. Fundamental Analysis Report With Charting Trends- 07 April 2023

Fundamental Analysis Report With Charting Trends- 07 April 2023

Fundamental Analysis Report With Charting Trends- 07 April 2023

07 Apr 2023

FUNDAMENTAL REPORT FORECAST

MARKET UPDATE:

As investors awaited the publication of US jobs data, which may offer hints as to the Federal Reserve’s stance on monetary policy, Asian stock markets were divided on Friday. In March, hiring is predicted to have slowed down because to indications of a slowing economy and rising prices, according to the carefully watched non-farm payrolls data.

Analysts predicted that a positive report would improve market confidence and allay recessionary fears, but it would also put greater pressure on the Fed to hike interest rates more quickly. On the other hand, a weaker-than-expected result may increase worries about the condition of the world’s largest economy and force the Fed to halt its tightening cycle.

The Dow Jones Industrial Average increased by less than 0.1% to 33,485.29. On Wall Street, the S&P 500 increased by 0.4% to 4,105.02. Gains in Facebook, Amazon, and Netflix helped the Nasdaq Composite increase by 0.8% to $12,087.96.

The US dollar index, which compares the dollar to a basket of six important currencies, remained steady at 97.32. The dollar’s value versus the yen remained unchanged at 111.76 and was little down against the euro at 1.1235.

At $1,291.80 per ounce, gold prices were unchanged as investors awaited clues from the US employment report and Fed policies. A common defence against inflation and declining currencies is gold.

The price of crude oil remained constant at $52.50 for WTI and $62.10 for Brent as supply reductions by OPEC and its allies’ offset worries about sluggish global demand.

What happened in the Asian session?

With Average Cash Earnings y/y at 1.1% (expected 1.2%, previous 0.8%), Household Spending y/y at 1.6% (anticipated 4.9%, previous -0.3%), and Leading Indicators at 97.7% (forecast 97.5%, prior 96.6%), recent economic data from Japan are likely to have a positive effect on the Yen.

What does it mean for the Europe & US Sessions?

Upon the release of the US labour data, it is anticipated that USD/JPY will break out of consolidation between 131.00 and 131.90. A stronger-than-anticipated data set might push the pair closer to 133.00, while weaker numbers might push it down to 130.50.

The Dollar Index (DXY)

Key news events today

Average Hourly Earnings m/m

Non-Farm Employment Change

Unemployment Rate

What can we expect from DXY today?

  • The US labour data releases could have a mixed impact on the USD, with potential upward pressure from higher wages but downside pressure from a lower number of jobs added.
  •  The statement from the central bank notes that recent developments may result in tighter credit conditions for households and businesses, which suggests a cautious outlook.
  •  Additionally, the Federal Reserve has raised the target range for the federal funds rate and is committed to returning inflation to its 2 per cent objective.
  • The next meeting is on 3 May 2023.
  • Overall, the bias for the next 24 hours is weak and bearish, which means that the USD may experience some downward pressure.

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

  • The price direction for CHF today is likely to be influenced by the previously released Unemployment Rate data, which remained stable at 1.9%, indicating the consistent performance of the Swiss economy.
  • The central bank notes that the policy rate has been raised to 1.5% to counter inflationary pressure and ensure price stability, and the SNB may need to raise it further in the future.
  •  The SNB is providing liquidity assistance to Credit Suisse, and mortgage and real estate market vulnerabilities persist.
  • 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.
  •  The next meeting is on 11 April 2023.
  • Overall, the bias for the next 24 hours is mixed, which means that the direction of CHF is uncertain.

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

  • The French Trade Balance is expected to improve, with a forecasted value of -11.8B compared to the previous value of -12.9B.
  • This could have a positive impact on the Euro as it suggests an increase in demand for French exports, which can boost economic activity and ultimately strengthen the Euro.
  •  The central bank notes that the ECB has raised interest rates by 50 basis points to ensure the 2% inflation target is met, and inflation is projected to average 5.3% in 2023, with growth at 1%.
  •  The bank will continue to monitor market tensions closely and will be data-dependent in its policy rate decisions. The next meeting is on 4 May 2023.
  • Overall, the bias for the next 24 hours is weak-bullish, which means that the Euro may experience some upward pressure.

Global Markets:

Asian Stock Markets: Nikkei is up 0.17%, Shanghai Composite is up 0.45%, Hang Seng is up 0.28%, and ASX is down 0.25%.

European equities, the DAX futures up 0.50%, CAC 40 up 0.12%, and FTSE up 1.03%.

US Stock Market: Dow Jones is up 0.01%, S&P 500 is up 0.36%, and the Nasdaq 100 is up at 0.76%.                   

Commodities: Gold at $2023.90 (-0.57%), Silver at $25.13 (+0.37%), Brent Oil at $84.94 (-0.06%), WTI Oil at $80.47 (-0.17%)

News & Data

  • (USD) Unemployment Rate (Mar) Forecast 3.6%, Previous 3.6% at 18:00
  • (USD) Nonfarm Payrolls (Mar) Forecast 239K, Previous 311K at 18:00

TECHNICAL OUTLOOK

GBPUSD

Currently, the GBP/USD chart is showing bearish momentum. 

