Dear Client,

Warmly reminds you that the component stocks in the stock index spot generate dividends. When dividends are distributed, VT Markets will make dividends and deductions for the clients who hold the trading products after the close of the day before the ex-dividend date.

Indices dividends will not be paid/charged as an inclusion along with the swap component. It will be executed separately through a balance statement directly to your trading account, the comment for which will be in the following format “Div & Product Name & Net Volume ” .

Please note the specific adjustments as follows:

If you’d like more information, please don’t hesitate to contact [email protected].

Daily Market Analysis

Market Focus

US equity market declined on four-consecutive days. The Dow Jones Industrial Average index suffered the most, dropped 1.58%. Meanwhile, the tech heavy Nasdaq and the S&P 500 index also fell 0.81% and 1.31% respectively. All sectors within the S&P 500 settled in the red.

The European Central Bank will allow banks to exclude deposits held at the central banks when calculating their leverage ratio until March next year. The ECB’s attitude toward a loose leverage ratio is a strong contrast to the US, which the Fed has ended a similar exemption in March. It further reveals European banks’ dependence on bank loans, rather than capital markets, as a source of corporate financing.

Michael Burry, one that is famous for winning bet against housing bubbles in 2008, has warned retail traders about “losses as the size of countries” in the event of crypto and meme-stock declines. “When crypto falls from trillions, or meme stocks fall from tens of billions, #MainStreet losses will approach the size of countries. History ain’t changed,” tweeted from Burry. Worth mentioning today is quad-witching day, with tons of stock and index options set to expire, options’ gamma will also deplete. It will take some time for gamma to refill, which leaves room for volatility to kick in.

Main Pairs Movement:

The US dollar rally continues on Friday, with the dollar index soared to 92.2 from pre-FOMC’s 90.5, refreshed the largest weekly gain since last March. Non-US currencies are flashing oversold across four-hour and daily timeframes, and we anticipate a cool off or rebound during next week’s trading.

All other major currencies were dropping against the dollar greenback on Friday except for the Japanese Yen. The 10-year US Treasury yields have been falling on Thursday and Friday, dipped total of 14 basis point to settle around 1.447%. It seems like investors are pricing in a high inflation in the near future as observed from a tightening in the 2- and 10-year bond yield spread. Short-dated bonds are less desirable if near term inflation remains high, the shift in demand from short-dated to longer term bonds will create downward pressure on long rates. With rates dropping in the long-end of the yields curve, carry trade investors want to undo their position, thus enhance the value of Japanese Yen.

Oil price continues to advance after a temporary pullback. With economic activities gradually return to pre-pandemic levels, demand for crude oil in either industrial or household use may outrun supply in the short term, therefore causing a surge in oil price. We may see yet accelerating upward momentum in fuel price as summer approaches. WTI and Brent crude oil gained 0.87% and 0.55% on Friday.

Technical Analysis:

XAUUSD (Daily Chart)

Gold looks to end its five-consecutive plunge after finding some support around $1770. The yellow metal rebounded to contest 50% Fibonacci level of $1798 earlier today, but the upward momentum quickly faded. Nonetheless, the sell off decelerated around $1770, and has hope to slowly recover some of its losses as daily RSI breaching oversold threshold, thus will prompt some profit-takings from sellers. The immediate resistance remains to be today’s high of $1798, followed by 1825. We cannot completely rule out a further plummet as current fundamentals are acting against inflation-hedge Gold.

Resistance: 1798, 1825, 1860

Support: 1770, 1734, 1680

USDCHF (Daily Chart)

USDCHF lifted off post hawkish Fed announcement, appreciation in the last three days completely erased losses in the past two months. Multiple key resistance lines failed to contain the bulls, and price went straight to challenge March support line at 0.923, which also marks the 61.8% Fibonacci level. We expect some pullbacks to take place next week towards 0.9154, if breached then 0.908 may lend some support to the continuation of an uptrend. RSI is on the verge of a overbought zone, currently printing 69.3.

Resistance: 0.923, 0.932, 0.947

Support: 0.916, 0.908, 0.9

GBPUSD (Daily Chart)

Cable officially ended its bullish trend which started from July 2020 by breaking a big ascending trendline. Price is currently finding ground at 1.38 handle, and we expect this pair to retrace upward to validate some of the key levels such as 1.389 and 1.396. The selling bias were certainly very strong this week given reopening concerns in the UK and the Fed’s surprise. However, UK remains to be top listed country to initial a full reopening, so investors need to keep a close eye on developments of the mutated virus in Britain. Any positive headline could easily boost Sterling, though it is unlikely to recapture the mentioned upward trendline.

