FUNDAMENTAL REPORT FORECAST.

Nasdaq up 2.2% as Markets Rise on Debt Deal

Following the news out of Washington that a compromise on the debt crisis has been agreed upon in principle, Asian markets are expected to start the day strongly. The debt ceiling will be raised because of an agreement between President Biden and House Speaker Kevin McCarthy, allaying investor concerns about a potential default. The Dow closed 1%, the S&P was up 1.3%, and the Nasdaq was up 2.19% on the day as rumors of a potential merger spread to the markets. US markets ended the week on a bullish note. The dollar is still trading at recent highs versus the majority of the other currencies, and now that a deal has been reached, the US treasury market should start to stabilize.

Changing investor attention to the Fed and data

Investors are expected to focus on other market issues now that a deal on the debt crisis appears to be almost a lock in Washington. Fed expectations and the data that affects them are, as usual, front and center. Since the market is aware that the Core PCE Price Index is a preferred indication for the FOMC, the fact that it came out higher than anticipated on Friday has only raised anticipation for a rate hike. The market is currently pricing in a nearly 70% chance that the Fed will raise rates again at its meeting in June. As investors attempt to price in additional factors, this could cause a brief relief bounce for stock markets and risk assets this week.

What happened in the Asian Session?

Tokyo’s Core CPI registered at 3.2% year over year, behind both the 3.4% predicted and the 3.5% recorded previously. The Japanese Yen may suffer as a result of the weaker-than-expected statistics since it may cause the Bank of Japan to adopt a more dovish approach, possibly leading to the continuation of low-interest rates.

What does it mean for Europe & US Sessions?

If the US Core PCE Price Index m/m is much lower than 0.3%, the profit-taking that has been occurring since the DXY’s recent increase may intensify. A decrease to 103.40 would not be unexpected. Otherwise, persistent US inflation might push the Dollar Index up to 105.00.

Gold (XAU)

Key news events today

No major news events.

What can we expect from gold today?

In line with recent dovish remarks from the Fed, the USD could decline if the Core PCE Price Index m/m is lower than anticipated. This would indicate a lower possibility of tightening monetary policy, which is good for gold and could have a favourable impact on the price of gold. 

Next 24 Hours Bias

Mixed

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Alexander Novak, the deputy prime minister of Russia, dismissed the probability that the OPEC+ alliance would further reduce production at their upcoming summit. The OPEC+ summit had earlier fuelled hope and supported oil prices since it was expected to address output changes. However, a drop in oil prices is inevitable because of Novak’s rejection of further reduction. 

Next 24 Hours Bias

Weak bearish

The Pound (GBP)

Key news events today

No major news

What can we expect from GBP today?

Following a prior fall of -0.9%, the UK’s Retail Sales m/m data is expected to show rise of 0.3% in the approaching release. This encouraging development means that the retail industry will experience higher customer spending and economic activity. The enhanced data is anticipated to be advantageous for the GBP.

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 bullish

Global Markets:

Asian Stock Markets: Nikkei is up 1.03%, Shanghai Composite is up 0.33%, Hang Seng is down 0.59%, ASX is up 0.87%

European equities, the DAX futures up 1.20%, CAC 40 up 1.24%, and FTSE up 0.74%.

US Stock Market: Dow Jones is up 1.00%, S&P 500 is up at 1.30%, and Nasdaq 100 is up at 2.19%.  

Commodities: Gold at $1950.02 (+0.57%), Silver at $23.04 (+1.41%), Brent Oil at $77.40 (+0.55%), WTI Oil at $73.11 (+0.56%)

News & Data

• (VND) Vietnamese CPI (YoY) Actual 2.43%, Previous 2.81% at 07:30
• (USD) Dallas Fed PCE (Apr) Previous 3.40% at 20:20

TECHNICAL OUTLOOK

GBPUSD

There is currently a downward trend on the GBP/USD chart, suggesting the price may go even lower.

A probable negative move was signaled when the price fell beneath a rising support line.

A negative continuation towards the first support level at 1.2202 is conceivable.

Because it is overlap support and falls within a 50% Fibonacci retracement and a 78.60% Fibonacci projection, the first support level at 1.2202 is notable.

A second support level, known as a multi-swing low support, is also present at 1.1834, further highlighting its significance as a potential price floor.

On the resistance side, a pullback barrier is indicated at the initial resistance level at 1.2421.

A second resistance level, known as a multi-swing high resistance, is also present at 1.2658.

EURUSD

EUR/USD chart, raising the possibility of additional decline.

There is a chance of a climb in the near term toward the first resistance level at 1.0806.

The significance of the first support level at 1.0695 as a potential price floor is indicated by the fact that it is an overlap support.

Its significance as a potential price floor is further reinforced by the existence of a second support level at 1.0516, which is known as a multi-swing low support.

The initial resistance level, at 1.0806, is an overlap resistance on the resistance side. Its significance as a potential price ceiling is increased by the fact that it coincides with a 50% Fibonacci retracement and a 61.80% Fibonacci projection.

