Weekly Technical Analysis & Price Market Strategy- 14 May 2023

14 May

WEEKLY TECHNICAL ANALYSIS & PRICE MARKET STRATEGY – 14 MAY 2023

/ CSFX Analytics

WEEKLY SNAPSHOT

German CPI (MoM) (Apr), EUR

WHEN: WHAT IT HAD INFLUENCED:

10 MAY 2023 GBP and its subsequent pairs

WHAT HAPPENED: The Consumer Price Index (CPI) measures the change in the prices of goods and services from the perspective of the consumer. As Germany has the largest output of any country in the euro-zone, the European Central bank pays very close attention to this figure in its role of maintaining price stability.

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

WHEN: WHAT IT HAD INFLUENCED:

10 MAY 2023 USD and its subsequent pairs

WHAT HAPPENED: 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.

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

Retail Sales (MoM), AUD

WHEN: WHAT IT HAD INFLUENCED:

09 MAY 2023 AUD and its subsequent pairs

WHAT HAPPENED: 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.

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

As markets reconsider Fed rate reduction, gold declines

WHAT IT HAD INFLUENCED:

GOLD

WHAT HAPPENED: Gold prices steadied on Friday after reversing all their gains this week as sticky U.S. inflation data saw markets reassess their expectations for rate cuts from the Federal Reserve.

A string of weak economic readings from the U.S. and China spurred steep losses in copper and other base metals, amid growing fears that an economic slowdown this year will crimp demand.

These fears kept gold pinned above the $2,000 an ounce mark, with haven demand for the yellow metal remaining relatively high as the economic outlook deteriorated. Bullion prices appear to have formed a new support level at $2,000 an ounce, as concerns over a U.S. banking crisis also drove capital into the yellow metal.

Still, gold saw steep losses in the prior session as sticky U.S. producer price index (PPI) inflation data saw markets scale back their expectations for any interest rate cuts by the Federal Reserve this year.

Spot gold rose slightly to $2,016.97 an ounce on Friday, while gold futures crept up to $2,022.05 an ounce by 20:10 ET (00:10 GMT). Both instruments were now trading flat for the week after sharply reversing course on Thursday.

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

A stronger dollar and worries about demand cause the price of oil to decline

WHAT IT HAD INFLUENCED:

CRUDE OIL

WHAT HAPPENED: Oil prices settled more than 1% lower on Friday, falling for the third consecutive week, as the market balanced supply fears against renewed economic concerns in the United States and China.

Brent crude futures settled down 81 cents, or 1.1%, to $74.17 while West Texas Intermediate (WTI) U.S. crude futures fell 83 cents, or 1.2%, to $70.04.

Both benchmarks settled about 1.5% lower week on week.

The U.S. dollar clung to modest gains against the euro on Friday and was headed for its biggest weekly gain since February, as uncertainty around the U.S. debt ceiling and monetary policy prompted a shift to safe havens. (=EUR)

A stronger greenback makes dollar-priced oil more expensive for holders of other currencies.

An OPEC report on Thursday said the producer group expects July-December demand for its own crude to be 90,000 barrels per day (bpd) higher than previously projected.

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

The decline of Bitcoin is unlikely to end over $25,000.

WHAT IT HAD INFLUENCED:

BITCOIN

WHAT HAPPENED: The crypto market lost 3.2% over the past day, dragged down by the institutions’ favourite instruments: Bitcoin (-4.5%) and Ether (-4.3%). Other top altcoins range from -4% (Polygon) to 0% (XRP). The Cryptocurrency Fear and Greed Index fell to 49 (neutral), its lowest level in two months.

Bitcoin is trading at $26.3K, its lowest level since March 17, losing over 15% from its peak last month. The local technical pattern offers little reason for optimism. Bitcoin fell well below its 50-day moving average at the beginning of the week. By the end of Thursday, it was below $27.5K, the support line for the last two months. Friday’s early morning drop took BTCUSD below the 61.8% Fibonacci correction level from the rally off the March lows. In other words, we see more than just a correction of this latest growth impulse.

Bitcoin’s return to $25K looks like a real prospect in the coming days. The bears will have their work cut out for them here, as some oversold conditions will have built up by then. The $25K level is also significant that Bitcoin did not breach between the middle of last year and the middle of March. Now it has every chance of becoming an equally reliable support.

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

5 KEY EVENTS TO WATCH OUT

CPI (YoY) (Apr) U.K.

WHEN: WHAT IT INFLUENCES:

17 MAY 2023 GBP 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 EUR, while a weaker than forecast reading is generally negative (bearish) for the EUR.

Retail Sales (MoM) (Apr), U.S.

WHEN: WHAT IT INFLUENCES:

16 MAY 2023 USD 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 USD, while a weaker than forecast reading is generally negative (bearish) for the USD.

EMPLOYMENT CHANGE (APR), AUD

WHEN: WHAT IT INFLUENCES:

18 MAY 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 factor in consumer spending.

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.

CORE CPI (MoM) (APR), CAD

WHEN: WHAT IT INFLUENCES:

16 MAY APRIL 2023 CAD and its subsequent pairs

WHAT’S HAPPENING: The Core Consumer Price Index (CPI) measures the change in the prices of goods and services from the perspective of the consumer (excluding food and energy). The Central bank pays very close attention to this figure in its role of maintaining price stability, as it excludes the volatile food and energy components.
A reading that is stronger than forecast is generally supportive (bullish) for the CAD, while a weaker than forecast reading is generally negative (bearish) for the CAD.
GDP (QoQ) (Q1), JPY

WHEN: WHAT IT INFLUENCES:

17 MAY 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

WALMART INC. (WMT) to announce its Quarterly Results on 18 MAY 2023, EPS estimated to 1.31 per share while revenue estimated 148.687B.
HOME DEPOT, INC. (HD) to announce its Quarterly Results on 16 MAY 2023, EPS estimated to 3.81 per share while revenue estimated 38.337B.
ALI BABA GROUP HOLDING LTD. (BABA) to announce its Quarterly Results on 18 MAY 2023, EPS estimated to 1.38 per share while revenue estimated 30.396B.
TARGET CORPORATION (TGT) to announce its Quarterly Results on 17 MAY 2023, EPS estimated to 1.77 per share while revenue estimated 25.277B.
SYNOPSYS INC. (SNPS) to announce its Quarterly Results on 17 MAY 2023 EPS estimated 2.48 per share while revenue estimated 1.378B.