Resistance: 1.4, 1.422, 1.437

Support: 1.382, 1.368, 1.352

Economic Data

Daily Market Analysis

Market Focus

Reflation trades that have ruled the market for most of 2021 were in retreat Thursday. Stock market was mixed. Dow Jones slumped 0.62%, while Nasdaq rose 0.87%. Tech stocks are back in favor of the investors, the old world order in stock seems back as reopening trade takes lumps.

“The recent moves across the curve are interpreted by some as a sign of declining growth prospects,” said Adam Phillip, managing director of protfolio strategy at EP Wealth Advisors. “And when the outlook for growth dims, investors gravitate back to growth-oriented stocks.”

On the other hand, debates amid the newly signed federal holiday have taken place in the Wall Street. While most government workers will be granted paid time off Friday as the holiday falls on Saturday this year, the same won’t be true for financial markets. Before deciding whether to close , U.S. exchanges rely on input from several participants including banks, broker-dealers and regulators.

The Fed plans to operate normally Friday and Monday, but SEC decides a day-off. Any decision about whether to make Juneteenth a market holiday “will be part of our annual calendar review during which we consult with stakeholders,” Katrina Cavalli, a Sifma spokeswoman, said in an e-mailed statement. CMC Group Inc., the wrold’s largest futures exchange, will follow Sifma’s lead, according to its spokeswoman. The holiday also falls on a weekend in 2022.

Main Pairs Movement:

Greenback continued to win over most of its major rivals, except JPY, which was supported by falling government bond yields. However, traders keep pricing in the latest hawkish stance from the US Federal Reserve, which indicated two rate hikes in 2023 amid escalating growth and inflation forecast.

Fiber hovered around 1.19, while cable bounced up and down at 1.39, struggling to rebound. Antipodean currencies advanced at the beginning of the day due to upbeat New Zealand GDP and better-than-expected Australian employment figures, but soon the robust American dollar resumed its advance, pushing rivals to multi-month lows. Aussie bounced off it yearly low at 0.7532, one step ahead of a steeper slide. Loonie trades around 1.235, its highest since late-April.

Commodities slumped hard during the day. Gold made its fifth decline to $1,767.29, while oil prices were also down, but managed to bounce a bit ahead of the close. WTI settled at $71.00 a barrel, and Brent $73.00.

US Treasury yields retreated from post-Fed peaks. The yield on the 10-year Treasury note currently stands around 1.506% after hitting 1.594%.

Cryptos continued their correction. Bitcoin climbed to $39559 earlier today, and hours later plummeted below $38000. Ethereum basically followed its big brother’s step, with a daily high at $2460.5, and once flirted with the $2300 support line.

Technical Analysis:

EURNOK (Daily Chart)

EURNOK has started its corrective trend since late-April. The 50% Fibonacci appears to be a strong resistance for its upward attempts, and there’s a greater headwind from the fundamantal side. The Norges Bank’s hewkish messege which depicted the whole rate-hiking blueprints was released this morning. The cross plunged to the 38.2% Fibonacci at the moment but soon rebounded to its previous level, failing its yet again attempt to break 50% Fibonacci, and now trades at 10.174, a price in between. In our opinion, the disappointing market reaction derived from the investors focusing more on the post-FOMC phenomena. However, rate differentials will provide a consistent downward traction for EURNOK, and we anticipated that the cross will move to fresh low below 9.90 at the end of the month.

Resistance: 10.191, 10.259, 10.344

Support: 10.122, 10.037, 9.900

XAUUSD (Daily Chart)

XAUUSD has sharply declined for two consecutive days and breached every DMA support due to FOMC’s hawkish signals. Gold breached below $1800, and traded at a price last seen in mid-Apirl. On the downside, the $1765 support line awaits violation, and since there’s no apparent support after that level, the yellow metal may go straight forward to the yearly low at $1680 and call for a rebound. On the technicals, the MACD histogram appears strongly bearish, and the RSI indicator has just landed at the oversold territory. Given the robust selling pressure and negative fundamentals, we speculates the pair to extend further south if it really breaks the $1765 support.

Resistance: 1809, 1850, 1905

Support: 1756, 1678

GBPJPY (Daily Chart)

GBPJPY breached the symmetrical triangle and stretched lower to the south today as the safe-haven JPY took advantage of the risk-off market sentiments after the FOMC meeting, and concerns on the EU-UK conflict over Northern Ireland protocol as well as the delayed lockdown easing in England keeps acting as headwinds for the pound.

