USD/CHF Price Analysis: Hovering around the top of the 0.9600-0.9660 range, eyeing 0.9700

 

• USD/CHF bounces from weekly lows, set to finish the week with gains of 0.73%.
• From a daily chart perspective, the USD/CHF has nowhere to go; it would likely remain in consolidation.
• Near-term, a symmetrical triangle in the USD/CHF 4-hour chart targets 0.9767.

The USD/CHF stages a comeback after hitting weekly lows around 0.9577 earlier in the day and is about to erase Thursday’s losses as the USD/CHF aims towards the 100-DMA, following hawkish remarks by the US Federal Reserve Chief, Jerome Powell. The USD/CHF is trading at 0.9659, up by almost 0.20%.

USD/CHF Price Analysis: Technical outlook

Consolidation in the daily chart will keep the USD/CHF trading within the 0.9600-0.9690 range, as shown by this week’s price action. Worth noting that the support/resistance levels are the 100 and 50-day EMAs, each at 0.9657 and 0.9614, respectively. Therefore, unless the exchange rate decisively breaks above/below the range, the USD/CHF might remain subdued.

GBP/USD needs to clear strong resistance at 1.1870 to gather bullish momentum

GBP/USD has managed to recover above 1.1800 on Friday ahead of FOMC Chairman Jerome Powell’s remarks at the Jackson Hole Symposium. The pair will reveal a buildup of bullish momentum on a break past 1.1870, FXStreet’s Eren Sengezer reports.

Pound struggles to turn bullish ahead of Powell

“In case the chairman's comments suggest that the bank could opt for another 75 basis points in September, GBP/USD could turn south amid a stronger dollar. On the other hand, an optimistic tone inflation outlook should hurt the greenback and help GBP/USD gain traction.”

 On the upside, cable faces key resistance at 1.1870, where the Fibonacci 23.6% retracement level of the latest downtrend is located. Above that level, the 50-period SMA forms interim resistance at 1.1900 ahead of 1.1940 (Fibonacci 38.2% retracement).”

“1.1800 (psychological level, 20-period SMA) aligns as initial support before 1.1750 (static level, end-point of the downtrend) and 1.1720 (Aug. 23 low).”

USD/TRY leaps to fresh 2022 peaks past 18.00 after CBRT cut rates

 

• USD/TRY clinches new YTD tops beyond the 18.00 mark.
• The pair now targets the all-time top at 18.25 (December 20 2021).
• The Turkish central bank reduced the policy rate by 100 bps.
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The Turkish lira debilitates to fresh lows vs. the greenback and pushes USD/TRY past the 18.00 yardstick for the first time since December 2021.

USD/TRY now targets the all-time high at 18.25

USD/TRY leaves behind the key barrier at 18.00 after the Turkish central bank (CBRT) caught the markets off guard and reduced the One-Week Repo Rate by a full point to 13.00% at its meeting earlier on Thursday. the central bank also cut the Overnight Borrowing Rate and the Overnight Lending Rate by 100 bps to 11.50% and 14.50%, respectively.

In its statement, the CBRT continues to see domestic inflation largely driven by higher energy costs exclusively on the back of geopolitical events and “effects of pricing formations that are not supported by economic fundamentals”.

EUR/USD Price Analysis: Sustained gains seen above 1.0670/80

 

• EUR/USD keeps the erratic activity well in place this week.
• The 1.0670/80 band continues to cap the upside so far.

EUR/USD resumes the upside bias past the 1.0500 mark following Thursday’s decent pullback.

So far, and as long as the 4-month line in the 1.0670/80 band limits the upside, extra pullbacks in the pair should remain on the cards in the near term. The surpass of this area, however, could spark a bull run to the June top at 1.0773 and the May peak at 1.0786.

In the longer run, the pair’s bearish view is expected to prevail as long as it trades below the 200-day SMA at 1.1136.

📕 Comment on Gold on April 29, 2022:

 📕 Comment on Gold on April 29, 2022:

 - In yesterday's trading session, after precious metal fell to 1871, Gold rallied strongly to 1896 ($25), closed the day session with a bull pusher and in the early morning of this day Gold continued to rise.  up to around 1905. With the current showing of good upward momentum, my view will be to prioritize the bullish option for this precious metal.

 - On the H4 time frame, bullish force also prevails and the nearest support area for this precious metal is around 1895-1898, Here we can establish a buy position with a safe target around the threshold.  1910-1915.

