Trade Talk

USDX: 88.45

Dollar index continues to operate in its overbought territory with 20-D RSI at 27, in addition, the broke of the downtrend channel established since March 2017 doesn’t last long. One of the main reasons underpinned that little upbeat should be the hawkish FOMC announcement, however, greenback failed to hold gains. The worry that NFP data wouldn’t come out strong certainly weakens the expectation of a dollar rally. If the unemployment data exhibits a steady advance, and not major outline could be observed, the continuation of the selling pressure would surely last longer against other major counterparts

USD JPY: 109.40

A confined consolidative channel is in place since January 2017, within that period, 114.70~115.60 has been tested multiple time. Such level prove to be strong support, notwithstanding the recent descending momentum, we might find it is hard to adjust position bases on fundamental if U.S. data won’t offer any surprise. Yet if we turn to four-hour chart, our estimation of a very strong support around 107.32~108.25 confirms for the last three time, and it is strong probability that we can see another confined wave come into play.

EUR USD: 1.2500

We enter this first NFP report of the year with EUR/USD edging above 1.25, the NFP and the average hourly earnings tonight is critical for the market’s framing of the FED this year. Signs of wage growth is what the FED wants to see along with nearly every central bank this year. EURUSD entered its uptrend channel since October 2016, and from then the we have witnessed long lasting weakness of dollar and solid fundamentals provided from Euro Zone. A resistance that has been tested three times at 1.2570 2014 November, and trader would be able to harness such key psychological level to place their position.

GBP USD: 1.4255

A reversal could happen to this pairing and GBP/USD is looking really comfortable in its uptrend. A high since 2016 June at 1.4260 has been broken from below, and we are seeing the momentum is heading toward last year’s key resistance at 1.4635 level. In addition, an uncomfortable zone at RSI is approaching 70, but it shouldn’t raise too much concern as we could expect the overbought situation will be extended for a decent period of time.

AUD USD: 0.8030

From our weekly chart, Aussie dollar consolidated at 0.8050 since January 2015, and such level had just been tested one week again. Major stories have been absorbed like potential trade war with China, tension with settling a deal of NAFTA. Right now the Fib 23.6% retracement at 0.7985 help AUDUSD holds gains for the week, the next key level to look at is 38.6% at 0.7890. However, the upside rejection does seems valid enough to encounter and cope with the recent volatility and velocity, hence, a higher high and lower low might made its debut, coupled with 20-D RSI continues to ease from the top down.

NZD USD: 0.7390

A nice and neat forth ascending channel since 2015 January has been operating for three months. And 0.6825 promises significant support for at least next few months, market tested that price for a dozen times and we have considerate momentum from our four hour chart at present. The 0.7520 resistance and 0.7361 23.6% retracement is our near term support. The bullish outlook is still in play.

USD CAD: 1.2265

The pair declined with breaching the key support level at 1.2280, which showing the directional sign, as the dollar weakened after post-FOMC meeting and further fuelled by interest rate differential 2 years US-CAD spread pushing back above 30bps. Momentum signals are bearish; However, the magnitude is still not significant, breaking below the next key support level at 1.2250 will confirm the bearish trend.

VIX: 13.47

US major indices turning into consolidation phase after the two days declined waits for the upcoming major economic data of US NFP later this week. The fear index still remain near all-time low and strong NFP would push down the fear index lower.

GOLD: $1,348.5

Gold price showing a recovery sign for the 2nd days consecutively, going upward testing back to the level $1,350 following the renewed US dollar weakness and strong sell-off sentiment around European equity markets. The upcoming keenly watched NFP data awaited by investors for providing fresh meaningful impetus as the upcoming release US manufacturing PMI fail to give significant directional move.

OIL (WTI): $65.95

Oil price regained its strength and able to extends its retaking to above $65.00 level, reaching towards the last week high level. The movement following the significant drawback in gasoline and distillate inventories which negate the sell-off sentiment from increasing oil production. The fresh rally shows that the bearish in past two days are short lived, yet to break the key resistance level at $66.65 is needed to confirm the bullish phase,

BITCOIN (BTC): $8,875

Bitcoin price plummeted overnight and crossing the key support level at 9,000 to its fresh year low for the first time since November, following news regarding India’s finance minister announcement about cracking down cryptocurrencies which further fuelled the already bad week in terms of headlines. Expected sentiment of sell-off as investors concern regarding regulation oversight, price manipulation and hacking.

Macro Themes in Play

• USD still soft overall, coupled with EUR, GBP, AUD demonstrate formative position
• Yen operates in a very confined channel, and the situation may alter if greenback rallies
• Gold rebounded last night and, and still bid higher along with the weakness of dollar