Fundamental Analysis Report With Charting Trends – 20 July 2023

20 Jul 2023

Nasdaq Holds Steady Despite Microsoft’s Dip.

The stock market saw a positive trend on Wednesday as investors analyzed the latest company reports. The blue-chip Dow Jones Industrial Average and the S&P 500 index both experienced mild gains. However, a dip in Microsoft’s stock kept the Nasdaq close to its previous level.

S&P 500 Bank Index Continues to Rise

The S&P 500 bank index extended its winning streak for the third consecutive session and the eighth time in the last nine sessions, pushing bank stocks higher.

Goldman Sachs Shows Resilience Despite 3-Year Low in Profit

Goldman Sachs, despite posting a 3-year low in profit, saw an increase of 0.97%. The CEO, David Solomon, expressed optimism about signs of an investment banking revival, echoing sentiments shared by other significant banks on Tuesday.

Dow Records Longest Winning Streak Since September 2019

With advances in eight straight sessions, the Dow Jones Industrial Average recorded its longest winning streak in nearly four years.

Second-Quarter Earnings Predictions

According to Refinitiv data, second-quarter earnings are predicted to have decreased by 8.2%. This figure is worse than the initial estimate of a 5.7% fall at the beginning of the month.

What Happened in the Asia Session?

The Asia session saw some noteworthy events, particularly in Australia. According to Australia’s Labour Force report, the country’s unemployment rate remained at a low 3.5%. Surprisingly, the economy created 32.6k more jobs than expected (15.4k). As a result, the Australian dollar received a significant boost, crossing above 0.6800 and advancing toward 0.6850. Simultaneously, the US dollar, represented by the dollar index (DXY), showed weakness and slid near 100.

Europe & US Session Expectations

Given the stronger-than-expected labor numbers and the decline in the value of the US dollar, gold prices are expected to remain strong throughout the day. Currency pairs like the Australian and New Zealand dollar are also likely to continue advancing due to the US dollar’s weakened demand. A potential further impetus for the decline of the US dollar could come from the US unemployment claims report, which is set to be released at 12:30 PM GMT.

The Dollar Index (DXY)

Key News Events Today

Unemployment Claims

What Can We Expect from DXY Today?

The projection for this week’s unemployment claims is 239k. However, last week’s claims came in significantly lower than the forecast at 237k. Despite the historically low US unemployment rate, there might be a slight increase in claims. If claims are higher than expected, we can anticipate the DXY to decline once again near 99.60.

Central Bank Notes

The federal funds rate target range will be 5 to 5-1/4 percent.
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 labor market conditions, inflation pressures, inflation expectations, and international and financial developments.
The next meeting is on 26 July 2023.

Next 24 Hours Bias

Medium Bearish

The Australian Dollar (AUD)

Key News Events Today

Labour Force Report

What Can We Expect from AUD Today?

The Australian Labor Force report indicates that the country’s unemployment rate remains at 3.5%, even though the economy created 32.6k more jobs than expected (15.4k). As a result, the US dollar sell-off and the stronger-than-expected labor figures have acted as significant catalysts for the Australian dollar this morning.

Central Bank Notes

The RBA increased the cash rate target by 25 basis points to 4.10%.
Inflation in Australia has passed its peak but remains high at 7% and needs to return to the target range.
Further tightening of monetary policy may be necessary.
Next meeting on 1 August 2023.

Next 24 Hours Bias

Medium Bullish

The Swiss Franc (CHF)

Key News Events Today

Trade Balance

What Can We Expect from CHF Today?

Switzerland’s trade balance for the month of May provided a significant positive surprise. Another unexpected trade surplus might cause the USDCHF to decline, given the US dollar’s vulnerability in the market.

