Weekly Technical Analysis & Price Market Strategy- 26 March 2023

26 Mar

WEEKLY TECHNICAL ANALYSIS & PRICE MARKET STRATEGY – 26 MARCH 2023

/ CSFX Analytics

WEEKLY SNAPSHOT

Trade Balance (Jan), U.K.

WHEN: WHAT IT HAD INFLUENCED:

20 MARCH 2023 GBP and its subsequent pairs

WHAT HAPPENED: The Trade Balance measures the difference in value between imported and exported goods and services over the reported period. A positive number indicates that more goods and services were exported than imported (a trade surplus). A negative number indicates that fewer goods and services were exported than imported (a trade deficit)

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

Fed Interest Rate Decision, U.S.

WHEN: WHAT IT HAD INFLUENCED:

22 MARCH 2023 USD and its subsequent pairs

WHAT HAPPENED: 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.

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

RBA Meeting Minutes, AUD

WHEN: WHAT IT HAD INFLUENCED:

21 MARCH 2023 AUD and its subsequent pairs

WHAT HAPPENED: The Reserve Bank of Australia (RBA) Monetary Policy Meeting Minutes are a detailed record of the bank’s most recent policy-setting meeting, containing in-depth insights into the economic conditions that influenced the rate decision.

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

Gold is rising for the fourth consecutive week, approaching $2,000, as the banking crisis increases demand for haven assets.

WHAT IT HAD INFLUENCED:

GOLD

WHAT HAPPENED: Gold futures notched a fourth straight weekly gain, settling within striking range of the key $2,000 target, as fresh ructions in the U.S.-to-Europe banking crisis limited fallout from the dollar’s rebound that weighed on the yellow metal.

Gold returned to $2,000 an ounce over the past 24 hours but closed off those highs on Friday as the Dollar Index, which pits the U.S. currency against six majors, including the euro and yen, rose for the first time in a week.

Notwithstanding the dollar’s rally, the investor flight to safe havens, particularly gold was still evident as Germany’s Deutsche Bank became the newest big name caught in the U.S.-to-Europe banking crisis.

Heightened inflation worries were also keeping gold on investors’ minds despite a senior Federal Reserve official saying on Friday that there might be just one more U.S, rate increase in the current hiking cycle.

James Bullard, president of the St. Louis chapter of the Fed and one of the central bank’s most hawkish advocates of higher rates, said a rate increase at the May 3 or June 14 meeting of the Fed might be the last for now. The central bank has added 475 basis points to rates since March 2022 in its bid to fight the worst U.S. inflation in 40 years.

“Gold prices will remain supported amidst heightened U.S. economic policy uncertainty and the risk of elevated headline inflation,” analysts at Montreal-based BCA Research said in a note.

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

Oil settles down on worries over European banks, U.S. crude reserve

WHAT IT HAD INFLUENCED:

CRUDE OIL

WHAT HAPPENED: oil prices settled lower on Friday as European banking shares fell and after U.S. Energy Secretary Jennifer Granholm said refilling the country’s Strategic Petroleum Reserve (SPR) may take several years, dampening demand prospects.

Brent crude settled down 92 cents, or 1.2%, to $74.99. West Texas Intermediate U.S. crude futures fell 70 cents, or 1%, to $69.26 a barrel.

Both benchmarks rose this week as banking sector turmoil eased. Brent futures rose 2.8% in the week while U.S. crude futures rose 3.8%. Last week, both benchmarks posted their biggest declines in months.

“We’re riding along macroeconomic headwinds, and there’s a newfound correlation with equities” said John Kilduff, partner at Again Capital LLC in New York.

Banking stocks slid in Europe with Deutsche Bank and UBS Group slammed by worries that the worst problems in the sector since the 2008 financial crisis could persist.

U.S. Treasury Secretary Janet Yellen convened an unscheduled meeting of the Financial Stability Oversight Council on Friday morning.

The dollar rose 0.6% against other currencies, which also pressured oil, making crude more expensive to holders of other currencies.

The White House said in October it would buy back oil for the SPR when prices were at or below about $67-$72 per barrel.

