Trader Talk

USDX: 89.60

The dollar index came up strong, seemingly to test back up to above 90.00 level, which outperforms all major currencies as another healthy rebound in US 10Y treasury yields to 2.93% and followed by the 2Y yield to 2.24%, which is the highest level since September 2008. FOMC minutes meetings will be released tomorrow as investors will look for more details on the prospects by the Federal Reserve.

USD JPY: 107.35

USDJPY rallied for a third day consecutively and regained ground above the 107.00 level during UK trading session, as backed by an advance in US Treasury yields ahead of Wall Street’s opening. Not much major economic news coming from both sides, except minors such as Japanese Nikkei manufacturing PMI and the US Manufacturing PMI. Breaking the next resistance level target at 108.00 level will indicate strong bullish momentum.

EUR USD: 1.2335

The gains in the pair from the last week were trimmed more than half when the greenback got the market’s favour due to rising US Treasury Yields, however demand slowed down after Wall street’s opening. EURUSD however, broke below the key level at 1.2400 and found its next support level at 1.2250. Not much fundamental news coming from EUR side, except the German ZEW economic sentiment.

GBP USD: 1.3995

The British Pound held its position against the dollar’s broad strength, reversing an early decline to 1.3930 and settle just underneath the 1.4000 figure, as unable to break above it. News coming from the UK were mixed, as the CBI Industrial Order fell to a four-month low in February, while the manufacturing sector keeps expanding. UK will release important employment data tomorrow which investors look forward to finding fresh impetus.

AUD USD: 0.7915

The Aussie dollar lacked momentum and direction in thin market trading, with China and the US both on holidays, but held last week’s gains against USD maintaining above 0.79 level. AUD showed recovery, however remains exposed to US dollar strengthening in the coming week. RBA still hold the projections of a rate increase, following mixed data for Australia and middling economic growth.

NZD USD: 0.7340

Reserve Bank of New Zealand Governor would make his appearance today discussing bank’s annual report, however, we do not expect ground-breaking news to be release. That being said, NZDUSD might exhibit its extremely sensitive attribute and test its lower trendline at 0.7300. After six-day low at 0.7366, we don’t see the catalyst for the boosting or the dumping pressure, thus a retracement back to 0.7430 seems likely to happen in the near term.

USD CAD: 1.2560

The loonie weakened amid broader strength in greenback, fuelled with Canadian economic data regarding wholesales trade report with a negative figure from previous +0.3% as well as Canadian oil glut, which caused the CAD is now underperforming against all the other G-10 currencies. If the pair is sustaining above the key level at 1.2590, will have potentially crossed the early year high at 1.2685.

VIX: 20.60

5.86% daily increment after the holiday in U.S., the fear index continues to take investors on a wild ride. and U.S. equity bounced back from its 5% plus aggressive selling. VIX short ETN product retrace to 6.04 USD, and it boils down to the intersection of speculative buying and short covering. There is still no sign or directional path back to the status quo, since just a few weeks ago VIX is at lower 8.

GOLD: $1,330

Gold just took a substantial daily loss to the $1,328, steepest one since 2016. It is a function of higher than normal FED 10-yield hovering at around 2.90% and unattractive stock market globally. As expected, a further test to the $1,307 is possible. A reversal of resistance and support at 1329~1330 region is our daily projection. However, no sign of any testing to the breakout yet when the dollar index remains pretty bullish.

OIL (WTI): $61.65

Canadian crude oil is now selling at a steep discount, almost 45% compared to U.S. oil refineries. On the flip side, the U.S. is now the biggest oil producer in the planet, owning to its own shell oil and very less dependent on Canadian oil. Technically, we might still see the downward shorting trend today, and our main reference is the dollar index. If dollar index meets its upside rejection, it is probable to see a rigid reversal in oil price.

BITCOIN (BTC): $11,250

Despite the extremely bearish remark made by BOE govern Mark Carney, quoting “bitcoin has failed as a currency”, we have 2.49% growth in bitcoin for four consecutive days. $194 billion in market capitalisation, and $107 billion more than Ethereum, bitcoin is challenging to be the symbolic alternative asset class in 21-century. The technology behind the crypto asset still has plenty of time to prove its significance in the financial sector, and its intrinsic value will reveal over time. Next immediate bounce to watch is $12,200.

Macro Themes in Play

• US dollar is coming back to the stage, FED fund is pricing in the fourth rate hike for 2018
• Bitcoin cleared its path to $12,000, massive potential when the bullish sentiment is in play