AUD/NZD to slide towards the 1.12 level – OCBC

 AUD/NZD continued to trade with a heavy downside bias amid growing policy divergence between the Reserve Bank of Australia and the Reserve Bank of New Zealand. Economists at OCBC Bank maintain a short bias targeting 1.12.

Risks remained skewed to the downside

“RBNZ’s accompanying MPS was slightly more hawkish than expected as it noted that the MPC considered 50, 75 bps at this meeting; core CPI is ‘too high’ and lower NZD if sustained poses further upside risk to CPI.”

“We maintain our tactical short play on AUD/NZD, targeting 1.12, 1.1050 objectives.”

“Daily momentum is bearish while RSI fell. Risks remained skewed to the downside.”

“Support at 1.1240, 1.1210 levels.”

“Resistance at 1.1305 (21 DMA), 1.1380 levels.

Silver Price Analysis: XAG/USD maintains a large top, further downside ahead – Credit Suisse

 Silver maintains the top analysts at Credit Suisse have been highlighting since mid-May. Therefore, XAG/USD is expected to decline towards the $15.56 support.

Break above $21.39 remains needed to negate the top

“Silver has risen back above the crucial 61.8% retracement support of the whole 2020/21 upmove at $18.65/15, however, still maintains a large top below $21.39 and we hence expect further downside from here towards the $15.56 support from a technical analysis perspective.”

“Next resistance is seen at $20.87 and above $21.39 remains needed to negate the top.”

Malaysia: BNM hikes rates again – UOB

 

Senior Economist Julia Goh and Economist Loke Siew Ting at UOB Group review the latest interest rate decision by the BNM.

Key Takeaways

“As widely expected, Bank Negara Malaysia (BNM) raised the Overnight Policy Rate (OPR) today (8 Sep) by 25bps to 2.50%. This marks the third back-to-back rate hike since BNM started the hiking cycle in May this year as the economy recovered at a stronger pace. To date, BNM has hiked 75bps, which partly reversed the 125bps of rate cuts since the start of the pandemic in Jan 2020.”

“In the latest monetary policy statement (MPS), BNM continues to expect the domestic economy to expand, supported by private sector spending amid the transition to endemicity, positive labour market conditions, resumption of tourism activities and investments. However, BNM cautioned that external demand is expected to moderate amid softer global growth. BNM expects inflation to peak in 3Q22 before moderating thereafter amid abating base effects and easing global commodity prices.”

“BNM highlighted that there is no ‘pre-set course’ and the monetary policy committee (MPC) will continue to assess developments and their impact on domestic inflation and growth. BNM also reiterated that any adjustments will be done in a ‘measured and gradual’ manner. We think BNM may have signalled a temporary pause for rate hikes pending forward-looking growth and inflation dynamics. As such, we maintain our OPR target at 2.50% by year-end, and 3.00% by mid-2023. The next and final monetary policy meeting for the year is on 2-3 Nov.”

Euro holds above 2-decade low before ECB decision

 LONDON (Reuters) - The euro was hovering above Tuesday's two-decade low on Thursday as investors awaited a policy decision from the European Central Bank (ECB) and comments from the head of the Federal Reserve for insight on the path for global monetary tightening.

The ECB is expected to raise rates by 75 basis points (bps), taking its deposit rate above zero for the first time since 2012, but the option of a smaller 50 basis point hike hasn't been ruled out.

"We expect the ECB to only do 50 basis points today, instead of the consensus view of 75," said Chris Turner, head of markets at ING. "If that's the case, we think euro-dollar probably corrects back down to about $0.99."

By 0747 GMT, the euro was trading down 0.3% at $0.99795, holding above its lowest level since late 2002 of $0.9864 as Europe's energy crisis keeps the single currency under pressure and the dollar reigns as the Fed reiterates its commitment to bring inflation down to target.

Fed Chair Jerome Powell is scheduled to participate in a discussion at 1310 GMT -- overlapping with ECB chief Lagarde's post-decision press conference -- with Fed officials soon due to enter into a blackout period prior to the central bank's Sept. 20-21 meeting.

Recent Fed rhetoric has continued to be hawkish overall.

Boston Fed President Susan Collins said on Wednesday that bringing inflation back down to 2% is the Fed's "Job One," while Vice Chair Lael Brainard said tight monetary policy will continue "for as long as it takes to get inflation down."

Money markets lay 79% odds that the Fed will hike by another 75 basis points at this month's meeting, which would increase the fed funds rate to 3.0% to 3.25%.