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

The crypto market is temporarily more attractive than stocks

WHAT IT HAD INFLUENCED:

BITCOIN

WHAT HAPPENED: Cryptocurrency market capitalization rose 2.2% over the past 24 hours to $1.183 trillion, returning to Wednesday’s highs. Cryptocurrencies came under selling pressure after the stock market at the close of the US session on Thursday but found much more support on that local dip.

Bitcoin failed to rewrite the previous day’s local highs on Thursday but found support from increasingly higher levels during the day, which looks like a short-term bullish signal. Despite entering the oversold territory on the daily chart’s RSI, Bitcoin still has a good chance of testing the $30K level before a medium-term correction to $25K.

Top crypto industry executives interviewed by CNBC remain bullish on the first cryptocurrency. Tether CTO Paolo Arduino believes bitcoin could retest its previous record high of $69K. Gemini cryptocurrencies exchange strategic director Marshall Beard believes BTC could hit $100K this year.

The US Securities and Exchange Commission (SEC) has sued Tron project founder Justin Sun and three of his companies for “unregistered sales of securities in the form of cryptocurrencies” Tron (TRX) and BitTorrent (BTT). The regulator also believes that Sun manipulated the secondary market for TRX through “laundered trading”.

US cryptocurrency exchange Coinbase has received a notice of investigation from the SEC regarding the listing process on the platform and its products – Coinbase Prime, Coinbase Wallet, and the Coinbase Earn stacking service. The exchange has time to respond.

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

5 KEY EVENTS TO WATCH OUT

Consumer Inflation Expectation (Mar), U.K.

WHEN: WHAT IT INFLUENCES:

30 MARCH 2023 GBP and its subsequent pairs

WHAT’S HAPPENING: Consumer Inflation Expectation number is a report by Eurostat that tries to forecast inflation forward, by analyzing surveys of consumers all over the Eurozone. The impact on the currency may go both ways, a rise in CPI may lead to a rise in interest rates and a rise in local currency, on the other hand, during the recession, a rise in CPI may lead to a deepened recession and therefore a fall in local currency.

Pending Home Sales (MoM) (Feb), U.S.

WHEN: WHAT IT INFLUENCES:

29 MARCH 2023 USD and its subsequent pairs

WHAT’S HAPPENING: The National Association of Realtors (NAR) Pending Home Sales Report measures the change in the number of homes under contract to be sold but still awaiting the closing transaction. The report excludes new construction.

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.

Retail Sales (MoM) (Feb), AUD

WHEN: WHAT IT INFLUENCES:

28 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 the forecast is generally supportive (bullish) for the AUD, while a weaker-than-forecast reading is generally negative (bearish) for the AUD.

Unemployment Rate (Feb), RUB

WHEN: WHAT IT INFLUENCES:

29 MARCH 2023 RUB and its subsequent pairs

WHAT’S HAPPENING: The Unemployment Rate measures the percentage of the total workforce that is not working, yet actively seeking employment.
A reading that is higher than forecast is generally negative (bearish) for the RUB, while a lower-than-forecast reading is generally supportive (bullish) for the RUB.

Leading Index (MoM), JPY

WHEN: WHAT IT INFLUENCES:

27 MARCH 2023 JPY and its subsequent pairs

WHAT’S HAPPENING: The Leading Indicators Index is a composite indicator based on twelve economic reports intended to project the future direction of the economy.

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

MICRON TECHNOLOGIES, INC. (MU) to announce its Quarterly Results on 28 MARCH 2023, EPS estimated to -0.66 per share while revenue estimated 3.729B.
CINTAS CORPORATION (CTAS) to announce its Quarterly Results on 29 MARCH 2023, EPS estimated to 3.03 per share while revenue estimated 2.153B.
PAYCHEX, INC. (PAYX) to announce its Quarterly Results on 29 MARCH 2023, EPS estimated to 1.25 per share while revenue estimated 1.361B.
JEFFERIES FINANCIAL GROUP INC, (JEF) to announce its Quarterly Results on 28 MARCH 2023, EPS is estimated to 0.43 per share while revenue is estimated 1.088B.
TARGA RESOURCES INC, (TRGP). to announce its Quarterly Results on 03 APRIL 2023, EPS is estimated to 1.37 per share while revenue is estimated 5.531B.