FUNDAMENTAL REPORT FORECAST 

MARKET UPDATE:

2% growth on the Nasdaq on weaker US data released 

Friday night gave the US stock markets a boost, causing them to soar upward. The US economy slowed down according to both PPI data and weekly jobless figures, and shares rose on higher expectations that the Fed’s aggressive tightening cycle would come to an end. The S&P and Dow followed closely behind, ending the day up 1.33% and 1.14%, respectively, as the Nasdaq led the way, ending the day just shy of 2% up. In response to the data, the dollar declined, the Euro touched yearly highs, and gold maintained its position by trading above $2,000 per ounce.

Euro trading higher

As new statistics revealed continued weakening in the US economy, the euro rose to new yearly highs overnight against the dollar. The EURUSD trade appears to have further room to run based only on interest rate differentials, and important indicators in the fixed-interest markets support this conclusion. Even though Germany is only one of the Eurozone’s members, the overnight narrowing of the gap between US and German 10-year rates to its smallest in two years is important, and many investors closely monitor this correlation. Technically speaking, the recent break of longer-term trend line resistance on the Daily chart allows the euro to advance closer to 1.1700.

The trading week is still ongoing.

With the Easter break keeping things calm at the beginning but a multitude of data and central bank activity adding a fair degree of volatility subsequently – and we still have another 3 sessions to go – it’s been one of those very long, short weeks for financial markets. After dropping US data, the markets are optimistic, but there are still a few potential pitfalls before we close for the weekend. The Asian and European sessions are rather quiet when it comes to data releases, but the US session, which once again has less liquidity, may see some activity. Additionally, to US Retail Sales and the University of Michigan Sentiment Report, several important banks will be reporting profits.

What happened in the Asian session?

The weaker Business NZ Manufacturing Index has dampened the strong growth in Visitor Arrivals m/m, which has had a mixed effect on the NZD. As a result, the Kiwi maintained its price inside a 30-pip band throughout the session.

What does it mean for the Europe & US Sessions?

If the upcoming Retail Sales report exceeds expectations, there is a probability that the US Dollar Index, DXY, may stage a technical recovery close to the 100.00 mark. If the positive scenario for the USD plays out, the Euro might decline to test 110.00 while the Cable retraces to 125.00.

The Dollar Index (DXY)

Key news events today

Core Retail Sales m/m

Retail Sales m/m

Prelim Consumer Sentiment

What can we expect from DXY today?

The US Retail Sales data set that will soon be released is anticipated to weaken the dollar. It is anticipated that both Core Retail Sales m/m and Retail Sales m/m will fall by 0.4%, which reflects a decline in consumer expenditure. Additionally, it is anticipated that the Prelim UoM Consumer Sentiment will stay at 62.0, which indicates that consumers do not feel any more enthusiastic about the economy.

Central Bank Notes:

• The US banking system is sound and resilient, but recent developments may result in tighter credit conditions for households and businesses.
• The Federal Reserve has raised the target range for the federal funds rate to 4-3/4 to 5 per cent, committed to returning inflation to its 2 per cent objective.
• In determining the extent of future increases in the target range, the Committee will consider various factors, including the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and economic and financial developments.
• Next meeting is on 3 May 2023

Next 24 Hours Bias

Weak Bearish

Gold (XAU)

Key news events today

No major news events.

What can we expect from gold today?

Lower-than-anticipated inflation rates can result in a weaker US currency, which raises demand for gold as a safe-haven asset, thus boosting gold prices. Lower PPI numbers may indicate economic turbulence and a probable recession, causing the Fed to change its aggressive monetary stance, which is good for gold prices.  

Next 24 Hours Bias

Mixed

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Two impending data releases, the Business NZ Manufacturing Index (prior 52.0) and Visitor Arrivals m/m (-26.3), are anticipated to have an impact on the NZD. Better-than-expected data provide the currency upward momentum, while worse-than-expected data put downward pressure on it.