The U.S. dollar index, which measures the currency against six major counterparts, edged up 0.1% lower to 109.82, after hitting a peak at 110.79 on Wednesday, a level not seen since June 2002.

Sterling weakened 0.4% to $1.1486, heading back toward the previous day's 37-year low of $1.1407, ahead of new British Prime Minister Liz Truss's announcement on her plans to tackle soaring energy bills.

Japan's yen showed some resilience on Thursday, trading little changed at 143.77 per dollar, after reaching a 24-year low of 144.99 in the previous session.

The yen has been a particular victim of recent dollar strength, partly due to its sensitivity to rising long-term U.S. yields as hawkish Fed bets ramped up and the Bank of Japan remains the holdout dovish central bank.

"Ongoing depreciation pressure on the yen has raised the probability of a change in policy (from the Bank of Japan) later this year," Goldman Sachs (NYSE:GS) analysts said in a research note.

"If the BoJ drops YCC (yield curve control), rate differentials vs the U.S. should stop widening, and the rise in USD/JPY should pause or reverse."

Officials from Japan's Finance Ministry, Bank of Japan and Financial Services Agency are meeting today to discuss global financial markets, the Ministry of Finance (MOF) said.

Meanwhile, the Aussie fell 0.5% to $0.67345, earlier tumbling as low as $0.6713, after RBA Governor Lowe said in a speech "the case for a slower pace of increase in interest rates becomes stronger as the level of the cash rate rises."

UK: Liz Truss wins contest to become the next UK Prime Minister

 Liz Truss won the Conservative Party leadership race to become the next British Prime Minister.

"I will deal with long-term issues on energy supply," Liz Truss said in her acceptance speech and noted that she will deal with the crisis in households' energy bills.

Additional takeaways

"I will govern as a conservative."

"I intend to deliver what we promised voters in 2019."

"I will deliver a bold plan to cut taxes and grow our economy."

"We will deliver a great victory for the conservative party in 2024."

Market reaction

The UK's FTSE 100 Index showed no immediate reaction to these comments and was last seen losing 0.6% on a daily basis. Meanwhile, the GBP/USD pair continues to fluctuate at around 1.1500 during the European trading hours.

Iran Foreign Minister: Carefully reviewing EU-drafted text for revival of 2015 nuclear pact

 Iran's Foreign Minister Hossein Amirabdollahian said on Wednesday that Tehran is carefully reviewing the EU-drafted text for the revival of the 2015 nuclear pact, as reported by Reuters. 

"We need stronger guarantees from the other party to have a sustainable deal,"  Amirabdollahian added. "The (U.N.) agency should close its politically-motivated probes."

Market reaction

Crude oil prices showed no immediate reaction to these comments. As of writing, the barrel of West Texas Intermediate was trading at $89.10, where it was down 3.5% on a daily basis. 

US Dollar Index Price Analysis: Immediately to the upside comes 109.77

 

• DXY prints fresh cycle highs near 109.50 on Monday.
• Further upside could revisit the September 2002 high at 109.77.

DXY extends the post-Powell rally to the area of 109.50, recording at the same time new cycle highs.

Further upside remains on the cards for the index in the near term. Against that, the surpass of the 2022 high at 109.47 (August 29) should open the door to the September 2002 top at 109.77 prior to the round level at 110.00.

In the meantime, while above the 6-month support line around 105.40, the index is expected to keep the short-term positive stance.

Looking at the long-term scenario, the bullish view in the dollar remains in place while above the 200-day SMA at 100.74.

US Dollar Index Price Analysis: The surpass of the YTD high exposes 109.77

 

• DXY remains bid and flirts with the 2022 top near 109.30.
• Further north of comes the September 2002 high around 109.80.

DXY keeps the rally well and sound and trades at shouting distance from the YTD highs near 109.30 on Tuesday.

The continuation of the upside momentum looks increasingly likely in the very near term. That said, beyond the 2022 high at 109.29 (July 14) the index could challenge the September 2002 peak at 109.77 prior to the round level at 110.00.

In the meantime, while above the 6-month support line near 105.10, the index is expected to keep the short-term positive stance.

Looking at the long-term scenario, the bullish view in the dollar remains in place while above the 200-day SMA at 100.49.

US Dollar Index Price Analysis: Another visit to 105.00 remains on the cards

 

• DXY reverses the earlier bull run to the 106.50/55 band.
• The resumption of the selling bias could extend to 105.00.