Central Bank Notes

SNB has tightened its monetary policy further, raising the SNB policy rate by 0.25 percentage points to 1.75%.
The new forecast predicts average annual inflation at 2.2% for 2023 and 2024 and 2.1% for 2025. Without the rate increase, the estimates would be even higher.
SNB predicts modest growth for the rest of the year due to subdued foreign demand, loss of purchasing power from inflation, and stricter financial conditions. The GDP is projected to grow around 1% this year.
Next meeting on 21 September 2023.

Next 24 Hours Bias

Weak Bearish

Global Markets

Asian Stock Markets

Nikkei is down 1.31%
Shanghai Composite is down 0.92%
Hang Seng down 0.27%
ASX up 0.02%

European Equities

DAX futures are down 0.05%
CAC 40 up 0.16%
FTSE up 0.50%

US Stock Market

Dow Jones up 0.31%
S&P 500 up 0.24%
Nasdaq 100 up 0.03%

Commodity Prices

Gold at $1983.75 (+0.17%)
Silver at $25.293 (-0.36%)
Brent Oil at $79.47 (+0.01%)
WTI Oil at $75.28 (+0.01%)

News & Data

(CNY) PBoC Loan Prime Rate Actual 3.55%, Forecast 3.55%, Previous 3.55% at 06:45
(AUD) Employment Change (Jun) Actual 32.6K, Forecast 15.0K, Previous 75.9K at 07:00
(USD) Initial Jobless Claims Forecast 242K, Previous 237K at 18:00
(USD) Existing Home Sales (Jun) Forecast 4.20M, Previous 4.30M at 19:30
(USD) Philadelphia Fed Manufacturing Index (Jul) Forecast –10.0, Previous –13.7 at 18:00

GBPUSD: Technical Analysis Indicates a Buy Outlook

Exponential Moving Average

EMA 5: The 5-day EMA stands at 1.2977, suggesting a Sell sentiment.
EMA 20: The 20-day EMA displays 1.2869, reinforcing a Buy indication.
EMA 50: With a value of 1.2708, the 50-day EMA aligns with a Buy recommendation.

Simple Moving Average

SMA 5: The 5-day SMA shows 1.3009, indicating a Sell sentiment.
SMA 20: The 20-day SMA records 1.2836, supporting a Buy stance.
SMA 50: The 50-day SMA stands at 1.2649, signifying a Buy indication.

RSI (Relative Strength Index)

The RSI, calculated over a 14-day period, displays a reading of 56.91, suggesting a neutral signal.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Negative condition.

Resistance And Support Levels

Resistance: The resistance level is identified at 1.2958.
Support: The support level is observed at 1.2865.

Summary And Trade Suggestions

Based on the technical analysis, GBP/USD presents a Buy outlook. Traders may consider entering a long position, considering the indicators, moving averages, and oscillators.

Trade Suggestion:

Entry Point: 1.2995
Take Profit: 1.3042
Stop Loss: 1.29616

EURUSD: Buy Signal Based on Technical Analysis

Exponential Moving Average

EMA 5: The 5-day EMA stands at 1.1197, indicating a Buy signal.
EMA 20: The 20-day EMA is at 1.1066, signalling a Buy sentiment.
EMA 50: The 50-day EMA currently sits at 1.0955, suggesting a Buy indication.

Simple Moving Average

SMA 5: The 5-day SMA shows a value of 1.1219, reinforcing the Sell recommendation.
SMA 20: With a value of 1.1022, the 20-day SMA also supports a Buy sentiment.
SMA 50: The 50-day SMA registers at 1.0888, affirming a Buy indication.

RSI (Relative Strength Index)

The RSI, calculated over a 14-day period, stands at 70.16, signifying a Buy signal.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Neutral stance.

Resistance And Support Levels

Resistance: The resistance level is observed at 1.1241.
Support: The support level is identified at 1.1187.

Summary And Trade Suggestions

In summary, the technical analysis of EURUSD points towards a Buy sentiment. Considering the indicators, moving averages, and oscillators, it seems favourable for traders to enter a long position.