On the technicals, the MACD histogram remains bearish, while the RSI indicator dropped below 50, suggesting a negative market mood toward the cross. Given available information, we speculate that the downward adjustment may persist, unless the upcoming Japan inflation data and BOJ meeting surprise the market.

Resistance: 155.30, 156.076

Support: 151.266, 149.064

Economic Data

Dear Client,

In order to provide you with a better user experience with VT Markets, we are glad to announce that we will upgrade our MT4 software and server to version 1335 on June 19, 2021 (Saturday), so as to ensure a better trading experience.

If your software version has not been updated yet, we sincerely recommend that you upgrade to the latest version (1335) after June 19, 2021.

The steps to check your MT4 software version are as follows:
PC: Open the MT4 software Help -About;
Android: Open the MT4 app – About;
iOS: Open the MT4 app-Settings – About.

For PC users, please uninstall the software and install the latest version from the following link:
https://www.vtmarkets.com/trading/platforms/metatrader-4/

For Android users, please go to the following link to update your MT4 version:
https://play.google.com/store/apps/details?id=net.metaquotes.metatrader4

For iOS mobile users, please go to the following link to update your MT4 version:
https://apps.apple.com/au/app/metatrader-4/id496212596

If you’d like more information, please don’t hesitate to contact [email protected].

Daily Market Analysis

Market Focus

US equity market dropped as Federal Reserve is actually more hawkish than market expected. Though the initiation of tapering talk is widely anticipated, but two interest rate hikes by the end of 2023 reveal by the dot plot had investors surprised. The Nasdaq 100 and Dow Jones Industrial Average index lost 0.34% and 0.77% respectively. All sectors closed in the red within the S&P 500 index except for Consumer Discretionary shares. The 10-year US Treasury yield surged 7.5 basis points to 1.57%.

The Federal Reserve kept interest rate unchanged, and here are Bloomberg’s key takeaways from the FOMC statement and Chair Jerome Powell’s press conference:

Main Pairs Movement:

Euro is the second worst performing currency against the dollar on Wednesday, the first being Swiss Franc, plunged 0.97% and 1.11% respectively. The Fed has turned from extreme dovish to slightly hawkish, and will finally start to kick off the long-expected tapering talks in forthcoming meetings. Given ECB’s plan to bulk up monetary and fiscal spending in the second half of 2021, this officially marks the divergence between Federal Reserve and European Central Bank. The outlook for Euro is not so bright in the 2H20.

Cable also fell 0.6% amid strengthening dollar. Today’s plunge is more likely a temporary shock to the Sterling rather than a long-term bearish trend like the Euro. Speculators are still factoring in the delayed of reopening from the Britain. However, we don’t think this delay will prolong into the summer given UK’s successful vaccination campaign. Once the delta variant concern is taken off the table, the UK economy will steer in full speed. An optimistic and hawkish BoE will continue to underpin the Pound, ad it is highly possible that they will act ahead of the Federal Reserve in easing QE.

Technical Analysis:

GBPUSD (Daily Chart)

Cable finally exited its consolidation phase from downside. After trapped within a tight range between 1.42 and 1.408 for more than a month, the bears are set to seek gains in the south. Price promptly plunged toward the ascending trendline after FOMC statement release, and was finding support around 1.402 as of writing. Further on the downside, an immediate horizontal resistance would be the big 1.4 round number, followed by May’s low of 1.38, and 1.367.

Resistance: 1.42, 1.437, 1.464

Support: 1.4, 1.382, 1.369

XAUUSD (Daily Chart)

XAUUSD continues to head south after penetrated the 2-month ascending trendline and DMA20 dynamic support. The yellow metal breached below 61.8% Fibonacci level of $1850, which previously defended bears’ attack. Closing below this level could open doors for sellers to capitalize on large downside space, where we might witness February’s huge plummet in gold price given the lack of inflation-hedge demand post FOMC meeting. On the downside, $1815 will be the next key level to watch for.

Resistance: 1890, 1920, 1960

Support: 1815, 1780, 1743

USDCAD (Daily Chart)

USDCAD is undergoing a U-shape recovery after price was extremely subdued for the past two-months. However, it is not completely out of the woods yet since a big downward trendline still hangs above current price level, we need to see a solid breakout from the trendline to confirm a bullish reversal in USDCAD. In the near term, this pair looks to contest 1.23 hurdle, and failing to overcome this level could put the bears back into the driver’s seat as the persistent higher oil price always bolsters the Canadian dollar.

