FUNDAMENTAL ANALYSIS REPORT WITH CHARTING TRENDS – 02 MARCH 2023
02 Mar 2023
Yesterday’s markets got off to a positive start after encouraging risk trades during the Asian session were sparked by solid data coming out of China. The cost of raw materials, though, led to yet another positive data print in the US, and the market responded as usual by raising prices. The US 10-year Treasury Bonds have returned to multi-year highs near 4% and have touched levels over the past two years not seen since 2007. Despite this, the dollar’s position relative to most of the major currencies remained weak. Again, US market indices ended the day in the red, and it appears that Asian stock exchanges will follow their example and open to the downside.
What took place during the US session?
The US ISM PMI increased marginally from the previous month’s reading of 47.4, which was slightly below the predicted figure of 47.9, to 47.7. The most recent reading indicates that, despite the minor gain, the manufacturing sector is contracting.
How does this affect the Asia Session?
The most recent information on Australia’s CPI y/y indicates that, although inflationary pressures are still there, they may be beginning to diminish. In the short term, this might cause the demand for gold to decline.
The Dollar Index (DXY)
Key news events today
What can we expect from DXY today?
The anticipated number for US unemployment claims is 196,000, a little rise from the 192,000 figures from the previous week. The US dollar could suffer if the number were considerably higher because the trend of rate increases is in part supported by the robust labour market.
24 Hours from Now Bias
Gold (XAU) (XAU)
today’s major news events
No significant news stories.
What can we anticipate from gold right now?
The lower-than-anticipated Australian CPI statistic might be a sign that inflationary pressures are beginning to subside in Australia. If investors grow more optimistic about the economy, there may be less demand for safe-haven assets like gold.
24 Hours from Now Bias
Key news events today
Crude Oil Inventories
What can we expect from Oil today?
The upcoming data release for crude oil inventories is expected to decrease to 1.7 million barrels, compared to the previous week’s figure of 7.6 million. This indicates a potential reduction in the supply of crude oil, which may lead to a rise in oil prices if demand remains stable or increases.
Next 24 Hours Bias
Asian stock markets rose 0.26% on the Nikkei, 1.00% on the Shanghai Composite, 4.21% on the Hang Seng, and 0.09% on the ASX.
European equities closed in red, the DAX futures 0.39%, CAC 40 in red 0.46%, FTSE closes at 0.49%.
US stock market declined Dow jones up 0.02%, S&P 500 lower at 0.47%, Nasdaq 100 in red at 0.66%.
commodities: Brent oil at $83.86 (down 0.51%), WTI oil at $77.28 (down 0.58%), silver at $20.77 (down 1.01%), and gold at $1831.80 (down 0.29%).
News & Data:
- (USD) Initial Jobless Claims Forecast 195K, Previous 192K at 19:00
- (EUR) CPI (YoY) (Feb) Forecast 8.2%, Previous 8.6% at 15:30
- (EUR) Unemployment Rate (Jan) Forecast 6.6%, Previous 6.6% at 15:30
- (EUR) ECB Publishes Account of Monetary Policy Meeting at 18:00
- (JPY) Capital Spending (YoY) (Q4) Actual 7.7%, Forecast 6.9%, Previous 9.8% at 05:20.
Price is being squeezed by a lowering resistance line against our first support, which is a strong overlap support at 1.1933. The recent swing low of around 1.1840 is the next important support to keep an eye on if prices were to breach this first level.
Our middle resistance, which is a double swing high resistance, is located at 1.2100 in terms of resistance. Breaking this might cause a move up to our first resistance, 1.2256, as well as the descending resistance trend line.
Price is currently hitting our first support level at 1.0629, which coincides with the 23.6% Fibonacci retracement. This Fibonacci retracement is typically seen as the initial retracement that needs to be broken to initiate a larger move up. The first resistance level to be aware of is 1.0800 should the price bounce from this point.
The overlap support that we’re considering is located at 1.0478 if prices were to decline from here.
As prices decline into our first support around 0.6700, which is a multiple swing low support + 50% Fibonacci retracement, a descending resistance line is pushing prices down. It’s important to note that the price has also reacted off the overlap resistance and 23.6% Fibonacci retracement of the intermediate level at 0.6773.
Prices could fall further if they breach the first support, reaching 0.6581, a pullback support that corresponds to the 61.8% Fibonacci retracement.
The rising wedge’s first intermediate resistance, at 136.50, which corresponds to a 38.2% Fibonacci retracement, is being nicely met by price as it continues to advance. The first resistance level, which is a significant overlap resistance at 138.14, will be reached if it breaches this level.
At 134.00, which is our first support, we can notice overlap support in terms of support. If that is broken, a decline to second support at 132.70 may follow.
Prices are being constrained by a short-term descending resistance line and a long-term ascending support line. The first support, overlap support, is located at 15175. Prices might drop to the second support level at 14699, which is a recent swing low support, if they were to break through this level and the rising support line.
The most recent swing high resistance, at 15642, is the next important level to watch out for if prices were to rebound from this point and break the falling resistance line.
BRENT CRUDE OIL
An uptrend will start as soon, as the market rises above the resistance level 84.20, which will be followed by moving up to the resistance level 89,21.
The downtrend may be expected to continue, while the market is trading below the resistance level of 80,00, which will be followed by reaching the support level of 78,60.
Brent crude oil renews its intraday high of around $84.20 during the initial hour of Thursday’s European session.
The price of silver is moving in descending pattern. Price is currently testing a crucial first support level in 20.581, which coincides with overlap support and a 50% Fibonacci retracement. The price might rise to the first resistance level in 21.453, 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 20.195. This overlap support is just below the important 61.8% Fibonacci retracement.
Price is being driven upward by our rising support trend line as it tests an intermediate overlap resistance at 1671. Prices could move more strongly towards the first resistance in 1732 if they were to break through the intermediate level.
But should prices go below the ascending support line, we might witness a decline to our first support, which also happens to be the swing low support, at 1550.