 in the next 1-2 days.

Support0.99500.98950.9845
Resistance1.00001.00501.0105

GBP/USD – Price climbed to a high of 1.1498 this morning but the rally seems exhausted. There was also a divergence warning from the MACD indicator hinting at a possible price high. Stochastic is also in the overbought zone. However, 20EMA is hinting at a strong bullish price trend. We think price may have reached a high and we are looking at a decline back to 1.1065 in the next few days. If price goes above 1.1498, it could be heading towards 1.1550.

Support1.14651.14051.1365
Resistance1.15001.15501.1590

XAU/USD – Price broke above a downtrend channel that has been in force since 8 March 2022. This reversal means price has probably reached a low at $1614.58 and we are likely to see a price move to the Fibonacci 38% correction point of the previous decline at $1788.65 in the next couple of weeks. The immediate resistance lies at $1735 and this could be tested in the next 24 hours. Stochastic is in the oversold zone but both MACD and 20EMA are hinting at a strong bullish price trend.

Support1717.251702.551687.40
Resistance1729.001745.301758.20

USD/CAD – We have a sell recommendation at 1.3635 yesterday which was filled when price advanced to a high of 1.3663. Our view remains the same as yesterday. We would recommend lowering stop to cost at 1.3635  while keeping profit order at 1.3460. Stochastic is in the oversold zone and is hinting at a limited downside. However both MACD and 20EMA are hinting at a bearish price trend.

Support1.35001.34551.3420
Resistance1.35551.36051.3660

FX Commentary – Sterling Recovered After Bank of England’s Comment.

Nicholas

Market Talk
– The British pound dropped to an all-time low against the dollar on Monday as investors worried Britain’s new economic plan will hurt the country’s finances, while the Bank of England said it was watching financial markets “very closely” following sharp moves in asset prices.

– Sterling, which collapsed to a record low $1.0327 on Monday, recovered to $1.0742.  The Bank of England said it would not hesitate to change interest rates and was monitoring markets “very closely” which helped to halt the decline.

– The dollar firmed to 144.585 against the yen, heading back toward Thursday’s 24-year peak of 145.90. It sank to around 140.31 that same day after Japan conducted yen-buying intervention for the first time in more than 20 years.

– The European single currency was up 0.3% on the day at $0.9634 after hitting a 20-year low a day ago. The risk-sensitive Australian dollar touched $0.6438, its lowest since May 2020, and was last down 1.02%.

– Gold prices rose to $1629.95 from two-year lows on Tuesday as a rally in the dollar paused. Rising interest rates boosted the greenback’s safe haven demand, helping the currency largely overtake gold as a preferred safe haven this year.


Chart Focus USD/CAD

Key Points

1. Buy USD/CAD recommendation.

2. Buy USD/CAD at 1.3630. Stop at 1.3595 and profit target at 1.3790.

3. A hawkish Federal Reserve and a potential economic recession in Europe and US are both likely to aid the US dollar.

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

Fundamental Comments

1. A hawkish Federal Reserve bent on hiking interest rates to curb inflation is likely to weigh on the Canadian dollar.

2. A potential economic recession in Europe and US is likely to aid the US dollar as a safe haven.

Technical Comments

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

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

Technical Overview

USD/JPY – Price reached a high of 145.90 on Friday before BOJ intervention sent it down to 140.35. Price has recovered to 144.78 and we are likely to see price test the 145.00 level again. Stochastic is close to the overbought zone but both MACD and 20EMA are both bullish and hinting at a bullish price trend. Fear of another intervention is likely to cap price around the previous high.

Support144.25143.80143.30
Resistance144.80145.35145.90

EUR/USD – Price declined to a low of 0.9525 on Monday and there was no divergence. This is a hint that the low may not be in. Price is likely to find resistance at the 20EMA at 0.9715. Unless price can move above this resistance, we are likely to see another test of the low at 0.9525 again in the next few days. Stochastic is rising from the oversold zone. However, both 20EMA and MACD are bearish and hinting at a bearish price trend.

Support0.96200.95800.9525
Resistance0.96650.97100.9760

GBP/USD – After reaching a low of 1.0322 on Monday, we have seen a recovery to a high of 1.0929. Currently, the 20EMA line at 1.0920 is likely to cap the rally. Unless price can move above this resistance, we are likely to see another test of the previous low at 1.0322 again in the next few days. MACD and 20EMA remain bearish while stochastic is rising from the oversold zone.