Resistance: 1.23, 1.25, 1.264

Support: 1.2, 1.1925, 1.18

Economic Data

Daily Market Analysis

Market Focus

US stocks retreated from their peaks after the retail sales missed the expectations. Tech shares closed in the red, with the Nasdaq 100 dropped 0.71%, and Dow Jones declined 0.27%. Energy shares gained traction, but still could not lift the S&P 500 index as Real Estates and Tech stocks dragging behind.

Investors remained calm ahead of Fed’s policy decision. The statement is set to include updated forecasts, and communication of any taper plans well in advance. “After nearly a year of anti-climactic FOMC meetings, tomorrow’s meeting has the potential to move markets because it will likely start the process of the Fed communicating tapering of this historic accommodation,” commented Tom Essaye former Merrill Lynch trader.

China called the US “very ill indeed,” after President Joe Biden formed an anti-China ally during his Europe trip. China Foreign Ministry spokesman Zhao critized Biden’s efforts to counter China’s global economic expansion and told reporters “The G-7 had better take its pulse and come up with a prescription.” Tension continues to mount between the developed nations and the rising giant, though no actions are taken so far, but such development worries investors.

Main Pairs Movement:

Market turned cautious after the US depressing retail sales figures and the better-than-expected PPI. Investors focus on news about the Delta variant of COVID and uncertainty US infrastructure as the Fed’s decision approaches. Cryptos are struggling to cling gains.

The dollar index performed well heading into the US opening but turned sour after the release of the macros, closing the day mixed. The swissy and the fiber are unchanged against its American rival, as well as the Japanese Yen, while the loonie and the sterling declined significantly.

US 10-year Treasury yields has breached 1.50% after US retail sales release, seemingly consolidating its previous gains. The UK and Canada CPI and industrial output also stand out on the economic calendar, along with the New Zealand GDP.

Oil price edged further north. WTI traded at $72.5, and Brent traded at $74.24, both recovering to the past-pandemic price level. Gold continues to fall, traded at $1858.82 as of writing.

Cryptos seems experiencing a correction. Bitcoin surged to $41330 earlier today, and rapidly dropped below $40000 within two hours, and Ethereum slightly decreased toward its $2,500 support after it bounced off $2,600.

Technical Analysis:

GBPUSD (Daily Chart)

GBPUSD has declined for three consecutive days, and the selling pressure seems still strong. The MACD histogram remains bearish, while the RSI indicator fell under 50. Sterling fell short for demand despite the goodish UK employment report as analysts are worried about the delay of the lockdown program forcing some struggling businesses to lay off. On the other hand, though Fed is supposed to remain monetary policy unchanged, a less dovish statement are still possible given the upbeat inflation figures, and this may further dragged the pair down. The instant support for cable appears at 1.40, followed by the quarterly low, 1.367.

Resistance: 1.424, 1.438

Support: 1.40, 1.367

USDCAD (Daily Chart)

After three consecutive week’s consolidations, USDCAD finally broke through the 1.2 to 1.215 interval. Similar to other major pairs, the breakthrough of the loonie derived from the expectations of a slightly less dovish Fed after the US greater-than-expected inflation figures poped up. The MACD histogram appears bullish, while the RSI indicator has just consolidated in the buy-side territory.

However, pressure from the rising oil price is still a concern, adding that the policymakers’ attitude toward the higher inflation is still unclear, a solid rebound is still questionable. The FOMC press conference that takes place this Wednesday will provide further instructions from the officials. The best strategy is to stay positive but prudent before that.

Resistance: 1.225, 1.2367

Support: 1.215, 1.20, 1.192

AUDNZD (Daily Chart)

AUDNZD was rejected by the 1.081 resistance last Friday and slipped below 1.080 at the beginning of the week, traded 1.0794 as of writing. The Australian dollar got slightly weaker on the dovish RBA meeting minutes as the policymakers suggested no rush to taper, albeit emerging reflation.

However, due to the technicals, the bullish sentiment seems to resume a little more time, as the RSI indicator still haven’t reached the overbought territory, and the MACD histogram remain positive. The strong 1.081 resistance level is the key. If breached, then, at least in the short term, the upside traction will still prevail.

