Fundamental Analysis Report With Charting Trends – 08 June 2023
08 Jun 2023
Nasdaq Decreases 1.3% as Tech Suffers
The Nasdaq concluded the day down 1.3%, albeit the Dow remained strong, rising 0.27%, and the S&P dipped 0.38%, all signs of the market’s confusion ahead of the upcoming Fed meeting. Yesterday, US markets suffered a slight hit as tech stocks led the way down. After the Bank of Canada raised rates again against expectations, mirroring the RBA the day before, stock market worries grew; investors are worried that the FOMC will do the same. As the market anticipates inflation data and the Fed next week, the dollar strengthened against the majority of the major currencies, with the Cad being the exception following the BOC.
Investors Seeking Additional Details
Investors have already had a hard week, and there hasn’t been a lot of brand-new material for them to process. The majority of the major participants will have acknowledged that both the RBA and the BOC lifted rates in defiance of market expectations. Investors paid attention when the Bank of Canada increased rates to a 22-year high. The clear message from central banks is that they will continue to weigh short-term inflation as a factor against all other concerns. If we consider that to be the president, then perhaps the FOMC’s decision to stop is not that clear-cut.
What happened in the Asian Session?
The Japanese Yen experienced a number of favourable data points: Bank Lending y/y above expectations at 3.4% (forecast: 3.1%), Current Account stood at a solid 1.90T over the projected 1.39T, and Final GDP q/q demonstrated stronger growth at 0.7% versus the anticipated 0.5%. Economy Watchers Sentiment, however, came in at 55.0 as opposed to the predicted 55.1, slightly underperforming expectations.
What does it mean for Europe & US Sessions?
The Fed may consider keeping the Fed Funds rate “higher and longer” if US unemployment claims are stronger than projected. The DXY would increase in response to this news and retest recent highs of about 104.60. On the other hand, a decline to 103.30 would be expected.
The Dollar Index (DXY)
Key news events today
What can we expect from DXY today?
With an estimate of 236,000 claims as opposed to the previous figure of 232,000, the next data release for US unemployment claims is anticipated to indicate a modest increase from the prior period. If the evidence supports this prediction, the US dollar may decline.
Central Bank Notes:
- The committee raised the target range for the federal funds rate to 5 to 5-1/4 percent. The U.S. banking system is sound and resilient.
- Tighter credit conditions for households and businesses may weigh on economic activity, hiring, and inflation.
- The committee is committed to returning inflation to its 2% objective
- The committee will adjust monetary policy as appropriate if risks emerge that could impede the attainment of goals
- Next meeting is on 14 June 2023
Next 24 Hours Bias
Key news events today
No major news events.
What can we expect from Gold today?
With the RBA acting prior to the most recent rate hike by the BoC, the non-interest-bearing gold could deteriorate further amid a global trend of central banks boosting rates to combat inflation.
Next 24 Hours Bias
Key news events today
No major news events.
What can we expect from Oil today?
Unexpectedly, US crude stockpiles fell to -0.5 million (forecast: 1.2 million; last: 4.5 million), suggesting that supply and demand may be rebalancing. Concurrently, the nation’s gasoline inventories accumulated more than expected. In May, China’s exports decreased more quickly than anticipated, increasing worries about a lower market and probable economic difficulties.
Next 24 Hours Bias
Asian Stock Markets: Nikkei down 0.85%, Shanghai Composite up 0.50%, Hang Seng up 0.29%, ASX down 0.26%
European equities, the DAX futures down 0.19%, CAC 40 down 0.08%, FTSE up 0.10%.
US Stock Market: Dow jones up 0.27%, S&P 500 down at 0.38%, Nasdaq 100 down at 1.29%.
Commodities: Gold at $1945.69 (+0.29%), Silver at $23.66 (+1.14%), Brent Oil at $77.20 (+0.32%), WTI Oil at $72.81 (+0.39%)
News & Data
- (JPY) GDP (QoQ) (Q1) Actual 0.7%, Forecast 0.4%, Previous 0.0% at 05:20
- (EUR) GDP (QoQ) (Q1) Forecast 0.0%, Previous 0.1% at 14:30
- (USD) Initial Jobless Claims Forecast 235K, Previous 232K at 18:00
- (EUR) GDP (YoY) (Q4) Forecast 1.2%, Previous 1.8% at 14:30
- (GBP) RICS House Price Balance (May) Actual –30.%, Forecast 3.1%, Previous –39% at 04:31
The price of GBP/USD is currently above a significant ascending trend line, indicating bullish momentum and the possibility of more upward movement.
This momentum suggests that the price may continue to rise in the direction of the first resistance level at 1.2467. The 50% Fibonacci retracement serves as support for this level, which is designated as an overlap resistance level.