At 1.2442, which is also a strong overlap support level and a 38.20% Fibonacci retracement, is where the initial support level can be found.  

At 1.2337, which is both a drop support level and a 78.60% Fibonacci retracement, there is a second level of support. 

The initial resistance level is at 1.2516 and is a multi-swing high resistance level. It also happens to be a 138.20% Fibonacci extension. If the price is unable to break above this level, a reversal could take place and push prices back towards the initial support level. 

At 1.2588, there is a second resistance level which is a swing-high resistance level. If the market were to cross this level, further bullish momentum might emerge.

EURUSD

On the EUR/USD chart, there is currently negative momentum, and additional drops may result in a test of the first support level around 1.0790. This support level is significant since it is overlap support, which has previously undergone numerous tests and is likely to spark significant demand for purchases. In addition, there is a secondary support level at 1.0739 that is also an overlap support in case the price falls below the first support.

On the other hand, the chart shows that there is resistance at the initial resistance level of 1.0969. It is expected to spark a lot of selling activity because it is a multi-swing high resistance level that has already been tested. This resistance level’s alignment with the 138.20% Fibonacci Extension level only emphasises how potent a resistance level it may be. There is also a second resistance level at 1.1022, which is a swing high barrier and may be used as an upside target if the price were to break through the first obstacle.

AUDUSD

On the AUD/USD chart, there is a broad negative momentum, and the price may continue to fall towards the first support level.  

If the price were to keep declining, it might find support at the initial support level of 0.6675. At this level, there is reliable swing-low support that has historically held. If the price were to fall below this support level, the next one to watch for would be the second one at 0.6640. This level could provide more market stability and serve as an overlap support level.

The initial resistance level on the upswing at 0.6741 coincides with a pullback barrier and the 50% Fibonacci retracement level. If the price were to rise further after bouncing off the initial support level, it might reach this level. The second resistance level, which has a high number of swings, is at 0.6791. A shift in momentum in favour of a more bullish trajectory could be indicated if the price were to break through this level.

USDJPY

The USD/JPY chart’s overall positive trend predicts continued price increases. There aren’t any factors affecting the tempo right now. 

The price may continue to rise until it reaches the first barrier level at 133.00. This level functions as a pullback resistance and is supported by the 78.60% Fibonacci retracement. If the price can get past this resistance, it can move up towards the second obstacle at 133.82, a multi-swing high resistance.

However, if the price were to decline, it might receive support at the 130.52 initial support level. If the price bounces off this support level, it may continue upward towards the first resistance level. 

If the first support level is unable to hold, the price may fall towards the second support level at 129.75. This level has historically seen multiple price rebounds since it is a multi-swing low support.

DOW JONES

The price may drop further till it reaches the first support level, according to the Dow Jones chart’s negative momentum. The initial level of support is at 33150.40 and is dropping in support with a 23.60% Fibonacci retracement. If the price breaks through this level, it can move on to the second support level at 32807.13, which is also drop support with a 38.20% Fibonacci retracement. 

If the price moves higher after bouncing off the first support level, it may eventually approach the first resistance level at 33599.30, which is a swing high resistance. The second resistance level, which is marked by a swing high resistance and a Fibonacci extension of 127.20%, is situated at 34021.79.

The chart currently has a bearish momentum, and the declining trend line suggests that there may be more bearish momentum to come. This is crucial to keep in mind.

WTI CRUDE OIL

WTI crude oil has been trending lower recently, and the price may do so further towards the first support level. The overall momentum of the chart is currently bearish. 

The first level of support to watch is at 78.49, which is the drop support level and 23.60% Fibonacci retracement level. This is an important threshold because a break below it could portend the continuation of the bearish momentum. The Crossover support level at 74.688 is the second level to pay attention to.

On the resistance side, the first level to watch is 82.54, which is a swing-high resistance level. If the price can break through this level, the bearish momentum might change. The next level to watch is 86.48, another swing-high resistance level.

GOLD

The general momentum of the gold chart is trending lower, and recent swings in the gold price have been bearish. 

If the bearish pattern continues, the price may go in the direction of the first support level at $2002.28. The 38.20% Fibonacci retracement level coincides with this level, making it a potent support zone. 

if the market drops below the first support level, it can reach the second support level at $1956.85.  

On the other hand, if there is a bullish reversal, the price may go in the direction of the first resistance level at $2033.72. This level is a strong resistance area because it’s close to a previous swing high. 

If the bullish momentum continues, the second resistance level at $2050.00, which is also a significant barrier region because it coincides with a previous swing high, can be hit.

BITCOIN

The overall momentum of the BTC/USD chart is optimistic, suggesting that the price may continue to move higher. 

At 25122.03, there is the second support level, which also functions as a retreat support level. Because it has historically provided some support, this level is essential. 

28370.70 is the initial resistance level, which is a swing-high resistance level. This resistance level is significant since it formerly served as a barrier to prevent price.

The second barrier is the swing high resistance level at 29280.09, which is also the 161.80% Fibonacci extension level. This resistance level is significant because it might serve as a strong barrier to prevent the price from climbing.