Resistance: 1.081, 1.0945, 1.1045

Support: 1.060, 1.054, 1.042

Economic Data

Dear Client,

To provide our clients with a wealth of trading options, VT Markets will launch new products on June 21, 2021.

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact [email protected].

Daily Market Analysis

Market Focus

US stocks market was mixed as investors were adjusting positions to Thursday’s Federal Reserve meeting. Tech shares were gaining traction, with the Nasdaq 100 up nearly 1%, they also helped the S&P 500 to close in the green. Meanwhile, Financials dropped as JPMorgan Chase CEO Jamie Dimon suggested Wall Street’s trading prosperity in the pandemic era may fade away.

US President Joe Biden entered his first international summit looking for a breakthrough on vaccine pledges for developing countries, and a unity action to counter China’s economic might. US officials said the G-7 group is now a united ally to fight against China on issues such as forced labor and human rights abuses, and to stand up to an alternative to China’s Belt and Road plan to counter Chinese influence abroad.

US consumers expectation for inflation rose to 3.6% over the medium term, refreshed an eight year high in May, according to the Federal Reserve Bank of New York survey. “Notably, medium-term inflation expectations have increase at a slower pace than short-term inflation expectations over the past few months, and the difference between one- and three-year-ahead median inflation expectations marks a series high,” officials from New York Fed said in a press release.

Main Pairs Movement:

Gold plunged as much as 1.7% during the first day of the week. Money managers are paring their long positions in the futures market ahead of Thursday’s FOMC meeting. Judging from market reaction to last week’s CPI figures, investors seemed to believe current inflation spike is temporary and will ease over the second half of 2021. Of course, the Fed will factor in market reaction when considering how they should play the script. With market participants are more in line with the central bank proposed transitory inflation theory, we are unlikely to see any big surprise on Thursday. That being said, the Fed would still be guiding the market to where they desired by giving out little hints in FOMC statement, or adjusting their portfolio holdings (small enough to not cause any ripples across stocks and bond market while sending a signal).

Cable is on the back against US greenback amid lockdown extensions, dipped 0.05%. British Prime Minister Boris Johnson announced on Monday that reopening will be postponed to July 19th. Though the negative headline is much expected, it still keeps the pressure on the Sterling compared to other G-7 currencies.

Technical Analysis:

EURUSD (Daily Chart)

EURUSD exits from consolidation mode and enters a bearish trend. Price failed to reclaim 1.22 in last week, we have seen five rejections from 1.22 before it turns south. Market is perhaps pricing in a more dovish ECB than its US counterpart given Christine Lagarde’s speech on EU’s forthcoming larger spending. We do not rule out potential price recoveries or sideway trading prior to Thursday’s FOMC meeting. If the Fed’s message is affimative then the bears should not have too many troubles at taking out 1.21 horizontal support, which would open doors to 1.2 and 1.195.

Resistance: 1.22, 1.235

Support: 1.21, 1.204, 1.195 

XAUUSD (Daily Chart)

XAUUSD finally made a decisive breakout, and it was in favor of the sellers this time. Price penetrated the 2-month ascending trendline, along with its DMA20 support line. However, it quickly bounced off upon touching 38.2% Fibonacci level at $1846. Today’s move indicates bearish reversal, which makes sense when considering investors are gradually buying into Fed’s rhetoric of transitory inflation. With market expecting the Fed to maintain easy monetary policies and not initial the taper talk during June’s meeting or even during the whole summer, Gold is likely to suffer until another impetus shows up. On the downside, $1815 will be the next key level to watch for.

Resistance: 1894, 1959, 2000

Support: 1846, 1822, 1790

USDJPY (Daily Chart)

USDJPY is building on last Friday’s goodish rebound, climbed 0.35% on Monday. This pair is well fitted within its ascending channel and managed to regain 110 handle. Now there is a solid breakout to the upside, the buying bias will be here to stay until meeting yearly high of 110.8. On a larger timeframe, USDJPY stills shows a bullish trend after April’s pullback is proved to be temporary. Further in the north, stern resistance sits around 112 and 113.8.

Resistance: 110.8, 112, 113.8

Support: 108.7, 107.9, 106.7

Economic Data

Dear Client,

Warmly reminds you that the component stocks in the stock index spot generate dividends. When dividends are distributed, VT Markets will make dividends and deductions for the clients who hold the trading products after the close of the day before the ex-dividend date.

Indices dividends will not be paid/charged as an inclusion along with the swap component. It will be executed separately through a balance statement directly to your trading account, the comment for which will be in the following format “Div & Product Name & Net Volume ” .