Support1.07251.06801.0605
Resistance1.08101.08751.0930

XAU/USD – Price reached a low of $1620.75 overnight. Stochastic is also in the oversold zone and is hinting at a limited downside. However, both 20EMA and MACD are bearish and hinting at bearish price trend. We think price may do a correction back to the 20EMA resistance line at $1646 to the previous low turned supported point at $1653.80 and if price cannot move above this resistance, we are likely to see a continuation of the downtrend.

Support1620.751606.401590.45
Resistance1634.401646.101658.25

XAG/USD – Yesterday, we had a sell call at $18.65. Overnight price went up to a high of $19.02, taking out our stop at $18.90. Price had declined to a low of $18.31 and this low was accompanied by a divergence warning from the MACD indicator. Price may have reached a low and we are likely to see a price rally back to $19.00 again. Stochastic is in the oversold zone. Both 20EMA and MACD remain bearish.

Support18.3018.0017.80
Resistance18.7019.0519.40

FX Commentary – Sterling Plunged On Huge Government Borrowing

Nicholas

Market Talk
– Sterling tumbled as much as 4.9% to a record trough of 1.0327 before stabilizing around $1.0540, 2.9% below the previous session’s close on Monday as traders scampered for the exits on speculation the new government’s economic plan will stretch Britain’s finances to the limit.

– It dropped 3.6% on Friday, when British finance minister Kwasi Kwarteng laid out a plan of historic tax cuts paid for by huge increases in borrowing, which sent British government bonds into freefall and the pound sharply lower.

– The euro also touched a fresh 20-year trough at 0.9528 to the dollar on Monday Asian trade on simmering recession fears, as the energy crisis extends toward winter amid an escalation in the Ukraine war. A weekend election in Italy was also set to propel a right-wing alliance to a clear majority in parliament weighing on the Euro.

– The greenback added 0.39% to 143.95 yen, continuing its climb back toward Thursday’s 24-year peak of 145.90. It tumbled to 140.31 on Friday after Japan conducted yen-buying intervention for the first time since 1998. On Monday, Japanese Finance Minister Shunichi Suzuki repeated that authorities stood ready to respond to speculative moves in currency.

– Gold prices retreated further on Monday reaching as low as $1626.35 as the dollar index notched a new 20-year high amid growing fears of rising interest rates from a hawkish Federal Reserve and a potential economic recession.


Chart Focus XAG/USD – Silver

Key Points

1. Sell Silver recommendation.

2. Sell Silver at $18.65 Stop at 18.90 and profit target at 18.00

3. A hawkish Federal Reserve and a potential economic recession are both weighing on Silver.

4. A Double Top chat pattern and bearish MACD are both hinting at a price decline.

Fundamental Comments

1. A hawkish Federal Reserve bent on hiking interest rates is likely to weigh on Silver.

2. A potential economic recession in Europe and US is likely to weigh on Silver demand.

Technical Comments

1. Price broke below the neckline of a Double Top chart pattern, hinting at a likely price decline.

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



Key Levels

Support18.4518.1517.80
Resistance18.7019.0019.30

Technical Overview

USD/JPY – Price reached a high of 145.90 on Friday before BOJ intervention sent it down to 140.35. Price has recovered to 144.18 at the point of this writing. Stochastic is rising, MACD is moving up and 20EMA is also hinting at a price rally. All three indicators are hinting at a price rally. We are likely to see price test the 145.00 level again but fear of another intervention is likely to cap price around the previous high.

Support143.75143.10142.60
Resistance144.40145.00145.40

EUR/USD – Price declined to a low of 0.9525 early this morning. This is also the Fibonacci 261.8% price projection from the decline of 1.0197 to the low at 0.9944. It is possible the decline has reached its target. Stochastic is in the oversold zone. However, 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.

Support0.96150.95550.9525
Resistance0.96650.97100.9760

GBP/USD – Price had declined on Friday as a result on fear of high debt from UK latest budget as well as rising UK interest rate. The decline continues this morning to reach a low of 1.0322. Stochastic is in the oversold zone and is hinting at a limited upside. MACD remains bearish while 20EMA is hinting at a strong bearish price trend. We see price being capped at 1.0840 and another decline in the next few days.

Support1.05201.04101.0325
Resistance1.06501.07201.0810

XAU/USD – Price reached a low of $1626.35 this morning and the low was accompanied by a divergence warning from the MACD indicator. Stochastic is also in the oversold zone and is hinting at a limited downside. 20EMA is also pointing down with a steep slope, hinting at a strong bearish price trend. We remain bearish as price will need to move above $1654 to regain its bullish impetus.

