Weekly Technical Analysis & Price Market Strategy- 09 April 2023

09 Apr

WEEKLY TECHNICAL ANALYSIS & PRICE MARKET STRATEGY – 09 APRIL 2023

/ CSFX Analytics

WEEKLY SNAPSHOT

Manufacturing PMI (Mar), U.K.

WHEN: WHAT IT HAD INFLUENCED:

03 APRIL 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

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

JOLTs Job Opening (Feb), U.S.

WHEN: WHAT IT HAD INFLUENCED:

04 APRIL 2023 USD and its subsequent pairs

WHAT HAPPENED: A survey was done by the US Bureau of Labor Statistics to help measure job vacancies. It collects data from employers about their businesses employment, job openings, recruitment, hires and separations.
JOLTS defines Job Openings as all positions that are open (not filled) on the last business day of the month. A job is “open” only if it meets all three of the following conditions:
1. A specific position exists and there is work available for that position.
2. The job could start within 30 days, whether the establishment finds a suitable candidate during that time.
3. There is active recruiting for workers from outside the establishment location that has the opening.

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

RBA Interest Rate Decision (Apr), AUD

WHEN: WHAT IT HAD INFLUENCED:

04 APRIL 2023 AUD and its subsequent pairs

WHAT HAPPENED: The Reserve Bank of Australia (RBA) reports 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.

AUDUSD is trading in a downward channel. The further downside can be seen in the coming week.

Gold price registered a weekly close above $2,000 for the first time ever.

WHAT IT HAD INFLUENCED:

GOLD

WHAT HAPPENED: The US Dollar (USD) came under selling pressure in the American session after the monthly PMI report published by the ISM revealed that the economic activity in the manufacturing sector continued to contract at an accelerating pace in March. Additionally, the inflation component of the survey, the Prices Paid sub-index, and the Employment sub-index both came in below 50, showing a decline in the sector’s input inflation employment. XAU/USD capitalized on the USD weakness and registered daily gains.

Gold price staged a technical correction on Thursday as the 10-year US Treasury bond yield recovered above 3.3% from the multi-month low it set at 3.25% earlier in the week. The US Department of Labor (DOL) announced that there were 228,000 initial jobless claims in the week ending April 1, compared to the market expectation of 200,000. The DOL, however, noted that they have revised seasonal adjustment factors and markets refrained from reacting to this data.

On Friday, the BLS reported that Nonfarm Payrolls (NFP) rose by 236,000 in March and the Unemployment Rate declined to 3.5% on the back of an increase to 62.6% in Labor Force Participation rate. Furthermore, wage inflation, as measured by Average Hourly Earnings, declined to 4.2% on a yearly basis from 4.6% in February. With the initial reaction to this data, the 10-year US yield gained more than 1% in the shortened session.

GOLD is trading in up channel; an upside will be seen in the coming days.

Oil has 3rd weekly gain, but price stuck at ‘OPEC-cut’ highs

WHAT IT HAD INFLUENCED:

CRUDE OIL

WHAT HAPPENED: A weekly rise in crude was exactly what OPEC+ got because of one of the deftest gestures in recent memory to support the oil market.

Crude prices did not rise past this week’s initial gains of $86.44 per barrel for Brent and $81.81 for WTI, which followed the announcement that the world’s largest oil producers would work together to reduce daily output by an additional 1.7 million barrels after a previous decision in November to do so.

The price of West Texas Intermediate, or WTI, on the New York exchange, rose $9 cents, or 0.1%, to settle at $80.70 per barrel on Thursday. The benchmark U.S. crude price increased 6.6% for the week, building on previous weeks’ back-to-back gains of 9.3% and 3.4%. WTI dropped 13% in just one week prior to the three-week period.

Brent increased by 13 cents or 0.2% to settle at $85.12. The global crude benchmark gained 6.7% for the week, following advances of 6.4% and 2.8% in back-to-back weeks. Brent had previously fallen 12% in a single

“Sustainability below $79.60 can push WTI towards $78.50, followed by $77.60,” said Sunil Kumar Dixit, chief technical strategist at SKCharting.com. “The $77.60-$77.50 is an important gap area that remains to be filled up.”

For now, the deeper OPEC+ output cut announced this week dominates the market narrative in oil, Craig Eram, an analyst at online trading platform OANDA, wrote on Thursday as U.S. markets wound up the week earlier than usual due to the Good Friday holiday.

WTI CRUDE OIL is trading in down channel; a downside will be seen in the coming days.