Central Bank Notes:

• OCR increased by 50bps from 4.75% to 5.25%
• Recent severe weather events in the North Island have led to higher prices, increasing the risk of inflation expectations exceeding the target range.
• New Zealand’s economic growth is expected to slow through 2023 due to the slowing global economy, reduced residential building activity, and the ongoing effects of monetary policy tightening.
• Next meeting is on 25 May 2023

Next 24 Hours Bias

Mixed

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

The PPI m/m is predicted to rise by 0.1% (up from -0.2%), according to the forecasted statistics, which would strengthen the CHF because the SNB is likely to keep its hawkish monetary policy in place.

Central Bank Notes:

• Raised policy rate to 1.5% to counter inflationary pressure and ensure price stability. The SNB may need to raise the policy rate further in the future
• The SNB is providing liquidity assistance to Credit Suisse, and the crisis has been halted
• The new inflation forecast assumes a policy rate of 1.5% and puts average annual inflation at 2.6% for 2023 and 2.0% for 2024 and 2025.
• Mortgage and real estate market vulnerabilities persist
• Next meeting on 22 June 2023

Next 24 Hours Bias

Weak Bullish

Global Markets:

Asian Stock Markets: Nikkei up 1.20%, Shanghai Composite up 0.60%, Hang Seng up 0.46%, ASX up 0.51%

European equities, the DAX futures up 0.43%, CAC 40 up 0.29%, FTSE up 0.27%.

US Stock Market: Dow jones up 1.14%, S&P 500 up at 1.13%, Nasdaq 100 up at 1.99%.            

Commodities: Gold at $2032.56 (-0.36%), Silver at $25.79 (-0.15%), Brent Oil at $85.98 (-0.14%), WTI Oil at $82.07 (-0.09%)

News & Data

• (USD) Core Retail Sales (MoM) (Mar) Forecast –0.3%, Previous –0.1% at 18:00 
• (USD) Retail Sales (MoM) (Mar) Forecast –0.4%, Previous –0.4% at 18:00
• (CAD) Manufacturing Sales (MoM) (Feb) Forecast –2.7%, Previous 4.1% at 18:00
• (NZD) Business NZ PMI (Mar) Actual 48.1, Forecast 51.0, Previous 52.0 at 04:00

Technical Outlook

GBPUSD

According to the study, the GBP/USD chart’s overall momentum is optimistic. The first resistance level of 1.2597, which is a swing high barrier and 138.20% Fibonacci Extension level, presents the possibility of a bullish continuation.

The first support level, which is an overlap support level, is located at 1.2501. If the price fell, it might find assistance at the overlap support level known as the second support level at 1.2425.

The second resistance level, which is a swing high resistance and a 161.80% Fibonacci Extension level on the resistance side, is at 1.2652.

Although prices may move back and forth between the support and resistance levels, if the bullish trend persists, we can see prices go from the first support level up to the first resistance level.

EURUSD

Bullish momentum is currently seen on the EUR/USD chart, indicating that price increases may continue soon. The price is trading around 1.1105 as of this writing.

The price may increase over the present level and head towards the first resistance level at 1.1178 if the positive trend keeps on. This level of resistance, which also happens to be a swing high resistance and a 127.20% Fibonacci Extension level, presents a formidable barrier that the price may find difficult to cross.

On the support side, the first support level, which is a pullback support level and has proven to be strong in holding the price up, is located at 1.1035. The second support level at 1.0976, which is also an overlap support level that the price has previously bounced off, would be the next support level if the price were to break through the first support level.

Between the present price and the first resistance level, at 1.1066, there is also an intermediate resistance. A larger bullish acceleration towards our first resistance may start if the price were to break through this intermediate resistance.

AUDUSD

The AUD/USD chart is in the uptrend. Price could move in a positive direction in the direction of the first resistance level at this time.

The first support level, which is around 0.6726, is regarded favourably because it overlaps with a 38.20% Fibonacci retracement. The second support level, which is around 0.6666, is also a strong level because it overlaps with a 78.60% retracement.

The first resistance level, on the other hand, is at 0.6819 and is regarded as a favourable level because it is an overlap resistance level. Because it is an overlap resistance level, the second resistance level at 0.6870 is likewise a suitable level. Additionally, there is a multi-swing high intermediate resistance level at 0.6784, which is regarded as a favourable level.