Support1636.601626.351616.40
Resistance1643.901653.901664.25

EUR/JPY – We had a sell call last Thursday at 142.95 but price rose to a high of 143.69 and our stop at 143.30 was triggered. Price has since decline to a low of 137.20 and we think price may have reached a bottom. MACD is starting to warn with a divergence. Stochastic is in the oversold zone but 20EMA is pointing lower with a steep slope hinting at a strong bearish price trend.

Support138.55137.60137.20
Resistance139.40140.25141.05

FX Commentary – US Dollar Nursed Losses Ahead Of US Inflation Data

Nicholas

Market Talk
– The U.S. dollar nursed losses on Tuesday ahead of U.S. inflation data that could show some signs of softening. After falling 0.7% overnight, the largest daily decline since August, the dollar index stood firm at 108.2.

– U.S. inflation figures are due at 12.30 GMT and the consensus is for the core inflation rate last month to have risen 0.3% month-on-month, the same as in July. Recent dollar gains have slowed on market expectations that peaking inflation will mean less aggressive interest rate hikes from the Federal Reserve.

– The euro rose 0.08% to $1.0130, after hitting a nearly one-month high of $1.0198 in the previous session and gaining 0.76% overnight. Sterling edged up 0.07% to $1.1691, after rising 0.86% overnight, the largest daily increase in a month.

– The yen likewise eked out gains and last traded 0.2% higher at 142.53 per dollar, helped slightly by talk of intervention from Japanese officials. The New Zealand dollar fell 0.2% ahead of current account and GDP data due later this week.

– Gold prices moved little to $1,725.70 on Tuesday but held on to recent gains as investors awaited more signs that U.S. inflation was moving away from peaks hit this year.


Chart Focus USD/JPY

Key Points

1. Sell USD /JPY recommendations.

2. Sell USD /JPY at 142.75. Stop at 143.05 and profit target at 141.40.

3. Market expects U.S inflation is peaking which may weigh on the greenback.

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

Fundamental Comments

1. Market expects that U.S inflation is peaking which will mean less aggressive interest rate hikes from the Federal Reserve.

2. Easing in U.S inflation may weigh on the greenback.

Technical Comments

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

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



Key Levels

Support142.15141.85141.40
Resistance142.85143.50144.15

Technical Overview

EUR/USD – Price is consolidating in the range from $1.0115 to $1.0145 after reaching a high of $1.0197 yesterday. Stochastic is declining and hinting at a price decline. However, both 20EMA and MACD remain bullish and hinting at a bullish price trend. We see price may have a correction to $1.0085 before the rally resume. However, a break below this level at $1.0085 would negate our bullish view.

Support1.01151.00851.0055
Resistance1.01601.02001.0240

GBP/USD – Price is consolidating and forming a potential Pennant pattern which is a continuation bullish pattern. While stochastic is in the overbought zone and is hinting at a limited upside potential, both 20EMA and MACD remains bullish and hinting at a bullish price trend. If the price can break out from the Pennant pattern, we are likely to see the price rally and test the previous support turned resistance at $1.1740.

Support1.16651.16201.1575
Resistance1.17401.18001.1850

XAU/USD – Price broke above the resistance of $1727.25 yesterday but failed to sustain and declined to a low of $1720.46 this morning. Stochastic is in the middle of its range and is neutral now. Price is still supported above the 20EMA which is hinting at a bullish price trend. MACD is also bullish and is hinting at a bullish price trend. Price may need to break and sustain above the $1727.25 resistance to regain its upside momentum.

Support1711.101697.201688.55
Resistance1727.251745.301758.30

XAG/USD – We had a short position last Friday at $18.90. Yesterday we kept our stop at $19.20 but lifted our profit target higher to $18.58. Unfortunately, the price rallied above $19.20 to a high of $19.98 overnight and we are out of this position with a $0.30 loss. Price is likely to have a correction to the support at $19.40 before it continues to move higher. Stochastic is in the overbought zone but both 20EMA and MACD are hinting at a bullish price trend.

Support19.4018.9518.40
Resistance19.9020.3520.80

AUD/USD – We had a buy recommendation yesterday at $0.6810 which was not filled as the lowest price yesterday are only $0.6822 before the price started to rally to a high at $0.6898. Stochastic is hinting at a bearish price trend but both 20EMA and MACD remain bullish and hinting at a bullish price trend. We are cautious as the price has reached the Fibonacci 61.8% resistance level at $0.6890, from $0.6698 to the high at $0.7008.

