Weekly Technical Analysis & Price Market Strategy

05 Mar

Weekly Technical Analysis & Price Market Strategy – 05 March 2023

/ CSFX Analytics

WEEKLY SNAPSHOT

Manufacturing PMI, U.K.

WHEN: WHAT IT HAD INFLUENCED:

01 MARCH 2023 GBP and its subsequent pairs

WHAT HAPPENED: The Manufacturing Purchasing Managers’ Index (PMI) is a diffusion index incorporating survey results provided by manufacturing firms throughout the region. A reading above fifty suggests the manufacturing sector is expanding, while a reading below fifty suggests the manufacturing sector is in contraction. Policymakers and traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, rather than waiting for the hard data to emerge. While manufacturing accounts for a far smaller percentage of economic output than services, it is far more cyclical and is therefore a useful indicator of where in the economic cycle the economy is currently situated.

EURGBP is currently in downward channel. Further downside can be seen in coming week.

CB Consumer Confidence (Feb), U.S.

WHEN: WHAT IT HAD INFLUENCED:

28 FEBRUARY 2023 USD and its subsequent pairs

WHAT HAPPENED: Conference Board (CB) Consumer Confidence measures the level of confidence consumers have in the economy. When consumers are optimistic, they tend to spend more which increases consumption and overall economic growth.

USDZAR is currently in the upward channel. Further upside can be seen in the coming week.

GDP (QoQ) (Q4), AUD

WHEN: WHAT IT HAD INFLUENCED:

01 FEBRUARY 2023 AUD and its subsequent pairs

WHAT HAPPENED: Gross Domestic Product (GDP) gauges the inflation-adjusted value of all goods and services produced within the economy. It is the most comprehensive measure of economic activity and an important indicator of economic health.

AUDUSD is trading in downward channel. Further downside can be seen in coming week.

Gold prices rise on some Fed clarity, set to snap 4-week losing spree

WHAT IT HAD INFLUENCED:

GOLD

WHAT HAPPENED: Gold prices advanced on Friday and were set for their first weekly gain in five as recent comments from Federal Reserve officials helped provide more clarity on the path of monetary policy this year.

Atlanta Fed President Raphael Bostic reiterated the case for a 25-basis point hike in March, while Fed Governor Christopher Waller said in a separate speech that moderating inflation and economic growth could call for rates peaking at an earlier forecast of 5.4%.

But they both warned that any signs of an overheated economy could invite more hawkish moves by the central bank. Still, metal markets took their comments in stride, extending earlier gains seen this week.

Spot gold rose 0.2% to $1,838.42 an ounce, while gold futures rose 0.2% to $1,844.25 an ounce by 19:40 ET (00:40 GMT). Both instruments were set to add about 1.5% this week, their first positive week since mid-January.

But the yellow metal was still nursing sharp losses in February, following signs of stubborn U.S. inflation and a strong labour market. Treasury yields also rose overnight, while the dollar firmed as data showed U.S. jobless claims fell further in the past week.

Focus on Friday is on a reading on U.S. service sector activity, with any signs of economic resilience giving the Fed more room to raise interest rates.

Rising U.S. interest rates bode poorly for metal markets, given that they drive up the opportunity cost of holding non-yielding assets. Gold and its peers had logged steep losses through 2022 as the Fed began aggressively raising interest rates

GOLD is trading in up down channel; a downside will be seen in the coming days.

Oil up 4% on week after dollar slide, belated response to U.S. exports

WHAT IT HAD INFLUENCED:

CRUDE OIL

WHAT HAPPENED: It was a belated response by oil longs though not entirely surprising, given the outsized exports for last week. Crude prices jumped almost 2% Friday and over 4% on the week in a catch-up to record crude exports reported by the EIA for last week.

New York-traded West Texas Intermediate settled at $79.68 a barrel, up $1.52, or 1.9%. For the week, the U.S. crude benchmark gained 4.4%.

London-traded Brent crude settled at $85.83, up $1.08, or 1.3%. The global crude benchmark was up 3.7% on the week.

Crude prices started the week with a stumble, then gained momentum on positive factory data from top oil importer China.

Hawkish rate hike talks and inflation concerns kept the market from breaking out after the EIA, or Energy Information Administration, reported on Wednesday that U.S. crude exports hit a record high of 5.629 million barrels last week.

Friday’s session was again volatile as prices initially tumbled on a Wall Street Journal report that the United Arab Emirates had an internal debate about leaving OPEC and pumping more oil. By midmorning though, the market retraced the losses and headed higher on the back of a weaker dollar after a Reuters report quoted a UAE official as saying that the WSJ story was “far from the truth.”

