It was a tough end to the week for gold bugs which saw the yellow metal plunge 5% from its YTD high. Yet support was found just above the 50-day EMA, and two inverted hammers (with slight bullish closes) show that bearish momentum is waning.
To my eyes it looks as though gold is ready to drift higher as part of a countertrend move against its NFP losses. Yet I...
The US dollar index (DXY) posted three solid days of gains between Thursday and Monday. I cannot say I am overly surprised to see A Doji formed yesterday given the resistance cluster around 103.50 which includes a previous support zone, trend resistance and the 50-day EMA. But we also had a change in sentiment for markets yesterday that were eager for a decisively...
Hawkish Fed members have helped to push US yields and the dollar higher. We saw some volatility across yen pairs on Friday after the favoured candidate to success Kuroda (and a dove) pulled out of the nomination, and Japan’s PM backed a more hawk candidate. If a hawk takes the helm, the yen will likely strengthen on hopes that the BOJ will abandon YCC. But until...
The combination of hawkish Fed speak and firmer inflation has seen the US dollar strengthen overnight. But we're interested in shorting the Kiwi dollar against it, given yesterday's lower forecasts for 2 and 3-year inflation forecasts by RBNZ. It should be noted that RBNZ hold their monetary policy meeting on Wednesday February the 22nd, and there has been call...
On Friday the euro tried (but failed) to close below the ‘pandemic low’, instead closing the day with a bullish hammer candle. It also closed back above the 50-day EMA and has continued to hold above it during Asian trade. Given the fact the US is on a public holiday and data is light, we see the potential for range trading – which means bulls may be tempted to...
The main event for today is actually the release of the FOMC minutes tonight at 19:00 GMT – for which we have gold in focus.
The rise of US yields and increased expectations of a 50bp March hike mean the minutes have become of greater importance. As traders had assumed a 25bp February hike was practically a given, it could come as a surprise if we learn that the...
It may have taken a few weeks, but markets are finally pricing in what we argued all along; a higher terminal rate and no cuts this year.
If you cast your mind back to the Fed’s recent 25bp hike, it is fair to say the Fed were not impressed with the market’s original response. Fed fund futures not only lowered the terminal rate to 5% but even began pricing in...
RBNZ were one of the first central banks to hike rates, and could one of the last to finish at the rate they are going.
We'll cover key economic developments, NZD crosses and what to expect ahead of this potentially live meeting.
The ASX 200 had a great start to the year, but has since seen prices pull back from tis YTD highs. Yet is we zoom out, the daily trend remains bullish overall, and prices during the recent decline appear to be corrective.
It's pullback has also found support around a cluster of support levels including the 38.2% Fibonacci retracement, 50-dy EMA, monthly pivot...
US producer prices, manufacturing and housing data in focus
No miracles will be expected for US housing data given the Fed’s hikes, but it will be interesting to see if the Philadelphia Fed Manufacturing Index contracts at a much faster pace, like the NY State Empire equivalent did yesterday. And with US retail sales hitting a near 2-year high and inflation...
Technically, AUD/NZD looks ripe for another leg higher as it is holding above trend support and the 100-bar EMA. A break above the weekly pivot point could confirm such a breakout and resumption of its trend and bring the weekly R1 / recent highs, with 1.10 also making an interim target along the way.
However, keep in mind that data from AU and NZ between 11:30...
The yen began to correct against its sustained weakness in September, when the MOF (Ministry of Finance) intervened in the currency markets to strengthen the yen. That helped CHF/JPY spent the next three or so months pull back from its highs and retrace against its bullish trend. However, the end of the correction may have been seen around 137, as momentum turned...
We made a case that the dollar was at or near oversold levels, and momentum has now turned higher. With hawkish Fed members out in force and a US inflation report pending, let's update a few of our trade ideas around the dollar.
Price action on copper has caught our eye, as its pullback from the YTD highs has paused above the November highs despite a surging US dollar. RSI (2) is overbought on the daily chart, and yesterday’s Doji held above the 20-day EMA. It's also holding above $4.00, whilst money managers and large speculators have continued to increase their net-long exposure to...
Summary of the RBA’s February 2023 statement:
• The RBA hiked the cash rate target by 25 basis points to 3.35%
• Underlying inflation was above expectations at 6.9%
• Strong domestic demand is adding to the inflationary pressures
• CPI is expected to decline this year due to global factors and slower growth in domestic demand
• Medium-term inflation expectations...
We’ve been waiting for AUD/NZD to retrace from its cycle high to reconsider longs, and it has now once again piqued our interest. Prices found support at the 200-day EMA yesterday, with the 38.2% Fibonacci retracement holding today’s low nearby.
Whilst RSI (2) is not quite overbought, it is not far from it which suggests we could be approaching a cycle low. It is...
AUD/JPY finally broke above trend resistance, the 200-day EMA and pivotal zone of 90.9 – 91.5. The 20-day EMA also provided support for two bullish hammers, which could mark the end of a shallow retracement from its breakout move higher. The bias remains bearish above this week’s lows and for a move towards the high around 93.
Yield differentials between the US and China 2-year treasury note continue to suggest USD/CNH could be oversold, at least over the near-term. The daily close chart (above in black) also better shows the potential for a higher low, as part of a countertrend move.
The daily candlestick chart shows a recent pullback has failed to retest the 6.6976 low, and yesterday...
