FUNDAMENTAL REPORT FORECAST
MARKET UPDATE:
Stocks increase more than 2% as the jobs report beat expectations.
Stock markets in the US rose sharply on Friday because of positive jobs statistics, a better-than-expected non-farm number of 253k, and a decrease in the unemployment rate to 3.4%. The Nasdaq increased 2.25%, the S&P 1.85%, and the Dow 1.65%. The US bond rates increased on the day as the dollar held stable against the majors.
More questions for the Fed as jobs data increases
US stock markets reacted strongly on Friday after all three jobs data releases—non-farm employment, average hourly earnings, and unemployment rate—returned good results. This indicated that the US labour market is still tight, which will cause the Fed’s decision-makers more trouble. However, if the statistics continue to show inflationary pressures in the US economy, this might be the first piece of a puzzle that pushes the Fed for one more raise. The expectation is still strongly leaning towards a pause in June. This puts a lot of emphasis on Wednesday’s crucial CPI report for investors going forward.
Traders anticipate a quiet day.
With no tier 1 data releases scheduled for the three trading sessions, the data calendar is relatively quiet for the upcoming day. Many investors view this as a positive development since it gives them the chance to reflect on all the events of the previous week and what they represent in the overall scheme of things, which should allow for more favourable trading circumstances. Despite this, traders will continue to keep an eye on newswires for any shocks. This is especially true in the US, where the attention being paid to regional banking and earnings will continue to affect sentiment.
What happened in the Asia Session?
The minutes from the BoJ’s March meeting show that the members are worried about the possibility of an acceleration of inflation, with many members highlighting the need for caution. The minutes show that there is significant uncertainty surrounding the Japanese economy, notwithstanding some members’ hope that the BoJ’s pricing aim will be achieved.
What does it mean for the Europe & US Session?
If either the US’s Final Wholesale Inventories m/m or the impending German Industrial Production m/m disappoint, the Euro may drop below 1.1050. The Australian dollar, which led the Asia session in performance, may retrace from an intermediate peak at 0.6770 and towards the round level support at 0.6700 should the latter release favour the USD.
Gold (XAU)
Key news events today
No major news events.
What can we expect from gold today?
Positive developments in the employment market and salary growth are revealed by the reliable labour data from the US. This signals that the US economy is doing well, which might increase consumer confidence and spending while temporarily strengthening the value of the US dollar. As a result, the precious metal’s USD price could be adversely affected.
Next 24 Hours Bias
Weak bearish
Oil
Key news events today
No major news events.
What can we expect from Oil today?
As the possibility of a global economic collapse lingers and unfavourable sentiments result from the instability of US regional banks and the deteriorated state of Chinese industrial activities, the price of oil continues to be under pressure.
Next 24 Hours Bias
Weak bearish
The Euro (EUR)
Key news events today
No major news events.
What can we expect from EUR today?
The German Industrial Production m/m report, which is anticipated to show a fall of 1.6% from the prior month, and the Sen tix Investor Confidence survey, which is anticipated to show a little improvement with a reading of -7.9, are the forthcoming data releases for the euro. The Sen tix Investor Confidence report’s negative reading denotes a lack of confidence, which could lead to less investment and slower economic growth. The negative implications of the German Industrial Production m/m statistics, on the other hand, might overshadow the good effects of the Sen tix Investor Confidence survey.
Central Bank Notes:
- The ECB has decided to raise the three key interest rates by 25 basis points as the inflation outlook continues to be too high for too long.
- The ECB will continue to follow a data-dependent approach to determining the appropriate level and duration of restriction.
- Renewed financial market tensions and Russia’s war against Ukraine remain significant economic downside risks.
- The continued resilience of the labour market could lead to higher growth than anticipated.
- Next meeting on 15 June 2023
Next 24 Hours Bias
Mixed
Global Markets:
Asian Stock Markets: Nikkei down 0.71%, Shanghai Composite up 1.81%, Hang Seng Up 1.24%, ASX up 0.78%
European equities, the DAX futures up 0.08%, CAC 40 up 0.12%, FTSE up 0.98%.
US Stock Market: Dow jones up 1.65%, S&P 500 up at 1.85%, Nasdaq 100 up at 2.25%.
Commodities: Gold at $2023.27 (+0.36%), Silver at $25.59 (-0.17%), Brent Oil at $76.72 (+1.89%), WTI Oil at $72.84 (+2.10%)
News & Data
- (JPY) Monetary Policy Meeting Minutes
- (AUD) Building Approvals (MoM) (Mar) Actual –0.1%, Forecast 3.0%, Previous 4.0% at 07:00
- (EUR) German Industrial Production (MoM) (Mar) Actual –3.4%, Forecast –1.3%, Previous 2.0% at 11:30
Technical Outlook
GBPUSD
The GBP/USD chart is currently displaying bearish momentum, suggesting the possibility of long-term price declines. However, a rally towards the first resistance level at 1.2766 may be possible in the near term.
This level serves as a pullback resistance and a possible turning point from which the price might retrace and could fall into the first support level at 1.2421. The potential to drive prices considerably down exists at this overlap support level.
In the long run, if the price declines below the first support level, it may go even lower.
