. Fundamental Analysis Report With Charting Trends- 25 April 2023

FUNDAMENTAL ANALYSIS REPORT WITH CHARTING TRENDS – 25 APRIL 2023

FUNDAMENTAL ANALYSIS REPORT WITH CHARTING TRENDS – 25 APRIL 2023

25 Apr 2023

FUNDAMENTAL REPORT FORECAST

MARKET UPDATE:

On Monday, the Nasdaq closed, trailing both the S&P 500 and the Dow, under pressure from well-known mega caps as investors anticipated Microsoft’s results and Tesla shares sank on worries about its spending plans.

After increasing its 2023 capital expenditure forecast to increase output, Tesla Inc. closed lower by 1.5%, becoming the second-largest drag on the benchmark S&P 500 after Microsoft Corp.

Wall Street has been supported this year by a boom in these equities, but investors are concerned about whether the gains can last give the bleak economic outlook.

“People are a little hesitant that the outperformance, which has so far been significantly higher than predicted, may not continue throughout earnings season. As the managing director of trading and derivatives at Charles Schwab in Austin, Texas, Randy Frederick acknowledged that the bar was low.

Concern over incoming economic statistics, such as first-quarter growth and inflation readings, was another issue Frederick brought up.

Stronger-than-expected results from big banks have kept U.S. stocks mostly stable through the beginning of the earnings season, allaying concerns about a spill over from the regional banking crisis in March. According to Refinitiv IBES data, of the 90 S&P 500 companies that have released first-quarter results so far, nearly 77% have surpassed analysts’ expectations, compared to the long-term average beat rate of 66%.

Following recent indications of slower inflation and economic growth, U.S. Treasury yields decreased, but investors were more concerned about a government budget standoff and the possibility that the country may reach its debt ceiling earlier than anticipated.

What happened in the US Session?

Compared to the expected value of 0.1%, the New Housing Price Index (NHPI) m/m data release for Canada was 0.0% lower. The Belgian NBB company Climate data for the EUR was -7.8, which was lower than both the expected value of -5.2 and the prior reading of -7.6 and indicates a decline in company confidence in Belgium.

What does it mean for the Asian Session?

If the upcoming Japanese inflation data set matches expectations, the USD/JPY pair may test the most recent highs above 134.70. In contrast, higher inflation data for Japan could push the pair lower, possibly as low as 134.00, with further declines possible as low as 133.50.

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

Today is a bank holiday in the nation, thus the direction of the AUD price will probably be determined by the impending CPI statistics. The data set is anticipated to be lower than the previous one, pointing to a decline in inflation that could reduce demand for the currency.  

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

Weak Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

As there is a bank holiday in New Zealand today, it is anticipated that the impending Trade Balance data will have an impact on the direction of the NZD’s price. The preceding report on the trade balance revealed a deficit of -714M, worse than the anticipated deficit of -500M, demonstrating that imports outpaced exports by a larger margin than anticipated.  

Central Bank Notes:

  • OCR increased by 50bps from 4.75% to 5.25%
  • Recent severe weather events in the North Island have led to higher prices, increasing the risk of inflation expectations exceeding the target range.
  • New Zealand’s economic growth is expected to slow through 2023 due to the slowing global economy, reduced residential building activity, and the ongoing effects of monetary policy tightening.
  • Next meeting is on 25 May 2023

Next 24 Hours Bias

Weak Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

The Trade Balance data for Switzerland is expected to rise from the previous month’s 3.31B to 4.20B in the next release. As a result of increased demand for Swiss exports and a stronger CHF, this might have a favourable effect on the CHF.

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

Weak Bullish

Global Markets:

Asian Stock Markets: Nikkei up 0.09%, Shanghai Composite down 0.32%, Hang Seng down 1.71%, ASX down 0.11%

European equities, the DAX futures down 0.10%, CAC 40 down 0.71%, FTSE down 0.28%.

US Stock Market: Dow jones up 0.20%, S&P 500 up at 0.09%, Nasdaq 100 down at 0.29%.            

Commodities: Gold at $1987.94 (-0.07%), Silver at $25.01 (-0.57%), Brent Oil at $82.28 (-0.31%), WTI Oil at $78.48 (-0.34%)

News & Data

  • (USD) Building Permits Forecast 1.413M, Previous 1.550M at 19:00
  • (USD) New Home Sales (Mar) Forecast 630K, Previous 640K at 19:30 
  • (USD) CB Consumer Confidence (Apr) Forecast 104.0, Previous 104.2 at 19:30

Technical Outlook

GBPUSD

The price may continue to rise towards the first barrier level given the prevailing bullish momentum on the GBP/USD chart. 

The initial support level and a nice level for probable support is 1.2340. Should the price fall, a significant amount of potential support is provided by the level’s overlap support and 23.60% Fibonacci retracement. 

The next potential level of support is at 1.2284, which likewise lies inside the 38.20% Fibonacci retracement and overlaps the prior level. At this level, the price has previously found support.

On the other hand, the first resistance level is at 1.2475 if the price were to increase. A big level of possible resistance for the price exists at this level, which is a multi-swing high resistance and coincides with the 61.80% Fibonacci retracement.

The next possible resistance level is at 1.2530, which would be reached if the price were to pass through the first resistance level. This level has served as a price resistance in the past and is a multi-swing high resistance.

EURUSD

The price is in a bullish ascending channel, which adds to the overall bullish momentum on the EUR/USD chart. This channel indicates that the price may continue to grow given its upward tendency. 

Price may continue to rise in a bullish direction approaching the 1.1028 first resistance level. Since it is a pullback resistance, this level has previously served as a price barrier level. The price’s upward trend might continue with a break over this level. 

