Fundamental News And Technical Analysis Report – 26 January 2023
26 Jan 2023
The dollar sways close to an eight-month low ahead of central bank meetings.
Asian stock market closes in green on Wednesday. The Shanghai Composite is up 0.76% at 3264.81. Overall, the Singapore MSCI is down 0.51% at 298.38. Over in Hong Kong, the Hang Seng Index is up 1.82% at 22044.65. In Japan, the Nikkei 225 is up 0.35 at 27395.01. While the Topix index is up 0.39% at 1980.69, South Korea’s Kospi is up 1.39% at 2428.57. Australia S&P/ASX 200 is down 0.30% at 7468.30.
Top News of the Day:
The dollar held close to an eight-month low against its peers on Thursday, as a gloomy U.S. corporate earnings season stoked recession fears and as traders stayed on guard ahead of a slew of central bank meetings next week.
The U.S. dollar index, which measures the greenback against a basket of currencies, inched 0.1% higher to 101.65, after falling as low as 101.52 earlier in the session, testing last week’s eight-month trough of 101.51.
Trading was thin, with Australia out for a holiday and some parts of Asia still away for the Lunar New Year.
Downbeat earnings and guidance from U.S. companies and a string of tech sector layoffs have deepened fears of a sharp economic downturn in the United States, leading investors to pare back expectations on how much longer the Federal Reserve will need to aggressively raise interest rates.
“There are now signs the U.S. economy may be slowing in a more meaningful manner,” said economists at Wells Fargo.
“With the Fed no longer leading the charge on interest rate hikes and U.S. economic trends set to worsen, we now believe the U.S. dollar has entered a period of cyclical depreciation against most foreign currencies.”
The Fed’s policy-setting committee will begin a two-day meeting next week, and markets have priced in a 25-basis-point (bps) interest rate hike, a step down from the central bank’s 50 bps and 75 bps increases seen last year.
Market Summary as per 25/01/2023:
European equities Wednesday closing. The DAX futures contract in Germany traded down 0.08% at 15081.64, CAC 40 futures down 0.09% at 7043.88. UK 100 futures contract in the U.K. down 0.16 at 7744.87
In the U.S. on Wall Street, the Dow Jones Industrial Average Closed up 0.03% at 33743.84. The S&P 500 down 0.02% at 4016.22 and the Nasdaq 100 down 0.18% at 11313.36, NYSE 0.13% closes at 15889.27.
Top Market News Today:
In the Forex market, GBPUSD up 0.01% at 1.2397. The USDJPY up 0.07% at 129.63, The USDCHF up 0.01 at 0.9177. EURUSD up 0.01% at 1.0913. EUR/GBP up 0.06% at 0.8803. The USD/CNY up 0.01% at 6.7820 at the time of writing.
In the Commodity market U.S. Gold futures down at 0.27% $1,940.63. Elsewhere, Silver futures down 0.91% at $23.67 per ounce, Platinum down 0.65% at $1031.50 per ounce, and Palladium down 0.01% at $1691.50.
Brent Crude Oil up 0.16% at $86.21 per barrel.
In the Cryptocurrency Markets, Bitcoin at 23020.00 down at 0.17%, Ethereum down 0.25% at 1608.27, Litecoin at 89.08 down 0.37%, at the time of writing.
Top Market Segment to Watch Out for Today :
NATURAL GAS– Relief isn’t on the horizon yet for bulls in natural gas, with the heating fuel trading in $2 territory on Wednesday after hitting 20-month lows despite evolving forecasts for cold in a winter dominated by unseasonable warmth.
The action in gas futures “appears to be a repetitive theme lately, where prices will rally one day and then will sell off the next,” Gelber & Associates, a Houston-based energy markets trading consultancy, said in a note.
US: – The U.S. economy likely maintained a strong pace of growth in the fourth quarter as consumers boosted spending on goods, but momentum appears to have slowed considerably towards the end of the year, with higher interest rates eroding demand.
