Tag: XAU/USD

FX Commentary – U.S. Dollar Pinned Near 7-week Low After FOMC Decision

Nicholas

Market Talk
– The U.S. dollar was pinned near seven-week lows on Thursday after the U.S. Federal Reserve sounded close to calling time on interest rate hikes after announcing a 25 basis points hike, which markets think are more or less over.

– The US central bank raised its benchmark funds rate by 25 basis points, as expected, but dropped language about “ongoing increases” being needed in favour of “some additional” rises, as it watches how wobbling confidence in banks affects the economy.

– The euro touched a seven-week high of $1.0912 on Wednesday, while the yen, which closely follows U.S. yields, fell 0.7% to a six-week low of 130.50. The Australian and New Zealand dollars rose 0.7% and 0.8% respectively to track back toward Wednesday’s peaks.

– Sterling also hovered near a seven-week high as British inflation unexpectedly rose, leaving it at an eye-watering 10.4% and heaping pressure on the Bank of England to raise rates and sound hawkish at its meeting later in the global day.

– Gold prices rose on Thursday, hovering below the key $2,000 level amid expectations that the Federal Reserve will have limited headroom to hike interest rates further, which also pulled the dollar lower.


Chart Focus USD/CAD

Key Points

1. Sell USD/CAD recommendation.

2. Sell USD/CAD at 1.3690. Stop at 1.3720 and profit target at 1.3555.

3. An end of the Fed hike cycle is likely to weigh on the U.S. dollar.

4. A chart pattern and a bearish MACD are both hinting at a price decline ahead.

Fundamental Comments

1. With the U.S. Federal Reserve close to calling time on interest rate hikes, the US dollar is likely to be weak.

2. A decline in US Treasury yields is likely to weigh on the US dollar.

Technical Comments

1. Price could be forming a Descending Triangle chart pattern, which is a hint of a price decline ahead.

2. MACD is bearish and is hinting at a price decline.



Key Levels

Support1.36501.36001.3555
Resistance1.36901.37401.3790










Technical Overview

USD/JPY – Price had reached a low of 130.41 overnight, which was lower than Monday’s low of 130.53. This low was accompanied by a divergence warning from the MACD indicator hinting at a possible price low. However, 20EMA and stochastic indicator are both hinting at a continuation of this price decline. We think the downside is limited. We are looking at a bounce to 131.90 in the next 48 hours.

Support130.40129.80129.20
Resistance130.95131.45131.95

EUR/USD – Price continued its rally and had reached a high of 1.0929 at the point of this writing. Stochastic is deep in the overbought zone but expectation of a narrowing of an interest rate differential is likely to keep the bid strong and the market overbought. MACD and 20EMA are both hinting at a bullish price trend. We think the rally is likely to continue towards 1.1030 in the next few days.

Support1.08851.08501.0795
Resistance1.09301.09851.1030

GBP/USD – Price broke above last Monday’s high at 1.2284 to reach a high of 1.2334. Stochastic is rising and is hinting at a continuation of this rally. MACD is also hinting at a continuation of this price rally. 20EMA is hinting at a bullish price trend. We think the topside may be limited to 1.2405 in the 24 hours. Bank of England is likely to hike rates by 25 basis points which could have a big impact on the next directional move.

Support1.23201.22801.2230
Resistance1.23701.24051.2450

XAU/USD – The decline was halted at $1934 overnight and we have seen a rally up to 1983.58 at the point of this writing. We remain bearish and think this rally could be a corrective rally, especially if price cannot move above $1989. MACD had previously hinting at a possible price high with a divergence but both stochastic and 20EMA are currently hinting at a price rally. Above $1989 would negate our bearish view and calls for a test of the recent high at $2009.75.

Support1969.401951.901942.55
Resistance1988.302009.752030.25

EUR/AUD – We had a buy call yesterday at 1.6045 but price only fell to a low of 1.6053 and our entry order was not filled. Overnight, we saw price moved above our target to a high of 1.6353. We think this could be a temporary high and we see a decline back to 1.6000 in the next few days. MACD has a divergence warning of a potential price high and stochastic is also hinting at a price decline. 20EMA is hinting at a bullish price trend.

Support1.61501.61051.6055
Resistance1.62051.62551.6295

FX Commentary – U.S. Dollar Pinned Near Low Ahead of FOMC

Nicholas

Market Talk
– The U.S. dollar was pinned near five-week lows on Wednesday ahead of the conclusion of the U.S. Federal Reserve’s policy meeting, with investors awaiting clarity on the path the central bank is likely to take in the wake of global banking turmoil.