📕 Comment on Gold on April 20, 2022:

📕 Comment on Gold on April 20, 2022:

 - In yesterday's trading session, precious metal Gold had one day of decline from 1981 to 1943 ($38), closing the day session with a strong bearish candle around 1949. Gold has returned.  back to the upper boundary of the previous sideways range.  With Gold approaching this support zone, I think it's likely that Gold will have a rebound in the early trading session today.

 - On the H4 chart, Gold may recover to around the threshold of 1950-1951 and is expected to rise around the threshold of 1962-1965.  Here, there is a high possibility that Gold will face selling pressure and drop again.

XAU/USD Price Forecast: Technical outlook

 Gold (XAU/USD) bias is still up, but it would remain under selling pressure. Failure to reclaim February 24 daily high at $1974 left the precious metal exposed to selling pressure unless XAU bulls recover the aforementioned. It is worth noting that the 200-day moving average (DMA) at $1816.85, from an upslope, is horizontal, indicating that the steep rally above $2000 might be subject to a further correction lower.

Upwards, XAU/USD’s first resistance would be $1974. Once cleared, the next resistance would be $2000, and the YTD high at $2075.82.

On the flip side, and the most likely scenario, XAU/USD’s first support would be March 20 low at $1950.30. Breach of the latter would expose March 16 daily low at $1895.06, followed by November 16, 2021, low at $1877.14.

Comment on Gold on February 28, 2022:

 Last week, we saw very strong fluctuations, Gold price bounced up quickly to 1974 and then fell sharply to 1877, closing the session with a bearish candle around 1889. At the beginning of the session.  this morning's trading World gold opened the first session of the week with about GAP increasing to nearly 1930 at the opening session and then decreasing after that.  With the Russian military campaign in Ukraine along with the tension of the US and its allies, it is very difficult at this time for Gold to fall deeply, so in my opinion, the possibility of Gold will continue to gain momentum.  get a raise.

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On the H4 time frame, Gold is showing signs of completing the GAP and if Gold returns to around 1900, this is the price range we can consider buying in with this precious metal with a target of 193x.  Another note is that currently, the amplitude of Gold at this time will be quite large, so everyone balances the volume and capital for safer transactions.

Russia's rouble also recovered some ground, trading at around 82.8 per dollar

 The euro steadied on Friday following Thursday's sharp declines after Russia's all-out invasion of Ukraine unleashed the biggest attack on an European state since World War Too.

The dollar flattened against most currencies as markets walked back some of the tumultuous moves from the previous day.

Russia's rouble also recovered some ground, trading at around 82.8 per dollar, having hit a record low of 89.986 per dollar the day before.

"FX markets are slightly calmer this morning as the world tries to come to terms with war in Europe," said Chris Turner

Global Head of Markets at ING.

The size and prominence of the sanctions on Russian banks and the size of their FX deposits may take some time to percolate through, he said.

The United States, the European Union and some other countries responded to Russia's invasion of Ukraine with a wave of sanctions impeding Russia's ability to do business in major currencies along with sanctions against banks and state-owned enterprises.

Fighting continued on Friday though risk sentiment across markets improved after the shock in the previous 24 hours, with the pan European stocks index bouncing back around 1%. [MKTS/GLOB]

The euro was last at $1.1175, edging 0.15% lower against the dollar, having touched its lowest $1.1106 since May 2020 on Thursday.

Sterling also recovered some ground from Thursday's tumble to trade flat against the dollar at $1.3389, having hit a 2022 low of $1.3272 on Thursday.

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The safe-haven dollar index steadied against a basket of currency at 97.162 after climbing to its highest level since June 2020 the previous day.

As well as the direct fallout of the war in Ukraine, currency traders were trying to assess its impact on monetary policy around the world.

Policymakers at the European Central Bank (ECB) said the situation in Ukraine could cause the ECB to slow its exit from stimulus measures.

Meanwhile, investors and some U.S. officials said the war would likely slow but not stop approaching interest rate hikes.

Federal Reserve policymakers have been publicly sparring over whether to begin with a 25 or 50 basis point rate hike at its March meeting.

"We expect the consequences (of the conflict) to translate into a somewhat less hawkish stance from major central banks – tilting the Fed towards a 25 basis hike in March and keeping the ECB on the fence," said Invesco strategists in emailed comments.

INFLANATION RISK AT THE MARKET

 RUSSELS (Reuters) - Euro zone economic growth will be slower than earlier expected this year because of a new wave of COVID-19 infections, high energy prices and continued supply-side disruptions, while inflation will be much higher, the European Commission said.

