Trader Talk

USDX: 90.15

The recent greenback’s rally was interrupted by the comments from Philly Fed Harker regarding his expectation on two rate hikes for this 2018, however yields back towards multi-year highs sending the dollar higher. Not much macroeconomic headlines from the USD side as the movements mainly triggered by stocks and yields. The daily recovery of the USD looks promising.

USD JPY: 109.35

Japanese Yen gaining strength as the dollar giving away initial gains due to following Fed Harker’s talks regarding expected hikes in the rate, dragging down the pair to below 109.00 level, and further fuelled by losses in US equities on risk aversion. No major data coming from Japan except the least significant data of money supply. Breaking the key support level at 108.30 would confirming the bearish dominance.

EUR USD: 1.2255

EURUSD’s bearish phase continues as it holds near its weekly low, which trimmed almost half of its January gains as USD gaining its strength across the board due to bonds sell-of in the US accelerated, causing pushing up back the yields. Not macroeconomic headlines except the recent news regarding unemployment backed the USD. Movements is driven by equities and yields while Investors waits for fresh catalyst.

GBP USD: 1.3925

Strong upward rally seen at the beginning of the day, testing above the 1.4000 level as the sterling took an advantage following the BOE’s monetary policy meeting as Carney mentioned the rates need to be raise sooner, yet quickly rejected gave up the gains as it now back towards to below 1.3900 level. Investors waits for another upcoming key data from UK later this Friday is the manufacturing production alongside with the latest trade balance.

AUD USD: 0.7775

Another drawback to the pair, breaking below a resistance level at 0.7800 as Aussie took an early hit from Chinese December trade data with the surplus down to 135B Yuan from previous 361B. The decline is further bolstered by sour performance of commodities such as gold and oil, and from the generally strengthening dollar. Early data in Friday are the RBA monetary policy statement and home loans.

NZD USD: 0.7215

NZDUSD fallen this week to 0.7175 to its early month low breaking the key level at 0.7200, giving away its gain from yesterday’s strong NZ jobs data. The kiwi also undermined by the poor performance of commodities and lower Chinese trade data in December. Investors looking forward to the China’s January inflation data for fresh drivers.

USD CAD: 1.2595

USDCAD extends its gains from the last day as the dollar continues to gather strength, showing a breakout of key 1.2600 level. While risk reversal occupies as the denominated sentiment in the market, USD marched on alongside with gains from JPY and CHF. However, we are seeing RSI at 70 to 75 overbought territory, which indicates our immediate neat term resistance level of 1.2660 (December 2017 high). If such level broke, fresh air to its next resistance at 1.2695.

VIX: 33.46

A second-round aggressive sell-off in U.S. equity market causes another cycle advancement of our fear index. Volatility is back to the game, and we should expect such scenario to persist in the near future as the sentiment and emotions are still intertwined in major asset class, and with the distortion of crypto currency, it reminds us that we should not identify a status quo to the growth continuation in U.S. or any other major economies without a deep examination of its key fundamentals such as inflation, employment, fiscal and monetary conditions.

GOLD: $1,319

As our senior analyst pointed yesterday, gold find its technical strong support at $1,306 and bounces back almost immediately, demonstrating its velocity to the correction and a robust reaction to the equity dump in EZ and U.S. Whether this resurgence is convincing and will it maintain its vigorous momentum is one expected to be answered next week. The appreciation in gold value might well progress until the NY session, and adhere to the divergence with greenback value, gold proves its worthiness for our close attention.

OIL (WTI): $60.50

As expected, oil just break its ascending channel from above at $61.35, plunging down to $60.40 as of writing. Right now, we are looking at daily support region between $54.80 and $55.80. Tentative gains from yesterday has been radically wiped out, and a bearish perspective produces a theme that would be in the forefront of our medium-term trade.

BITCOIN (BTC): $8,313

Bitcoin continues its advance to $8,500 region and poised with a consolidative proposition. After a bloodbath for whole week, bitcoin demonstrate its momentum toward its highs, coupled with positive news that Japanese Financial Regulator would embark on operations to reduce the hacking activities. If $8,500 level cleared itself, we see fresh air toward $9,500. The bullish outlook for bitcoin is in play.

Macro Themes in Play

• US indexes experienced another significant sell-off following the sentiment of increasing interest rates.

• U.S. dollar recovery continues following another big drop in equities and remained high yields.