The first support level, at 1.0920, is a great spot to seek for potential assistance. If the price were to fall, this level might provide support as an overlap support.

The next possible support level, if the price were to go below the first support level, is at 1.0840. This level has served as a support level for the price in the past and is also an overlap support.

However, if the price were to increase, the second resistance level would be at 1.1060. Since it has previously served as a level of resistance for the price, this level is a swing high resistance, which means that if the price were to approach it, it might offer powerful opposition.

There is an intermediate resistance level at 1.0990 if the price were to pass through the first resistance level. Prior to reaching the second resistance level, the price may encounter opposition at this overlap resistance level.

AUDUSD

The AUD/USD chart is in the red, suggesting that prices may continue to fall. It is therefore expected that the price may decrease in the direction of the second support level at 0.6643 after making a bearish breach off the first support level at 0.6690. 

The initial support level, which overlaps with the 78.60% Fibonacci projection level and serves as a support, is at 0.6685, which is seen favourably. Given that it has historically drawn purchasing activity, this support level is essential for traders.

The second level of support, a multi-swing low support, is located at 0.6634. This level has previously attracted interest from buyers and may provide as additional support if the price declines even further.

The initial resistance level, which is an overlap barrier and corresponds with the 38.20% Fibonacci retracement level, is at 0.6785. In the past, there has been a lot of selling interest around this level.

The 50% Fibonacci retracement level and the second resistance level are both at 0.6880, which is a pullback resistance. This resistance level is crucial because it can serve as a barrier to any price increases.

USDJPY

On the USD/JPY chart, the price is currently above a crucial ascending trend line and on an ascending trend line that acts as support, suggesting that additional upward momentum is expected. It is therefore expected that the price will eventually continue to rise in the direction of the first resistance level at 135.50. 

Since it crosses over another level of support and falls at the 50% Fibonacci retracement level, the original level of support at 133.93 is seen favourably. Given that it has historically drawn purchasing activity, this support level is essential for traders.

The second support level is at 130.00, although it is not explained why it is thought to be strong. However, if the price continues to decline, this level may provide as additional support.

The initial resistance level, which is an overlap resistance, is at 135.50 in terms of levels of resistance. A breakout above this level might start a bullish momentum that could continue as this level has historically been a big region of selling interest.

The second resistance level, which is also an overlap resistance, is located at 138.00. The initial resistance level may potentially operate as an additional barrier to price increases if the price were to break above it.

S&P 500

The S&P 500 chart suggests that prices might keep falling. It is therefore expected that the price may make a likely negative move in the direction of the first support level at 4136.77. 

The 4073.32 level serves as the initial support level and is seen favourably since it crosses over the 61.80% Fibonacci retracement level and serves as a support. If the price decrease persists, this support level may operate as another support level because it has traditionally drawn buying activity.

The second support level, a pullback support, is located at 4073.32, which also happens to be the 38.20% Fibonacci retracement level. This level has previously drawn interest from buyers and could serve as additional support if the price continues to decline.

The first resistance level, which is also a multi-swing high resistance, is located at 4208.15. This level has historically seen a lot of selling activity and might potentially function as resistance to price increases.

The second resistance level, which is similarly a multi-swing high resistance, is located at 4283.50. This resistance level is crucial because it can serve as a barrier to any price increases.

WTI CRUDE OIL

WTI may continue its downward trend towards the first support.

The price is currently below a significant falling trend line, which is one of the elements contributing to the WTI chart’s current bearish momentum. It implies that further bearish momentum is imminent.

Price might likely make a negative move towards the first support at 75.57 if it maintains its current momentum. Given that it lines up with a swing low support and a 38.20% Fibonacci retracement, this level is a strong support.

If the price moves away from the first support and then upward, it can move towards the pullback resistance level at the intermediate resistance at 78.87. From there, the price may continue to decline in direction of the first resistance level at 79.04. An overlap resistance exists at this level.

The second support at 71.78 may be reached if the price were to break through the first level, though. This level serves as a pullback support, making it a strong support as well. The price might carry on falling towards the second barrier at 84.49 if it were to breach the second support. There is substantial swing resistance at this level.

SILVER

Technical analysis indicates that the silver chart has been trending downward lately. The price is most likely to have a negative reaction off the first resistance level and drop to the first support level, according to the chart.

24.66, a multi-swing low support and 78.60% Fibonacci retracement level, serves as the first support level. This level has historically demonstrated significant support and might do so once more. The next support level, which is also a multi-swing low support and a 78.60% Fibonacci projection level, is at 23.93 if the price drops below this level.

On the other hand, the initial resistance level, which is also an overlap resistance level, is located at 25.48. This level has historically served as resistance and is expected to do so again. The next resistance level is at 26.07, which is a multi-swing high resistance and a 50% Fibonacci retracement level, if the price breaks above this level.

BITCOIN

BTC/USD Momentum Remains Bullish with a Possibility of Reversing from First Support 

The overall momentum for BTC/USD continues to be good because the price is currently above a significant ascending trend line and more positive momentum is predicted.  

The possibility exists that BTC/USD will move in the direction of the first resistance after making a positive bounce off the first support. 

The initial support level, 26527.58, is a helpful level to keep an eye on for a potential bounce. Currently, the overlap support level coincides with a 38.20% Fibonacci retracement.

Price movement could move upward towards the first resistance at 27918.15 if it bounces off this support level. This level is an important one to watch since it acts as a pullback resistance and coincides with a 38.20% Fibonacci retracement.

If the first support level is broken, the price may fall towards the second support at 24789.38. This level is important since it also functions as an overlap support.

On the other hand, if the price can go past the first level of resistance, it may move up towards the second level of resistance at 29308.71 A significant level of resistance, this level represents a pullback resistance that coincides with a 61.80% Fibonacci retracement.