. Fundamental Analysis Report With Charting Trends- 24-May-2023

FUNDAMENTAL ANALYSIS REPORT WITH CHARTING TRENDS- 24-MAY-2023

FUNDAMENTAL ANALYSIS REPORT WITH CHARTING TRENDS- 24-MAY-2023

24 May 2023

FUNDAMENTAL REPORT FORECAST 

MARKET UPDATE:

Stocks plunged on Debt Stalemate

The lack of movement on the debt crisis has caused the US stock markets to make some abrupt downward moves during today’s trading session. On Tuesday in the late afternoon, Kevin McCarthy left the White House with the advice that the parties had failed to reach a consensus and that no further negotiations were scheduled. The Nasdaq led the way lower, ending 1.26% in the red, followed by the S&P and the Dow, which all closed. The dollar strengthened against most of the major pairings as short-end US Treasury rates once more surged higher, with the 1-month trading at record highs.

The US Debt Problem Could Spark Some Major Developments in the Future 

Updates on the US debt issue have dominated financial market news for the past several days, but they have been a slow-burning fuse for months, and markets don’t seem ready for a default to happen. Wall Street’s fear index, or VIX, is currently trading at relatively low levels, but investors with long memories will recall 2011, when the US government almost missed the deadline for increasing the ceiling and S&P downgraded the US from AAA to AA+. Markets were in a tailspin at the time, and the VIX reached 48-point highs. Given the potential risks from these and other factors, such as the ongoing concern for the US banking system, stock markets are trading at relatively high levels. A rush for the exit might result in major downside corrections across financial markets.

What happened in the Asian Session?

RBNZ Governor Adrian Orr announced a dovish 25 basis point rate increase and highlighted positive economic statistics, a relaxed labour market, and rising house prices that were getting closer to sustainable levels. He expressed assurance that he would control inflation.

What does it mean for Europe & US Session? 

A higher-than-anticipated set of UK CPI figures could raise expectations that the BoE will retain its hawkish stance and push the Cable towards 1.2500. The GBP/USD pair may also experience downward pressure to 1.2350.

Gold (XAU)

Key news events today

No major news events.

What can we expect from gold today?

The FOMC Meeting Minutes, which reveal details about the deliberations and decisions made by the US central bank, will be made public, which will have a substantial effect on the USD and, as a result, the price of gold. Positive commentary on inflation, employment, or economic growth may strengthen the USD, which could cause gold prices to fall. On the other hand, a cautious or gloomy outlook might make gold more appealing and raise its value. The US dollar and gold are frequently inversely connected.

Next 24 Hours Bias

Mixed

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Before the OPEC+ summit, Saudi Arabia warned oil market speculators. The price of US petrol futures may rise because of this development. The third consecutive weekly drop in oil stocks was announced by the API, significantly bolstering market confidence.

Next 24 Hours Bias

Weak bullish

The Pound (GBP)

Key news events today

CPI y/y

What can we expect from GBP today?

A higher-than-anticipated set of UK CPI figures could raise expectations that the BoE will retain its hawkish stance and push the Cable towards 1.2500. The GBP/USD pair may also experience downward pressure to 1.2350.

Central Bank Notes:

  • The MPC of the BoE voted 7-2 to increase Bank Rate by 0.25 percentage points to 4.5%.
  • The updated projections show that CPI inflation is expected to decline slightly above 1% at the two and three-year horizons, below the 2% target.
  • CPI increased unexpectedly but is expected to fall sharply over the rest of the year due to lower energy prices.
  • Next meeting on 22 June 2023 

Next 24 Hours Bias

Weak bearish

Global Markets:

Asian Stock Markets: Nikkei down 0.89%, Shanghai Composite down 1.01%, Hang Seng down 1.34%, ASX down 0.63%

European equities, the DAX futures down 0.44%, CAC 40 down 1.33%, FTSE down 0.10%.

US Stock Market: Dow jones down 0.66%, S&P 500 down at 1.04%, Nasdaq 100 down at 1.23%.   

Commodities: Gold at $1971.75 (-0.15%), Silver at $23.34 (-0.46%), Brent Oil at $77.67 (+1.08%), WTI Oil at $73.84 (+1.29%)

News & Data

  • (NZD) RBNZ Interest Rate Decision Actual 5.50%, Forecast 5.50%, Previous 5.25% at 07:30
  • (NZD) RBNZ Rate Statement at 07:30
  • (GBP) CPI (YoY) (Apr) Actual 8.7%, Forecast 8.3%, Previous 10.1% at 11:30
  • (USD) FOMC Meeting Minutes at 23:30
  • (EUR) ECB President Lagarde Speaks at 23:15

Technical Outlook

GBPUSD

The GBP/USD pair is currently trading at 1.2435, down 0.15% on the day. The pair has been in a downtrend since the beginning of the year, and it is currently trading near its 200-day moving average.

The RSI indicator is in the oversold territory, which suggests that the pair may be due for a bounce. However, the MACD indicator is still in a bearish trend, which suggests that the downtrend is still in place.

The main support level for the GBP/USD pair is at 1.2400. If the pair breaks below this level, it could fall to the 1.2300 level.

The main resistance level for the pair is at 1.2500. If the pair breaks above this level, it could rise to the 1.2600 level.

