. Fundamental Analysis Report With Charting Trends- 29 March 2023

FUNDAMENTAL ANALYSIS REPORT WITH CHARTING TRENDS – 29 MARCH 2023

FUNDAMENTAL ANALYSIS REPORT WITH CHARTING TRENDS – 29 MARCH 2023

29 Mar 2023

MARKET UPDATE:

Markets Have a Calm Day, but Will It Last?

Yesterday’s market activity was relatively low, particularly when compared to the volatility of recent weeks. The main US indices ended the day on the downside but not significantly, with the Dow down 0.1%, the S&P 0.2%, and the Nasdaq 0.5% in the red as investors continued to take profits in tech stocks. Stock markets had a stagnant day with very few foreign indices moving over 1%. The US dollar suffered the most from the resurgence of risk appetite in the currency market, losing ground against all the majors by 0.3% as the day went on, despite a rise in US treasury yields, with the 10-year ending the day at a high above 3.57.

Dollar Conundrum Ahead for Dealers

Investors have cautious optimism at the start of this week, and each day that passes without a new bank panic or market shock contributes to that outlook. The dollar has been highly correlated with interest rate differentials over the past few months, but recent market turmoil has hit that correlation, and its haven status has dominated the direction in recent weeks. This presents a bit of a problem for currency traders. The riddle is whether a return to normalcy and stable markets will lead us back to seeing a hawkish Fed that is much more concerned with inflation, which will push the dollar higher, or whether the ‘risk on’ element of the trade will prevail, and the dollar depreciates.

Asian Traders Focus on Aussie Data

Today is another quiet day for macroeconomic reports on all international markets, so sentiment is probably going to have a bigger impact on direction. However, the CPI data, which will be released at 11.30 a.m. Sydney time, will be the main emphasis for Australian markets. Although there have been signs of slowing in the Australian market, a stronger print along with a calming in the recent global market turmoil could see pressure on the RBA to push a more hawkish stance. The market is expecting a slight drop for the y/y number to 7.2%, which is still well above where the RBA would like to see it.

What happened in Asian session?

The Australian CPI year-over-year fell by 6.8% (previously 7.4%, predicted 7.2%), marking the second time in history that this has happened. This move should make it possible for the RBA to defend stopping the rate walk cycle that has harmed the regional economy.

What does it mean for Europe & US Session?

The AUD/USD exchange rate should fall to 0.6670 or even 0.6630 due to the reduced Australian CPI.

Price movements will probably consolidate in the range established in the previous session due to the absence of first-tier date releases for the upcoming sessions.

In terms of commodities, the upcoming increase in Crude Oil Inventories (forecast 1.8 million, previous 1.1 million) will likely cause the black gold to yield back some of its recent gains in direction of $72 level.

Gold (XAU)

Key news events today

No major news events.

What can we expect from gold today?

Gold is frequently regarded as a safe-haven asset, and during times of inflation or economic turbulence, it’s worth usually rises. The value of yellow gold could decline in the upcoming sessions as the financial crisis eases and the upcoming AUD CPI y/y is predicted to decline.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

CPI y/y

What can we expect from AUD today?

Australia’s CPI y/y is predicted to rise by 7.2%, which is slightly less than the previous estimate of 7.4%. The RBA may decide to hold off on raising interest rates if the CPI figure is less than anticipated.

Central Bank Notes:

  • Cash rate raised by 25 basis points to 3.60%.
  • Board prioritises returning inflation to target, with a likely need for further monetary policy tightening.
  • Board to closely monitor the global economy, household spending trends, inflation and labour market outlook when assessing interest rate increases.
  • Next meeting on 4 April 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?

There are no noteworthy updates for NZD currently. The upcoming data releases on Thursday—namely, the Building Consents m/m and ANZ Business Confidence—are expected to have an impact on its future path.

Central Bank Notes:

  • Monetary Policy Committee increased the OCR from 4.25% to 4.75%
  • Higher interest rates are needed to reduce inflation and support employment sustainably
  • Severe storms in North Island will increase inflation and disrupt production.
  • Next meeting is on 5 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?

Due to decreased investor demand and possible monetary policy changes, a result with a Credit Suisse Economic Expectations score of -12.3 could have a negative 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 11 April 2023

Next 24 Hours Bias

Mixed

Global Markets:

Asian Stock Markets: Nikkei up 1.33%, Shanghai Composite is down 0.16%, Hang Seng up 2.06%, ASX up 0.23%

European equities, the DAX futures up 0.91%, CAC 40 up 1.26%, and FTSE up 0.67%.

US Stock Market: Dow jones down 0.12%, S&P 500 is down at 0.16%, and Nasdaq 100 is down at 0.45%.                    

Commodities: Gold at $1966.78 (-0.32%), Silver at $23.26 (-0.12%), Brent Oil at $78.68 (0.69%), WTI Oil at $73.93 (1.02%)

News & Data

  • (USD) Pending Home Sales Index (Feb) Forecast –2.3%, Previous 8.1% at 19:30
  • (USD) Crude Oil Inventories Forecast 0.092M, Previous 1.117M at 20.00
  • (RUB) Unemployment Rate (Feb) Forecast 3.8%, Previous 3.6% at 21:30
  • (RUB) Retail Sales (YoY) (Feb) Forecast –11.1%, Previous –6.6% at 21:30
  • (EUR) European Central Bank Non-Monetary Policy Meeting at 12:30

Technical Outlook

GBPUSD

Price may continue to move downward towards the first support level at 1.21859, which is an important level to monitor because it overlaps with support. The second support at 1.21276, which is also an overlap support and lines up with the 38.20% Fibonacci retracement, is another potential support level to keep a watch on.

