. Fundamental Analysis Report With Charting Trends - 11 August 2023

Fundamental Analysis Report With Charting Trends – 11 August 2023

Fundamental Analysis Report With Charting Trends – 11 August 2023

11 Aug 2023

US CPI Surprise Sends Markets on a Wild Ride: Stocks Rally, Dollar Bounces Back.

Introduction

In the fast-paced world of finance, every twitch and tremor in economic indicators can send ripples through the global market. Yesterday’s revelation of the US Consumer Price Index (CPI) statistics showcased precisely this. The financial world sat at the edge of their seats, and as the numbers blinked on screens, reactions ricocheted across markets. This article dives into the heart of these market dynamics and anticipates what might be in store as we look ahead.

Rollercoaster Reactions: CPI Fall’s Impact

A Below-Par Performance

When the much-anticipated US CPI figures finally emerged, they did so with an unexpected twist. The year-over-year results fell short of forecasts, sparking a flurry of swift reactions across various sectors. Goods took centre stage in this dance of numbers, causing stocks to soar and the currency to falter. However, these dramatic swings were quick to reverse as investors refocused their gaze on the broader panorama.

Markets in Motion

The aftermath of this financial shockwave saw the Dow boasting a 0.15% rise, the S&P edging up by 0.03%, and the Nasdaq recording a 0.12% uptick. Despite this recovery, it was a far cry from the lofty heights they had previously scaled. The dollar, initially staggering, managed to stage a comeback, ending the day stronger against the majority of major currencies. Notably, the USDJPY surged, challenging the formidable 145.00 barrier.

Looking Ahead

Yet, before traders can kick back for the weekend, another bustling day awaits. This week’s pivotal data release had already triggered the anticipated volatility, but more chapters are yet to be written. As the US session reverberates and Japanese investors capitalize on the extended weekend, the Asian market anticipates a comparatively tranquil day. Meanwhile, all eyes will be on the UK as the curtain rises on the most recent GDP figures, coinciding with the opening of Europe’s gates. The onslaught of US data continues unabated; today, the spotlight shines on the PPI numbers. Both the headline and Core numbers are projected to scale 0.2%. Following this, the University of Michigan’s freshest Sentiment print is set to make its appearance.

Unpacking the Asian Session

Dollar’s Dance

The dollar index (DXY) seems to have paused its steps around the 102.60 milestone, waiting for a cue to sway in either direction. This limbo unfolds against a backdrop of dwindling crude oil prices. As WTI oil teeters on the brink of diving below $82 per barrel, it faces the prospect of ending the week cloaked in crimson, relinquishing a streak of six consecutive weeks of gains.

European & American Adventures

Pound’s Predicament

The first quarter of 2023 bore witness to a tepid growth rate of 0.2% in the UK’s GDP. This anemic performance persisted through the subsequent two quarters. As the second quarter unfolds, expectations for a substantial uptick remain tempered. The spotlight on the US dollar, fragile in nature, might pave the way for the Pound’s ascent.

Central Bank Whispers

  • The Bank of England’s Monetary Policy Committee (MPC) has cast its vote: a 0.25 percentage point surge in the Bank Rate to 5.25%.
  • Amidst this unanimity, a lone voice sought to maintain the Bank Rate at 5.0%, while two champions rallied for a bolder 0.5 percentage point rise.
  • As the CPI inflation narrative unfolds, projections see it nosediving to around 5% by year-end, driven by shrinking energy prices. However, services price inflation’s elevated stance is poised to persist in the near future.
  • Peering further into the crystal ball, the projections paint a picture of CPI inflation dwindling to 2.0% and 1.9% at the two and three-year junctures, respectively.
  • The calendar sets the stage for the next meeting on September 21, 2023.

Canadian Dollar’s Dance

The day’s news stream doesn’t cascade with major happenings for the Canadian Dollar. Nevertheless, the USDCAD’s retreat from its overnight peak of 1.3450 suggests a continued descent as the sun journeys across the sky.

Central Bank Whispers

  • The Bank of Canada has thrown its weight behind an increased target for the overnight rate, now resting at 4.75%.
  • The initial quarter of 2023 unveiled Canada’s economy in a grander light than anticipated, with GDP marking a triumphant 3.1% growth.
  • However, clouds of concern have gathered over inflation, casting doubts on its subsiding beneath the 2.0% threshold.
  • The tapestry of time weaves us toward the next meeting on September 6, 2023.

