FUNDAMENTAL AND TECHNICAL ANALYSIS REPORT – 17 November 2022

FUNDAMENTAL AND TECHNICAL ANALYSIS REPORT – 17 November 2022

Technical Analysis

BOJ’s Kuroda reiterates his commitment to continuing monetary easing

Asian stock market marked its closing in red on Wednesday. The Shanghai Composite is down 0.85% at 3093.45 Overall, the Singapore MSCI is down 0.24% at 300.45. Over in Hong Kong, the Hang Seng Index is down 2.34% at 18,256.48. In Japan, the Nikkei 225 is down 0.35% at 28028.30, while the Topix index is up 0.12% at 1963.29 South Korea’s Kospi is down 1.14% at 2,449.30. Australia S&P/ASX 200 up 0.19% at 7122.20.

Top News of the Day:

Bank of Japan Governor Haruhiko Kuroda reiterated on Thursday that the central bank needs to continue with its monetary easing programme in order to support a fragile economy.

The Japanese central bank remains an outlier among global advanced economy peers in normalising monetary policy, with inflation still weak and the post-COVID economic recovery far from assured.

“We are aiming to achieve the price stability target, involving wage hikes,” Kuroda told a parliament session. “It may take a long time though.”

Speaking at the same parliament session later, BOJ executive director Shinichi Uchida said it was too early to explain the exit strategy from massive monetary stimulus.

“When exiting, the point will be adjusting long-term and short-term policy rates and the BOJ’s balance sheet,” Uchida said. “The order and mixture of those factors would differ depending on economy, prices and financial situations at the time.”

Uchida added that the BOJ won’t rule out prioritising raising policy interest rates.

Market Summary as per 16/11/2022:

European equities Wednesday closing. The DAX futures contract in Germany traded down 1.00% at 14234.02, CAC 40 futures down 0.52% at 6607.22. UK 100 futures contract in the U.K. down 0.25 at 7351.19.

In the U.S. on Wall Street, the Dow Jones Industrial Average Closed down 0.12% at 33553.83. The S&P 500 down 0.72% at 3961.15 and the Nasdaq 100 also down 1.54% at 11183.66, NYSE closes 0.75% down at 15265.25.

Top Market News Today:

In the Forex market, GBPUSD up 0.03% at 1.1913. The USDJPY down 0.04% at 139.50 The USDCHF down 0.01 at 0.9441. EURUSD up 0.01% at 1.0391. EUR/GBP down 0.03% at 0.8721. The USD/CNY up 0.57% at 7.1278 at the time of writing.

In the Commodity market U.S. Gold futures down at 0.34% $1,769.80. Elsewhere, Silver futures down 0.216% at $21.308 per ounce, Platinum down 0.10% at $1024.90 per ounce, and Palladium down 1.16% at $2051.53.

Brent Crude Oil down 0.69% at $92.22 per barrel.

In the Cryptocurrency Markets, Bitcoin at 16561.50 down 0.50%, Ethereum down 0.79% at 1205.54, Litecoin at 57.59 up 0.24%, at the time of writing.

Top Market Segment to Watch Out Today:

Siemens: German engineering and technology group Siemens posted a better-than-expected fourth-quarter profit for its industrial business on Thursday and said its factory hardware and software continued to witness strong demand.

The company said in a statement it has seen growth in many markets despite a “continuing complex macroeconomic environment influenced by energy shortages and availability concerns stemming from the Russia-Ukraine conflict, high inflation and effects associated with the coronavirus pandemic”.

This made the maker of trains, and industrial software confident for the future, saying it expected revenues to grow by 6% to 9% during its 2023 fiscal year.

Economic News:

US: A Federal Reserve tool that provides liquidity in times of stress could be strengthened if it were open to more participants and integrated into how regulators assessed financial market firms’ liquidity positions, participants at a New York Fed event said.

Speaking at a conference on Treasury market issues, the panellists – Harvard University’s Jeremy Stein, Yale University’s Andrew Metrick and Goldman Sachs (NYSE:GS) Executive Beth Hammack – were taking stock of a central bank facility launched last summer.