Price might move upward towards the second resistance level if it were to break through the first resistance level. But if it were to breach the first support level, it might fall in the direction of the second support level. It’s important to note that there is a significant bullish momentum and that support levels are viewed as promising buying chances. As a result, there is a chance that prices will increase from support to resistance.

USDJPY

On the chart, USD/JPY is currently showing bearish momentum, which suggests that additional drops may be on the horizon. Our first support level at 131.81 is a strong overlap support level that coincides with the 61.80% Fibonacci retracement, and it serves as a potential target for further price declines. This level has previously undergone several tests and might serve as a formidable barrier to additional price declines.

The second support level, located at 130.53, is the level to which prices could fall if they were to break the first support level. This level is an overlap support level that has previously been challenged in the past and may offer a solid base for price reversals.

However, if prices were to rise, our first resistance level, an overlap resistance level that lines up with the 50% Fibonacci retracement, is located at 133.76. Prices might potentially climb towards our second resistance level at 135.08 if they break through this level. The 61.80% Fibonacci retracement coincides with this level, which acts as a pullback resistance level.

DOW JONES

The DJ30 chart is currently showing negative momentum, and there is a chance that prices could rise briefly towards the first resistance before turning around and falling towards the first support.

The first support, which is a strong overlap support level, is situated at 33571.33. If the price falls below this level, the second support, which is an overlap support level, can be found at 33258.90.

On the upside, the first resistance level, which is a strong swing high resistance level, is located at 34150.20. Additionally, a 127.20% Fibonacci Expansion coincides with it, making it a potent resistance level. Price may go on to the second resistance at 34383.63 if it manages to break through this level. A 138.20% Fibonacci Extension and a multi-swing high resistance level are present at this level.

Bearish divergence between the RSI and price, a sign that a reversal may be imminent, is noteworthy, nonetheless. This means that even if price can overcome the first resistance, the positive momentum may not last, and price may instead reverse to the negative.

WTI CRUDE OIL

On the chart, WTI oil prices have been trending downward and could drop further to the first support level at $80.93. This level, which also corresponds with the 100% Fibonacci projection, is a dependable pullback support. The next support level, which is a swing low support, is at $78.93 if the price were to drop below this level.

On the resistance side, $83.25, a swing high resistance, is the first level to keep an eye on. The next barrier is at $85.48, which also happens to be a swing high resistance and the 127.20% Fibonacci extension, if price manages to break above this level.

It is important to note that the RSI indicator is exhibiting bearish divergence versus the price, indicating that a potential reversal could happen shortly. This can cause prices to fall towards the support levels.

GOLD

Although the XAU/USD chart displays bearish momentum, an ascending trend line suggests that positive potential may still exist. If there is a bearish reaction off the first resistance level of 2070.00, prices could potentially fall to the first support level at 2022.73.

A noteworthy level to watch is the first support level at 2022.73 since it corresponds with a 61.80% Fibonacci projection and a retreat support. Prices may drop to the following overlap support level of 2006.65 if this level is broken.

On the other side, a price breakout over the first resistance level of 2070.27 would signal additional positive momentum towards the next barrier level, 2047.15. This level is a multi-swing high resistance and a 78.60% Fibonacci projection both occur at the same time.

It’s important to note that the RSI is showing negative divergence versus price, indicating that a turn may be on the horizon. This lends more credence to the idea that prices might fall to the first support level.

ETHEREUM

The ETH/USD chart’s overall trend is bullish, and the price is indicating the possibility of a bullish continuation towards the first barrier level. Price is currently above a significant ascending trend line, which indicates that additional positive momentum is likely.

The first support level, which is a favourable level because it is a pullback support, is at 2029.15. At 1924.44, there is a second support level that serves as a retreat support.

The first resistance level is located at 2159, and it is a strong level because it is a swing high resistance. The second resistance level, which is similarly a swing high resistance, is located at 2295.90.

Price may move up to the first resistance level if it bounced off the first support level. The first support level and the present price are separated by the intermediate support level at 1983.00. If this intermediate support level is broken, a significant bearish acceleration in the direction of the second support level may result.