MARKET UPDATE:

As PCE Growth Slows, Nasdaq Rises 1.7%

When the crucial US PCE data came in below forecasts, the stock markets resumed their recent uptrend on Friday. Tech companies and the Nasdaq once again led the way, completing the day up 1.7% and recording the largest quarterly gain since June 2020. Besides having solid finishes, the Dow and S&P closed 1.3% and 1.4%, respectively. Due to some currency speculators taking profits before the weekend, the dollar increased despite the data print. Late trade saw a decline in US Treasury rates, with the 2-year currently expected to record its biggest monthly decline since 2008.

Oil Rises as OPEC+ Attacks the Supply

Once Saudi Arabia and the other OPEC+ nations agreed supply cutbacks over the weekend, the price of oil surged. Once the market started, Brent Futures increased by more than 7%, and US crude rose by more than $5 to surpass the $80/b milestone. With the output being reduced by as much as 1.1 million barrels per day because of the unexpected news, several market pundits are now pushing for Brent to quickly go back toward $95/b. Market volatility is expected to increase as investors assess the news and its consequences, according to traders.

Uncertain Week Ahead for the Markets

What was always going to be a bit of a disjointed week has an unusual start for investors. In terms of central bank activity, tier 1 data releases, and the normally low liquidity levels associated with the Easter weekend, this week is busy. Although there are fewer macroeconomic releases during today’s trading sessions, investors are still assessing the effects of the most recent US data and the weekend’s oil supply restrictions. The Swiss CPI numbers, which are released during the European session, are one of the day’s most important data releases. The market is already sensitive because of the recent collapse of Credit Suisse. ISM Manufacturing PMI data are issued during the US session, and Fed observers are searching for additional indications of slowing growth to help the FOMC temper its expectations for a rate hike.

What happened in US session?

The actual 0.5% announcement of the Canadian GDP month-over-month was higher than the expected 0.4% and the prior -0.1%. This might make the CAD stronger. The US Core PCE Price Index m/m report, meantime, came in at 0.3%, below both the previous 0.5% and the predicted 0.4%, potentially weakening the Dollar.

What does it mean for the Asian Session?

The actual 0.5% announcement of the Canadian GDP month-over-month was higher than the expected 0.4% and the prior -0.1%. This might make the CAD stronger. The US Core PCE Price Index m/m report, meantime, came in at 0.3%, below both the previous 0.5% and the predicted 0.4%, potentially weakening the Dollar.

The Dollar Index (DXY)

Key news events today

ISM Manufacturing PMI

What can we expect from DXY today?

The ISM Manufacturing PMI data (forecast 47.5, p [previous 47.7]) may have a small negative effect on the USD because it indicates that the manufacturing sector will continue to decline.

Central Bank Notes:

• The US banking system is sound and resilient, but recent developments may result in tighter credit conditions for households and businesses.
• The Federal Reserve has raised the target range for the federal funds rate to 4-3/4 to 5 percent, committed to returning inflation to its 2 percent objective.
• In determining the extent of future increases in the target range, the Committee will consider various factors, including the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and economic and financial developments.
• Next meeting is on 3 May 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 US Core PCE Price Index m/m came in lower than anticipated, suggesting that inflationary pressures may be easing. As a result, the price of gold may suffer as investors may no longer view gold as a hedge against low inflation.

Next 24 Hours Bias

Weak Bearish

The Swiss Franc (CHF)

Key news events today

CPI m/m

What can we expect from CHF today?

The forecasted value of Switzerland’s CPI m/m is 0.4% (previously 0.7%), which indicates a potential slight decline. A short-term decline in CHF value could result from lower inflation levels reducing demand.