Global Symphonies

Divergent Tones

As the sun painted the world in hues of crimson and gold, global markets took to their stages, each painting a unique performance:

Asian Stock Markets

  • Nikkei’s star shone bright, soaring by 0.84%.
  • Shanghai Composite danced to a different tune, descending by 2.01%.
  • Hang Seng’s performance was somber, stepping down by 0.79%.
  • ASX’s graceful retreat saw it declining by 0.24%.

European Equities

  • The DAX futures adopted a melancholic tone, slumping by 0.31%.
  • The CAC 40 added its voice to the melancholy choir, marking a dip of 0.51%.
  • FTSE’s lament echoed with a 0.67% decrease.

US Stock Market

  • The Dow Jones index’s melodic ascent played at 0.15%.
  • S&P 500 hummed a cheerful tune, recording an increase of 0.03%.
  • Nasdaq 100’s crescendo reached 0.12%.

Commodity Cadence

In the realm of commodities, the symphony was composed as follows:

  • Gold commanded the stage at $1917.68, donning a 0.29% increase.
  • Silver’s refrain joined at $22.70, its tone elevated by 0.04%.
  • Brent Oil echoed a note of strength, standing at $86.59 with a 0.22% surge.
  • WTI Oil chimed in at $83.03, bearing a 0.21% rise.

News & Data Snapshot

  • GBP’s YoY GDP for Q2 stood at 0.4%, surpassing the 0.2% forecast and preceding 0.2%.
  • Manufacturing Production (MoM) in June showcased a spirited jump of 2.4%, outshining the anticipated 0.2% rise, and outperforming the previous month’s –0.2% tumble.
  • Q2’s GDP (QoQ) struck a chord at 0.2%, surpassing the 0.0% forecast and eclipsing the preceding 0.1%.
  • USD’s PPI (MoM) in July held its gaze on the horizon, forecasting a 0.2% rise after a 0.1% previous step.
  • Core PPI (MoM) in July followed a similar path, with a 0.2% forecast treading the trail left by the 0.1% prior.

Expert Analysis: Forex and Commodity Technical Outlook for Traders

GBP/USD: The British Pound and the US Dollar Dance

Exponential Moving Averages (EMA)

  • EMA 5: The 5-day EMA stands at 1.2706, suggesting a Buy sentiment.
  • EMA 20: The 20-day EMA displays 1.2735, reinforcing a Sell indication.
  • EMA 50: With a value of 1.2788, the 50-day EMA aligns with a Sell recommendation.

Simple Moving Averages (SMA)

  • SMA 5: The 5-day SMA shows 1.2709, indicating a Sell sentiment.
  • SMA 20: The 20-day SMA records 1.2726, supporting a Sell stance.
  • SMA 50: The 50-day SMA stands at 1.2796, signifying a Sell indication.

RSI (Relative Strength Index)

The RSI, calculated over a 14-day period, displays a reading of 44.38, suggesting a Negative signal.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Negative condition.

Resistance And Support Levels

  • Resistance: The resistance level is identified at 1.2780.
  • Support: The support level is observed at 1.2675.

Summary And Trade Suggestions

Based on the technical analysis, GBP/USD presents a Sell outlook. Traders may consider entering a short position, considering the indicators, moving averages, and oscillators.

Trade Suggestion:

  • Entry Point: 1.2617
  • Take Profit: 1.2521
  • Stop Loss: 1.2685

EUR/USD: The Euro and the US Dollar Tango

Exponential Moving Averages (EMA)

  • EMA 5: The 5-day EMA stands at 1.0986, indicating a Sell signal.
  • EMA 20: The 20-day EMA is at 1.0985, signalling a Sell sentiment.
  • EMA 50: The 50-day EMA currently sits at 1.1005, suggesting a Sell indication.

Simple Moving Averages (SMA)

  • SMA 5: The 5-day SMA shows a value of 1.0993, reinforcing the Sell recommendation.
  • SMA 20: With a value of 1.0975, the 20-day SMA also supports a Buy sentiment.
  • SMA 50: The 50-day SMA registers at 1.1021, affirming a Sell indication.

RSI (Relative Strength Index)

The RSI, calculated over a 14-day period, stands at 48.06, signifying a positive signal.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Negative stance.

