FUNDAMENTAL REPORT FORECASTÂ
MARKET UPDATE:
Investors await earnings and Fed cues as Wall Street closes higher. While investors prepared for a busy week of corporate results and remarks from Federal Reserve officials that could provide additional insight into the course of interest rates, major U.S. stock indexes registered moderate gains on Monday, helped by banking and industrial firms.
Following several banks’ impressive first-quarter earnings last week, markets are assessing the state of corporate profits and the economy.
The New York Fed said on Monday that its gauge of industrial activity in New York State grew in April for the first time in five months, supporting the argument for the U.S. central bank to hike rates at its meeting next month.
Markets are currently in a waiting-and-seeing mind set, according to Edward Jones financial strategist Angelo. A lot of corporate earnings are still to come, and the Fed will soon announce its interest rate decision.
Tuesday’s Asian markets closed with mixed results as investors assessed the most recent Wall Street earnings reports and awaited the publication of China’s first quarter GDP data. A Reuters poll predicts that China’s economy expanded by 2.9% in the previous quarter but grew by 4% year over year in the first quarter.
Silver futures sank 1.5% to close at $25.088 per ounce, while gold futures on the COMEX division of the New York Mercantile Exchange dipped 0.4% to settle at $2,007 per ounce. Futures for platinum increased 0.5% to close at $1,059.60 per ounce.
On the New York Mercantile Exchange, crude oil futures ended the day down as sentiment was dampened by worries about escalating global supply and demand uncertainty. The price of WTI crude for May delivery dropped by 0.2% to $80.65 per barrel, while the price of Brent crude for June delivery dropped by 0.3% to $83.42 per barrel.
What happened in the Asian session?
The RBA minutes state that while noting that some households were already using their savings, members debated whether to raise the cash rate by 25 basis points. The argument in favour of keeping the current monetary policy was because it had already been severely tightened in a short amount of time, and its effects on the economy were unpredictable.
China GDP quarterly shocked with a 4.5% increase (forecast: 4.0%; actual: 2.9%).
What does it mean for the Europe & US Sessions?
Based on the generally good trend on the domestic and trading partner fronts, the AUD/USD pair is still predicted to rise towards 0.6765.
Moreover, the Lonnie may outperform and continue its intraday upward trend towards 1.3500. The move might be supported by positive CPI data set development in Canada.
The Australian Dollar (AUD)
Key news events today
No major news events.
What can we expect from AUD today?
The RBA Monetary Policy Meeting Minutes should reveal the direction the central bank will take its monetary policy in the future, with hawkishness helping the AUD. The AUD may be impacted by China’s impending GDP numbers, which are expected to increase to 4.0% q/y from 2.9% previously, given China is Australia’s main trading partner.
Central Bank Notes:
- Kept the cash rate unchanged at 3.60%
- Full impact of previous interest rate hikes is yet to be felt.
- Inflation in Australia has peaked, and the central forecast is to decline this year, at around 3% in mid-2025.
- Further tightening of monetary policy may be necessary to achieve the 2 – 3% inflation targets
- Next meeting on 2 May 2023
Next 24 Hours Bias
Mixed
The Euro (EUR)
Key news events today
No major news events.
What can we expect from EUR today?
A rise from the previous reading of 13.0 to 15.5 is anticipated in the German ZEW Economic Sentiment report, which is scheduled for release. Investor optimism about the outlook for the economy could raise demand for the Euro if the actual data release meets or surpasses this expected value.
Central Bank Notes:
- ECB raised interest rates by 50 basis points to ensure the 2% inflation target is met
- Inflation is projected to average 5.3% in 2023, with growth at 1%, and underlying price pressures remain strong
- The bank will continue to monitor market tensions closely and will be data-dependent in its policy rate decisions
- Next meeting on 4 May 2023
Next 24 Hours Bias
Weak Bullish
The Canadian Dollar (CAD)
Key news events today
CPI m/m
Median CPI y/y
Trimmed CPI y/y
What can we expect from CAD today?
