. Fundamental Analysis Report With Charting Trends- 19 April 2023

FUNDAMENTAL ANALYSIS REPORT WITH CHARTING TRENDS- 19 APRIL 2023

FUNDAMENTAL ANALYSIS REPORT WITH CHARTING TRENDS- 19 APRIL 2023

19 Apr 2023

FUNDAMENTAL REPORT FORECAST 

MARKET UPDATE:

Tuesday, as the first-quarter earnings season got underway, the S&P 500 managed to scrape out a tiny gain thanks to strength in a few large technology firms that offset weaker-than-expected quarterly reports from Johnson & Johnson and Goldman Sachs. The Dow and Nasdaq both finished the day with minor losses.

Investors have been preparing for a somber reporting season, worried that the economy may be about to enter a slump. This is why the early quarterly reports from S&P 500 businesses come as a relief. According to earnings, what we are currently witnessing is the quiet before the storm, according to Commonwealth Financial Network Chief Investment Officer Brad McMillan. “The market is just attempting to determine whether there is potential for upside or not, and I believe that over the next couple of weeks, earnings will ultimately determine whether there is any.”

Refinitiv IBES data as of Friday indicate that S&P 500 corporate earnings are anticipated to have decreased 4.8% in the first quarter compared to a year earlier. Since the demise of Silicon Valley Bank last month sparked worries about potential systemic risks, investors have focused exclusively on bank performance.

Data from China, a significant purchaser of Australian products, revealed on Tuesday that its gross domestic product (GDP) in the first three months of the year exceeded analyst expectations, indicating that the country’s economic recovery was gaining momentum.

“The bullish sentiment from China’s vibrant GDP data will have a medium-term positive impact on the Australian economy,” said Glenn Yin, Head of Research and Analysis at AETOS Capital Group.

After overnight increases in bullion prices due to a depreciating US dollar, gold stocks increased by 0.5%.

  • What happened in the Asian session?

The MI Leading Index m/m data release, which came in at 0.0% for the actual release, slightly higher than the 0.1% previous data, had no appreciable impact on the AUD.

Separately, the Revised Industrial Production m/m data for Japan revealed a little increase to 4.6% for the actual release, which was higher than the anticipated and prior data of 4.5%, showing a healthy expansion of the Japanese economy.

  • What does it mean for the Europe & US Sessions?

Based on the soft data releases from the two countries, the USD will probably prevail against the AUD and JPY. The GBP should also be under pressure from the US dollar until the next CPI y/y announcement comes in higher than the forecast 9.8%.

The Pound (GBP)

Key news events today

CPI y/y 

  • What can we expect from GBP today?

It is anticipated that the UK CPI y/y data release will drop from 10.4% to 9.8%. If the result is less than expected, the GBP could suffer because the BoE might take a less aggressive posture. Otherwise, a higher-than-expected result would strengthen the pound since the central bank is likely to increase interest rates to stymie persistent price increases.  

Central Bank Notes:

  • The BoE’s MPC increased the Bank Rate by 25bps to 4.25%, with a majority of 7-2 in favour of the hike
  • The UK banking system is judged to be robust and resilient.
  • CPI inflation increased unexpectedly but is expected to fall sharply over the rest of the year due to lower energy prices.
  • The MPC will continue to monitor inflationary pressures and adjust Bank Rate as necessary.
  • Next meeting on 11 May 2023 

Next 24 Hours Bias

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

According to the predicted and historical statistics, Japan’s Revised Industrial Production m/m is anticipated to stay at 4.5%. However, there could be changes in the demand for the JPY if the forecast is much off. The demand for the Yen rises when positive data is released while falling when negative data is released.  

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

Mixed

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

A speech by Andrea Machler, a representative of the Swiss government’s executive branch, is scheduled for the Fund Experts Forum in Switzerland. Her comments will probably focus on whether Switzerland’s monetary policy is autonomous and the implications of any possible CHF value fluctuations.

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

Mixed

Global Markets:

Asian Stock Markets: Nikkei down 0.18%, Shanghai Composite down 0.68%, Hang Seng down 1.37%, ASX up 0.72%

European equities, the DAX futures down 0.15%, CAC 40 down 0.08%, FTSE down 0.38%.

US Stock Market: Dow jones down 0.03%, S&P 500 up at 0.09%, Nasdaq 100 down at 0.04%.            

Commodities: Gold at $1980.51 (-1.19%), Silver at $24.78 (-1.58%), Brent Oil at $83.25 (-1.77%), WTI Oil at $79.44 (-1.83%)

News & Data

  • (USD) Crude Oil Inventories Forecast –1.088M, Previous 0.597M at 20:00
  • (CAD) RMPI (MoM) (Mar) Forecast 0.0%, Previous –0.4% at 18:00
  • (EUR) CPI (YoY) (Mar) Actual 6.9%, Forecast 6.9%, Previous 8.5% at 14:30
  • (EUR) Core CPI (YoY) (Mar) Actual 5.7%, Forecast 5.7%, Previous 5.6% at 14:30
  • (GBP) CPI (YoY) (Mar) Actual 10.1%, Forecast 9.8%, Previous 10.4% at 11:30

Technical Outlook

GBPUSD

The bullish GBP/USD chart suggests a likely continuation in the direction of the first resistance level. Ascending support lines are being crossed by price, which is consistent with the chart’s bullish trend.

