SUMMARY

  • Despite the fact that the New York Stock Exchange remained closed yesterday for Presidents’ Day, investors increased their purchases of gold, which pushed the price of the metal up +0.22%. 
  • The USDJPY is currently up +0.14% at 150.32. Buyers are aiming for the currency to rise above 151. 
  • Low trading volume for the EURUSD, due to the holiday period in the United States. The currency is moving sideways around the 1.0769 area.

GOLD

Specifications

  • Leverage: 50
  • Units: 100
  • Margin requirement: USD$4,006
  • Example: USD$10 change in gold price = USD1000 potential PL.
  • Support 1: 2017,38
  • Support 2: 2016,39
  • Resistance 1: 2019,09
  • Resistance 2: 2019,81
  •  

Fundamental Analysis

  • Despite the fact that the New York Stock Exchange remained closed yesterday for Presidents’ Day, investors increased their purchases of gold, pushing the price of the metal up +0.22%.
  • Investors are interested in hedging equity positions in portfolios with traditional hedging instruments such as gold, as well as with certain fixed income securities.
  • Today’s Canadian CPI is expected to show a monthly increase of +0.4%.
  • Gold prices are above the 40-day moving average and are looking to reach resistance zone levels. The main point to cross is USD 2,030.
  • Investors are waiting for more clarity from central banks on the start of interest rate cuts. So far, speculation is focused on the end of the second quarter of the year.

USDJPY

Specifications

  • Leverage: 100
  • Units: 100,000
  • Margin requirement: USD$667
  • Example: movement of 100 pips = $1,000 potential PL.
  • Support 1: 150,28
  • Support 2: 150,24
  • Resistance 1: 150,36
  • Resistance 2: 150,40
  •  

Fundamental Analysis

  • At the moment, the USDJPY is up +0.14% and is trading at 150.32. Buyers are looking for the currency to rise above 151.
  • Japan’s trade balance will be released today and is expected to come in at USD -1.9 billion. Exports are expected to increase by 9.5% y-o-y.
  • The trade balance data is important because the Bank of Japan can assess the volume of money flowing in or out of the Japanese economy and its effect on the exchange rate and money supply. Currently, the yen’s money supply is shrinking, so the price of the currency continues to rise.
  • US Treasury yields continue to rise as investors seek to hedge their equity positions with fixed income instruments, given the potential slowdown in the US economy.
  • USDJPY is above the 40-day moving average and price is looking to break above the upper Bollinger band to move higher towards resistance at 151.

EURUSD

Specifications

  • Leverage: 100
  • Units: 100,000
  • Margin requirement: USD$1,071
  • Example: movement of 100 pips = $1,000 potential PL.
  • Support 1: 1.0765
  • Support 2: 1.0762
  • Resistance 1: 1.0770
  • Resistance 2: 1.0772
  •  

Fundamental Analysis

  • Low trading volume for the EURUSD, due to the hoiday in the United States. The currency is moving sideways around the 1.0769 area.
  • The Bundesbank delegates’ presentation showed that the German economy is in recession, due to weak demand, stagnant consumption and investors’ interest in other markets.
  • Traders are waiting for the FOMC to release the minutes of the previous meeting. However, they only want to confirm Powell’s statement, which ruled out a rate cut before March 2024.
  • EURUSD is just below its 40-day moving average. The price is sideways, but is starting to look for the 1.0800 resistance zone. If this level is reached, the way would be clear towards 1.0900.

SOURCES

  • Thomson Reuters
  • Market watch
  • Bloomberg
  • Tradingview

 

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