Fundamental Analysis Report With Charting Trends – 15 June 2023
15 Jun 2023
Markets are mixed following Fed’s indications that it is not done raising rates.
The Federal Reserve held rates unchanged this morning, as was to be expected, but it also gave a hint that it has not yet reached its peak in raising rates for this cycle. The major US stock indices had an irregular day, with the Dow closing down 0.68%, the S&P flat, and the Nasdaq up 0.39%. Markets were unsettled overall. The dollar lost ground versus the main currencies as the day came to a close but made some gains as a result of the Fed’s more aggressive stance. US government yields were also down for the day, but the market was bumpy once more as traders factored in the new information.
Traders Expecting More Volatility Following FOMC Deliveries
Following the Fed’s anticipated ‘no change’ call in Washington, traders anticipate greater volatility in the ensuing sessions. In advance of this happening, markets had been moving sharply, and now that it has, investors have more information at their disposal to take longer-term positions. Due to traders’ expectations for a more dovish Fed, the dollar had recently been particularly weak in the currency markets. However, with Jerome Powell’s more hawkish stance, this trend may quickly reverse, and some bullish dollar flow has already been observed early in the Asian session. Major indices have reached new highs in the US equity markets, which have been strong. Once the New York session begins later today, some corrections may occur.
What happened in the Asia Session?
The trade balance deficit decreased to -0.78T from -1.04T, while Japan’s Core Machinery Orders increased by 5.5% compared to the expected 3.1%, supporting a higher JPY.
The employment change increased to 75.9K, well exceeding the prediction of 18.6K, and the unemployment rate decreased to 3.6% from 3.7%, which helped the Australian dollar.
What does it mean for EUROPE & US Session?
Interest rates are predicted to rise by 25 basis points by the ECB. If the variance is less than anticipated, the EUR/USD pair may drop to an intraday low of about 1.0770. The Euro could challenge the current highs of around 1.0860 with a larger rate increase. The pair would trade between the aforementioned levels if the increase matched the forecasts of 4.00%.
The Dollar Index (DXY)
Key news events today
Core Retail Sales m/m
Empire State Manufacturing Index
Retail Sales m/m
What can we expect from DXY today?
Core Retail Sales m/m (+0.1% projected, +0.4% previous), Empire State Manufacturing Index (-15.0 predicted, -31.8 previous), Retail Sales m/m (-0.2% predicted, +0.4% last), and Unemployment Claims (246K predicted, 261K previous) are the forthcoming data releases for the USD. The dip in the Empire State Manufacturing Index and the anticipated decline in retail sales point to possible weaknesses, although the anticipated increase in Core Retail Sales predicts modest growth. However, the anticipated drop in unemployment claims denotes a more favourable job market. Depending on the proportional importance of each indication and the mood of the market, the effect on the USD currency may be variable.
Central Bank Notes:
- The federal funds rate target range will be 5 to 5-1/4 per cent.
- The Committee is strongly committed to returning inflation to its 2% target.
- The Committee will adjust monetary policy if risks emerge that could hinder achieving its goals.
- Various factors will be considered, including labour market conditions, inflation pressures, inflation expectations, and international and financial developments.
- Next meeting is on 26 July 2023
Next 24 Hours Bias
The Kiwi Dollar (NZD)
Key news events today
What can we expect from NZD today?
The GDP of New Zealand is forecast to drop by 0.1% in the current quarter, following a 0.6% contraction in the preceding quarter. The NZD may suffer as a result of the predicted decline in GDP since it may have a negative effect on investor sentiment and demand for the currency.
Central Bank Notes:
- The Monetary Policy Committee has raised the OCR from 5.25% to 5.50%
- The Committee believes that interest rates at a restrictive level for some time will bring inflation back within the target range while supporting maximum sustainable employment
- The Committee voted by a majority of five to two to increase the OCR by 25 basis points to 5.50%
- Interest rates must remain restrictive to ensure inflation returns to the target range while supporting maximum sustainable employment
- Next meeting is on 12 July 2023
Next 24 Hours Bias
Key news events today
No major news events.
What can we expect from Oil today?
The Energy Information Administration (EIA) has announced a rise in US crude stockpiles. The International Energy Agency (IEA) has increased its estimate of the growth in global oil demand for 2023 to 2.4 million barrels per day (bpd). The surge in US crude stocks may put downward pressure on prices, but these events have a mixed effect on the oil market. The updated IEA demand prediction also points to a beneficial climate for oil producers.
Next 24 Hours Bias
Asian Stock Markets: Nikkei down 0.05%, Shanghai Composite up 0.74%, Hang Seng up 2.07%, ASX up 0.19%
European equities, the DAX futures down 0.22%, CAC 40 down 0.31%, FTSE down 0.12%.
US Stock Market: Dow jones down 0.68%, S&P 500 up at 0.08%, Nasdaq 100 up at 0.39%.
Commodities: Gold at $1933.10 (-0.45%), Silver at $23.33 (+2.39%), Brent Oil at $73.53 (+0.44%), WTI Oil at $68.58 (+0.47%)
News & Data
- (NZD) GDP (QoQ) (Q1) Actual –0.1%, Forecast –0.1%, Previous –0.6% at 04:15
- (AUD) Employment Change (May) Actual 75.9K, Forecast 15.0K, previous –4.3K at 07:00
- (EUR) ECB Interest Rate Decision (Jun) Forecast 4.00%, Previous 3.75% at 17:45
- (USD) Core Retail Sales (MoM) (May) Forecast 0.1%, Previous 0.4% at 18:00
- (USD) Retail Sales (MoM) (May) Forecast –0.1%, Previous 0.4% at 18:00
- (USD) Initial Jobless Claims Forecast 250K, Previous 261K at 18:00
The bullish momentum on the GBP/USD chart at the moment suggests a price rising trend.
