FUNDAMENTAL ANALYSIS REPORT WITH CHARTING TRENDS – 09 MARCH 2023
09 Mar 2023
Yesterday, as markets around the world processed the Fed’s most recent statement on interest rates, there was a brief lull. The day was much quieter for the main US indices, with the Nasdaq closing 0.4% and the Dow and S&P finishing the session nearly flat. Treasury yields remained stable, and currencies traded in narrow bands. On the second day of his testimony before the Senate Banking committee, Fed Chair Jay Powell reiterated the FOMC’s stance on interest rates, and the US data came in firmly once more. The market has now set an 80% probability on the Fed raising rates by 50 basis points. The Bank of Canada maintained interest rates at 4.5% as anticipated north of the border, becoming the first significant central bank to halt its effort to shore up the currency.
Since Friday’s US Non-Farm Payrolls data will be the focus of all market attention, last night’s jobs data from ADP and Jolts both suggest that we may see another strong print. Some of the major commodities and currencies are currently trading at critical technical levels, which will offer traders profitable chances if they hold those levels through the important data. Notably, Cable has found support near 1.1800 and Gold is above 1,800; if we receive a surprise either side of the anticipated 224k number, then the market will experience significant movements.
In terms of economic data releases and central bank activity, today’s trading sessions are expected to be another quiet one. Up until the US weekly unemployment claims data later in the day, the Chinese CPI data is only really of third-tier importance. The Chinese CPI data is due out in the Asian session and is widely expected to come in close to the predicted 1.9% level.
How did the US session go?
To combat persistently high inflation and bring it down to the 2% goal, Fed Chair Powell reiterated that the central bank might raise interest rates more quickly. This affirmation, the strong ADP Non-Farm Employment Change, and the encouraging JOLTS Job Openings all contributed to the USD’s gain on Tuesday.
The BOC maintained its 4.5% overnight rate goal as anticipated.
What does it mean for the Asian Session?
China is Australia’s largest trading partner, and as such, the CPI year-over-year estimate for China is 1.9% (down from 2.1%), while the PPI year-over-year projection is -0.8% (down from -1.3%). Better PPI and higher CPI could increase demand for Australian raw commodities, which would increase the value of the Australian dollar.
The Dollar Index (DXY)
Key news events today
What can we expect from DXY today?
US Unemployment Claims data is due for release, with forecasted claims at 195K, compared to the previous figure of 190K. A better-than-expected figure could increase the dollar’s value and vice versa.
24 Hours from Now Bias
Today’s major news events
No significant news stories.
What can we anticipate from gold right now?
During Fed Chair Powell’s speech, the US central bank reiterated its aggressive stance towards inflation, which should further pull the price of gold lower.
24 Hours from Now Bias
Key news events today
No major news events.
What can we expect from Oil today?
The value of the US dollar has significantly increased because of Fed Chair Powell’s recent assertion regarding the possibility of a more rapid increase in interest rates. The global economy may be affected more broadly by this trend, which has the potential to drive down oil prices.
Next 24 Hours Bias
Asian Stock Markets: Nikkei up 0.63%, Shanghai Composite down 0.22%, Hang Seng down 0.35%, ASX up 0.45%
European equities, the DAX futures up 0.46%, CAC 40 down 0.20%, FTSE up at 0.13%.
US Stock Market: Dow jones down 0.18%, S&P 500 up at 0.14%, Nasdaq 100 up at 0.40%.
Commodities: Gold at $1815.60 (+0.07%), Silver at $20.03 (+0.06%), Brent Oil at $82.60 (-0.10%), WTI Oil at $76.60 (-0.08%)
News & Data:
- (USD) Initial Jobless Claims Forecast 195K, Previous 190K at 19:00
- (JPY) GDP (QoQ) (Q4) Actual 0.0%, Forecast 0.2%, Previous –0.3% at 05:20
- (JPY) GDP (YoY) (Q4) Actual 0.1%, Forecast 0.8%, Previous –1.0% at 05:20
- (AUD) Building Approval (MoM) Actual –27.6%, Forecast –27.6%, Previous 15.3% at 06:00
- (CNY) CPI (MoM) (Feb) Actual –0.5%, Forecast 0.2%, Previous 0.8% at 07:00
Price is moving in the direction of our first support, an overlap support at 1.1764, as it respects a declining resistance line. 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 fall.
Our first resistance, which is also an overlap resistance, is at 1.1918; the second resistance level is at 1.2144.
The EURUSD is exhibiting bullish divergence vs. RSI and has maintained strong support above our intermediate level at 1.0535. Prices might increase to our first resistance level at 1.0697, which is just below our 38.2% Fibonacci retracement, on a bounce from this point.
The first significant support, a strong overlap support, is located at 1.0485. If this level were to be broken, the price may fall much deeper, reaching our second support at 1.0354.
From a long-term declining resistance line, the price is moving strongly in the other direction. Also, we can observe that the bearish Ichi Moku cloud is driving prices farther lower. The first support, which is an overlap support, needs to be broken at 0.6535. The next crucial support level, which is also an overlap support, at 0.6379, would be reached if the price were to break through this level.
The first barrier is at 0.6696, which is a temporary pullback resistance level, and the second obstacle is at 0.640, which is a strong overlap resistance.
An ascending support line and bullish momentum from the Ichi Moku cloud are providing support for the price. The first resistance at 138.04, a significant overlap resistance, may be pressed further.
A significant overlap resistance level at 4073, which also corresponds to the 61.8% Fibonacci retracement, was where price earlier reversed. It can decline to the most recent swing low at 3917, the first support level. Please be aware that the support level at 3945 is intermediate.
The next resistance level is at 4159 if the price were to break through the first resistance level.
WTI CRUDE OIL
WTI/price USD’s structure is quite disorganised. Fibonacci retracements of 61.8% and 78.6%, respectively, serve as our first and second supports, which are both visible at 76.47 and 75.23, respectively.
In terms of resistance, we can see an overlap resistance at 77.48 – if price were to break that resistance, the next closest resistance is all the way up at 80.81 which is a major swing high resistance.
Our first overlap support level, at 1804, is being tested by the price. Price might drop back down to the second support level in 1785, which is a significant overlap support, if it were to break through this level.
Our first resistance level, which is an overlap resistance, is at 1824, and our second resistance level, which is also an overlap resistance, is in 1864, which coincides with the 38.2% Fibonacci retracement.
Price is moving down in a channel and is rapidly approaching strong overlap support at 21367. From there, given that the price would be near to the channel’s bottom support, we might see a brief bounce.
The overlap resistance at 22910 is our first hurdle.