Weekly Technical Analysis & Price Market Strategy

19 Mar

Weekly Technical Analysis & Price Market Strategy – 19 March 2023

/ CSFX Analytics

WEEKLY SNAPSHOT

Industrial production (MoM) (Jan), U.K.

WHEN: WHAT IT HAD INFLUENCED:

15 MARCH 2023 GBP and its subsequent pairs

WHAT HAPPENED: Industrial Production gauges the change in the total inflation-adjusted value of output manufacturers, quarries, and utilities produced.

EURGBP is currently in a downward channel. The further downside can be seen in the coming week.

CPI (MoM) (Feb), U.S.

WHEN: WHAT IT HAD INFLUENCED:

14 MARCH 2023 USD and its subsequent pairs

WHAT HAPPENED: 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.

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

Employment Change (Feb), AUD

WHEN: WHAT IT HAD INFLUENCED:

16 MARCH 2023 AUD and its subsequent pairs

WHAT HAPPENED: 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.

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

Gold hits 11-month high as U.S. banking crisis feeds safe havens

WHAT IT HAD INFLUENCED:

GOLD

WHAT HAPPENED: Gold hit 11-month highs, breaking from the clutches of mid-$1,900 pricing to head for bullion bulls’ long-term target of $2,000, as the U.S. banking crisis drove more investors towards safe havens on Friday.

The spot price of gold, more closely followed than futures by some traders, was at $1,973.92 by 13:55 ET (17:55 GMT), up $54.37, or 2.8%. The session high for spot gold was $1,975.24, also marking an 11-month high.

Spot gold’s charts indicated that a test of $2,000 was possible, so long as the current momentum held, said chartist Sunil Kumar Dixit.

The last time spot gold peaked at above $2,000 was in March 2022 when it hit $2,070.29, virtually matching the record high of 2,072.90 from August 2020, Investing.com data shows.

Gold prices have been on a tear since the U.S. banking crisis erupted a week ago with the takeover of two mid-sized lenders — Silicon Valley Bank and Signature Bank — by the Federal Deposit Insurance Corp as depositors yanked billions of dollars from them after fearing for their solvency. Silicon Valley filed for bankruptcy protection over the past 24 hours. A third bank, First Republic, is also in trouble despite receiving a $30 billion cash infusion from a consortium of banks.

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

Oil prices settle down, post big weekly losses on bank fears

WHAT IT HAD INFLUENCED:

CRUDE OIL

WHAT HAPPENED: Oil prices settled lower Friday, reversing early gains of more than $1 a barrel as banking sector fears caused both benchmarks to reach their most significant weekly declines in months.

Brent crude futures settled down by $1.73, or 2.3%, to $72.97 a barrel. U.S. West Texas Intermediate crude fell $1.61, or 2.4%, at $66.74.

At their session low, both benchmarks were down more than $3. Brent fell nearly by 12% in the week, its biggest weekly fall since December. WTI futures fell 13% since Friday’s close, its biggest since last April.

“The underlying fundamentals aren’t as terrible as what is being priced here, but there is concern the oil is not as safe a place as cash or gold,” said John Kilduff, Partner at Again Capital LLC in New York.

Oil prices tracked equity markets lower, dogged by the banking sector crisis and worry about a possible recession.

All three indexes were sharply lower in afternoon trading, with financial stocks down the most among the major sectors of the S&P 500 following the collapse of Silicon Valley Bank (SVB) and Signature Bank and with trouble at Credit Suisse and First Republic Bank (NYSE: FRC).

Prices had recovered some ground after support measures from the European Central Bank and U.S. lenders but dropped again when SVB Financial Group said it had filed for reorganization.

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

The worse the banks are doing, the better the cryptocurrency is doing

WHAT IT HAD INFLUENCED:

BITCOIN

WHAT HAPPENED:

Bitcoin has risen over 7%. The worse the banks are doing, the better the cryptocurrency is doing. Bitcoin has risen over 7% in the past 24 hours to $26.7K, taking its gain over the past seven days to 36% and testing highs not seen since June last year. Bitcoin is now trading above its 50 and 200-week moving averages. A break of the latter in a sharp move would look like a bearish capitulation.