Please note the specific adjustments as follows:

If you’d like more information, please don’t hesitate to contact [email protected].

Daily Market Analysis

Market Focus

US stocks climbed to record high as investors are shifting to believe Federal Reserve will maintain accommodative policies in upcoming months. The Nasdaq 100 Index gained more than 1%, while the Dow Jones Industrial Average index was up only 0.06%. S&P 500 closed 0.47% higher with Health Care shares led the gains, and Financials were underperforming.

Commerce ministers from China and the US agreed to push forward trade and investment links. While the two nations are slowly resuming official contact after Joe Biden took office, it is still unclear what the US plans to do with the so-called ‘Phase One’ deal signed last year. “It’s positive in the sense that both countries are stepping up economic and trade communication, but no game-changing decisions or announcements have come out yet, I won’t be overly excited,” commented Alvin Tan, head of Asia currency strategy at RBC Capital Markets LLC.

The Basel Committee on Banking Supervision is putting the strictest capital requirement for holding crypto assets on banks’ balance sheet. The panel proposed that a 1,250% risk weight be applied to bank’s exposure, meaning banks need to hold a dollar in capital for each dollar worth of crypto asset under the current 8% minimum capital requirement. The Committee is deeply concerned that the growth in these volatile assets could jeopardize global financial stability, thus the required capital will need to be sufficient to absorb a full write-off without exposing depositors and other senior creditors of the banks to a loss.

ECB kept policy rate unchanged, and here are Bloomberg’s key takeaways from its policy statement:

Main Pairs Movement:

EURUSD was on the back foot against the dollar greenback despite dollar negative mood. The Euro weakness could come from ECB’s announcement of larger monetary spending. Meanwhile, US CPI (MoM) in May climbed 0.6%, the second-largest advance in more than a decade. The inflation gauge showed steady growth in the costs of used vehicles, house, airfares, and apparel. According to the Labor Department, the rapid rise in used car prices account for 1/3 of total monthly advance in CPI. The Core CPI which excludes volatile food and energy rose 3.8% on a year-over-year basis, the highest number since 1992. A better-than-expected inflation should press Federal Reserve to start tapering sooner, which bolsters the US dollar. But since we saw quite the opposite reaction in the market, it rather implies investors are buying into Fed’s transitory inflation narrative and dollar bearish bias could resume from here.

Cable temporarily put behind some of its concerns and ride with dollar weakness, gained 0.4% on Thursday. Aside from EU’s disagreement over the implementation of the Northern Irish protocol, UK is also facing a possible delay of its reopening. The Delta variant is finding its way to spread around the unvaccinated, the highly anticipated ‘Freedom Day’ will likely be postponed from June 21st to early July.

Technical Analysis:

NZDJPY (Daily Chart)

NZDJPY is still supported by 78.6% Fibonacci level around 78.7. Most of the gains from RBNZ hawkish shock have been erased by choppy trading sessions in the past two weeks. Price is retesting an upward trendline started from last November, and will likely cling to it given current uninspired market sentiment. A strong deviation to the upside is needed to keep the bullish bias alive. In the north, the nearest resistance sits around 80.1, next to 81.1.

Resistance: 80.1, 81.1, 82.2

Support: 78.7, 76.84, 75.5

USDCHF (Daily Chart)

USDCHF failed to extend beyond 0.899 as SMA20 remains to be a solid cap on this pair. There was a false breakout on SMA20 and it went straight to contest soft resistance at 0.904, but upward momentum quickly faded amid a lack of follow up demand. With the bears are back in the driver’s seat, USDCHF looks to close the day with a lower-low, which could provide an exit to recent consolidation phase. To the south, the immediate support lies around 0.885, followed by six-years low of 0.878.

Resistance: 0.904, 0.908, 0.916

Support: 0.885, 0.878

XAUUSD (4-Hour Chart)

Gold briefly touched $1870 after US CPI release, then quickly reversed back above $1890. We witnessed yet another strong defense from gold buyers, price did not even have a chance to pass the ascending trendline. Worth mentioning SMA20 is still a valid dynamic support line for the yellow metal. However, we are somewhat cautious on the direction of Gold in the near term given today’s positive correlated move in stocks and gold. Investors should be prudent to wait for a clear breakout, which could be provided by next week’s FOMC meeting.

Resistance: 1922, 1956, 2000

Support: 1870, 1890, 1847

Economic Data