The 23.60% Fibonacci retracement and the first support level, which is a strong overlap support, are located at 1.2346. The second level of support is at 1.2273, which also overlaps with the previous level and falls on the 38.20% Fibonacci retracement.

The first resistance level, which coincides with the 78.60% Fibonacci projection, is at 1.2541 and is a swing high barrier. The intermediate resistance level at 1.2440, which is also a swing high resistance, may be reached by strong bullish acceleration if price were to break through this level.

EURUSD

Because it is in a bullish ascending channel, the EUR/USD chart is now moving in a bullish direction. Price might potentially make a bullish break through the first hurdle and advance to the second resistance level if the momentum holds.

The first support level is located around 1.0910 and is a strong support level because it overlaps with the 61.80% Fibonacci retracement level. The second support level, which is a swing low support and is located at 1.0831, is another support level.

However, the first resistance level, which is at 1.0976 and is an overlap resistance level at the 38.20% Fibonacci retracement level, is a good level of resistance. The second resistance level, which is a swing high resistance, is located at 1.1071.

been put to the test numerous times in the past and has shown to offer a solid price resistance zone.

AUDUSD

A neutral momentum phase may be seen on the AUDUSD chart. Prices may fluctuate within the first resistance and first support levels’ area.

A 78.60% Fibonacci Projection lines up with the first support level at 0.6680, which is a strong overlap support and suggests it may hold as a support level. A multiple-swing low support is found at the second support level of 0.6624.

On the resistance side, the first resistance level, which is located at 0.6785, is an overlap resistance that coincides with a 38.20% Fibonacci Retracement. A 50% Fibonacci Retracement lines up with the second resistance level, which is a pullback resistance level at 0.6873.

USDJPY

The USD/JPY chart’s general trend appears to be negative, although a brief bullish climb towards the first resistance level before reversing and falling towards the first support level is possible.

The first barrier, which is a strong overlap resistance and a 61.80% Fibonacci retracement, is currently being approached by the USD/JPY price. It is located at 134.73. Before a reversal happens, a rally towards this resistance level in the near term may be feasible.

However, the chart’s overall momentum is bearish, and the price may decline towards the first support level at 133.72. This support level’s importance is increased by the fact that it is a strong overlap support. Price might fall to the second support level at 132.36 if it were to breach the first support level. This level is an important potential support level because it is a multi-swing low support and matches up with a 61.80% Fibonacci projection.

The USD/JPY market may run into pullback resistance at 135.37, which is intermediate barrier, on the upswing. Price might move upward towards the second resistance level at 136.09 if it were to overcome this obstacle.

DAX 40

The rising wedge pattern on the chart indicates a bearish momentum and an impending breakthrough to the downside. Prices may react negatively and fall to the first support after encountering the first resistance.

Strong overlap support and a 23.60% Fibonacci retracement are lined up with the first support level at 15657.0. Prices might perhaps move towards the second support, which is also an overlap support level, at 15481.5 if this level is broken.

The initial resistance, though, is a swing high resistance at 15944.1, and a 78.60% Fibonacci projection lines up with it. The second resistance at 16087.6, another swing high resistance level with the 127.20% Fibonacci extension aligning up with it, might be reached if prices manage to break above this level.

WTI CRUDE OIL

The price of WTI crude oil has been moving lower recently, exhibiting bearish momentum. According to the most recent analysis, the price may move in a bearish direction towards the first support level, with the overall momentum of the chart being bearish.

The 23.60% Fibonacci retracement level and an overlap support level are located at 79.76, which is the initial level of support. The second support at 77.01, a retreat support and the 38.20% Fibonacci retracement level, might be reached if the market breaks below this level.

On the other side, the initial resistance level, an overlap resistance level, is located at 81.52. Price might move upward towards the second resistance level at 84.38, a swing high resistance level, if it is able to break through this level.

GOLD

Recently, the price of gold has been trending downward, and it may continue to do so until it reaches the 1981.86 first support level. This support level is significant since it is an overlap support and because it is located at the 23.60% Fibonacci retracement level. The next possible support level is at 1950.98, which is a multi-swing low support and is at the 38.20% Fibonacci retracement level, if prices drop below this level.

The overlap resistance at 2011.12, which is at the 38.20% Fibonacci retracement level, is the first resistance level on the upswing. The next possible resistance level is at 2032.25, which is a pullback resistance and is at the 78.60% Fibonacci retracement level, if prices can break above this resistance level.

The momentum of the chart is generally negative for XAU/USD. Trading participants should monitor the support levels if prices do really continue to decline. However, if prices can go past the resistance levels, this may signal a change in momentum from bearish to positive.

ETHEREUM

Overall, the Ethereum/USD pair is displaying a neutral movement. Between the first resistance and first support levels, the price could change. The first support level, which is a pullback support, is situated at 2018.15, and the second support level, which is likewise a pullback support, is situated at 1906.10. While the intermediate support level is situated at 2066.17 and is a multi-swing low support, the initial resistance level is situated at 2134.20 and is a multi-swing high resistance.