US Nonfarm Payrolls turn out to be a non-event for Bitcoin and Ethereum

WHAT IT HAD INFLUENCED:

BITCOIN & ETHEREUM

WHAT HAPPENED: Bitcoin and Ethereum prices failed to move in response to the US March jobs report.

US Nonfarm Payrolls showed a decline in job growth, rising 236,000 v. expectation of 240,000.

Market participants likely priced in the jobs report ahead of time, with Bitcoin’s recent run up to $29,000 and Ethereum’s 2023 high above $1,900.

Bitcoin and Ethereum prices were unmoved in response to US Nonfarm Payrolls (NFP). The US jobs report turned out to be a non-event from crypto market participants. It is likely that the event was “priced in” by traders as both Bitcoin and Ethereum prices rallied close to psychologically relevant price levels over the past week.

Bitcoin and Ethereum ignore US jobs report for March 2023

The US Bureau of Labor Statistics (BLS) dropped its Nonfarm Payrolls report earlier today, noting a 236,000 increase in payrolls against the market expectation of 240,000. February’s job report showed an addition of 326,000 in Nonfarm Payrolls.

There was a decline in the Unemployment Rate, down to 3.5%, and Average Hourly Earnings nosedived to 4.2%.

In response to the report, Bitcoin and Ethereum remained unmoved. It’s important to note that the release of the report ahead of the Easter holiday could be one of the reasons why zero-to-low volatility was noted in crypto prices.

BITCOIN & ETHEREUM is trading in a up channel; a upside will be seen in the coming days.

5 KEY EVENTS TO WATCH OUT

Industrial Production (MoM) (Feb), U.K.

WHEN: WHAT IT INFLUENCES:

13 APRIL 2023 GBP and its subsequent pairs

WHAT’S HAPPENING: Industrial Production gauges the change in the total inflation-adjusted value of output manufacturers, quarries, and utilities produced.
A reading that is stronger than the forecast is generally supportive (bullish) for the EUR, while a weaker-than-forecast reading is generally negative (bearish) for the EUR.

Core CPI (MoM) (Mar), U.S.

WHEN: WHAT IT INFLUENCES:

12 APRIL 2023 USD and its subsequent pairs

WHAT’S HAPPENING: The Core Consumer Price Index (CPI) measures the changes in the price of goods and services, excluding food and energy. The Central Bank pays very close attention to this figure in its role of maintaining price stability. Because the Fed believes that core inflation is a better gauge of underlying price pressures, it is more closely watched than overall inflation which tends to be more volatile.
A reading that is stronger than the forecast is generally supportive (bullish) for the USD, while a weaker-than-forecast reading is generally negative (bearish) for the USD.

Employment Change (Mar), AUD

WHEN: WHAT IT INFLUENCES:

13 APRIL 2023 AUD and its subsequent pairs

WHAT’S HAPPENING: Employment Change reports the change in the number of people employed across Australia. Jobs and the income they generate is an important factors in consumer spending.
A reading that is stronger than the 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:

12 APRIL 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.

CPI (YoY) (Mar), CNY

WHEN: WHAT IT INFLUENCES:

11 APRIL 2023 CNY and its subsequent pairs

WHAT’S HAPPENING: The Consumer Price Index (CPI) measures the change in the prices of goods and services contained in a basket of consumer items. The Central bank pays very close attention to this figure in its role of maintaining price stability.
A reading that is stronger than forecast is generally supportive (bullish) for the CNY, while a weaker-than-forecast reading is generally negative (bearish) for the CNY.

EQUITIES IN THE COMING WEEK

JP MORGAN CHASE & CO. (JPM) to announce its Quarterly Results on 14 APRIL 2023, EPS is estimated to be 3.40 per share while revenue is estimated 36.141B.
WELLS FARGO & COMPANY (WFC) to announce its Quarterly Results on 14 APRIL 2023, EPS estimated to 1.12 per share while revenue is estimated 20.103B.
FASTENAL COMPANY (FAST) to announce its Quarterly Results on 13 APRIL 2023, EPS is estimated to 0.50 per share while revenue is estimated 1.855B.
DELTA AIR LINES, INC (DAL) to announce its Quarterly Results on 13 APRIL 2023, EPS estimated to 0.33 per share while revenue estimated 12.031B.
CARMAX INC (KMX) to announce its Quarterly Results on 11 APRIL 2023 EPS estimated 0.20 per share while revenue estimated 6.111B.