. Fundamental Analysis Report With Charting Trends - 06 March 2023

FUNDAMENTAL ANALYSIS REPORT WITH CHARTING TRENDS – 06 MARCH 2023

FUNDAMENTAL ANALYSIS REPORT WITH CHARTING TRENDS – 06 MARCH 2023

06 Mar 2023

MARKET UPDATE:

As investors continue to examine China’s growth target established during its parliamentary sessions and wait for a week’s worth of economic data, Asia-Pacific shares traded with mixed outcomes on Monday. Bond markets are still on edge as they await the world’s most powerful central banker’s commentary on the US rate outlook and a jobs report that may determine whether the next boost will need to be significant.

After a solid lead-in from Wall Street indexes, the technology-heavy bourses fared well. While the KOSPI in South Korea increased by 1%, the Taiwan Weighted index increased by 1.2%. Market speculation that the Bank of Japan will maintain its ultra-loose policies in the short term helped the Nikkei 225 index in Japan rise by 1.2%. The Shanghai Composite index dropped 0.3%, while the Shanghai Shenzhen CSI 300 index fell 0.6% after government officials announced a 5% economic growth target for 2023 over the weekend.

Once investors decided that the increase in yields to 4.09% last week was sufficiently alluring to invest in, the yields on 10-year Treasuries stayed at 3.94%. Oil prices fell, possibly because of investors’ dissatisfaction that China did not set more aggressive growth goals.

What took place during the Asian session?

The increase in the MI Inflation Gauge for AUD was 0.4%, less than the previous 0.9%. This means that the Australian economy’s inflationary pressure may be diminishing.

Actual data for NZD’s ANZ Commodity Prices m/m climbed by 1.3%, beating the anticipated -0.9%. The New Zealand economy benefits from rising commodity prices, which could accelerate short-term economic growth.

How does this affect the Europe & US Sessions?

The most recent AUD MI Inflation Gauge m/m data will probably confirm the Reserve Bank of Australia’s (RBA) dovish position on monetary policy. In tomorrow’s announcements, the central bank is predicted to increase interest rates by 25 basis points.

With an estimated 0.5% increase from the previous 0.6%, the next Swiss CPI report is expected to confirm falling inflation in the main global economies.

The Dollar Index (DXY)

Key news events today

No major news events.

What can we expect from DXY today?

Factory Orders m/m, a leading economic indicator for the US economy, is expected to decrease by 1.8%, following a previous increase of 1.8%. This could pressure the USD upon data release, albeit temporarily.

24 Hours from Now Bias

Mixed

Gold (XAU) (XAU)

today’s major news events

No significant news stories.

What can we anticipate from gold right now?

It is anticipated that the Swiss CPI would climb by 0.5% MoM this month, which is significantly less than the 0.6% increase seen last month. Depending on how the market reacts, it can influence gold prices. A higher number could lead to a rise in demand for gold as an inflation hedge. A lower number might lead to a decline in demand.

24 Hours from Now Bias

Bearish

Global Markets:

Asian Stock Markets: Nikkei is up 1.11%, Shanghai Composite is down 0.23%, Hang Seng is up 0.48%, ASX is up 0.62%

European equities closed in green, the DAX futures at 1.64%, CAC 40 in green at 0.88%, and FTSE closes at 0.04%.

The US stock market rose Dow jones up 1.17%, S&P 500 up 1.61%, Nasdaq 100 in up at 0.97%.                    

Commodities: Gold at $1859.25 (+0.25%), Silver at $21.33 (+0.42%), Brent Oil at $85.20 (-0.73%), WTI Oil at $79.13 (-0.69%)

News & Data:

  1. (NZD) ANZ Commodity Prices m/m 1.30% vs -0.90% previous
  2. (AUD) MI Inflation Gauge m/m 0.40% vs 0.90% previous
  3. (USD) ISM Services PMI 55.1 vs 54.5 expected
  4. (USD) Final Services PMI 50.6 vs 50.5 expected
  5. (CAD) Labor Productivity q/q -0.50% vs 0.20% expected
  6. (CAD) Building Permits m/m -4.00% vs 1.70% expected

Technical Outlook

GBPUSD

The 23.6% Fibonacci retracement has been used to sustain the price’s bounce from our first support at 1.1918. Considering how frequently the price has reacted to and bounced off it in the past, our first support is a potent overlap support. The next important support to keep an eye on if prices were to breach this initial level is 1.1630, which corresponds to the 38.2% Fibonacci retracement.

Our first resistance level is 1.2435, which is also a very powerful resistance because the price has repeatedly reacted to it and rebounded off it. If the price were to breach it, it might advance towards our second resistance, located at 1.2671.

EURUSD

Price reversed from our initial resistance level of 1.10012 and moved to our initial support level of 1.0478, which also corresponds to the 38.2% Fibonacci retracement. Price may potentially fall much further to our second support at 1.03332, which is the overlap support, if it were to breach our first support at 1.04788.

AUDUSD

Price has broken through our rising trendline, and it can fall to the 50% Fibonacci retracement at 0.6614 and our first support level.

Resistance is seen as overlap resistance at 0.6886. The second resistance level at 0.7127 may be reached if the price were to breach this one.

USDJPY

With the 50% Fibonacci retracement acting as a strong overlap resistance, we can see that the price may eventually approach our first resistance at 138.077.

At 130.84, our first support, we can detect overlap support in terms of support. Price might fall to the second support at 127.08 if it were to breach this level.

S&P 500 

Price is currently testing our first support level at 3918 before bouncing back up to our first resistance level at 4145, which is overlap resistance. The price might rise to our second barrier at 4319, which is another overlap resistance if it were to break through this level.

The price may drop to our first support at 3918 and our second support is at 3759, nevertheless, if the price is unable to overcome our first obstacle.

BRENT CRUDE OIL

An uptrend will start as soon, as the market rises above the resistance level 86.54, which will be followed by moving up to the resistance level 88,90.

The downtrend may be expected to continue, while the market is trading below the resistance level 83,88, which will be followed by reaching the support level 80,20.

GOLD

Price has retraced from our first support level, and with the 50% Fibonacci retracement, it may push up to our first resistance level at 1883. With the 61.8% Fibonacci retracement, the price may push up to our second resistance level at 1900 if it were to break.

BITCOIN

The markets have repeatedly reacted to our first barrier, which is a very powerful overlap resistance at 25000. Price may push up to our second resistance at 28497 if it were to break.

First, the support level at 21649, and if it is broken, the second support level at 18040, which is a very strong overlap support at this level.