FUNDAMENTAL AND TECHNICAL ANALYSIS REPORT – 28 October 2022

FUNDAMENTAL AND TECHNICAL ANALYSIS REPORT – 28 October 2022

Technical Analysis

ECB Hikes Key Rates by 75 Basis Points

Asian shares fell on Friday. The Shanghai Composite is down 1.47% at 2,938.97. Overall, the Singapore MSCI is up 0.50% at 272.70. Over in Hong Kong, the Hang Seng Index is down 3.17% at 14,973.00. In Japan, the Nikkei 225 is down 0.73% at 27,100.00, while the Topix index is down 0.34% at 1898.00. South Korea’s Kospi is down 0.93% at 2,267.48. Australia S&P/ASX 200 down 0.87% at 6785.70.

Top News of the Day:

The European Central Bank raised its key interest rates by another 75 basis points and said it plans to hike further in its battle to bring inflation down from a 40-year high.

As such, the key deposit rate – which sets the floor for Eurozone money markets – will rise to 1.50%, while the refinancing rate rises to 2.00% and the marginal lending rate rises to 2.25%.

Market Summary as per 27/10/2022:

European equities Thursday closing. The DAX futures contract in Germany traded up 0.12% at 13,211.23, CAC 40 futures down 0.51% at 6244.04 and the UK 100 futures contract in the U.K. up 0.25% at 7073.70.

In the U.S. on Wall Street, the Dow Jones Industrial Average closed up 0.61% at 32033.29. The S&P 500 down 0.61% at 3807.29 and the Nasdaq 100 down 1.88% at 11191.63, NYSE closes up 0.26% at 14569.89.

Top Market News Today:

In the Forex market, GBPUSD down 0.15% at 1.1543. The USDJPY up 0.17% at 146.691. The USDCHF up 0.19% at 0.9926. EURUSD up 0.04% at 0.9968, EUR/GBP up 0.23% at 0.8635. The USD/CNY up 0.12% at 7.2325 at the time of writing.

In the Commodity market U.S. Gold futures down 0.23% at $1,658.26. Elsewhere, Silver futures down 0.72% at $19.447 per ounce, Platinum down 0.37% at $954.00 per ounce, and Palladium up 0.90% at $1957.50.

Crude Oil down on Friday; Brent Crude Oil down 0.97% at $95.98 per barrel while U.S. West Texas Intermediate (CLc1) down 0.83% at $87.35.

In the Cryptocurrency Markets, Bitcoin at 20325.00 down 1.91%, Ethereum up 0.07% at 1515.10, Litecoin at 54.51 down 0.40%, at the time of writing.

Top Market Segment to Watch Out Today:

Volkswagen: Volkswagen reported earnings of 4.3 billion euros ($4.29 billion) in the third quarter with an earnings margin of 6%, weighed down by 1.6 billion in one-off effects from suspending activities in Russia and listing Porsche AG.

It also suffered a 1.9-billion-euro non-cash impairment charge resulting from the write-down of its investment in Argo AI, a self-driving start-up it jointly owned with Ford Motor (NYSE:F) Co until both companies shifted spending away from the business on Wednesday.

Economic News:

US: The Biden administration expects to ink a deal with allies in the near-term to bring them on board with new U.S. rules curbing China’s access to sophisticated chipmaking tools, a senior Commerce Department official said on Thursday.

This month, the Commerce Department published a sweeping set of export controls, including measures tightly restricting Chinese access to U.S. chipmaking technology, vastly expanding its reach in its bid to slow Beijing’s technological and military advances.

But it faced criticism for failing to convince key allies to put in place similar equipment curbs, since Japanese and Dutch firms Tokyo Electron Ltd and ASML Holding NV (NASDAQ:ASML.AS), along with U.S. companies, produce chipmaking equipment.

Retail sales of new vehicles are expected to rise 12.1% to 1,008,200 units in October, compared with a year earlier, the report showed.

Euro Zone: Some European Central Bank policymakers played down a change in the ECB’s official message on interest rates, which saw the bank remove a reference to “several” further hikes in the coming months, sources told Reuters.

The European Central Bank raised interest rates again on Thursday and said it expects to increase them “further” but it cautioned “substantial” progress had already been made in its bid to fight off a historic surge in inflation.

It also dropped a reference to increasing rates “over the next several meetings” that was in its September statement. Traders took it to mean that the series of large rate hikes that started in July was nearing an end.

Some policy hawks, who favour higher interest rates, said the change in guidance was not a major point of discussion at the meeting and barely noticed it in the ECB’s official statement, four sources, who asked not to be named, said.

Top Economic Releases Today:

  1. GERMANY GDP (QoQ) (Q3) today at 4:00 this time estimated -0.2%, previously which was 0.1%.
  2. 30 this time estimated 0.10%, previously which was 0.10%.
  3. U.S. Pending Home Sales (MoM) (Sep) today at 10:00 this time estimated -5.0%, previously which was -2.0%.
  • EURO ZONE Industrial Sentiment (Oct) today at 05:00 this time estimated -1.8, previously which was -0.4.
  • FRANCE GDP (QoQ) (Q3) today at 02:30 this time estimated 0.2%, previously which was 0.5%.

TECHNICAL SUMMARY

GBPUSD TECHNICAL ANALYSIS

TRADE SUGGESTION- BUY AT 1.1530, TAKE PROFIT AT 1.1636 AND STOP LOSS AT 1.1478

EURUSD TECHNICAL ANALYSIS

TRADE SUGGESTION- BUY AT 0.9966, TAKE PROFIT AT 1.0028 AND STOP LOSS AT 0.9943

GBPJPY TECHNICAL ANALYSIS

TRADE SUGGESTION- BUY AT 169.054, TAKE PROFIT AT 169.918 AND STOP LOSS AT 168.891

CHFJPY TECHNICAL ANALYSIS

TRADE SUGGESTION- SELL AT 147.800, TAKE PROFIT AT 147.418 AND STOP LOSS AT 148.028

HANG SENG TECHNICAL ANALYSIS

TRADE SUGGESTION- SELL AT 14807.00 TAKE PROFIT AT 14794.00 AND STOP LOSS AT 14810.00

WTI CRUDE OIL TECHNICAL ANALYSIS

TRADE SUGGESTION- BUY AT 87.77 TAKE PROFIT AT 89.01 AND STOP LOSS AT 87.06

GOLD TECHNICAL ANALYSIS

TRADE SUGGESTION- SELL AT 1652.21, TAKE PROFIT AT 1642.72 AND STOP AT 1657.76

LITECOIN TECHNICAL ANALYSIS

TRADE SUGGESTION- SELL AT 53.82 TAKE PROFIT AT 52.55 AND STOP AT 54.76

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