It is anticipated that the next data releases for the Canadian CPI m/m, Median CPI y/y, and Trimmed CPI y/y will have a substantial effect on the value of the currency. The prior values are 0.4%, 4.9%, and 4.8%, respectively. The Bank of Canada may adopt a more hawkish approach because of higher Canadian inflation rates.
Central Bank Notes:
- Bank of Canada holds its target for the overnight rate at 4.5%
- Labour markets remain tight with persistent price pressures, especially for services
- Economic growth in Q1 looks to be stronger than projected; to be weak through the remainder of this year before strengthening gradually next year
- Prepared to increase the policy rate further to return inflation to the 2% target.
- Next meeting on 7 June 2023
Next 24 Hours Bias
Mixed
Global Markets:
Asian Stock Markets: Nikkei up 0.51%, Shanghai Composite up 0.23%, Hang Seng down 0.63%, ASX down 0.29%
European equities, the DAX futures up 0.36%, CAC 40 up 0.38%, FTSE up 0.25%.
US Stock Market: Dow jones up 0.30%, S&P 500 up at 0.33%, Nasdaq 100 up at 0.28%.
Commodities: Gold at $2000.04 (+0.24%), Silver at $25.047 (+0.05%), Brent Oil at $84.66 (-0.12%), WTI Oil at $80.73 (-0.12%)
News & Data
- (USD) Building Permits (Mar) Forecast 1.450M, Previous 1.550M at 18:00
- (CAD) Core CPI (YoY) (Mar) Forecast 4.4%, Previous 4.7% at 18:00
- (CAD) Core CPI (MoM) (Mar) Forecast 0.4%, Previous 0.5% at 18:00
- (GBP) Claimant Count Change Actual 28.2K, Forecast 10.2K, Previous -18.8K at 11:30
- (CNY) GDP (YoY) (Q1) Actual 4.5%, Forecast 4.0%, Previous 2.9% at 07:30
Technical Outlook
GBPUSD
There is potential for a bullish continuation up to the first resistance on the GBP/USD chart due to the overall bullish momentum.
The first support level, which is an overlap support, is located at 1.2346. This level has previously through several tests and has proven to offer good support for pricing.
The second support level, which is likewise an overlap support and falls on a 38.20% Fibonacci retracement, is at 1.2273. Additionally tested frequently in the past, this level has demonstrated that it offers a good support area for price.
The first resistance level, which is a swing high resistance, is located at 1.2437. In the past, pricing has encountered heavy resistance at this level.
A second, multi-swing high resistance level is present at 1.2541 as well. Multiple tests of this level in the past have revealed that it offers a potent price resistance zone.
EURUSD
There is a general bullish momentum on the EUR/USD chart. A bullish continuation in the direction of the first resistance is possible.
The swing low support level at 1.0910, which also happens to be a 61.80% Fibonacci retracement, serves as the first support level. In the past, this level has proven to offer the price solid support.
The second support level, which is a swing low support, is located at 1.0828. Additionally tested frequently in the past, this level has demonstrated that it offers a good support area for price.
The first resistance level, which is a pullback barrier, is located at 1.0969. In the past, pricing has encountered heavy resistance at this level.
The second resistance level, which is a multi-swing high resistance, is located at 1.1071. Multiple tests of this level in the past have revealed that it offers a potent price resistance zone.
AUDUSD
There is potential for a positive continuation up to the first resistance level at 0.6785 on the AUD/USD chart, which currently has an overall bullish momentum. The fact that the price is currently trading above the Ichi Moku cloud suggests that bullish momentum is there.
The initial level of support is at 0.6685, which also happens to be an overlap support level and a Fibonacci projection of 78.60%. This area has historically served as support and can provide the price a boost.
The first resistance level at 0.6785 may be reached if the price were to rebound from the first support level. This level’s strength as a resistance level during pullbacks is increased by the fact that it falls within a 38.20% Fibonacci retracement.