– CME FedWatch tool showed markets are now pricing in about a 14% chance of the Fed not increasing rates, with a roughly 86% chance of a 25 basis point hike. The Fed will announce its decision on Thursday morning 2am Singapore time.

– The euro was at $1.0767, hovering around a five-week high of $1.0789 scaled overnight. The yen weakened 0.04% to 132.59 a dollar, whereas sterling was last trading at $1.2221, up 0.06% on the day.

– The Australian dollar was at $0.6684, after falling 0.7% to as low as $0.6650 overnight, despite a broad improvement in risk appetite. The kiwi dollar was changing hands at $0.6189, having also eased 0.8% as far as $0.6168 overnight.

– Gold prices moved in a tight range on Wednesday, stabilizing after a sharp drop in the prior session as markets hunkered down ahead of a Federal Reserve interest rate decision, while easing fears of a banking crisis spelt lesser safe haven demand for the yellow metal.


Chart Focus EUR/AUD

Key Points

1. Buy EUR/AUD recommendation.

2. Buy EUR/AUD at 1.6045. Stop at 1.6015 and profit target at 1.6190

3. A solution to Credit Suisse and an aggressive ECB are both likely to aid the euro.

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

Fundamental Comments

1. The end of Credit Suisse saga is likely to aid the euro.

2. With the ECB on a aggressive hike path, the interest differential is likely to narrow and favours the euro.

Technical Comments

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

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



Key Levels

Support1.60701.60051.5940
Resistance1.61251.61951.6225










Technical Overview

USD/JPY – Price had reached a low of 130.53 on Monday and this low was accompanied by a divergence warning from the MACD indicator hinting at a possible price low. 20EMA has also turned around and is hinting at a price rally. However, stochastic is in the overbought zone and is hinting at a limited upside. We think price is likely to be supported by the 20EMA and we see a rally to 133.80 in the next few days.

Support132.05131.60131.00
Resistance132.75133.20133.80

EUR/USD – Price continued its rally and had reached a high of 1.0787 overnight. However, stochastic is hinting at a limited upside and MACD is also hinting at a possible price high. Only the 20EMA is hinting at a bullish price trend. We think price has reached a temporary high at 1.0787. We see a decline in price back to 1.0575 in the next few days. A move above 1.0790 would negate our bearish view and calls for a test of 1.1030.

Support1.07551.07201.0670
Resistance1.07901.08451.0885

GBP/USD – Price had reached a high of 1.2284 last Monday and this high was accompanied by a divergence warning from the MACD indicator, hinting at a possible price high. Stochastic is declining from the overbought zone and is hinting at a price decline. However, both MACD and 20EMA are hinting at a bullish price trend. We think a high is in place and we see a decline to 1.2050 in the next few days. A move above 1.2284 would negate our bearish view.

Support1.22051.21651.2115
Resistance1.22501.22901.2345

XAU/USD – We think price has reached a high on Monday at $2009.75. A Spinning Top candlestick price pattern is also hinting at a possible price high. MACD on the 4-hourly chart is showing a divergence and is also hinting at a possible price high. Price has also moved below the 20EMA, adding to the bearish price trend. We see price going lower to $1885 in the next few days. Only a move above $1966 would negate our bearish price view.

Support1935.401922.251907.50
Resistance1952.051968.501983.15

NZD/USD – Price had reached a high of 0.6280 on Monday and a decline has seen price reached a low of 0.6166. Stochastic is in the oversold zone and is hinting at a price rally. MACD is about to crossover the zero line and is hinting at a price rally as well. 20EMA is currently hinting at a neutral price trend. We think price is likely to be capped at 0.6235 and we see a decline back to 0.6165 in the next 24 hours.

Support0.61950.61650.6135
Resistance0.62300.62800.6310

Forex Trading Idea – Gold

Nicholas

Strategy

Sell Gold at $1983.50 for a price movement to $1810. Stop should be placed above $2010. Time duration is estimated at about 2-3 months.

Technical View

Price had reached a high of $2009.75 and that high was accompanied by a Spinning Top candlestick price pattern, which is a hint of a possible price high. Stochastic is also hinting at a price decline with a reading above 80. There was a stochastic bearish crossover that is also hinting at a possible price decline.  However, 20EMA and MACD are both showing a bullish price trend and a continuation of this price rally. We think price may have reached a high and the move below the previous high at $1959.70 has confirmed the top and a decline back to February 2023 low at $1808.50.

