Trader Talk

USDX: 89.90

In U.S. bond market, the bond yield had experienced a slump from its four-year high at 3.96% to 3.86%. Alongside with the yield-chasing sentiment in the market overall, the dollar demonstrates its resilience in contrast to the failed attempt to 1.2300 in EUR. The profound impact of a steepening yield curve has on greenback is solid strong. The rigidness of the price region between 88.10 and 90.50 held a lack of catalyst for a near-term breakout stall the market into sideways.

USD JPY: 106.95

Bank Of Japan performed its daily jawboning as usually, enjoying the trimmed gains and slumps in U.S. dollar. The normalization of Japan’s monetary easing polity strokes a cautious tone last week, notwithstanding, Japan’s export is one of the greatest beneficiaries of dollar weakness. The speculative interest in gauging the 3.0% 10-year Treasury bond rate levels with the weekly chart for USDJPY price section, with the immediate horizontal resistance at 107.90.

EUR USD: 1.2290

The pair recovered its ground back to above 1.2300 level and remained around that figure after bottoming for the day at 1.2255 during Asian trading hours, as the rally backed by the greenback turned lower against most of its rivals. Macroeconomic data was ignored as disappointing EU data while the US is encouraging. The next resistance level is at 1.2360 level.

GBP USD: 1.3970

A bullish Doji close in Friday for GBPUSD might indicate a further test to the 1.4063 with immediate support at 1.3800, with the bullish outlook in our weekly chart in mind, an equilibrium in the momentum oscillator confirms a trend formation is presumed to materialize. Fundamentally, a bullish remark delivered by Deputy Governor Dave Ramsden “I see the case for rates rising somewhat sooner rather than somewhat later”. November rate hike for the U.S. is not yet impending but worthy of note for the general ascending bond yield in EZ as well as in the U.S.

AUD USD: 0.7835

The Aussie dollar extended its recovery from last week, a failed attempted to test intraday low at 0.7800 swiftly turns into materialized gains. The buoyancy is justified by its proxy CNY, which had a decent demonstration in export data, and opened its equity market with a 0.75% rise in China 50. Our 200-day SMA is just below the Friday close at 0.7820, a test to its neckline at 0.7790 has it strong shorter term probability, and our immediate resistance is supported by 61.8% Fib retracement at 0.7900.

NZD USD: 0.7290

The pair starts the week by holding just beneath the 0.7300 level as the kiwi declined steadily for the last few trading days as the greenback back to buying has sent the other majors to decline despite the yields for US Treasuries are backing off at the end of the week. Upcoming major news from the NSD side is the trade balance figures, the rest of the week represent a quiet showing for the NZD and overall market sentiment will continue to drive the pair.

USD CAD: 1.2650

The loonie reacted to a significant oil price increase pretty aggressively, and USDCAD’s quasi-inverse relationship with oil and commodity export in general proven somewhat solid as well as agile. The reason being that the overbought territory in oil price in contrast to divergence signal in USDCAD is not well demonstrating by the price section, thus, the confirmation of its 38.2% pivotal retracement at 1.2630 to be broke is worth waiting for.

VIX: 16.49

The fear index gradually decreasing as the sell-off in US equities are seeming to ease and the volatility in the market is looking healthy compared to the previous downward spikes. Upcoming relevant news today is the data of New home sales, as better than expected will show a strong growth in the economy.

GOLD: $1,326

The yellow metal still holds its last week’s losses and failed to remain above $1330 level due to a reversal in dollar momentum as well as a recovery in the US equities and fresh increase in bond yields, pushed down the price. The key driver of gold price will be determined by the impact of US inflation and monetary policy expectations will continue. No meaningful directional confirmation for the past few days.

OIL (WTI): $63.45

Oil price holds its last week gains, however unable to push through above 63.70 level as USD showing recovery which causes the price of the Oil more expensive and the rally from the OPEC comment regarding supply cut seems to stop. Breaking above the 64.00 level would presume the upward momentum.

BITCOIN (BTC): $9,555

The crypto remained below the key level at $10,000 after the sell-off around 4% over the weekend. Positive news coming from one of the states in the US, Georgia, as it will accept cryptocurrencies as a valid form of payment for state taxes and licenses, however, failed to show meaningful support. Upward momentum from this point however and break through the key resistance level at $11,785, will put the bulls back in the game.

Macro Themes in Play

• JPY enjoyed the dollar weakness and the protracted jawboning from BOJ still favours Yen

• Heavy support at $9,000, we expect a U-curve price section for bitcoin this week