Resistance And Support Levels

  • Resistance: The resistance level is observed at 1.1040.
  • Support: The support level is identified at 1.0974.

Summary And Trade Suggestions

In summary, the technical analysis of EUR/USD points towards a Sell sentiment. Considering the indicators, moving averages, and oscillators, it seems favourable for traders to enter a short position.

Trade Suggestion:

  • Entry Point: 1.0933
  • Take Profit: 1.0838
  • Stop Loss: 1.1005

AUD/USD: Australian Dollar and US Dollar Choreography

Exponential Moving Averages (EMA)

  • EMA 5: The 5-day EMA stands at 0.6529, indicating a Sell signal.
  • EMA 20: The 20-day EMA is at 0.6557, signalling a Sell sentiment.
  • EMA 50: The 50-day EMA currently sits at 0.6617, suggesting a Sell indication.

Simple Moving Averages (SMA)

  • SMA 5: The 5-day SMA shows a value of 0.6535, reinforcing the Sell recommendation.
  • SMA 20: With a value of 0.6546, the 20-day SMA also supports a Sell sentiment.
  • SMA 50: The 50-day SMA registers at 0.6646, affirming a Sell indication.

RSI (Relative Strength Index)

The RSI, calculated over a 14-day period, stands at 39.89, signifying a negative signal.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Negative stance.

Resistance And Support Levels

  • Resistance: The resistance level is observed at 0.6543.
  • Support: The support level is identified at 0.6504.

Summary And Trade Suggestions

In summary, the technical analysis of AUD/USD points towards a Sell sentiment. Considering the indicators, moving averages, and oscillators, it seems favourable for traders to enter a short position.

Trade Suggestion:

  • Entry Point: 0.6490
  • Take Profit: 0.6416
  • Stop Loss: 0.6547

USD/JPY: US Dollar and Japanese Yen Rendezvous

Exponential Moving Averages (EMA)

  • EMA 5: The 5-day EMA stands at 144.34, indicating a Buy signal.
  • EMA 20: The 20-day EMA is at 143.35, signalling a Buy sentiment.
  • EMA 50: The 50-day EMA currently sits at 142.40, suggesting a Buy indication.

Simple Moving Averages (SMA)

  • SMA 5: The 5-day SMA shows a value of 144.35, reinforcing the Buy recommendation.
  • SMA 20: With a value of 143.17, the 20-day SMA also supports a Buy sentiment.
  • SMA 50: The 50-day SMA registers at 141.99, affirming a Buy indication.

RSI (Relative Strength Index)

The RSI, calculated over a 14-day period, stands at 67.14, signifying a Buy signal.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Neutral stance.

Resistance And Support Levels

  • Resistance: The resistance level is observed at 144.83.
  • Support: The support level is identified at 144.10.

Summary And Trade Suggestions

In summary, the technical analysis of USD/JPY points towards a Buy sentiment. Considering the indicators, moving averages, and oscillators, it seems favourable for traders to enter a long position.

Trade Suggestion:

  • Entry Point: 145.12
  • Take Profit: 146.63
  • Stop Loss: 143.91

Dow Jones: Navigating the Stock Market Waves

Exponential Moving Averages (EMA)

  • EMA 5: The 5-day EMA stands at 35275.01, indicating a Sell signal.
  • EMA 20: The 20-day EMA is at 35340.19, signalling a Sell sentiment.
  • EMA 50: The 50-day EMA currently sits at 35294.03, suggesting a Sell indication.

Simple Moving Averages (SMA)

  • SMA 5: The 5-day SMA shows a value of 35244.19, reinforcing the Sell recommendation.
  • SMA 20: With a value of 35313.44, the 20-day SMA also supports a Sell sentiment.
  • SMA 50: The 50-day SMA registers at 35458.00, affirming a Sell indication.

RSI (Relative Strength Index)

The RSI, calculated over a 14-day period, stands at 44.32, signifying a Neutral signal.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Negative stance.

Resistance And Support Levels

  • Resistance: The resistance level is observed at 35344.74.
  • Support: The support level is identified at 35203.83.

Summary And Trade Suggestions

In summary, the technical analysis of Dow Jones points towards a Sell sentiment. Considering the indicators, moving averages, and oscillators, it seems favourable for traders to enter a short position.