Fundamental View

Price has a strong run up to above $2000 recently due to the banking crisis first in the US with Silicon Valley Bank and Signature Bank, followed by the Credit Suisse saga. However with the Federal Reserve providing liquidity to the banking system to avoid a crisis and UBS bank buying over Credit Suisse, risk sentiment is getting better. This could be detrimental to safe havens like gold.

Inflation in the U.S. had likely peaked and is currently on the recovery path. Gold which is often a hedge against inflation is likely to see less demand as an inflation hedge, weighing on its price. With inflation having reached its peak, the Federal Reserve is also on a less aggressive hike path. However, the Federal Reserve is still going ahead with rate hike and is likely to hike rates a few more times. Market is also expecting a terminal rate above 5%. A higher interest rate is likely to be detrimental to gold and likely to send price of gold lower.

FX Commentary – U.S. Dollar Remained Weak As Traders Bet On A Smaller US Rate Hike

Nicholas

Market Talk
– The US dollar remains weak on Monday morning after a weekend deal to rescue Credit Suisse and promises of liquidity from central banks offered little lasting respite from fears that a bigger banking crisis is brewing.

– Fears of a U.S. banking crisis saw investors begin pricing in a less hawkish Federal Reserve in the coming months, as the bank races to stem further pressure on the economy from rising interest rates. Last week, the ECB had raised interest rate by 50 basis points despite the banking crisis.

– The euro rose 0.66% to $1.0675. Sterling last traded at $1.2192, up 0.70%, while the dollar fell 0.39% against the Swiss franc. Earlier this week, the franc plunged the most against the dollar in one day since 2015, when the Swiss central bank loosened its currency peg.

– The Japanese yen, which tends to benefit in times of extreme market volatility or stress, strengthened 1.48% versus the greenback to 131.77 per dollar. The Aussie eased 0.1% to $0.6692, while the kiwi dollar also slipped to $0.6255, having hit a one-month high of $0.6309 earlier in the day 

– Gold prices traded just below their strongest levels in 11 months on Monday as markets gauged the impact of emergency liquidity measures from the Federal Reserve and other major central banks amid increasing fears of a banking crisis.


Chart Focus USD/CHF

Key Points

1. Buy USD/CHF recommendation.

2. Buy USD/CHF at 0.9210. Stop at 0.9175 and profit target at 0.9330.

3. Credit Suisse saga and interest rate differential are both likely to weigh on the Swiss francs.

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

Fundamental Comments

1. Credit Suisse saga is likely to weigh on the Swiss francs.

2. Interest rate differential is in the U.S. dollar favour.

Technical Comments

1. Price is likely to be 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

Support0.92050.91700.9120
Resistance0.92650.93000.9340










Technical Overview

USD/JPY – Price continued its decline, moving past the previous week’s low at 131.55 at the point of this writing. Stochastic is hinting that this price decline can continue. 20EMA is also hinting at a strong bearish price trend. MACD is also hinting at a bearish price trend. We think the price is likely to be limited to 131.05. If price can hold above this point, we see a rally back to 134.00 in the next few days.

Support131.30130.70130.30
Resistance131.80132.55133.20

EUR/USD – Price had reached a low of 1.0517 last Wednesday and we have seen a rally to 1.0690 this morning. We think price may have reached a high and we see a decline to 1.0590 in the next 48 hours. Stochastic is suggesting a possible price high in the making. MACD is also hinting at a price decline with its fast line turning down. However, 20EMA remains bullish. A move above 1.0690 would negate our bearish view and calls for a price move to 1.0759.

Support1.06451.05901.0545
Resistance1.06901.07351.0770

GBP/USD – Price has made a high at 1.2209 this morning but this high was accompanied by a divergence warning from the MACD indicator, hinting at a possible price high. Stochastic is also in the overbought zone and hinting at a possible high as well. 20EMA remains bullish. We think price has made a high and we see a price decline to 1.2010 in the next few days. A move above 1.2210 would negate our bearish view.

Support1.21651.21101.2060
Resistance1.22101.22701.2310

XAU/USD – Price move above the previous week high at $1959.40 this morning to reach a high of $1991.95. Stochastic and MACD are hinting at a possible price high with divergence warnings. However, the 20EMA is hinting at a strong bullish price trend. We think price may be capped by the $2000 mark and we see a decline back to $1935 over the next few days. A move above $2000 is likely to hinting at a continuation of the rally to $2048.50.

