MARKET UPDATE:
The announcement of Silicon Valley Banks’ closure on Friday shook the world’s stock markets. When investors fled the market, the Nasdaq took the lead, closing 1.76% lower, followed closely by the S&P and Dow. In the last two trading days, the US banking sector lost more than $100 billion in value, but this morning in Asia, futures markets rose on news that US regulators were taking action to slow the negative effects. The unemployment rate and pay growth data decreased, while the Non-Farm Payroll number came in with a stronger print. When expectations for a Fed rate hike decreased, the currency fell sharply along with US Treasury yields.
World markets appear headed for more turbulence as investors process the effects of SVB’s shutdown over the coming trading hours and days. Stocks in the banking industry have experienced some strong sell-offs due to concerns of sector-wide contagion, and on Friday, safe-haven trading ruled the day. The important non-farm payroll data, which came in at 311k versus the predicted 205K and once again above expectations, was almost an afterthought. On a normal day, this data would have sent the dollar soaring. The dollar suffered against most of the major currencies on the day because of slowing wage growth, a rise in unemployment, and market unrest.
central bank speakers scheduled for today’s trading sessions, but investors will be eagerly watching the news wires for any further developments on the SVB crisis and the US response in general. The market anticipates a decrease from last month’s number for tomorrow’s big data release, which will be the latest inflation (CPI) numbers from the states.
How did the US session go?
US labor market statistics are generally worse than in the past. According to the most recent data, incomes climbed by 0.2% (previously expected 0.3%), 311K jobs were added (previously forecasted 504K), and the unemployment rate jumped to 3.6% (previously forecasted 3.4%).
What does it mean for the Asian Session?
The latest announcement by the US Treasury and Federal Reserve to stem the developing crisis in the banking system has weakened the USD and is likely to see a continuation of the reactive effect in the session.
Gold (XAU)
Key news events today
No major news events.
What can we expect from gold today?
When yellow gold becomes somewhat more affordable for customers using other currencies, the projected weaker USD could increase demand for the precious metal. Lower predictions for US inflation on Tuesday would give the market another boost.
Next 24 Hours Bias
Weak Bullish
Oil
Key news events today
No major news events.
What can we expect from Oil today?
The price of oil in non-dollar currencies could drop due to the predicted decline in the US dollar, which could increase demand.
Next 24 Hours Bias
Weak Bullish
The Japanese Yen (JPY)
Key news events today
No major news events.
What can we expect from JPY today?
The JPY BSI Manufacturing Index is expected to register -4.2 in the future release, a small decline from the previous reading of -3.6. This suggests that Japanese manufacturers may be losing faith, which might have a bad effect on the economy of the nation.
Central Bank Notes:
- The bank will continue with QQE with Yield Curve Control to achieve the price stability target of 2%
- Japan’s economy is expected to recover gradually
- The bank will not hesitate to take additional easing measures if necessary
- Next meeting is on 27 April 2023
Next 24 Hours Bias
Weak Bearish
The Pound (GBP)
Key news events today
No major news events.
What can we expect from GBP today?
The direction of the currency is likely to be influenced by the most recent GDP m/m numbers, which show an increase of 0.3% in the economy in the most recent reported period. Nevertheless, there are no significant news events for GBP today. Although a lagging indicator, the growth in the GDP can indicate that the economy is improving and may help to maintain the value of the pound.
Central Bank Notes:
- MPC voted to increase Bank Rate by 0.5 percentage points to 4%
- Near-term data developments are crucial in assessing how quickly external and domestic inflationary pressures will abate
- MPC’s updated projections show CPI inflation falling back sharply from its current level
- Next meeting on 23 March 2023
Next 24 Hours Bias
Weak Bullish
Global Markets:
Asian Stock Markets: Nikkei is down 1.11%, Shanghai Composite is up 1.20%, Hang Seng is up 1.64%, ASX is down 0.50%
European equities, the DAX futures down 1.31%, CAC 40 up 0.01%, and FTSE down at 0.01%.
US Stock Market: Dow jones is down 1.07%, S&P 500 is down at 1.45%, and Nasdaq 100 is down 1.76%.
Commodities: Gold at $1877.15 (+0.53%), Silver at $20.74 (+1.12%), Brent Oil at $83.05 (+0.33%), WTI Oil at $76.94 (+0.34%)
News & Data:
- (USD) Unemployment Rate 3.60% vs 3.40% expected
- (USD) Non-Farm Employment Change 311K vs 224K expected
- (USD) Average Hourly Earnings m/m 0.20% vs 0.30% expected
- (CAD) Unemployment Rate 5.00% vs 5.10% expected
- (CAD) Employment Change 21.8K vs 8.5K expected
- (CNY) New Loans 1810B vs 1500B expected
Technical Outlook
GBPUSD
Price has reversed from the overlap support that serves as our intermediate support at 1.184 7, and it may now rise to both our first resistance at 1.2440 and our second resistance at 1.2671.
Our first support level, which overlaps support and aligns up with the 38.2% Fibonacci retracement, is at 1.1630.
EURUSD
With a strong reversal from our first support at 1.04788, the EURUSD is now witnessing bullish divergence from the RSI and lines up with the 38.2% Fibonacci retracement. If the price were to break through, it might move up to our first resistance at 1.1001, or it might move up to our intermediate support at 1.0787.
The first significant support, which is also a strong overlap support, is at 1.0478 in terms of price. Price could decline much more if it breaks through this level, reaching our support at 1.03545.
AUDUSD
Price is clinging to our first support level of around 0.6554, which corresponds to the 61.8% Fibonacci retracement. The next significant support level, which is also overlap support, would be at 0.6383 if the price were to depart from this one.
The first resistance level, which is a significant overlap resistance, is at 0.6886, and the second resistance level, which is a pullback resistance level, is at 0.7127.
USDJPY
Price is stuck between the first resistance at 139.45, which lines up with the 50% Fibonacci retracement, and the first support at 130.84, which overlaps support. If the price were to break through, it would move up to the second resistance at 145.16. Our secondary backup is 127.087.
S&P 500
Price is currently attempting our overlap resistance at 3907; if price were to break through, it might advance to our second resistance at 4050.
If the price were to reverse from the first resistance level, our first support would be 3782, and our second support would be 3582, another swing low support.
WTI CRUDE OIL
If the price were to reverse from this level, it might push up to our first resistance at 82.119, which is overlap resistance, and our second barrier is 92.47, which is yet another overlap resistance. Price is respecting our ascending trendline, which coincides with our first support level at 72.72.
GOLD
From our first support in 1805, the price has neatly reversed. The price is currently testing the 50% Fibonacci retracement at 181, which is our first resistance level. The price might fall to our first support in 1805 if it reversed from this resistance. In 1734, which is overlap support, we have our second support.
1960 is our second resistance, which is a swing-high resistance.
ETHEREUM
The price is moving towards our first resistance level at 1674; if the price were to turn around from here, it might decline to our first support level at 1357, which overlaps support and lines up the 61.8% Fibonacci retracement. The second support level is 1153.