Notwithstanding Friday’s runup, crude prices look set to stay in a range, with WTI likely to be boxed between $75 and $80, said Craig Eram, analyst at online trading platform OANDA.

“Prices have fluctuated in a range for months now and the current price sits more-or-less in the middle of that range. While trade Fed Interest Rate Decision are becoming more optimistic about the Chinese recovery, the risks to the global economy may be increasing as interest rate expectations have risen,” said Eram.

WTI CRUDE OIL is trading in an up channel; a upside will be seen in the coming days.

Crypto Influencer Gets Called Out for Conflicting Bitcoin Outlook

WHAT IT HAD INFLUENCED:

BITCOIN

WHAT HAPPENED: Popular crypto influencer Andrew Kang has been called out by fellow influencers and crypto traders on Twitter for his conflicting opinions on the Chinese narrative. Criticism for Kang poured in after he shared his views on Bitcoin’s potential price action considering the Chinese narrative.

Andrew Kang took to Twitter on Thursday to comment on Bitcoin’s potential to push up. He claimed that following the upward momentum over the past two months, the Bitcoin pool has gotten crowded. According to him, “For market to go higher, [it] first need[s] more people to go back to the side-lines.”

The influencer claimed that bullish momentum was over for the first quarter of the year and that he would open long positions on Bitcoin once its price reached the $20,000-$21,000 level, in line with the Chinese narrative. Critics did not hold back while telling Kang about his ill-informed plan to long BTC, which would eventually end in his positions getting liquidated.

BITCOIN is trading in a down channel; a downside will be seen in the coming days.

5 KEY EVENTS TO WATCH OUT

GDP (QoQ) (Q4), U.K.

WHEN: WHAT IT INFLUENCES:

08 MARCH 2023 GBP and its subsequent pairs

WHAT’S HAPPENING: Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy’s health. A stronger than expected number should be taken as positive for the EUR and a lower-than-expected number as negative to the EUR.

Initial Jobless Claims, U.S.

WHEN: WHAT IT INFLUENCES:

09 MARCH 2023 USD and its subsequent pairs

WHAT’S HAPPENING: Initial Jobless Claims measures the number of people who filed for unemployment insurance for the first time during the past week. This is the timeliest U.S. economic data, but the market impact varies from week to week.

A reading that is higher than forecast is generally negative (bearish) for the USD, while a lower than forecast reading is generally supportive (bullish) for the USD.

Retail Sales (MoM), AUD

WHEN: WHAT IT INFLUENCES:

07 MARCH 2023 AUD and its subsequent pairs

WHAT’S HAPPENING: Retail Sales gauges the change in the aggregate value of sales at the retail level across the country. It is an important indicator of consumer spending accounting for most of the overall economic activity.

A reading that is stronger than forecast is generally supportive (bullish) for the AUD, while a weaker than forecast reading is generally negative (bearish) for the AUD.

BoC Interest Rate Decision, CAD

WHEN: WHAT IT INFLUENCES:

08 MARCH 2023 CAD and its subsequent pairs

WHAT’S HAPPENING: The Bank of Canada (BOC) publishes its decision on where to set the benchmark interest rate. As short-term interest rates are an important determinant of currency valuation, traders watch interest rate changes closely.

A reading that is weaker than forecast is generally supportive (bullish) for the CAD, while a stronger than forecast reading is generally negative (bearish) for the CAD.

GDP (QoQ) (Q4), JPY

WHEN: WHAT IT INFLUENCES:

09 MARCH 2023 JPY and its subsequent pairs

WHAT’S HAPPENING: Gross Domestic Product (GDP) measures the change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy’s health.

A reading that is stronger than forecast is generally supportive (bullish) for the JPY, while a weaker-than-forecast reading is generally negative (bearish) for the JPY.

EQUITIES IN THE COMING WEEK

ORACLE CORPORATION (OCL) to announce its Quarterly Results on 09 MARCH 2023, EPS estimated to 1.21 per share while revenue estimated 12.424B.
SEA LIMITED (SE) to announce its Quarterly Results on 07 MARCH 2023, EPS estimated to -0.64 per share while revenue estimated 3.054B.
FERGUSON PLC (FERG) to announce its Quarterly Results on 07 FEBRUARY 2023, EPS is estimated to 1.98 per share while revenue is estimated at 6.966B.
GAP, INC (GPS) to announce its Quarterly Results on 09 MARCH 2023, EPS estimated to -0.46 per share while revenue estimated 4.356B.
UNITED NATURAL FOODS, INC. to announce its Quarterly Results on 08 MARCH 2023, EPS estimated to 1.45 per share while revenue estimated 7.766B.