Support1980.551966.401951.45
Resistance1998.102015.452032.45

AUD/USD – Price has reached a high of 0.6729 this morning but the MACD indicator has given a divergence with price, hinting at a possible price high.  Stochastic is also turning down from the overbought zone and hinting at a bearish price trend ahead. However, 20EMA is hinting at a continuation of this bullish price trend. We think price may have reached a high and we are looking at a price decline back to 0.6590 in the next few days.

Support0.66600.66250.6595
Resistance0.67000.67300.6780

FX Commentary – Safe Havens Advanced On Credit Suisse’s Woe

Nicholas

Market Talk
– Safe haven currencies like the U.S. dollar and the yen were in bid on Thursday on renewed fears of a global banking crisis, after contagion from the implosion of U.S.-based Silicon Valley Bank had spread across the Atlantic to Swiss bank Credit Suisse.

– The euro was nursing deep losses in early Asia trade at $1.0582, after tumbling 1.4% in the previous session ahead of ECB monetary policy decision later today. Traders’ bets on a 50-basis-point rate hike have evaporated as the rout in Credit Suisse shares fanned concerns about the health of Europe’s banking sector.

– Sterling gained 0.18% to $1.2077, having fallen close to 0.9% on Wednesday. The yen jumped about 0.5% in early Asia trade and last stood at 132.73 per dollar, extending Wednesday’s 0.6% gain.

– The Aussie was last at $0.6634, after Australian data showed employment rebounded by a strong 64,600 in February, while the jobless rate fell back to 3.5%. Upbeat result would have added to the case for the RBA to hike interest rates again at its next meeting in April.

– Gold solidified its hold on the $1,900 perch on Wednesday, hitting a new six-week high at $1937.03, as the U.S. banking crisis that began with California’s Silicon Valley Bank turned global with a heightened focus on the troubled finances of leading European investment banker Credit Suisse.


Chart Focus GBP/USD

Key Points

1. Sell GBP/USD recommendation.

2. Sell GBP/USD at 1.2080. Stop at 1.2110 and profit target at 1.2005.

3. Credit Suisse’s woe and interest rate differential are both weighing on the pound.

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

Fundamental Comments

1. Credit Suisse’s woe is likely to weigh on the pound.

2. Interest rate differential is in the U.S. dollar favour.

Technical Comments

1. Price is likely to be capped by the 20EMA line.

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



Key Levels

Support1.20451.20001.1950
Resistance1.20851.21351.2190










Technical Overview

USD/JPY – Price reached a high of 135.10 yesterday which was just shy of the Fibonacci 62% correction point at 135.20. This was followed by another decline below the previous low at 132.27 to a low of 132.20. MACD had given a potential divergence warning hinting at a potential price low. Stochastic is also hinting at a possible price low. However, 20EMA is hinting at a strong bearish price trend.

Support132.65132.20131.75
Resistance133.05133.80134.65

EUR/USD – Price reached a low of 1.0517 overnight and we have seen a rally to a high of 1.0615 at the point of this writing. We are expecting the 20EMA line at 1.0640 to cap this rally. We are looking at another decline to 1.0517 again. Stochastic is hinting at a price rally but MACD and 20EMA are hinting at a price decline. However, tonight ECB monetary policy meeting could have a strong bearing on the next direction.

Support1.05901.05551.0515
Resistance1.06351.06851.0725

AUD/USD – Price was capped by the 20EMA line at 0.6715 and is currently close to the low at 0.6563. 20EMA and MACD remain bearish and are hinting at a bearish price trend. Stochastic is hinting at a price rally. We think if price can stay above the previous day’s low, we are likely to see a rally back to 0.6780 in the next few days. A move below 0.6563 would negate our bullish price view.

Support0.65900.65600.6520
Resistance0.66450.66750.6720

XAU/USD – Price reached a new six-week high at $1937.03 overnight but this high was accompanied by a divergence warning from the MACD indicator, hinting at a possible price high. Stochastic is also hinting a possible price decline. 20EMA is hinting at a continuation of the bullish price trend. We think price is likely to move lower today to the previous support level at $1885. A move above the 6-week high would negate our bearish view.

Support1907.351895.951885.15
Resistance1920.101937.101949.15

USD/CNH – We had a sell recommendation at 6.9225 yesterday but price only reached a high of 6.9140 and our entry order was not filled. Indicators are hinting that the upward correction may not be over and we could see a price higher to 6.9260 in the next 24 hours. However a price move above 6.9410 would negate our bearish price view and hinting at a bigger rally to 7.00 in the near future.

Support6.88406.86156.8485
Resistance6.91406.93856.9635