On the technical side, Bitcoin has quickly moved from oversold to overbuy on the daily chart’s RSI. The signal for a correction would be a return of the index from above 70, which could open the way for a pullback to $25. At the same time, going against the upward trend in bitcoin is now too dangerous, as a mirror image of June’s decline is possible.

Total crypto market capitalization rose 5% on the day to $1.14 billion, the highest since August. The driver is a reassessment of interest rate expectations by major central banks, fuelling Nasdaq and gold buying alongside cryptocurrencies.

However, another trend is also worth noting. The banking problems in the US and Europe have again highlighted the vulnerability of the traditional financial sector. Once again, investors’ fears that keeping money in banks can be risky are coming to the surface.

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

5 KEY EVENTS TO WATCH OUT

Service PMI (Mar), U.K.

WHEN: WHAT IT INFLUENCES:

24 MARCH 2023 GBP and its subsequent pairs

WHAT’S HAPPENING: The Services Purchasing Managers’ Index (PMI) is a diffusion index incorporating survey results provided by firms in the services sector throughout the country. A reading above fifty suggests the service sector is expanding, while a reading below fifty indicates the service 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. The service sector is far larger than the manufacturing sector and thus accounts for the largest share of the country’s economic output.

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.

Fed Interest Rate Decision, U.S.

WHEN: WHAT IT INFLUENCES:

22 MARCH 2023 USD and its subsequent pairs

WHAT’S HAPPENING: Federal Open Market Committee (FOMC) members vote on where to set the target interest rate. Traders watch interest rate changes closely as relatively short-term interest rates are a primary factor in currency valuation.

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.

Manufacturing PMI, AUD

WHEN: WHAT IT INFLUENCES:

24 MARCH 2023 AUD and its subsequent pairs

WHAT’S HAPPENING: The Australian Manufacturing Purchasing Managers Index (PMI) measures the activity level of purchasing managers in the manufacturing sector. A reading above 50 indicates expansion in the sector; below indicates contraction. Traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, which can be a leading indicator of overall economic performance. A higher-than-expected reading should be taken as positive/bullish for the AUD, while a lower-than-expected reading should be taken as negative/bearish for the AUD.

Core Retail Sales (MoM) (Jan), CAD

WHEN: WHAT IT INFLUENCES:

21 MARCH 2023 CAD 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 (excluding automobile sales). It is an important indicator of consumer spending accounting for most of the overall economic activity.

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

National Core CPI (YoY) (Feb), JPY

WHEN: WHAT IT INFLUENCES:

24 MARCH 2023 JPY and its subsequent pairs

WHAT’S HAPPENING: The National Core Consumer Price Index (CPI) measures the change in the prices of goods and services from the perspective of the consumer. The Central bank pays very close attention to this figure in its role of maintaining price stability, as the core rate excludes the volatile fresh food component.

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

NIKE INC. (NKE) to announce its Quarterly Results on 21 MARCH 2023, EPS estimated to 0.56 per share while revenue estimated 11.482B.
GAMESTOP CORPORATION (GME) is to announce its Quarterly Results on 21 MARCH 2023, EPS is estimated to be –0.13 per share while revenue is estimated at 2.18B.
HEALTH EQUITY, INC. (HQY) to announce its Quarterly Results on 21 FEBRUARY 2023, EPS estimated to 0.35 per share while revenue estimated 230.729M.
CANADIAN SOLAR INC, (CSIQ) is to announce its Quarterly Results on 21 MARCH 2023, EPS is estimated to be 0.70 per share while revenue is estimated at 1.924B.
CARNIVAL CORPORATION, (CC). to announce its Quarterly Results on 27 MARCH 2023, EPS is estimated to be –0.60 per share while revenue is estimated at 4.319B.