On the other hand, the first resistance level is at 1.23434, which is a strong level to monitor and a swing high resistance level. The second resistance at 1.24459, which is another overlap resistance level, would be the next level to watch for if price were to rise above this level.

Although the chart’s general momentum is weakly bearish, it is important to note that traders should pay attention to the support and resistance levels. While a break above the first resistance level at 1.23434 could prompt a move up to the second resistance level at 1.24459, a break below the first support level at 1.21854 could prompt a move down to the second support level at 1.21276.

EURUSD

Price may decline towards the overlap support at the first support level of 1.07997 if the bearish momentum persists. The second support level, at 1.06893, which is also an overlap support, would be the one to keep an eye on if price were to drop below this level.

On the other hand, if the price turned around, it might advance towards the swing high resistance at the first resistance level at 1.09277. This level should be watched closely by traders because a break above it could herald a possible bullish reversal.

It’s important to note that the EUR/USD chart’s present momentum is only marginally bearish, so traders should exercise caution and pay attention to support and resistance levels. When the first support level is broken, a move up to the second support level may follow, and when the first resistance level is broken, a move up to greater resistance levels may follow.

AUDUSD

Price may possibly continue rising in the near term towards the first resistance level.

The first support is at 0.66402, and it is a strong level because it overlaps with another support. The second support, which is also an overlap support, is located at 0.65493.

The first resistance, on the other hand, is located at 0.67744 and is a favorable level because it overlaps the previous resistance and coincides with the 38.20% Fibonacci retracement. The second barrier is located at 0.68764 and overlaps with the 50% Fibonacci retracement.

In general, the AUD/USD chart’s bullish momentum indicates that price may continue to climb toward the first resistance level at 0.6774. But in case of a market decline, it’s crucial to keep an eye on the support levels at 0.6549 and 0.6640.

USDJPY

The overall momentum of the USDJPY chart is weakly bearish with low confidence, according to the study of the chart. This is because of the price being below a significant declining trend line, which suggests the possibility of additional bearish momentum.

However, soon, the price might increase towards the first barrier at 132.818 before turning around and falling to the first support at 130.916. It’s important to note that the first support level is a swing low support and that the second support level, at 128.038, is also a swing low support and might offer additional support if prices continue to decline.

However, the first resistance level at 132.818 and the second resistance level at 134.559 both act as overlap resistance. Potentially, these amounts would act as a barrier to further price increases.

DAX 40

Price might move in a bullish direction in the direction of the first support level. It’s crucial to remember that the chart’s overall momentum can alter at any time.

14955.8, an overlap support level, serves as the first degree of support. If the price drops to this level, it will probably find support and rise once more. The second level of support is located at 1490.6, which also overlaps with the 61.80% Fibonacci retracement level. This level of support might also present a great buying chance.

On the other hand, the first resistance level, which is also an overlap resistance level, is located at 15231.5. Price pressure from sellers is expected to increase as it approaches this level. The second resistance level, which is also an overlap resistance level, is located at 15488.4. If the price can move through this resistance level, it might indicate a strong bullish trend and a possible buying chance.

WTI CRUDE OIL

With low confidence, the bullish tendency for WTI crude oil has been shaky. The price, however, might possibly make a bearish response off the first resistance level in the near term, falling towards the first support. The first support, an overlap support, is situated at 71.48.

The second support level, which is also an overlap support level and is situated at 66.81, could be reached if the price drops below this level.

However, if price can surpass the first resistance level, which is an overlap resistance and the 61.80% Fibonacci retracement level at 74.06, it may be able to advance to the second resistance level, which is another overlap resistance level at 77.38.

Overall, the state of the market suggests that traders exercise caution and pay close attention to the important support and resistance levels noted above. A bearish response at resistance may be possible given the weak bearish momentum, but traders should hold off on making any transactions until confirmation.

GOLD

The first level of support is at 1936.90, which is also a 38.20% Fibonacci retracement level and overlap support. The second support level at 1910.45, which is also an overlap support and a 50% Fibonacci retracement level, could become breached if this level is broken.

On the upside, an overlap resistance level at 1979.89 serves as the first opposition level. The second resistance level at 2003.04, which is also an overlap resistance, could be reached if this level is broken.

To spot potential trading opportunities, traders should keep a watch on price changes close to these important levels. An extension of the bullish trend could be indicated by a break above the resistance levels, while a break below the support levels might indicate a turn in the opposite direction, towards a negative trend.

LITECOIN

LTC/USD Bullish Momentum; Potential upside to First Resistance

The overall momentum of the LTC/USD chart is presently bullish, and the price may continue to rise in direction of the initial resistance level. The first support level for LTC/USD is at 88.22. This level is a strong support because it overlaps with another level and lines up with a 38.20% Fibonacci reversal. If price were to break below this level, it might head in the direction of the second support level, which is overlap support and is located at 85.01.

In contrast, the first resistance mark for LTC/USD is at 92.81, which is a high resistance with multiple swings. Previous attempts to break above this mark have been unsuccessful, which suggests that the bears are applying significant selling pressure.