A second resistance level is present higher, at 0.6873, which both serves as a pullback resistance level and a 50% Fibonacci retracement. This level might be reached by the price if it were to pass past the first resistance level.
The second support level at 0.6624 would be the level to which the price would fall if it were to breach the first support level at 0.6685. This level is a multi-swing low support level and can induce a price reversal.
USDJPY
There is a general bearish momentum on the USD/JPY chart, and a bearish reaction off the first resistance and a down to the first support are both possible.
The first support level, which is an overlap support and corresponds with a Fibonacci projection of 78.60%, is located at 133.720. In the past, this level has proven to offer the price solid support.
The second support level is at 132.360, a multi-swing low support that also happens to be a projection of the 61.80% Fibonacci ratio. In the past, this level has also shown to be a reliable zone of price support.
The first resistance level, which is a swing high resistance level at 134.730, also happens to be a 61.80% Fibonacci retracement. In the past, pricing has encountered heavy resistance at this level.
Additionally, there is an overlap resistance at a second resistance level of 137.070. Multiple tests of this level in the past have revealed that it offers a potent price resistance zone.
DOW JONES
The DJ30 index seems to be moving strongly in the positive direction, and there is a chance that this trend will continue towards the first resistance level at 34362.39. Price is currently above both the overlap supports at the first support level of 33841.90 and the second support level of 33581.65. The second support level is strengthened further by the fact that it falls on a 61.80% Fibonacci retracement.
A -27% Fibonacci expansion and many swing high resistance levels combine to strengthen the initial resistance level at 34362.79. If the price were to move higher, it might run into a swing high resistance level around 34135.00, which is an intermediate resistance level.
The second resistance level to watch out for is at 34666.01, a strong swing high resistance, should price break through the first resistance level. Price could, however, head towards the second support level at 33587.40 if it falls below the first support level.
WTI CRUDE OIL
The WTI chart is in the negative. The first support level at 79.41, which is a favourable level because it is a pullback support and a 23.60% Fibonacci retracement level, may become the next target for downward market movement. The second support level at 77.08, which is both a swing low support and a 38.20% Fibonacci retracement level, may present another potential buying opportunity if the stock declines below this level of support.
On the other hand, if the price can go upward, the first barrier at 83.06 might be difficult for it to overcome. This level is a pullback resistance and could serve as a roadblock to the price’s upward movement. There is also a second barrier at 84.56, a swing high resistance level that could offer additional resistance if the price tries to advance higher.
At 81.57, a pullback resistance level, there is also an intermediate resistance level. The intermediate resistance at 81.57 could present another obstacle to the price’s upward movement if it manages to break over the first resistance.
SILVER
The Silver chart is currently exhibiting positive momentum, and the price may decline in the near term towards the first support at 24.506, which coincides with the 23.6% Fibonacci retracement level and is a strong overlap support level. The second support at 23.824, which is also an overlap support and coincides with the 38.2% Fibonacci retracement level, might be reached if the stock breaks below this level.
The first resistance, which is a swing high resistance level, is on the resistance side and is located at 25.109. Price might perhaps move upward towards the intermediate resistance at 26.053, which is also a swing high resistance, if it is able to break through this level. Overall, the chart indicates that the momentum is bullish and that after a little decline towards the support levels, the price may continue to rise towards the resistance levels.
BITCOIN
The BTC/USD chart’s overall momentum is currently bearish. Price may maintain its downward momentum until the first support level at 28742 (a pullback support level that also happens to be the 78.60% Fibonacci retracement), which is a potential target. Price might drop to the second support level at 27462, which is also an overlap support level, if it were to break below this level.
The first resistance level at 30270 may be reached if the price were to climb from the first support level, on the other hand. This level is a pullback resistance level, and if the price moves past it, it can move towards the swing high resistance level at the next resistance level at 31058.