The Commerce Department’s advanced fourth-quarter gross domestic product report on Thursday could mark the last quarter of solid growth before the lagged effects of the Federal Reserve’s fastest monetary policy tightening cycle since the 1980s kick in. Most economists expect a recession by the second half of the year, though mild compared to previous downturns.
Retail sales have weakened sharply over the last two months and manufacturing looks to have joined the housing market in a recession. While the labor market remains strong, business sentiment continues to sour, which could eventually hurt hiring.
“This looks like it could be the last really positive, strong quarterly print we’ll see for a while,” said Sam Bullard, a senior economist at Wells Fargo (NYSE: WFC) Securities in Charlotte, North Carolina. “Markets and most people will look through this number. More recent data are suggesting that economic momentum is continuing to slow.”
According to a Reuters survey of economists, GDP growth likely increased at a 2.6% annualized rate last quarter after accelerating at a 3.2% pace in the third quarter. Estimates ranged from a 1.1% rate to a 3.7% pace.
Robust second-half growth would erase the 1.1% contraction in the first six months of the year.
Growth for the full year is expected to come in at around 2.1%, down from the 5.9% logged in 2021. The Fed last year raised its policy rate by 425 basis points from near zero to a 4.25%-4.50% range, the highest since late 2007.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, is expected to have grown at a pace faster than the 2.3% rate notched in the third quarter. That would mostly reflect a surge in goods spending at the start of the quarter.
Euro Zone: – The British government plans to provide taxpayer funding to support the country’s semiconductor companies, Bloomberg reported on Wednesday.
The support will include seed money for startups, help for existing firms to scale up and new incentives for private venture capital, Bloomberg reported, citing officials familiar with the plans.
A British government spokesperson said they do not comment on speculation when asked about the report, adding that the country’s semiconductor strategy will be published in due course.
The government said last month that it was exploring national initiatives to expand the domestic chip industry, including potentially establishing a new institution as part of its plans to boost the infrastructure.
The strategy will aim to “unlock the full potential” of microchip businesses and support jobs, and will also seek to ensure a reliable supply of semiconductors, Britain’s Department for Digital, Culture, Media & Sport (DCMS) said in the statement.
Top Economic Releases Today:
- USD: GDP (QoQ) (Q4) Forecast 2.6%, Previous 3.2% at 19:00
- USD: New Home Sales (Dec) Forecast 617K, Previous 640K at 20:30
- USD: Initial Jobless claims Forecast 205k, Previous 190k at 19:00
- CAD: Wholesale Sales (MoM) Previous 0.5% at 19:00
- RUB: Central Bank Reserves (USD) Previous 592.0B at 18:30
GBPUSD TECHNICAL ANALYSIS
TRADE SUGGESTION – BUY AT 1.23990, TAKE PROFIT AT 1.24775, SL AT 1.23286
EURUSD TECHNICAL ANALYSIS
TRADE SUGGESTION – BUY AT 1.09080, TAKE PROFIT AT 1.09742, SL AT 1.08634
AUDUSD TECHNICAL ANALYSIS
TRADE SUGGESTION– BUY AT 0.71080, TAKE PROFIT AT 0.71861, SL AT 0.70604
USDJPY TECHNICAL ANALYSIS
TRADE SUGGESTION- SELL AT 129.576, TAKE PROFIT AT 128.849, SL AT 130.173
NASDAQ 100 INDEX TECHNICAL ANALYSIS
TRADE SUGGESTION – BUY AT 11950.10, TAKE PROFIT AT 12009.28, SL 11900.10
BRENT CRUDE OIL TECHNICAL ANALYSIS
TRADE SUGGESTION– BUY AT 86.45, TAKE PROFIT AT 87.37, SL 85.66
SILVER TECHNICAL ANALYSIS
TRADE SUGGESTION– SELL AT 23.772, TAKE PROFIT AT 23.593, SL 23.820
ETHEREUM TECHNICAL ANALYSIS
TRADE SUGGESTION- BUY AT 1600.08, TAKE PROFIT AT 1623.27, SL AT 1595.32