In its regular economic forecasts, the EU executive arm said gross domestic product in the 19 countries sharing the euro would grow 4.0% this year and 2.7% in 2023.

The forecast is a cut compared to last November, when the Commission forecast 4.3% growth in 2022 and 2.4% in 2023 and is close to the latest view of the International Monetary Fund, which expects growth of 3.9% this year and 2.5% in 2023.

"Multiple headwinds have chilled Europe's economy this winter: the swift spread of Omicron, a further rise in inflation driven by soaring energy prices and persistent supply-chain disruptions," European Economic Commissioner Paolo Gentiloni said. "With these headwinds expected to fade progressively, we project growth to pick up speed again already this spring."

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The Commission expects inflation this year will be 3.5%, well above the European Central Bank's target of 2.0%, and much higher than its own forecast from November of 2.2%. This is also a more pessimistic forecast than that of the ECB from December, when the bank projected inflation at 3.2% this year.

Worried by the longer than earlier expected surge in consumer prices, the ECB has taken a hawkish turn and started preparing markets for the end of its unconventional stimulus with some hawkish board members calling for a rate hike already this year.

But the Commission, like the IMF, forecast inflation would slow again next year to 1.7%, below the ECB's target, so a potential rate rise would come just as price growth slows again. The ECB's own inflation in December was 1.8% for 2023.

"Price pressures are likely to remain strong until the summer, after which inflation is projected to decline as growth in energy prices moderates and supply bottlenecks ease. However, uncertainty and risks remain high," Gentiloni said.

The Commission said risks to the growth outlook were even as the COVID-19 infection wave could have a longer lasting impact and bring fresh disruptions to supply chains, but also household consumption could grow more strongly and investment, thanks to the EU recovery fund, could generate stronger activity.

Inflation could turn out higher if more cost pressures are passed on from producers to consumers and if that boosts the likelihood of wage growth to compensate.

"Risks to the growth and inflation outlook are aggravated by geopolitical tensions in Eastern Europe," the Commission said referring to the risk of Russian military aggression against Ukraine.

UNBREAKABLE RECORD BY EUR/GBP

 

EURGBP races to topside resistance

The BOE raised rates by 25 basis points with dissenters in the 5-4 vote leaning to 50 bp rise. That initially sent the EURGBP to the downside.

However, after Lagarde started to switch course for the ECB, it was "fast break the other way" for the EURGBP with the price racing toward the high from last week.

The high has extended to 0.8416. The high last week reached 0.8422.

The highs today have now entered into a topside swing area between 0.84148 and 0.8424 (see red numbered circles). Along the way, the pair cracked above the 100/200 hour MAs and swing areas around 0.8370 and 0.8403.

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Earlier today, after the BOE announcement, the pair broke to the downside and through a key swing area between 0.8305 to 0.8312. The low reached 0.82827 and failed.

So in the course of the day (and really over the last 8 or so hours, the price has traded the range since December 28th - with a failed break lower added on at the lows.

The question now is "Can the upper extreme be broken and stay broken?"

If low the 50% midpoint at 0.8440 followed by the falling 100 day MA at 0.84567 are the next key targets to get to and through.

Break through the 100 day MA and there should be more follow through buying in the pair with the 200 day MA up at 0.85129 as another key target to the upside.

DAILY NEWS HIGHLIGHTS! On 2 February 2022

 📌 Metaverse real estate sales top $500 million, and are projected to double this year. So far, real estate sales have been concentrated on the “Big Four” — Sandbox, Decentraland, Cryptovoxels and Somnium. 

📌 Sony to buy video game maker Bungie in $3.6 billion deal as industry consolidation heats up. Bungie is behind the multiplayer shooter games Destiny and Halo, the latter of which it developed until 2010. Technology companies are increasingly interested in gaming as they look to expand audiences and prepare for future iterations of virtual- and augmented-reality devices.

📌 China plans crewed moon mission, tourism and Jupiter exploration in space race with the U.S.. China has had some notable space successes in the past few years including launching an uncrewed mission to Mars and beginning construction of its own space station.

📌 Covid-19’s Economic Fallout Batters Latin America. The region is bracing this year for rampant inflation, low growth and high interest rates that spell hardship for tens of millions of people in poverty as businesses struggle to survive.

📌 Bond Market Hints at Calm After Disruptive Selloff. Yields on longer-term U.S. government bonds have shown signs of stabilizing in recent days, easing the pressure generated on stocks by their rapid early-year climb.