Trade Suggestion:

Entry Point: 1.1248
Take Profit: 1.1280
Stop Loss: 1.1227

AUDUSD: Technical Analysis Indicates a Buy Sentiment

Exponential Moving Average

EMA 5: The 5-day EMA stands at 0.6804, indicating a Buy signal.
EMA 20: The 20-day EMA is at 0.6755, signalling a Buy sentiment.
EMA 50: The 50-day EMA currently sits at 0.6718, suggesting a Buy indication.

Simple Moving Average

SMA 5: The 5-day SMA shows a value of 0.6811, reinforcing the Buy recommendation.
SMA 20: With a value of 0.6716, the 20-day SMA also supports a Buy sentiment.
SMA 50: The 50-day SMA registers at 0.6689, affirming a Buy indication.

RSI (Relative Strength Index)

The RSI, calculated over a 14-day period, stands at 58.75, signifying a Buy signal.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Negative stance.

Resistance And Support Levels

Resistance: The resistance level is observed at 0.6847.
Support: The support level is identified at 0.6785.

Summary And Trade Suggestions

In summary, the technical analysis of AUDUSD points towards a Buy sentiment. Considering the indicators, moving averages, and oscillators, it seems favourable for traders to enter a long position.

Trade Suggestion:

Entry Point: 0.6883
Take Profit: 0.6945
Stop Loss: 0.6838

USDJPY: Technical Analysis Indicates a Sell Sentiment

Exponential Moving Average

EMA 5: The 5-day EMA stands at 139.34, indicating a Sell signal.
EMA 20: The 20-day EMA is at 140.65, signalling a Sell sentiment.
EMA 50: The 50-day EMA currently sits at 139.96, suggesting a Sell indication.

Simple Moving Average

SMA 5: The 5-day SMA shows a value of 130.07, reinforcing the buy recommendation.
SMA 20: With a value of 141.90, the 20-day SMA also supports a Sell sentiment.
SMA 50: The 50-day SMA registers at 140.47, affirming a Sell indication.

RSI (Relative Strength Index)

The RSI, calculated over a 14-day period, stands at 39.78, signifying a Sell signal.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Neutral stance.

Resistance And Support Levels

Resistance: The resistance level is observed at 139.96.
Support: The support level is identified at 138.80.

Summary And Trade Suggestions

In summary, the technical analysis of USDJPY points towards a Sell sentiment. Considering the indicators, moving averages, and oscillators, it seems favourable for traders to enter a short position.

Trade Suggestion:

Entry Point: 138.39
Take Profit: 137.65
Stop Loss: 138.97

FTSE 100: Technical Analysis Indicates a Buy Sentiment

Exponential Moving Average

EMA 5: The 5-day EMA stands at 7523.83, indicating a buy signal.
EMA 20: The 20-day EMA is at 7471.23, signalling a Buy sentiment.
EMA 50: The 50-day EMA currently sits at 7540.48, suggesting a Buy indication.

Simple Moving Average

SMA 5: The 5-day SMA shows a value of 7497.56, reinforcing the Buy recommendation.
SMA 20: With a value of 7443.56, the 20-day SMA also supports a Buy sentiment.
SMA 50: The 50-day SMA registers at 7559.78, affirming a Buy indication.

RSI (Relative Strength Index)

The RSI, calculated over a 14-day period, stands at 62.57, signifying a positive signal.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Positive stance.

Resistance And Support Levels

Resistance: The resistance level is observed at 7650.1.
Support: The support level is identified at 7565.8.

Summary And Trade Suggestions

In summary, the technical analysis of the FTSE 100 points towards a Buy sentiment. Considering the indicators, moving averages, and oscillators, it seems favourable for traders to enter a long position.