DXY leaves behind Tuesday’s strong advance and sparked a corrective downside soon after hitting new 3-day peaks in the mid-106.00s on Tuesday.

Tuesday’s bounce did not clear any up barrier of note and thus leaves the index vulnerable to further weakness in the very near term at least. On this, the dollar faces the tangible chance to slip back to the multi-week lows in the 105.00 region (August 2) in the short term. This initial area of contention remains propped up by the proximity of the 55-day SMA, today at 104.84.

Furthermore, the broader bullish view in the dollar remains in place while above the 200-day SMA at 99.62.

EUR/USD Price Analysis: Range bound within 1.0100-1.0260 since July 22

 

• The EUR/USD is set to finish the week almost flat, gaining 0.05%.
• The shared currency daily chart is neutral-to-downwards, but the hourly is neutral-to-upwards.
• EUR/USD Price Analysis: A daily close above 1.0200 could pave the way towards 1.0300; otherwise, it might drop towards 1.0096.

The EUR/USD is trading at 1.0220, after hitting a daily high at 1.0254, but later tumbled towards the daily low at 1.0145 on elevated US inflation data. In June, the Personal Consumption Expenditures (PCE) rose by 6.8% YoY, fueling expectations of additional Federal Reserve rate hikes, despite the market's pricing in only 80 bps of tightening.

EUR/USD Price Analysis: Technical outlook

From a daily chart perspective, the EUR/USD remains neutral-to-downward biased, helped by the 20-day EMA lying below the exchange rate at 1.0167. Nevertheless, the EUR/USD, unable to capitalize on an upbeat market mood, and broad US dollar weakness, keeps the shared currency exposed to further selling pressure. If EUR/USD buyers want to shift the bias to neutral, they must reclaim the May 13 low-turned-resistance at 1.0348. Once cleared, a challenge of the 50-day EMA at 1.0423 is on the cards. On the other hand, if EUR/USD sellers achieve a daily close below 1.0200, that would pave the road towards 1.0096.

Downing Street Resignations: Housing Minister Stuart Andrew quits NEWS | 7/6/2022 12:16:19 PM GMT | By Eren Sengezer

 

"It is with sadness that I am resigning as Housing Minister," Conservative MP for Pudsey Stuart Andrew announced via Twitter on Wednesday.

Meanwhile, Sajid Javid, former British Health Minister who quit in protest at Prime Minister Boris Johnson on Tuesday, told Parliament that it had become increasingly difficult to be in PM's team.

 "It's not fair on conservative voters who expect better standards," Javid added. "At some point, we have to conclude that enough is enough. That point is now."

Market reaction

GBP/USD stays under heavy bearish pressure on Wednesday and was last seen trading at its weakest level since March 2020 at 1.1877, losing 0.67% on a daily basis.

Germany's Habeck: We want to prevent a domino effect in gas market

  

German Economy Minister Robert Habeck said on Tuesday that they will stick to their plan of prioritizing private households in case of a gas emergency, as reported by Reuters.

"The gas market situation is tense, cannot say whether more protection measures will be needed," Habeck added. "We want to prevent a domino effect in the gas market."

Market reaction

Safe-haven flows continue to dominate the financial markets following these remarks. As of writing, Germany's DAX 30 Index was down 1.5% on the day at 12,580.50 points.

📕Analysis on Gold on March 1, 2022:

- In yesterday's trading session, after the precious metal GAP rose to 1930, there were signs of decreasing and filling the GAP. Yesterday's closing session was around 1908. Although it ended the day with a bearish candle, it was a retreat candle and one more thing was that yesterday's Russia-Ukrainian negotiations were basically unsuccessful. As expected, there needs to be further negotiation so Gold still has many factors to boost the uptrend. - Moving to the H4 time frame, we can see that the price area around 1896-1900 is still the closest support area for precious metal Gold. Here we can establish a long position with a safe target around 1914 and expect 1920 in today's session.

✍️ Analysis of Oil on 24/02/2022:

🔺 About news:
 - Oil prices rose 5% on news of Russian military activity.  At noon on February 24, the price of Brent oil futures at one point exceeded $102 per barrel before falling slightly to $101.  Meanwhile, the price of WTI oil also increased by nearly 5%, to nearly 97 USD per barrel.

 - Analysts said that if the situation in Ukraine continues to be "hotter", it will trigger a wave of sell-offs in the stock market.  Investors will flock to safe havens like gold.  Oil prices will also skyrocket, even reaching 150 USD/barrel.

