. Fundamental Analysis Report With Charting Trends - 07 March 2023

FUNDAMENTAL ANALYSIS REPORT WITH CHARTING TRENDS – 07 MARCH 2023

FUNDAMENTAL ANALYSIS REPORT WITH CHARTING TRENDS – 07 MARCH 2023

07 Mar 2023

MARKET UPDATE:

The market started the week quietly yesterday, as many participants had anticipated, with most items trading in well-known ranges. There was little excitement for the Asian open as all the main American indices concluded the day nearly flat. Most of the major currencies continued to trade in very narrow ranges against the dollar, and US government yields concluded the day somewhat higher.

Despite a very dull (and expected) start to the week, traders anticipate ending it in a little more jaded manner due to the onslaught of economic data and central bank releases they will face as the sessions go on. The big event of the day will be Jerome Powell’s semi-annual testimony before Congress, and because the markets have been leaning more hawkish in response to recent US data, every word the Fed Chair says will be heavily scrutinized. Any changes in the recent outlook and language could cause some strong moves across all markets, as benchmark US rates are currently near to multiyear highs.

Looking ahead to today’s trade, the RBA starts off for the Asian session with its most recent cash rate announcement and statement. Another 25 bps are largely anticipated from them, but any change in Governor Phillip Lowe’s forward guidance may cause market volatility. Until we hear from the Fed Chair later in the day, it’s rather calm during the European session and into the North American time zone.

How did the US session go?

Ivey PMI for Canada dropped to 51.6 from 60.1, below the predicted value of 55.9. $ Factory Orders m/m declined by 1.6%, less than the previous value of 1.7% but better than the expected -1.8% decrease. The data shows that both currencies’ economic performance has been inconsistent, with a modest negative skew.

What does it mean for the Asian Session?

The RBA’s interest rate decision (anticipated to increase by 25 basis points) and its forecast for the rate hike path would take centre stage. The Australian dollar could fall below the five-day range, or about between 0.6700 and 0.6780, in response to a dovish rate statement.

The Dollar Index (DXY)

Key news events today

Fed Chair Powell Testifies  

What can we expect from DXY today?

Powell’s testimony may impact the USD as his remarks could reveal intentions for a more aggressive rate increase due to the stubborn inflation. A hawkish stance strengthens the USD, while a dovish one weakens it.  

24 Hours from Now Bias

Mixed

Gold (XAU) 

Today’s major news events

No significant news stories.

What can we anticipate from gold right now?

The fact that the Swiss CPI increased (0.7% m/m) indicates that global inflation may last longer than anticipated. This event may stimulate interest in buying gold as a hedge against inflation, which would lower the price of gold.

24 Hours from Now Bias

Bearish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Lower demand from China, the world’s largest oil consumer, due to a growth target of only 5% in 2023 could result in a decline in oil prices and a slowdown in oil production, with ripple effects on oil-producing countries and the global economy.

Next 24 Hours Bias

Weak Bearish

Global Markets:

Asian Stock Markets: Nikkei up 0.29%, Shanghai Composite down 0.22%, Hang Seng up 0.61%, ASX up 0.49%

European equities closed in green, the DAX futures 0.48%, CAC 40 in green 0.48%, FTSE closes at 0.22%.

US stock market rose Dow jones up 0.12%, S&P 500 up at 0.07%, Nasdaq 100 in red at 0.11%.                    

Commodities: Gold at $1853.65 (+0.06%), Silver at $21.16 (+0.10%), Brent Oil at $86.43 (+0.29%), WTI Oil at $80.69 (+0.29%)

News & Data:

  1. (USD) Fed Chair Powell Testifies at 20:30
  2. (USD) EIA Short-Term Energy Outlook at 22:30
  3. (AUD) RBA Interest Rate Decision (Mar) Actual 3.60%, Forecast 3.60%, Previous 3.35% at 09:00
  4. (AUD) Retail Sales (MoM) Actual 1.9%, Forecast 1.9%, Previous –4.0% at 06:00
  5. (AUD) RBA Rate Statement at 09:00

Technical Outlook

GBPUSD

Price is being driven lower by a descending resistance line approaching our first support, multiple-swing low support at 1.1923. It’s important to note that the Ichi Moku cloud is also exhibiting negative momentum, which may strengthen our belief that the price will continue to decline.

Our first resistance, which is a multiple swing high resistance and coincides with the 61.8% Fibonacci retracement, is at 1.2144.

EURUSD

Price is currently testing a significant resistance that has numerous swing highs at 1.0697. Prices may decline to 1.0577, the recent swing low support, if the trend changes from here.

Price could advance to the second barrier at 1.0805, a crucial overlap resistance that corresponds with the 50% Fibonacci retracement if it breaks this first obstacle.

AUDUSD

From a long-term declining resistance line, the price is experiencing strong bearish momentum. Also, we can see the bearish Ichi Moku cloud driving prices farther lower. The first support level that must be broken is 0.6696, a multiple swing low support; if price breaks this level, the next important support level would be lower at 0.6640, another multiple swing low .

USDJPY

The bullish Ichi Moku cloud is providing support for the price after it recently broke ascending support. To cause a decline below the first support at 134.46, overlap support that coincides with the significant 38.2% Fibonacci retracement must be broken coupled with the intermediate overlap support at 135.98.

DOW JONES

Major overlap resistance, which is also a 61.8% Fibonacci retracement, is not being fought by price at 33474. The first support that the price could hit if it reverses from here is 33205, which is pullback support and a short-term 38.2% Fibonacci retracement.

Price may move up to the second resistance at 33839, which is a larger 61.8% Fibonacci retracement if it overcomes the first obstacle.

WTI CRUDE OIL

Price is testing recent swing high resistance at 80.81, a significant level of resistance. It’s important to note that the price is experiencing a recent ascending support line, which could indicate positive momentum. Prices could test the recent multi-swing high resistance at 82.63 if they continue to rise.

The price might fall further to the second support at 77.48, which is overlap support and 50% Fibonacci retracement if it were to break the ascending support as well as the recent first support at 79.76.

SILVER

Price has retraced from our first support level, and with the 50% Fibonacci retracement, it may push up to our first resistance level at 21.49 With the 61.8% Fibonacci retracement, the price may push up to our second resistance level in 22.00 if it were to break.

ETHEREUM

Price is in a bearish descending channel with our 1st resistance at 1591 and the 1st support near at 1549. Price is currently being squeezed between these 2 levels and a break of either should either see prices with recent multi-swing high resistance at 1679 or recent swing low support at 1462.