Trade Suggestion:

Entry Point: 7681.6
Take Profit: 7759.2
Stop Loss: 7620.0

BRENT CRUDE OIL: Technical Analysis Indicates a Buy Signal

Exponential Moving Average

EMA 5: The 5-day EMA stands at 79.35, indicating a Buy signal.
EMA 20: The 20-day EMA is at 77.81, signalling a Buy sentiment.
EMA 50: The 50-day EMA currently sits at 77.18, suggesting a Buy indication.

Simple Moving Average

SMA 5: The 5-day SMA shows a value of 79.24, reinforcing the Buy recommendation.
SMA 20: With a value of 77.04, the 20-day SMA also supports a Buy sentiment.
SMA 50: The 50-day SMA registers at 76.11, affirming a Buy indication.

RSI (Relative Strength Index)

The RSI, calculated over a 14-day period, stands at 58.04, signifying a Buy signal.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Neutral stance.

Resistance And Support Levels

Resistance: The resistance level is observed at 79.93.
Support: The support level is identified at 78.51.

Summary And Trade Suggestions

In summary, the technical analysis of Brent Crude Oil points towards a Buy sentiment. Considering the indicators, moving averages, and oscillators, it seems favourable for traders to enter a long position.

Trade Suggestion:

Entry Point: 80.73
Take Profit: 82.86
Stop Loss: 79.13

SILVER: Technical Analysis Indicates a Buy Sentiment

Exponential Moving Average

EMA 5: The 5-day EMA stands at 24.92, indicating a Buy signal.
EMA 20: The 20-day EMA is at 23.99, signalling a Buy sentiment.
EMA 50: The 50-day EMA currently sits at 23.75, suggesting a Buy indication.

Simple Moving Average

SMA 5: The 5-day SMA shows a value of 25.01, reinforcing the Buy recommendation.
SMA 20: With a value of 23.54, the 20-day SMA also supports a Buy sentiment.
SMA 50: The 50-day SMA registers at 23.55, affirming a Buy indication.

RSI (Relative Strength Index)

The RSI, calculated over a 14-day period, stands at 71.02, signifying a Buy signal.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Neutral stance.

Resistance And Support Levels

Resistance: The resistance level is observed at 25.27.
Support: The support level is identified at 24.78.

Summary And Trade Suggestions

In summary, the technical analysis of Silver points towards a Buy sentiment. Considering the indicators, moving averages, and oscillators, it seems favourable for traders to enter a long position.

Trade Suggestion:

Entry Point: 25.44
Take Profit: 26.13
Stop Loss: 24.94

ETHEREUM: Technical Analysis Indicates a Buy Signal

Exponential Moving Average

EMA 5: The 5-day EMA stands at 1922.97, indicating a Buy signal.
EMA 20: The 20-day EMA is at 1906.37, signalling a Buy sentiment.
EMA 50: The 50-day EMA currently sits at 1876.00, suggesting a Buy indication.

Simple Moving Average

SMA 5: The 5-day SMA shows a value of 1923.31, reinforcing the Buy recommendation.
SMA 20: With a value of 1912.31, the 20-day SMA also supports a Buy sentiment.
SMA 50: The 50-day SMA registers at 1857.46, affirming a Buy indication.

RSI (Relative Strength Index)

The RSI, calculated over a 14-day period, stands at 53.47, signifying a positive signal.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Neutral stance.

Resistance And Support Levels

Resistance: The resistance level is observed at 1938.71.
Support: The support level is identified at 1900.47.

Summary And Trade Suggestions

In summary, the technical analysis of Ethereum points towards a Buy sentiment. Considering the indicators, moving averages, and oscillators, it seems favourable for traders to enter a long position.

Trade Suggestion:

Entry Point: 1959.96
Take Profit: 2015.21
Stop Loss: 1921.71

Conclusion

The stock market showed positive trends as earnings improved, with the Dow recording its eighth consecutive day of gains. While the US dollar weakened, the Australian dollar and other currency pairs advanced. Investors are keeping a close eye on various key news events that could impact the market further. As global markets and commodity prices fluctuate, staying informed about central bank notes and economic data will.