Fundamental Analysis Report With Charting Trends – 01 March 2023
01 Mar 2023
Despite the generally bearish inputs from Wall Street overnight, Asian stock markets are trading mainly higher on Wednesday as traders book some profits and appear cautious to make significant changes amid continued concerns about the outlook for interest rates. They are anticipating incoming data that is anticipated to offer additional hints regarding interest rate increases. Tuesday’s Asian stock markets ended largely higher.
What took place during the US session?
A second straight month of declines was seen in the US CB Consumer Confidence index, which dropped to 102.9 in February from 106.0 in January. This number fell short of the predicted value of 108.5, indicating that American consumers may have become more pessimistic about their expectations.
How does this affect the Asia Session?
Considering the antipodeans’ weaker-than-expected data releases, the Dollar recovery is likely to continue against them.
The Dollar Index (DXY)
Key news events today
ISM Manufacturing PMI
What can we expect from DXY today?
The upcoming release of the ISM Manufacturing PMI is expected to improve slightly, with a consensus estimate of 47.9 (previous 47.4). However, a reading below 50 still indicates a contraction in the manufacturing sector.
Next 24 Hours Bias
Gold (XAU) (XAU)
today’s major news events
No significant news stories.
What can we anticipate from gold right now?
While the yellow metal is sometimes regarded as a hedge against inflation, the US Consumer Confidence report showed a decrease in inflation predictions compared to the previous month.
24 Hours from Now Bias
Asian stock markets rose 0.26% on the Nikkei, 1.00% on the Shanghai Composite, 4.23% on the Hang Seng, and 0.09% on the ASX.
European equities closed in red, the DAX futures at 0.11%, CAC 40 in red at 0.38%, and FTSE closes lower at 0.74%.
The US stock market declined Dow jones in red at 0.71%, S&P 500 lower at 0.30%, Nasdaq 100 at 0.10%.
commodities: Brent oil at $83.98 (up 0.64%), WTI oil at $77.56 (up 0.66%), silver at $21.14 (up 0.34%), and gold at $1840.05 (up 0.18%).
News & Data:
- (AUD) GDP q/q 0.50% vs 0.80% expected
- (AUD) CPI y/y 7.40% vs 8.10% expected
- (USD) CB Consumer Confidence 102.9 vs 108.5 expected
- (USD) Richmond Manufacturing Index -16 vs -5 expected
- (CAD) GDP m/m -0.10% vs 0.00% expected
The Bearish Wedge in GBP/USD keeps the long-term “Double Top” the big risk for the pair.
A big rejection of the descending and bearish wedge trend line (and 50dma) will keep the bearish bias intact as a possible double top continues to set up a longer term with the pair.
In addition, the rejection of the 38% retracement at the 1.2119 level also weighs on the pair, enhancing the bearish case for the pair. A move below the 200dma would be near-term very bearish.
If the price were to break the 1st support, we’re likely to see a double top reversal pattern and price could drop to 1.1630 which also lines up with the 38% Fibonacci retracement.
Price is very close to our first support at 1.0578, which overlaps and coincides with a 38.2% Fibonacci retracement. Notably, the ascending support line is exerting bullish pressure on the price.
The second support is located below at 1.0333, which also happens to be a strong overlap support and 50% Fibonacci retracement.
The nearest point of resistance, which is also a recent swing high, is at 1.1001.
On the upside, 1.0660 (Fibonacci 23.6% retracement of the latest downtrend, 100-period SMA) aligns as strong resistance. Once EUR/USD stabilizes above that level, it could target 1.0720 (Fibonacci 38.2% retracement) and 1.0760 (200-period SMA).
Price has crossed over our descending support line and is headed for our first support at 0.6614.
This level coincides with the potential head and shoulders exit and a 50% Fibonacci retracement.
The first barrier to watch for if the price moves higher from there is at 0.6886, which also serves as the level where the head and shoulders reversal was formed.
The USDJPY is struggling to move over 136.66, which also happens to be the 200-day simple moving average (SMA), which is the 38.2% Fibonacci retracement level of the falling wave from 151.90 to 127.25. Any progress over these barriers could pave the way for more constructive measures.
Technically, the RSI is flattening close to the overbought area, indicating that the market may be overbought, while the MACD oscillator is gaining momentum above its trigger and zero lines. The 20- and 50-day SMAs exhibited a bullish crossover in the preceding sessions on trend indicators.
The 138.15 resistance and the 50.0% Fibonacci at 139.60 may be reached if the price moves past the previously indicated critical levels. Any upward movements could test the 61.8% level and change the short-term perspective to one that is more optimistic.
Price has breached our long-term descending resistance line that has since become a support line, and a short-term support line is also supporting prices rather well. The price might advance up to 4145, our first resistance that aligns up with numerous swing highs, on a bounce from our first support at 3945.
Prices might fall to the second support at 3759, which corresponds with a recent swing bottom, if prices were to break the ascending support line and our first support.
WTI CRUDE OIL
An uptrend will start as soon, as the market rises above resistance level 77,71, which will be followed by moving up to resistance level 80,78.
The downtrend may be expected to continue, while the market is trading below the resistance level of 77,71, which will be followed by reaching the support level of 72,64.
WTI crude oil renews its intraday high around $77.60 during the initial hour of Wednesday’s European session.
A clear upside break of the 12-day-old descending trend line, previous resistance around $76.65, directs WTI crude oil buyers toward the 50-DMA hurdle of $78.00.
The price of gold continues to defy the three-week-old negative pattern after recovering from the 200-day EMA the day before. The approaching bull cross on the MACD and the RSI’s (14) return from the oversold zone both support the recovery advances.
With this, the XAU/USD looks poised to try for the $1,848 100-day EMA obstacle.
Price is currently testing a crucial first support level in 1786, which coincides with overlap support and a 50% Fibonacci retracement. The price might rise to the first resistance level in 1867, which is a 38.2% Fibonacci retracement if it were to bounce from this point.
Breaking the first support might cause a move to the second support, which is in 1734. This overlap support is just below the important 61.8% Fibonacci retracement.
The first key resistance, which is also an overlap resistance, is at 25208 and the price is currently in a small range. The price might move smoothly to our second resistance at 28497, which is a 23.6% Fibonacci retracement if it were to break through this level.
A break of our first support level, which is at 21585, might cause prices to fall to 18040, a strong overlap support.