 - Armed conflict not only poses a risk to the facilities of the mining, refining and petrochemical industries, but also causes supply to be tighter if Russia responds to sanctions by "locking the valve" of oil.

 - Europe, which imports 25% of Russian oil and 40% of gas, will be severely affected if the Kremlin cuts off the supply of 3 million barrels of oil per day to this region.

 "Russia meets 30-40% of the gas needs of the whole of Europe every year.  No other country can replace it, even providing gas in the form of liquefied petroleum gas,” Al-Kaabi said.  “LNG trading contracts are signed in the form of a permanent, clear shipping location.  It is impossible to replace this huge amount of gas with LNG immediately.”

 👉 In short, through the above news, we can see that the picture of the crisis in energy is pushed to the climax and the possibility of a further increase of oil is completely happening.  On the technical chart, the nearest price level that oil is heading to is 105-110$ and if there is a slight decline to around 90-94$, this is the ideal price area for us to establish a buy position.  with the same goal as above!

📕 Comment on Gold on February 23, 2022:

 

- In yesterday's session, precious metal Gold, after bouncing up to 1913, fell to 1891, then fluctuated in two directions in 1894-1905, closing the day session with a bearish candle around 1898. Although it closed with a bearish candle, the decline in Gold was not strong and the criticized between the US and Russia related to the Ukraine crisis boosted safe-haven demand for the precious metal. So in my personal opinion Gold will still be supported uptrend in today's session. - Currently around 1893-1898 is the closest support area for this precious metal, where investors can establish a buy position with a safe target around 1912 and expect it to be around 1912. 192x in today's trading session.

Prediction on Gold on 22/02/2022:

- In yesterday's trading session Gold only fell slightly to 1887 then bounced back to around 1905, closing the day session with a bullish candle around 1903. With the Russia-Ukraine crisis escalating. The high again makes the prospect of reconciliation between the parties dim at the moment, so in my opinion, Gold will continue to be pushed up in today's session.

- Switching to a smaller time frame of H4 we can see that Gold is unlikely to have a big correction and the 1905-1902 price zone is the closest support area to push this precious metal up with a safe target. will be 1916-1921, expect to be 193x in today's trading session.

📕 Comment on Gold on February 21, 2022:

- In the last trading week, precious metal Gold had a good week of growth from 1844 to 1902, closing the week session with a bullish candle around 1898, this is the highest price range that Gold reached. within the past 7 months. With Gold showing such good upward force, in my opinion in the coming time this precious metal will continue to conquer the next peaks.

 - Early this morning Gold bounced slightly to the 1908 price zone, this is the resistance zone of precious metal Gold and the possibility of a slight downward correction, so we can establish a sell position with this metal with The safe target is around 1885. Here we will wait for the price reaction to see whether to buy or not, then I will have an update.

Comment on Gold on February 18, 2022:

 - In yesterday's trading session, precious metal Gold rebounded strongly from 1867 to 1901, closing the day session with a strong bullish candle that broke the previous resistance area of 1878.  With this overwhelming bullish force, in my opinion, precious metal Gold will continue to gain momentum in today's session.

 - Moving to the H4 time frame Gold is currently having a slight downward correction and I expect Gold to fall around 1880-1885, this is the closest support price to the precious metal Gold that we can establish.  establish a buy position with a safe target around 1902 and expect 1910-1915.

📕 Prediction on Gold on February 17, 2022:

- In yesterday's trading session, precious metal Gold went right in its analysis when it bounced up from 1850 to 1872, closing yesterday's session with a bullish candle around 1869. With Gold in today's trading session. Yesterday, it regained its upward momentum after having 1 previous decline, in my opinion, it is likely that in today's session, Gold will still be supported by this increase.

 - Switching to the H4 time frame, we can see that the increase of the last 3 candles is relatively good and if in the beginning of today's session, Gold has a slight correction around 1862, this is an opportunity. so that ace can establish a buy position with a safe target in the "old top" zone 1872-1878.

📕 Comment on Gold on February 16, 2022:

 - After touching the right analytical price zone of 1878 precious metals Gold dropped quite strongly to 1844, closing the day session with a bearish candle around 1853. This is also the closest support area for metals. gold and in my personal opinion the possibility of Gold recovering slightly in the early hours of this morning.

 - Looking at the H4 chart frame, we can see that Gold is currently leveling off at MA20 and in my opinion Gold can recover to 1858-1861 we can establish a buy position with this precious metal with the aim spend as above. After coming here, the possibility that Gold will experience downward pressure, I will update later.