A swing-high resistance is a second resistance level that can be found at 1.1044. Additional roadblocks for the price’s upward growth may exist at this level.

In addition, there is a pullback resistance level at an intermediate resistance level of 1. 0463.If the price tries to increase, this level may serve as a greater barrier.

AUDUSD

Bullish momentum is currently seen on the AUD/USD chart, indicating the possibility of more upward rise.

A bullish continuation into the first resistance level at 0.6652 is conceivable.

For the purpose of providing support, the first support level, which is located at 0.6496, is designated as a pullback support, indicating that it may serve as a floor for the price during retracements.

A second support level known as a swing low support is also present around 0.6386, which adds to the overall bullish feeling. This level’s significance is increased by the fact that it coincides with a 78.60% Fibonacci retracement.

The initial resistance level, which is a pullback resistance level, is at 0.6652 on the resistance side. The price may run into resistance at this level if it rises further.

A second resistance level, known as a multi-swing high resistance, is also present at 0.6790.

Traders may find support for future pullbacks at the 0.6548 intermediate resistance level, which corresponds with a 23.60% Fibonacci retracement.

USDJPY

Bullish momentum is currently seen on the USD/JPY chart, indicating the possibility of more upward rise.

The price’s position above a significant ascending trend line, which suggests a promising prospect for continuing bullish momentum, supports the bullish momentum.

A bullish extension into the first resistance level at 142.11 is conceivable.

The first support level, which is at 137.65, is designated as overlap support on the support side, indicating that it may have importance as a price floor.

A second support level known as overlap support is also present at 134.31, adding to the overall bullish feeling.

The initial resistance level, which is an overlap resistance level, is 142.11 on the resistance side. The price may run into resistance at this level if it rises further.

Additionally, a second resistance level known as a pullback resistance is located around 144.99.

Investors may find support for possible pullbacks at the intermediate support level of 138.94, which coincides with a 50% Fibonacci retracement.

DOW JONES

There is currently positive momentum on the DJ30 (Dow Jones Industrial Average) chart, indicating the possibility of continued upward growth.

A major rising trend line is above the price, indicating a bullish tilt in the market. The bullish momentum is fuelled in part by this trend line.

A bullish extension into the first resistance level at 33733.76 is conceivable. This level has been designated as an overlapping barrier, which can make further upward progress difficult. A second resistance level, or swing high resistance, is also present at 34287.50.

The initial support level, which is located at 3985.46, is acknowledged as overlap support. A price floor at this level might be available during prospective pullbacks. There is also a second support level at 32596.34, which is a multi-swing low support and a 50% Fibonacci retracement at the same time.

WTI CRUDE OIL

Crude oil price data for WTI (West Texas Intermediate) shows a bullish momentum, pointing to a likely price move toward the first resistance.

At $70.20, the initial line of support serves as overlap support. This price point can attract purchasers, preventing the price from falling much lower.

The second line of support, often referred to as multi-swing low support, is located around $65.40 if the price declines below this level. This level, which has previously served as a support and been challenged several times, might draw buyers once more and halt further loss.

Looking upward, the overlap resistance and 61.80% Fibonacci retracement level are located at $77.02, respectively. This may be a pivotal level where there may be some selling pressure on the market.

The 50% Fibonacci retracement level and another overlap resistance serve as the intermediate resistance level at $73.38. Before the price reaches the first resistance level, this level can offer some resistance.

The second resistance, which also overlaps, is located at $82.82. Due to its history of acting as a turning point, this level may experience significant selling pressure.

GOLD

Based on analysis it indicates that the Gold to US Dollar (XAU/USD) pair is currently exhibiting a bullish momentum.

At 1934.34, there is the first level of support. The 50% Fibonacci retracement level is represented by this point, which may prompt buyers to enter the market and stop the price decline in its tracks.

The second line of support is located at 1859.07 if the price drops below this mark. This level, which marks the 78.60% Fibonacci retracement level, serves as a pullback support.

On the upward, the initial resistance level, which also serves as an overlap resistance, is located at 1983.86. Further upward movement could be anticipated if the positive momentum holds and the price breaks through this obstacle.

The second obstacle, which both acts as a pullback resistance and a 50% Fibonacci retracement level, is situated at 2017.53. Given that sellers previously considered this level to be enticing enough to trigger a price reversal, this resistance may be substantial.

ETHEREUM

The price recently broke over a declining resistance line, indicating a potential bullish rise and the ETH/USD pair is displaying bullish momentum.

The 50% Fibonacci retracement level and overlap support line are located at 1733.99, respectively. This region can draw purchasers from the market, preventing the price from dropping any lower.

If the price breaks below this level, the second line of support lies at 1582.89, which is the 78.60% Fibonacci retracement level. It’s a crucial level where more buying interest might emerge to stop the market from falling lower.

The initial resistance on the upswing is at 1897.34, which is serving as a pullback resistance right now.

A prior swing high from 2003.52, serves as the second barrier. Given that sellers previously considered this level to be compelling to sell or short, which led to a downward price reversal, this resistance may be strong.