Trade Suggestion:

  • Entry Point: 35147.67
  • Take Profit: 34893.81
  • Stop Loss: 35320.75

Brent Crude Oil: Navigating the Energy Markets

Exponential Moving Averages (EMA)

  • EMA 5: The 5-day EMA stands at 86.20, indicating a Sell signal.
  • EMA 20: The 20-day EMA is at 85.66, signalling a Buy sentiment.
  • EMA 50: The 50-day EMA currently sits at 83.94, suggesting a Buy indication.

Simple Moving Averages (SMA)

  • SMA 5: The 5-day SMA shows a value of 86.44, reinforcing the Sell recommendation.
  • SMA 20: With a value of 85.61, the 20-day SMA also supports a Buy sentiment.
  • SMA 50: The 50-day SMA registers at 83.94, affirming a Buy indication.

RSI (Relative Strength Index)

The RSI, calculated over a 14-day period, stands at 57.16, signifying a Buy signal.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Negative stance.

Resistance And Support Levels

  • Resistance: The resistance level is observed at 86.52.
  • Support: The support level is identified at 85.41.

Summary And Trade Suggestions

In summary, the technical analysis of Brent Crude Oil points towards a Buy sentiment. Considering the indicators, moving averages, and oscillators, it seems favourable for traders to enter a long position.

Trade Suggestion:

  • Entry Point: 87.66
  • Take Profit: 89.60
  • Stop Loss: 86.16

Gold: Unveiling the Precious Metal Market

Exponential Moving Averages (EMA)

  • EMA 5: The 5-day EMA stands at 1917.21, indicating a Sell signal.
  • EMA 20: The 20-day EMA is at 1927.69, signalling a Sell sentiment.
  • EMA 50: The 50-day EMA currently sits at 1938.31, suggesting a Sell indication.

Simple Moving Averages (SMA)

  • SMA 5: The 5-day SMA shows a value of 1916.90, reinforcing the Sell recommendation.
  • SMA 20: With a value of 1929.16, the 20-day SMA also supports a Sell sentiment.
  • SMA 50: The 50-day SMA registers at 1945.64, affirming a Sell indication.

RSI (Relative Strength Index)

The RSI, calculated over a 14-day period, stands at 38.77, signifying a negative signal.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Negative stance.

Resistance And Support Levels

  • Resistance: The resistance level is observed at 1924.19.
  • Support: The support level is identified at 1907.23.

Summary And Trade Suggestions

In summary, the technical analysis of gold points towards a Sell sentiment. Considering the indicators, moving averages, and oscillators, it seems favourable for traders to enter a short position.

Trade Suggestion:

  • Entry Point: 1895.68
  • Take Profit: 1867.93
  • Stop Loss: 1916.48

Litecoin: Navigating the Cryptocurrency Waters

Exponential Moving Averages (EMA)

  • EMA 5: The 5-day EMA stands at 83.13, indicating a Sell signal.
  • EMA 20: The 20-day EMA is at 83.91, signalling a Sell sentiment.
  • EMA 50: The 50-day EMA currently sits at 86.50, suggesting a Sell indication.

Simple Moving Averages (SMA)

  • SMA 5: The 5-day SMA shows a value of 83.28, reinforcing the Sell recommendation.
  • SMA 20: With a value of 83.09, the 20-day SMA also supports a Buy sentiment.
  • SMA 50: The 50-day SMA registers at 87.27, affirming a Sell indication.

RSI (Relative Strength Index)

The RSI, calculated over a 14-day period, stands at 39.31, signifying a Neutral signal.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Negative stance.

Resistance And Support Levels

  • Resistance: The resistance level is observed at 85.12.
  • Support: The support level is identified at 81.02.

Summary And Trade Suggestions

In summary, the technical analysis of Litecoin points towards a Sell sentiment. Considering the indicators, moving averages, and oscillators, it seems favourable for traders to enter a short position.

Trade Suggestion:

  • Entry Point: 79.65
  • Take Profit: 73.43
  • Stop Loss: 84.36

Conclusion

In this whirlwind of market reactions, the echoes of the CPI fall still reverberate. From stocks taking flight to currencies stumbling, the financial landscape is a canvas painted with dynamic brushstrokes. As the market processes the aftermath and anticipates upcoming data, the journey through economic currents continues, accompanied by the ever-changing rhythms of global markets.