Additionally, there is a swing high intermediate resistance level at 1.2634, which also happens to be the 127.20% Fibonacci extension level. Price might potentially move up towards the first resistance level at 1.2766 if it were to break through this level.
But because the chart’s overall momentum is still bearish, any advance towards the first resistance level should be viewed as a potential chance to sell and profit from the long-term bearish trend.
EURUSD
The EUR/USD chart currently has bearish momentum, suggesting the possibility of a short-term price decline. In addition, the price is below the Ichi Moku cloud, a negative indicator.
The initial resistance level for the EUR/USD chart is around 1.1033, which is a high resistance level with several swings. This level is an excellent possible starting point for a reaction by the price, which could then decline towards the first support level at 1.0789. The potential to drive prices considerably down exists at this overlap support level.
Price might possibly drop to the second support level at 1.0516 if it drops below the first support level. Since it is a multi-swing low support level, this level is also important.
The second resistance level at 1.1166 may potentially be reached if the price were to move higher and break through the first resistance level at 1.103. The fact that this level is an overlap resistance level makes it important as well.
It’s important to note that the RSI is showing bearish divergence versus price, indicating that a reversal may be imminent.
AUDUSD
Strong positive momentum can be seen on the AUD/USD chart, which may be moving in the direction of the first resistance level. The initial support level, at 0.6556, is advantageous since it overlaps with a support level and a 61.80% Fibonacci retracement. The 0.6389 level, which is also an overlap support and coincides with a 78.60% Fibonacci retracement, is another support level to pay attention to.
The initial resistance level, though, at 0.6881, is one to keep an eye on because it is a pullback resistance and corresponds with a 50% Fibonacci retracement. Price may move forward towards higher levels if it is able to overcome this obstacle.
The chart is generally displaying positive momentum with the ability to continue towards the first barrier level. However, it’s crucial to pay attention to the support levels because a break below them can signal a change in momentum to the negative.
USDJPY
The price of USD/JPY is currently above a significant ascending trend line, which is a sign that there is a strong bullish momentum at play. This means that there may soon be additional upward momentum.
The overlap support at 133.69 serves as the first support level for the USD/JPY. In addition, a 38.2% Fibonacci retracement coincides with a critical support level that the price is currently testing. If price bounces off this level, it could rise towards the first resistance level at 135.30, which is a pullback resistance that also coincides with a descending trend line.
Between the price currently and our first resistance, at 136.04, there is an intermediate barrier. Price may accelerate more strongly in the direction of our first obstacle if it were to break through this intermediate resistance.
If it breaches the first resistance level, it can advance towards the multi-swing high resistance at the second resistance level at 137.79.
DOW JONES
There is currently a bearish momentum on the DJ30 chart. Price could potentially go in a bearish direction towards the first support if the trend keeps going.
At 33,451.31, there is an overlap support that serves as the intermediate support level. Price may drop lower towards the first support at 32,776.28, which is also an overlap support, if it breaches this level.
On the other side, if the price can surpass the resistance levels, a positive trend may develop. At 34,270.98, there is an overlap resistance that serves as the first resistance level. At 3,4921.89, there is a second resistance level that overlaps the first one.
WTI CRUDE OIL
WTI’s overall bullish trend seems shaky and unconfident. Price has, however, above the first resistance level at 73.70 and may now move upward towards the second resistance level at 78.97. The first support level is at 68.15 and the intermediate support level is at 64.33 in terms of support levels.
The first resistance level is advantageous since it is an overlap resistance, which denotes that it has historically served as a major level of price resistance. WTI could move in the direction of the second resistance level if price can hold above this level.
Similarly, the intermediate and first support levels are also strong because they overlap, showing that they have previously offered the price significant support.
Additionally, the RSI is showing positive divergence from price, pointing to the possibility of a sharp price increase.
GOLD
The XAU/USD chart indicates that the recent bearish trend in gold is likely to remain for the foreseeable future. Prices are more likely to decline than rise because the chart’s overall trend is bearish. In fact, pricing may decide to continue falling in the direction of the first support.
A 38.20% Fibonacci retracement and a strong overlap support are present at the first support level, which is located at 1958.54. Price might fall to the second support, which is also an overlap support, at 1884.24 if it were to dip below this support level.
On the other side, the first resistance is located at 2069.98 and is a high resistance level with several swings. The next resistance level at 2183.00 might be reached by the price if it were to break through this one.
Bearish divergence vs price is also being seen by the RSI indicator, indicating that a reversal may be on the horizon. The possibility of a bearish continuation towards the first support is increased by this.
ETHEREUM
Current positive momentum on the ETH/USD chart shows that the price may continue to rise because of this momentum. The price may go in a bullish direction towards the first resistance level given the general bullish momentum of the chart.
The first support level, which is an overlap support level, is located at 1870.71. This indicates that this level has previously undergone testing and has maintained as a support level, making it a powerful level to be on the lookout for. The second support level, which is a multi-swing low support level, is located at 1810.62.
The first resistance level, which is an overlap level, is located at 1926.18. This level has served as a significant resistance level and has undergone numerous tests. 1990.90 is the second resistance level, which is also an overlap resistance level.
The chart also features a symmetrical triangle chart pattern, which denotes a period of consolidation prior to a price breakthrough or breakdown. This means that a breakout could possibly occur soon, which could result in a price continuation that is bullish.