Central Bank Notes:

• Raised policy rate to 1.5% to counter inflationary pressure and ensure price stability. The SNB may need to raise the policy rate further in the future
• The SNB is providing liquidity assistance to Credit Suisse, and the crisis has been halted
• The new inflation forecast assumes a policy rate of 1.5% and puts average annual inflation at 2.6% for 2023 and 2.0% for 2024 and 2025.
• Mortgage and real estate market vulnerabilities persist
• Next meeting on 11 April 2023

Next 24 Hours Bias

Weak Bearish

The Canadian Dollar (CAD)

Key news events today

BOC Business Outlook Survey

What can we expect from CAD today?

A rise in manufacturing activity and possible support for the CAD could be indicated if the actual value of the upcoming Canadian Manufacturing PMI data release is higher than the previous value of 52.4. The BOC Business Outlook Survey’s optimistic predictions might also support the CAD.

Central Bank Notes:

• Bank of Canada maintains its target for the overnight rate at 4.5%
• Inflation eased in January, but price increases for food and shelter remain high
• BOC is prepared to increase the policy rate further to return inflation to the 2% target.
• Next meeting on 12 April 2023

Next 24 Hours Bias

Bullish

Global Markets:

Asian Stock Markets: Nikkei up 0.52%, Shanghai Composite up 0.72%, Hang Seng up 0.08%, ASX up 0.63%

European equities, the DAX futures up 0.12%, CAC 40 up 0.40%, FTSE up 0.73%.

US Stock Market: Dow jones up 1.26%, S&P 500 up at 1.44%, and Nasdaq 100 up at 1.74%.                    

Commodities: Gold at $1969.72 (+0.06%), Silver at $23.87 (-0.94%), Brent Oil at $84.47 (+5.67%), WTI Oil at $79.96 (+5.70%)

News & Data

• (USD) ISM Manufacturing PMI (Mar) Forecast 47.5, Previous 47.7 at 19:30
• (GBP) Manufacturing PMI (Mar) Forecast 48.0, Previous 49.3 at 14:00
• (AUD) Retail Sales (MoM) (Mar) Actual 0.2%, Forecast 0.1%, Previous 0.2% at 07:00
• (CNY) Caixin Manufacturing PMI (Mar) Actual 50.0, Forecast 51.7, Previous 51.6 at 07:15 
• (JPY) Tankan Large Manufacturers Index (Q1) Actual 1, Forecast 3, Previous 7 at 05:20

Technical Outlook

GBPUSD

The GBP/USD currency pair. The overall momentum of the chart is bearish, indicating a potential for prices to move lower.

The first support level we have identified is at 1.163. This level is a significant overlap support that has historically been respected by the market. Additionally, it aligns with a 38.20% Fibonacci retracement level, providing further support for its significance.

We have determined that the middle support level is at 1.1826. This level, which offers extra support for the GBP/USD currency pair, is multi-swing low support. The first resistance setting on the resistance side is located at 1.2440. This level is a swing high resistance and has traditionally provided the currency pair with significant levels of resistance.

We have located the second resistance level at 1.2671. This level’s importance as a resistance level is further supported by the fact that it is an overlap resistance that lines up with other technical indicators.

EURUSD

The EUR/USD chart’s overall momentum is bullish, suggesting that the price will probably keep increasing. Price might continue moving upwards towards the first barrier level. EUR/USD’s first support level is located at 1.0782. Because it is an overlap support level, it has previously been used as a support level. Given the high demand for EUR/USD at this level, if the price were to fall to this level, it might then begin to rise again.

EUR/USD’s second support level is located at 1.0494. Given that the price has previously bounced off this level numerous times, it is a multi-swing low support level. This suggests that there is high demand for EUR/USD at this price, and if price drops to this level, it might rise again. EUR/USD’s first resistance mark is at 1.1023. Given that it is a swing high resistance level, it has previously acted as a barrier. If the price rose further from its present level, it might eventually hit this level.