The Fed’s Standing Repo Facility allows eligible firms, who are mainly large banks, to quickly convert their Treasuries into short-term cash loans. The facility was designed to provide a safety valve for times where liquidity runs short in bond markets.

Since its launch, the tool has gone essentially unused and has not been tested in crises. But many experts and market participants say its existence should help if trouble arrives.

They reckon it would save the Fed from having to intervene in financial markets, as it did in the closing months of 2019 when bank reserves ran low and the spring of 2020 when markets seized up at the start of the coronavirus pandemic.

Focus has gravitated to the Standing Repo Facility given the market fragility as major central banks around the world have pursued aggressive rate increases to lower the highest levels of inflation in four decades. That has stressed liquidity in markets, most notably in the U.S. Treasury bond market, which serves as the backbone of the world’s credit system.

Euro Zone:

Britain’s banks are proactively helping customers hit by the cost-of-living crisis but implementing a new “consumer duty” on time could exclude vulnerable consumers from help, banking industry body UK Finance said on Wednesday.

Consumers are grappling with inflation at a 41-year high of more than 11%, higher energy and food prices, and more Bank of England interest rate rises anticipated.

UK Finance chief executive David Postings said portfolios of lenders have so far stood up to current economic stresses.

“Arrears and impairments are around normal levels but it is clear there is mounting strain as interest rates continue to rise,” Postings told UK Finance’s annual dinner.

Banks will have a repossession moratorium over the holiday period, Postings said.

But he saw a “real worry” over the rollout of the Financial Conduct Authority’s tougher “consumer duty” on financial firms to ensure good outcomes for customers.

The FCA has said the rules will start to apply to new and existing products from July 31, 2023, but this timetable is “extremely tight, maybe too tight”, Postings said.

“Faced with a lack of clarity over the definition of ‘good outcomes’ and the real risk of challenge down the line I worry that firms will take a low-risk approach, withdrawing products and/or tightening the sales criteria,” Postings said.

This would effectively exclude those who might need the greatest financial support, he added.

Top Economic Releases Today:

  1. USD: Fed Waller Speaks at 01:05.
  2. USD: Overall Net Capital Flow (Sep) Actual 30.90B, Previous 275.60B at 02:30.
  3. EUR: CPI (YoY) (Oct) Forecast 10.7%, Previous 9.9% at 15:30.
  4. GBP: BoE MPC Member Pill Speaks at 18:00.
  5. AUD: Unemployment rate (Oct) Actual 3.4%, Forecast 3.6%, Previous 3.5%.

TECHNICAL SUMMARY

GBPUSD TECHNICAL ANALYSIS

TRADE SUGGESTIONBUY AT 1.19547, TAKE PROFIT AT 1.20757, SL AT 1.18358

EURUSD TECHNICAL ANALYSIS

TRADE SUGGESTION BUY AT 1.04047, TAKE PROFIT AT 1.04877, SL AT 1.03251

AUDUSD TECHNICAL ANALYSIS

TRADE SUGGESTIONBUY AT 0.67660, TAKE PROFIT AT 0.68680, SL AT 0.66664 

USDJPY TECHNICAL ANALYSIS

TRADE SUGGESTION- SELL AT 138.890, TAKE PROFIT AT 137.502, SL AT 140.554

DOW JONES INDEX TECHNICAL ANALYSIS

TRADE SUGGESTION BUY AT 33815, TAKE PROFIT AT 34142, SL AT 33491

BRENT CRUDE OIL TECHNICAL ANAYSIS

TRADE SUGGESTION SELL AT 90.94, TAKE PROFIT AT 89.40, SL AT 92.51

SILVER TECHNICAL ANALYSIS

TRADE SUGGESTIONBUY AT 21.376, TAKE PROFIT AT 22.017, SL AT 20.952

LITECOIN TECHNICAL ANALYSIS

TRADE SUGGESTIONSELL AT 57.36388, TAKE PROFIT AT 55.05785, SL AT 59.99934

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