Overall, the GBP/USD pair is likely to remain in a downtrend soon. However, there is a possibility of a short-term bounce if the pair breaks above the 1.2500 level.

EURUSD

The EUR/USD pair is currently trading at 1.0780, down 0.20% on the day. The pair has been in a downtrend since the beginning of the year, and it is currently trading near its 200-day moving average.

The RSI indicator is in the oversold territory, which suggests that the pair may be due for a bounce. However, the MACD indicator is still in a bearish trend, which suggests that the downtrend is still in place.

The main support level for the EUR/USD pair is at 1.0750. If the pair breaks below this level, it could fall to the 1.0700 level.

The main resistance level for the pair is at 1.0800. If the pair breaks above this level, it could rise to the 1.0850 level.

Overall, the EUR/USD pair is likely to remain in a downtrend soon. However, there is a possibility of a short-term bounce if the pair breaks above the 1.0800 level.

AUDUSD

The AUD/USD pair is currently trading at 0.6625, down 0.15% on the day. The pair has been in a downtrend since the beginning of the year, and it is currently trading near its 200-day moving average.

The RSI indicator is in the oversold territory, which suggests that the pair may be due for a bounce. However, the MACD indicator is still in a bearish trend, which suggests that the downtrend is still in place.

The main support level for the AUD/USD pair is at 0.6600. If the pair breaks below this level, it could fall to the 0.6550 level.

The main resistance level for the pair is at 0.6700. If the pair breaks above this level, it could rise to the 0.6750 level.

Overall, the AUD/USD pair is likely to remain in a downtrend soon. However, there is a possibility of a short-term bounce if the pair breaks above the 0.6700 level.

USDJPY

The USD/JPY pair is currently trading at 137.83, up 0.15% on the day. The pair has been in an uptrend since the beginning of the year, and it is currently trading near its 200-day moving average.

The RSI indicator is in the overbought territory, which suggests that the pair may be due for a pullback. However, the MACD indicator is still in a bullish trend, which suggests that the uptrend is still in place.

The main support level for the USD/JPY pair is at 137.50. If the pair breaks below this level, it could fall to the 137.00 level.

The main resistance level for the pair is at 138.00. If the pair breaks above this level, it could rise to the 138.50 level.

Overall, the USD/JPY pair is likely to remain in an uptrend in the near future. However, there is a possibility of a short-term pullback if the pair breaks below the 137.50 level.

S&P 500

The S&P 500 is trading at 4,153.75, up 0.15% on the day. The index has been in a downtrend since the beginning of the year, and it is currently trading near its 200-day moving average.

The RSI indicator is in the oversold territory, which suggests that the index may be due for a bounce. However, the MACD indicator is still in a bearish trend, which suggests that the downtrend is still in place.

The main support level for the S&P 500 is at 4,148. If the index breaks below this level, it could fall to the 4,111 level.

The main resistance level for the index is at 4,179. If the index breaks above this level, it could rise to the 4,226 level.

Overall, the S&P 500 is likely to remain in a downtrend in the near future. However, there is a possibility of a short-term bounce if the index breaks above the 4,200 level.

WTI CRUDE OIL

With the price of WTI crude oil above a significant ascending trend line and exhibiting a positive trend, further bullish momentum may be imminent.

The price may decline further in the near term to the first support level at 70.99, which is seen as a swing low support. In situations where the price has already bottomed out, swing low support levels have historically served as a trustworthy floor.

As an overlap support, the second support level is located at 69.25. It is possible that this level will stop a price decrease because overlap supports have traditionally served as both resistance and support.

Price may rise to the first resistance level at 73.79 if it bounces off the first support level. This level is designated as an overlap resistance and may be a significant barrier to price increases.

The second resistance level, sometimes known as an overlap resistance, is located at 76.79. Price rises have frequently been halted by overlap resistance levels in the past, possibly signaling a reversal.

GOLD

Gold is trading at $1,875 per ounce, up 0.15% on the day. The price of gold has been on a downward trend since the beginning of the year, but it has been showing signs of a rebound in recent weeks.

The RSI indicator is in the oversold territory, which suggests that the market may be due for a bounce. However, the MACD indicator is still in a bearish trend, which suggests that the downtrend is still in place.

The main support level for gold is at $1,952 per ounce. If the price breaks below this level, it could fall to the $1935 per ounce level.

The main resistance level for the price is at $1,980 per ounce. If the price breaks above this level, it could rise to the $2000 per ounce level.

Overall, the price of gold is likely to remain volatile in the near future. However, there is a possibility of a short-term rebound if the price breaks above the $1,900 per ounce level.

LITECOIN

The price of the LTC/USD pair is above a significant ascending trend line, which is a major factor in the bullish trend. This means that there may be more positive momentum ahead.

The first support level at 85.43, which serves as a retreat support, may be reached by the price in the near future. Because they have previously stopped a downward trend and brought about a price comeback, pullback support levels are sometimes regarded as powerful support zones. 

The second level of support is at 80.92 and is seen as a multi-swing low support. When the price has repeatedly bottomed out, multi-swing low support levels have traditionally served as a firm floor, which increases their relevance as a possible support level.

Upon rising from the first support level, the price may ascend to the first resistance level at 89.93 on the upside. With its overlap resistance and alignment with the 50% Fibonacci retracement level, this level can be a formidable obstacle to price gains.