AUDUSD

The first support level for the AUD/USD pair is currently at 0.6554, which is a strong level of support because it overlaps with a 61.80% Fibonacci retracement. Due to its intersection with a 78.60% Fibonacci retracement, the second support level at 0.6389 is also notable. The first barrier on the resistance side is at 0.6702 and coincides with a 23.60% Fibonacci retracement. The second opposition level, located at 0.6875, overlaps the first level and contains a 50% Fibonacci retracement. A bullish turn could occur if the price is able to burst through these levels. The pair’s present momentum, however, indicates that the bearish trend may persist.

It is important to note that the AUD/USD pair is showing a bearish pattern because the chart’s overall momentum is bearish.

USDJPY

The USD/JPY indicator shows strength. The price may continue to rise in direction of the first resistance mark of 139.45. Given that it overlaps with the second support level and is in line with the 61.80% Fibonacci retracement, the first support level at 131.21 is a suitable place for the price to possibly retrace from. Being a swing low support, the second support level at 127.08 is also a strong level. The 50% Fibonacci retracement and strong overlap resistance of the first resistance level at 139.45, on the other hand, make it a critical level to look out for. The second resistance level, which is also an overlap resistance at 245.16, is a strong resistance level.

DOW JONES

Since the DJ30 chart is above a significant ascending trend line, bullish momentum is presently evident. Price may briefly climb towards the first resistance before turning around and falling towards the first support. The first support level, which is a powerful overlap support, is located at 30503.06. This level might offer a decent entry point for buyers into the market. Price could move towards the middle support level at 31765.26, which also happens to be a 50% Fibonacci retracement level, if it were to break through this support.

To the upside, a 38.20% Fibonacci retracement lines up with the first resistance mark, which is at 32775.02 and is also an overlap resistance. Price may move upward towards the second resistance level, which is also an overlap resistance at 33582.82, if it were to break through this resistance level.

WTI CRUDE OIL

Overall, there has been bullish momentum in the price of WTI, and it is conceivable that this momentum will continue as it approaches the first resistance level. The crossover support level at 71.05 serves as the first level of support for WTI. Furthermore, the swing low support level at 64.94 serves as the second support level. The first opposition level, which is an overlap level and the 38.20% Fibonacci retracement level, is located at 86.10. Another overlap resistance level, the second resistance level is located at 92.72. At 82.69, which is also an overlap resistance level, there is a final middle resistance level. The price may encounter some opposition at the intermediate resistance level or at the second resistance level before breaking through to continue its upward trajectory if it moves toward the first resistance level.

GOLD

The first support level, which is an overlap support level, is located at 1948.01. This level has served as a support level for the past several tests, making it a suitable level for a potential bounce. The second support level, which is also an overlap support level, is located at 1881.62. Another excellent level for a potential bounce is this one because it has served as a support level when tested numerous times in the past. The initial resistance mark on the upside is located at 2000.17. This level has historically been significant and is a multi-swing strong resistance level. It is also at the level of the 127.20% Fibonacci Extension, which increases convergence at the level.

The second resistance level is at 2070.00, which is a swing-high resistance level. This level has been an important level in the past, making it a good level for traders to watch.

BITCOIN

Bearish Momentum in BTC/USD with Potential Drop to Support The BTC/USD chart’s overall momentum is bearish, with a possible bearish continuation towards the first support line. Currently, the price is beneath the Ichi Moku cloud, demonstrating negative momentum. The first support level, which has a significant overlap, is located at 25243.09. This support level might be reached if the price drops from its present level. Another overflow support level, the second support level is located at 23935.51.

On the resistance side, the first barrier is at 28348.82, a significant overlap barrier that also happens to be a 38.20% Fibonacci retracement. Another overlap resistance level at 32842.55, which also happens to be a 50% Fibonacci retracement, serves as the second opposition level. Additionally, there is an overlap support level and intermediary support level at 25243.09, which also happens to be a 23.60% Fibonacci retracement. The second support level is the level to which the price could fall after breaking the first support level. On the other hand, if the price were to burst through the first resistance level, it might advance towards the second resistance level.