Societe Generale Investment (UK) Market Review: The U.S. Dollar Converges Gold Makes Up

Fundamentals

The dollar index ended its three-game rally on Wednesday, following a slight decline in U.S. Treasury yields. Gold made up for the rally, rising sharply from the 1810 line, reaching a high of 1843.20. However, non-U.S. currencies as a whole are less volatile. The euro has stabilized slightly above the uptrend line since the November lows, with a slight swing of less than 40 points. The pound is bullish and short, as the British economic data is strong but british Prime Minister Johnson is in a crisis of public opinion. USD/JPY turned lower after receiving a doji the previous day. In commodity currencies, the AUD and NZD rose slightly, but the CAD was dragged down by the profits of oil prices and recorded a shadowy candlestick above the previous highs.

US President Joe Biden called on the Fed to act as soon as possible to control inflation, while calling on Congress to confirm the re-election of Fed Chairman Jerome Powell as soon as possible. At the same time, Biden said that it will not take lockdown measures because of the epidemic, after the US government intended to provide 400 million non-medical surgical N95 masks to the public free of charge from its national strategic reserve. However, the Fed's march interest rate hike is basically a nail in the coffin, and there is no more unexpected news, which is difficult to push the dollar further upwards. The rebound in the dollar since Last Friday, more of a position adjustment, has not reversed the pullback since last December's highs.

British Prime Minister Boris Johnson announced that he will be exposed to the epidemic "Plan B" from next Thursday. At the same time, the data showed that the UK's CPI rose by 5.4% annually in December, exceeding expectations of 5.2%, the fastest growth rate in 30 years. The high inflation fever and the imminent lifting of the epidemic restrictions further boosted market expectations that the Bank of England would raise interest rates for a second time in February, which was positive for the pound. However, Johnson had violated the new crown epidemic prevention regulations to attend the cocktail party in 2020, thus falling into a serious public opinion crisis, coupled with the launch of metal tariff negotiations between the United Kingdom and the United States, which limited the rise of the pound.

Intraday focus on whether China will cut the loan market quotation rate as scheduled, after China's reduction of the MLF rate failed to give a significant boost to market sentiment. Also, focus on the minutes of the ECB's December meeting and ECB President Christine Lagarde's speech at the Davos Forum. The U.S. lacks the risk of a major event this week, and the euro, the dollar's largest rival currency, could lead the dollar, which has already overdrawn its tightening policy expectations, if the ECB has unexpected hawkish words and deeds.

Technical

EUR/USD

The daily chart has stabilized above the moderate uptrend line since the November lows, which is expected to continue to move higher. The 4-hour chart stabilized slightly above 1.1310, with short-term bulls still dominating. The hourly chart is moving higher and is still expected to rise. Intraday recommendations are light positions above 1.1335 to go long.

Support : 1.1335 1.1300 1.1270

Resistance: 1.1380 1.1400 1.1425

GBP/USD

The daily chart stabilized and rebounded above the 20-day moving average, and the overall upward momentum remained intact, but it faced MA200 pressure above. The 4-hour chart stabilized at the MA100 line, but the upward momentum was not strong. The hourly chart is facing the MA200 limit on the upside and needs to break through the line to reverse the recent pullback. Intraday recommendations tend to go long above 1.3600 and follow up above 1.3650.

Support: 1.3600 1.3570 1.3530

Resistance: 1.3650 1.3680 1.3710

USD/JPY

The daily chart is blocked below 115.00, and the bears are still expected to explore the 100-day moving average. The 4-hour chart continues the previously blocked pullback trend and is still bearish. The hourly chart is blocked at the 115.00 line to the downside, and there is still no correction signal. Intraday recommendations are short below 114.40, first look at 113.80

Support: 113.80 113.50 113.15

Resistance: 114.40 114.60 114.90

gold

The daily chart broke through the 1830 first-line resistance upwards, and the upward momentum was strong. The 4-hour chart of the big Yang line is strongly pulled up, and the bulls are still dominant. The hourly chart stabilized above 1810, moving higher continuously, with the current high oscillation focusing on the breakthrough of the 1844-1838 range. Intraday cautious operation is recommended to remain bullish above 1836.

Support level: 1836 1830 1820

Resistance level: 1844 1850 1860

silver

The daily chart has been sharply upside for two consecutive days, and the current test of the key resistance is the 200-day moving average. The 4-hour chart is long on the short-term moving average and remains bullish. The hourly chart is moving higher, with bulls still dominating. Intraday recommendation 24.20 first-line resistance performance determines further direction.

Support: 24.00 23.60 23.30

Resistance: 24.20 24.50 24.80

This article originated from the financial world