The first support at 1.2376 and the second support at 1.2305, both of which serve as swing low supports, are examples of support levels.
The second resistance level, located at 1.2536, is also acknowledged as a multi-swing high resistance, heightening its significance as a potential roadblock to further price growth.
The price of the EUR/USD chart has recently broken above a declining resistance line, signalling the possibility of a bullish rise.
This momentum suggests that the price may continue to rise in the direction of the first resistance level at 1.0759. The 61.80% Fibonacci projection and the overlap resistance level both support this level.
The first support level, which acts as a swing low support, is at 1.0638. The second support level, which serves as a multi-swing low support, is at 1.0535.
A noteworthy level to observe is the second resistance level at 1.0822, which is also known as an overlap resistance and coincides with the 38.20% Fibonacci retracement and 100% Fibonacci projection.
The significance of an intermediate support level at 1.0669 is increased by the fact that it is a multi-swing low support.
The current bearish momentum on the AUD/USD chart suggests a lower market trend.
The price breaching below an ascending support line, which could lead to a negative move, is what is driving the momentum.
The price may rise in the near term towards the first resistance level at 0.6708 before turning around and falling below the first support level at 0.6639.
As an overlap support, the first support level at 0.6639 may serve as a price point where buyers can enter the market.
Similar to the first support level, the second support level at 0.6576 also functions as an overlap support, enhancing its relevance as a possible location where buyers could enter.
The initial resistance level, at 0.6708, is regarded as a multi-swing high resistance on the upward.
The importance of the second resistance level at 0.6744 is increased by the fact that it acts as a pullback resistance and coincides with the level of the 78.60% Fibonacci retracement.
The USD/JPY chart’s present neutral momentum suggests that there isn’t a discernible market trend.
A range between the first support level at 138.79, which is overlap support, and the first resistance level at 140.23 is possible given the neutral momentum. This resistance level correlates with the 61.80% Fibonacci projection and is notable for being a multi-swing high resistance.
The second support level of 137.71, which also happens to represent the 50% Fibonacci retracement, offers additional support and might further price stability.
Furthermore, a pullback barrier is there at the second resistance level at 140.89, which can serve to restrain price increases.
There is currently bearish momentum visible on the GER30 (DAX 30) chart, pointing to a downward market trend.
There is a chance that the price will keep moving downward approaching the first support level around 15680.6.
A big area where buyers may enter is indicated by the first support level, which is marked as overlap support at 15680.6.
The second support level, which is at 15441.2, is also acknowledged as overlap support, which increases its significance as a potential price floor.
On the upswing, an overlap resistance is discovered at the initial resistance level at 16058.7.
Furthermore, a multi-swing high resistance is provided by the second resistance level at 16272.9.
WTI CRUDE OIL
The WTI (West Texas Intermediate) chart is currently showing bullish momentum, which denotes a rising market trend.
Since the price is above a significant ascending trend line, more bullish momentum may be anticipated.
The price might make a positive reversal off the first support level at 70.42 and move up to the first resistance level.
The first support level is significant as a potential region where buyers may supply support because it is indicated as an overlap support and lines up with the 50% Fibonacci retracement level.
Additionally, the second support level at 67.38 is acknowledged as multi-swing low support, highlighting the significance of this level as a potential entry point for buyers.
On the upswing, an overlap resistance is discovered at the initial resistance level at 74.42.
The significance of the second resistance level, which is located at 76.90 and acts as an overlap resistance as well as being at the 61.80% Fibonacci retracement level, is further increased.
The current strong momentum on the silver chart suggests an uptrend in the market.
The initial support level, which is designated as overlap support and acts as a prospective region where buyers might offer support, is located at 23.17.
Its significance as a prospective price level where buyers may enter is further strengthened by the fact that the second support level at 22.46 is acknowledged as multi-swing low support.
On the upside, the 23.83 initial resistance level is recognised as an overlap resistance and may serve as a barrier to additional price increases.
Furthermore, a pullback resistance is detected at the second resistance level at 24.44, signalling possible selling pressure at this level.
The positive momentum on the ETH/USD (Ethereum/US Dollar) chart at the moment suggests that the market is moving upward.
The price may make a positive reversal off the first support level at 1837.29 and move upwards towards the first resistance level.
Its significance as a potential place where buyers can offer support is increased by the fact that the first support level is recognised as an overlap support and coincides with the 50% Fibonacci retracement level.
The second support level, which is located at 1765.32, is also acknowledged as multi-swing low support, which increases its significance as a prospective price level where buyers might enter.
On the upside, an overlap resistance is discovered at the first resistance level at 1918.27.
The 1990.25-second resistance level also functions as a swing-high resistance.