Market Update: February 24th 2017
The bulls appear to take a breather in the Asian session after two consecutive sessions of recovery-gains, as the treasury yields are seen recovering some ground and in turn pushing the US dollar higher across the board. Currently, the EUR/USD pair trades at 1.0588, and looks to consolidate recent gains, fuelled by the extension of declines in the US dollar across the board, in response to dwindling bets of a March Fed rate hike and rising uncertainty over the Trump administration’s progress towards the US tax reforms. The major also remains underpinned by an updated report from Germany's central bank suggests the Governing Council is on course to conclude its easing-cycle. From a wider perspective, any recovery attempts in the EUR/USD pair look fragile, as the common currency remains undermined by mounting geopolitical concerns and resurgence of Greek debt crisis. Meanwhile, in absence of economic events in the EUR calendar, the major will get influenced by the US new home sales and revised consumer sentiment data, slated for release in the NA session. Immediate resistance is located at 1.0604 followed by 1.0628, while support is seen at 1.0547 ahead of 1.0513.
EUR/USD – 1 Hour Chart.
Resistance: 1.0604 / 1.0628
Support: 1.0547 / 1.0513
The GBP/USD pair is seen on a retreat from two-week tops reached at 1.2561 a day before, as the greenback attempts a tepid-bounce in Asia, correcting the previous heavy losses. However, the major remains confined in a 30-pips narrow range, as markets continue to assess the implications of the US Treasury Secretary Mnuchin’s on the US economy and greenback. Dollar Hit By Washington Grind While a lack of fresh fundamental drivers so far this session also adds to the subdued trading activity around cable. Next on tap for the spot remains the US datasets and CFTC report, which will provide fresh impetus. Immediate resistance is located at 1.2601 followed by 1.2648, while support is seen at 1.2468 ahead of 1.2381.
GBP/USD - 1 Hour Chart
Resistance: 1.2601 / 1.2648
Support: 1.2468 / 1.2381
The USD/JPY pair is seen trying hard to take on the recovery from 10-day troughs, but in vain, as the recovery remains restricted amid a broadly muted US dollar and mild weakness seen around US treasury yields. The spot is last seen exchanging hands at 112.79, having posted a day’s high at 112.95 and day’s low at 112.59. Moreover, the bulls extend its struggle to retest 113 handle, as negative Japanese equities underpin the safe-haven flow for the yen, hence, keeping a check on the USD/JPY recovery. Nothing of note for the major in terms of economic data until the US session, and therefore, persisting RO-RO sentiment will continue to drive markets as dust settles over the Mnuchin’s interview aftermath. Immediate resistance is located at 113.18 followed by 113.77, while support is seen at 112.28 ahead of 111.96.
USD/JPY– 1 Hour Chart
Resistance: 113.18 / 113.77
Support: 112.28 / 111.96
Gold prices on Comex are consolidating the latest upmove to fresh multi-month highs in the Asian session this Friday, as the bulls gather pace for the next leg higher. Currently, gold at $ 1253, aiming for a retest of three and a half month highs reached yesterday at $ 1252.05. Gold rallied hard yesterday as markets cheered the Fed minutes, which revealed reduced expectations of a March rate hike and boosted the non-interest bearing gold at the expense of the treasury yields and US dollar. Moreover, gold also benefited from uncertainties surrounding Trump’s administration policies, after Treasury Secretary Mnuchin’s raised doubts over the impact of Trump’s policies on the US economic growth this year. At the same time, his comments also raised uncertainty of over progress towards US tax reform. Looking ahead, the yellow metal may take cues from the risk-trends ahead of the US datasets, including the new home sales and revised UoM consumer sentiment, due to be reported in NA session. Immediate resistance is located at 1255.0 followed by 1260.7 while support is seen at 1239.6 followed by 1230.0.
XAU/USD – 1 Hour Chart
Resistance: $1255.0 / $1260.7
Support: $1239.6 / $1230.0
The AUD/USD pair caught some fresh bids near 0.7712 handle and jumped to fresh session peak, turning positive for the third consecutive session. Comments from RBA Governor Phillip Lowe dampened expectations of further interest rate cut action by the central bank and extended support to the major. Moreover, positive sentiment surrounding commodity space, especially copper prices, further boosted demand for commodity-linked currencies, including the Aussie. Meanwhile, continuous slide in the US Treasury bond yields undermined the greenback demand and drove some additional flows towards higher-yielding currencies and collaborated to the pair's up-move on Friday. The up-move, however, lacked conviction as bulls seemed exhausted, against the backdrop of overnight retracement from multi-month tops. Moreover, the pair has failed to attract any substantial follow through buying interest despite of broad based US Dollar sell-off, which points towards higher possibilities of some corrective slide ahead of the weekend. The release of new home sales and revised UoM Consumer Sentiment index could trigger the expected profit-taking move. Immediate resistance is located at 0.7748 followed by 0.7782 while support is seen at 0.7673 ahead of 0.7631.
AUD/USD - 1 Hour Chart
Resistance: 0.7748 / 0.7782
Support: 0.7673 / 0.7631
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