The fact that the price is above the bullish Ichi Moku cloud is one of the causes causing this momentum. This conveys a feeling of optimism and the possibility of continued upward movement.
The price may decline further in the near future until the first support level at 1.2588 before possibly rising again towards the first resistance level at 1.2676.
The 50% Fibonacci retracement level and a region of overlap support both lie at the initial support level at 1.2588, which is important. This level may be viewed by traders as a possible area of support where buyers may enter.
The price is given additional support at the second support level, which is a pullback support level at 1.2543.
The initial resistance level at 1.2676 serves as a pullback resistance on the upward, which might lead to selling pressure on the price.
The fact that the second resistance level at 1.2738 is the 100% Fibonacci projection adds to its relevance as a possible level of resistance for the price.
TRADE SUGGESTION: BUY AT 1.26697, TP AT 1.27787, SL AT 1.26008
The bullish momentum on the EUR/USD chart at the moment suggests a price rising trend.
The price may decline further in the near future until the first support level at 1.0783 before maybe rising again towards the first resistance level at 1.0829.
The initial level of support, at 1.0783, is notable since it shows a region of overlap support. At this point, buyers might intervene to sustain the price.
Another area of support, or an overlap support level, is the second support level at 1.0734.
The initial resistance level at 1.0829 serves as a pullback resistance on the upward, which might lead to selling pressure on the price.
The potential for a price reversal or a stop in upward advance is further reinforced by the fact that the second resistance level, at 1.0861, is a swing high resistance.
TRADE SUGGESTION: BUY AT 1.08419, TP AT 1.08743, SL AT 1.08185
The current bearish momentum on the AUD/USD chart indicates a downward trend in price movement.
A possible bearish extension towards the first support level at 0.6721 exists.
An overlap support level can be found at the second support level of 0.6692. It gives the possible support zone more weight and can spark interest from buyers.
Upside, an overlap resistance level at 0.6811 serves as the first resistance level. It may offer selling pressure and serve as a barrier to any upward advance.
Furthermore, a retreat barrier is evident at the second resistance level at 0.6873, which also happens to be the 38.20% Fibonacci retracement. This level can intensify the bearish trend and encourage sellers to enter the market.
TRADE SUGGESTION: SELL AT 0.68123, TP 0.67645, SL AT 0.68506
The bullish momentum on the USD/JPY chart at the moment suggests that price movement is now inclined upward.
The initial resistance level at 140.23 could be broken in a bullish manner. The fact that this resistance level is a multi-swing high barrier indicates that a break above it could trigger further upward momentum.
A swing high resistance at 142.11, the second resistance level, adds to its prominence as a potential roadblock to upward progress.
The initial support level at 140.23 serves as a retreat support on the downside. This level may be thought of by traders as a possible area of support where buyers could join the market.
A second support level, which stands for an overlap support level, is also present at 138.79. In the event that there is a retracement in the price, this level can offer additional support.
TRADE SUGGESTION: BUY AT 140.856, TP AT 141.628, SL AT 140.347
A bullish momentum is currently visible on the US500 (S&P 500) chart, showing a general upward bias in price movement. The price is above a significant ascending trend line, indicating the potential for continued bullish momentum, which supports this.
There is a chance of a further decline in the near term, possibly towards the first support level at 4325.97. Given that it falls within a 23.60% Fibonacci retracement, this support level is crucial and should be closely monitored. From there, there’s a chance of a bounce, which may push prices up towards the first resistance level at 4385.73. An location where selling pressure might be felt is indicated by the overlap resistance at this level.
The price may come into contact with the second support level at 4266.61, which corresponds with a 38.20% Fibonacci retracement, if the positive momentum persists. On the other hand, if bearish pressure increases, the price might find it difficult to surpass the first resistance level and might see a longer pullback.
TRADE SUGGESTION: BUY AT 4380.28, TP AT 4429.24, SL AT 4343.56
WTI CRUDE OIL
The price is currently trending downward as shown by the bearish momentum on the WTI (West Texas Intermediate) chart.
The first support level, which is a multi-swing low support level at 67.12, may be approached in a bearish manner. In the past, this level served as a support level where the price temporarily found stability. The second support level, which is also multi-swing low support, at 64.10, may come into play in the event of a further downturn.
The initial resistance level at 70.66 serves as an overlap obstacle on the upside, possibly creating selling pressure and impeding upward advances. The second resistance level, which is located at 74.72, is also an overlap resistance level, highlighting its importance as a potential roadblock for price growth.
TRADE SUGGESTION: SELL AT 68.53, TP AT 66.80, SL AT 69.91
The market is currently trending downward, as seen by the bearish momentum on the silver chart.
At the first resistance level of 24.24, there is a chance for a negative reaction. This would be followed by a decline towards the first support level of 23.17.
There are two support levels, the first at 23.17 and the second at 22.46, both of which are designated as overlap support zones.
The first resistance level on the upward, at 24.24, is a multi-swing high resistance, while the second resistance level, at 24.85, is an overlap resistance zone.
TRADE SUGGESTION: SELL AT 23.38, TP AT 23.02, SL AT 23.65
The market is currently moving downward, as shown by the bearish momentum on the LTC/USD chart.
The price could move back and forth between the first support level at 74.66 and the first resistance level at 78.97.
The first support level, which is designated as a multi-swing low support, is located at 74.66, while the second support level, which is designated as a swing low support and coincides with a 61.80% Fibonacci projection, is located at 67.22.
Additionally, there is overlap resistance at the first resistance level at 78.97.
Similar to the first resistance level, the second resistance level at 82.88 likewise denotes an overlap resistance area.
TRADE SUGGESTION: SELL AT 72.17, TP AT 68.12, SL AT 75.30