Fundamental Analysis Report With Charting Trends – 12 June 2023
12 Jun 2023
US STOCKS – U.S. stocks close marginally higher as Tesla prices rise
S&P 500 and Nasdaq reach new 2023 highs as Tesla prices rise.
On the eve of the Federal Reserve’s policy meeting and inflation data the following week, a Tesla surge failed to energize the broader market, and the S&P 500 ended the day higher but off session highs.
After General Motors Co (GM. N) decided to use the company’s Supercharger network, Tesla Inc shares (TSLA.O) increased by 4.06%, achieving its longest winning run since January 2021. GM. N) stock increased by 1.06%.
The benchmark S&P 500 (.SPX) continued its 20% gain from its closing low on October 12 on Thursday, signaling the beginning of a new bull market according to certain market participants.
Despite worries about an impending recession and sticky inflation, Wall Street has been supported this year by a rise in Mega cap stocks, a better-than-expected earnings season, and anticipation that the Fed was reaching the conclusion of its rate-hiking cycle.
Rick Meckler, partner at Cherry Lane Investments, stated that “the market’s general tone is based on the idea that the Fed will pause its increases.” “As it pauses, the broader market will start to rally and perhaps catch up with the large-cap tech stocks that have been leading the way up until now,” says the analyst.
What happened in the Asia Session?
China’s CPI came in at 0.2% year over year, which was in line with expectations and suggested stable inflation. The Producer Price Index (PPI) in China, however, revealed an actual value of -4.6% y/y, which was worse than the anticipated -4.3% and indicated deflationary tendencies. The larger-than-expected drop in PPI may have an impact on the AUD because there will be less of a market for Australian goods.
What does it mean for EUROPE & US Session?
Strong labour market data from Canada may cause the USD/CAD pair to fall lower, possibly to weekly lows of about 1.3230, if it breaks below the round figure support at 1.3300. The pair might also attempt a retest of recent highs at 1.3360.
The Dollar Index (DXY)
Key news events today
No major news events.
What can we expect from DXY today?
There are no notable news stories that will impact the USD today. Its course is anticipated to be determined by previously made available data. The higher-than-expected Unemployment Claims may cause the Fed to halt its rate hike plans because these numbers point to a possible rise in unemployment claims.
Central Bank Notes:
- The committee raised the target range for the federal funds rate to 5 to 5-1/4 per cent. The U.S. banking system is sound and resilient.
- Tighter credit conditions for households and businesses may weigh on economic activity, hiring, and inflation.
- The committee is committed to returning inflation to its 2% objective
- The committee will adjust monetary policy as appropriate if risks emerge that could impede the attainment of goals
- The next meeting is on 14 June 2023
Next 24 Hours Bias
Weak bearish
Gold (XAU)
Key news events today
No major news events.
What can we expect from Gold today?
The price of gold may increase due to the growth in US unemployment claims and potential changes to monetary policy because gold is seen of as a hedge against inflation and currency volatility.
Next 24 Hours Bias
Weak bullish
Oil
Key news events today
No major news events.
What can we expect from Oil today?
Uncertainty has been created in the oil market as a result of the White House’s denial of news of a potential oil agreement with Iran. Due to the disruption of original expectations of increasing Iranian oil shipments, the price of oil has fluctuated; the geopolitical concerns surrounding Iran’s nuclear program should continue to affect the price of oil.
Next 24 Hours Bias
Mixed
Global Markets:
Asian Stock Markets: Nikkei up 0.52%, Shanghai Composite is down 0.08%, Hang Seng is down 0.18%, ASX up 0.32%
European equities, the DAX futures up 0.65%, CAC 40 up 0.49%, and FTSE up 0.33%.
US Stock Market: Dow Jones up 0.13%, S&P 500 is up at 0.11%, and Nasdaq 100 up at 0.16%.
Commodities: Gold at $1961.78 (-0.01%), Silver at $24.14 (+0.52%), Brent Oil at $73.61 (-1.50%), WTI Oil at $68.99 (-1.64%)
News & Data
- (NZD) Electronic Card Retail Sales (MoM) (May) Actual –1.7%, Previous 0.7% at 04:15
- (JPY) PPI (MoM) (May) Actual –0.7%, Forecast –0.2%, Previous 0.2% at 05:20
- (USD) Federal Budget Balance (May) Forecast –236.0B, Previous 176.0B at USD
Technical Outlook
GBPUSD
The bearish momentum on the GBP/USD chart at the moment suggests a lower market trend.
The price may respond negatively off the first resistance level and fall in the direction of the first support level.
First support level at 1.2246, which is a major area of prospective buying interest and coincides with the 50% Fibonacci retracement, is recognised as an overlap support.
Furthermore, the second support level at 1.1834 is acknowledged as a multi-swing low support, highlighting the significance of this level as a potential entry point for buyers.