Support0.68550.68200.6785
Resistance0.68900.69250.6955

FX Commentary – The Greenback Stayed Near 2-Week Low Ahead Of U.S. Inflation Report.

Nicholas

Market Talk
– The US dollar weakened and stayed not far from a two-week low ahead of key U.S. inflation data on Tuesday that might allow the Federal Reserve to consider whether to slow the pace of rate hikes at its Sept. 21 policy meeting with market pricing in a 75 basis point hike at the next FOMC.

– The greenback was flat at 142.71 yen, following its retreat from a 24-year high at 144.99 from Wednesday as U.S. long-term 10-year Treasury yields paused at around 3.315% in Tokyo trading after an ascent that took it to the highest since mid-June at 3.365% last week.

– The euro jumped to a more than three-week peak versus the dollar on Monday as European Central Bank officials pushed the case for further aggressive monetary tightening and hiked rate by 75 basis points. Sterling rose to $1.1648, it highest this month.

– The Australian and New Zealand dollars struggled to extend a rally on Monday, after outperforming their peers in the previous session. The Aussie was off 0.2% at $0.6832, after surging 1.4% to as high as $0.6877 in the previous session. The kiwi dollar was mostly unchanged at $0.6108, having also climbed 0.9% on Friday.

– Gold prices inched higher to $1,718.83 an ounce on Monday, retaining mild gains from last week as the dollar fell further from 20-year highs ahead of key U.S. inflation data due on Tuesday.


Chart Focus AUD/USD

Key Points

1. Buy AUD/USD recommendation.

2. Buy AUD/USD at 0.6810. Stop at 0.6780 and profit target at 0.6890

3. Recent U.S. dollar weakness and Aussie bond yields are both weighing on the U.S. dollar.

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

Fundamental Comments

1. The greenback weakness ahead of inflation data is aiding the Aussie dollar.

2. Aussie 10-year bond yields have moved higher than the US 10-year Treasury yields aiding the Aussie dollar.

Technical Comments

1. Price is likely to be 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

Support0.68200.67850.6735
Resistance0.68550.68900.6925

Technical Overview

USD/JPY – Price reached a low of $141.49 last Friday which is just above the Fibonacci 62% correction point from $139.05 to the high at $144.99 at $141.45. Price has crossed above the 20EMA line which is hinting at a bullish trend. Stochastic is rising and hinting at a price rally. MACD may be about to turn bullish. If the price able to sustain above the 20EMA at $142.94, we may see a rally to the resistance at 144.35 the next 48 hours.

Support142.90142.50141.90
Resistance143.50144.15144.60

EUR/USD – Price gapped up and moved to a high at $1.0094 at the point of this writing. Stochastic is in the overbought zone and hinting at a limited upside. Both 20EMA and MACD are pointing higher and hinting at a bullish price trend. Price could be on the way to testing the last week high at $1.0145 in the 24 hours. However, a break below $1.0015 would negate our bullish view for the next 24 hours.

Support1.00751.00451.0015
Resistance1.01151.01451.0185

GBP/USD – Price reached a low of $1.1490 last Friday and we saw a rebound to $1.1636 this morning. Price is currently attempting to break above the last week’s high at $1.1648. If the price is able to stay above $1.1600, we may see the continuation of the rally to the next higher resistance at $1.1648 or to 1.1695. Stochastic is in the overbought zone, while both 20EMA and MACD remain bullish and are hinting at a bullish price trend.

Support1.16001.15501.1515
Resistance1.16501.16951.1740

XAU/USD – Price attempted to break above the resistance at $1727.25 but was unsuccessful. Price declined below the 20EMA support at $1714.30, hinting at a change of trend. Stochastic is moving lower and hinting at a price decline. MACD remains bullish but looks weak at the moment while 20EMA is neutral at the moment. If the price is hold above $1713.40 support, we are likely to see the price test the resistance at $1727.25 again in the next 24 hours.

Support1711.101697.201688.55
Resistance1727.251745.301758.30

XAG/USD – We had a sell recommendation last Friday which was filled at $18.90 with a stop at $19.20 and a profit target at $18.40. Price has moved to a low of $18.56 which is near to our profit target but rebounded to a high of $18.99 this morning. Stochastic remains overbought and is hinting at a limited upside but both 20EMA and MACD remain bullish. We would recommend keeping stop at $19.20 and lifting profit target higher to $18.58.

Support18.9518.4018.05
Resistance19.2019.6019.90