On the upside, the 1.2662 overlap resistance level is the initial level of resistance and might serve as a barrier to additional price increases.
Further highlighting its significance as a potential area of selling pressure, the second resistance level at 1.2975 is also a pullback resistance.
TRADE SUGGESTION: SELL AT 1.25856, TP AT 1.25762, SL AT 1.25936
EURUSD
The price broke below an ascending support line on the EUR/USD chart, signaling a likely bearish move, and this shows a general bearish momentum.
The likelihood exists that the price will go on moving down toward the first support level at 1.0516. Considered a multiple-swing low support, this level.
The first resistance level at 1.0787, which is a potential barrier to additional price increases, is recognized as an overlap resistance on the upward.
Further highlighting its significance, the second resistance level at 1.1044 is acknowledged as a multi-swing high resistance.
TRADE SUGGESTION: SELL AT 1.07762, TP AT 1.07679, SL AT 1.07806
AUDUSD
The bullish momentum on the AUD/USD chart at the moment suggests that the market is moving upward.
Given this positive momentum, there is a chance that the price may rise further in that direction, possibly reaching the first resistance level at 0.6804. This level coincides with the 50% Fibonacci retracement and is recognised as a multi-swing high resistance.
The first support level, which is known as a pullback support, is at 0.6564; the second support level, which is known as a swing low support, is at 0.6453.
The second resistance level at 0.6878 also serves as a pullback resistance and is significant because it falls on the 61.80% Fibonacci retracement, which increases its significance.
TRADE SUGGESTION: BUY AT 0.66789, TP 0.68066, SL AT 0.67581
USDJPY
Currently, the USD/JPY chart shows positive momentum, pointing to a rising market trend.
Given the current positive trend, it’s possible that the price will continue to rise in the direction of the first resistance level at 142.11. This level coincides with the 61.80% Fibonacci retracement and is designated as overlap resistance.
The first support level, which is considered an overlap support, is at 137.65, and the second support level, which is also an overlap support, is at 134.31.
Its significance is increased by the fact that the second resistance level, at 144.99, also acts as a pullback resistance and coincides with the 50% Fibonacci retracement.
TRADE SUGGESTION: SELL AT 139.185, TP AT 138.990, SL AT 139.306
S&P 500
The price is above a significant ascending trend line on the US500 chart, supporting bullish momentum and suggesting possibility for more upward movement.
The first resistance level at 4303.6, a big multi-swing high resistance level, is a potential target for a bullish continuation. A pullback resistance is also there at the second resistance level at 4385.8.
The first support level at 4206.4 offers pullback support on the downside, while the second support level at 4060.4 is an overlap support level. In the event that price retracements occur, these levels can offer support.
TRADE SUGGESTION: BUY AT 4299.60, TP AT 4307.54, SL AT 4294.75
WTI CRUDE OIL
The price trend for WTI is currently downward, as indicated by the bearish momentum on the chart.
The initial support level at 62.05, which is an area of overlap support, may be approached in a bearish manner. This level has served as support in the past and might do so again in the future.
Furthermore, there is an overlap support level at 64.60, which also serves as an intermediate support level.
On the upside, an area of overlap resistance is located at the initial resistance level at 73.60. The bullish momentum may be constrained by this level, which may serve as a barrier to further upward movement.
Additionally, the price movement may encounter severe opposition at the second resistance level at 82.87, which is another area of overlap resistance.
TRADE SUGGESTION: SELL AT 68.16, TP AT 66.90, SL AT 69.01
GOLD
There is currently bearish momentum visible on the XAU/USD chart, pointing to a price decline.
A bearish reversal with a target of the 1935.46 initial support level is possible. This support level is notable since it corresponds with the 50% Fibonacci retracement level and denotes an area of overlap support. It might offer assistance and possibly put an end to the deteriorating trend.
Also providing overlap support is the second support level at 1859.19. The 78.60% Fibonacci retracement level reinforces this level, making it a robust region of support to watch.
On the upside, the 1976.81 first resistance level serves as an overlap resistance zone. This level might prevent upward movement and possibly act as a roadblock for bullish momentum.
Another region of overlap resistance is the second resistance level at 2066.72. It might present severe resistance and prevent further ascent.
TRADE SUGGESTION: SELL AT 1959.30, TP AT 1939.16, SL AT 1972.87
ETHEREUM
There is currently bearish momentum on the ETH/USD chart, pointing to a price decline.
The initial support level at 1745.71, which is a substantial region of overlap support and corresponds with a 50% Fibonacci retracement, might see a bearish break. If this level is broken, there is a chance that the price may drop much further, possibly towards the second support level at 1665.48, which is also an overlap support region and represents a 61.80% Fibonacci retracement.
On the upswing, an area of overlap resistance is represented by the first resistance level at 1906.17. The bullish momentum may be constrained by this level, which may serve as a barrier to further upward movement.