WEEKLY TECHNICAL ANALYSIS & PRICE MARKET STRATEGY – 30 APRIL 2023

30 Apr 2023

WEEKLY SNAPSHOT

German Ifo Business Climate Index (Apr), EUR

WHEN: WHAT IT HAD INFLUENCED:

24 APRIL 2023 GBP and its subsequent pairs

WHAT HAPPENED: The German Ifo Business Climate Index uses survey results to gauge the sentiment of businesses across Germany. The index measure business perceptions of both current and future German business conditions. It is a composite index based on a survey of manufacturers, builders, wholesalers and retailers compiled by the Ifo Institute for Economic Research.

GDP (QoQ) (Q1), U.S.

WHEN: WHAT IT HAD INFLUENCED:

27 APRIL 2023 USD and its subsequent pairs

WHAT HAPPENED: Gross Domestic Product (GDP) measures the annualised 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.

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

CPI (QoQ) (Q1), AUD

WHEN: WHAT IT HAD INFLUENCED:

26 APRIL 2023 AUD 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.
AUDUSD is trading in downward channel. Further downside can be seen in coming week.

Gold futures ended April higher and have now seen two months of gains.

WHAT IT HAD INFLUENCED:

GOLD

WHAT HAPPENED: Gold futures ended a notch higher for April, clinching the second straight monthly settlement in the positive as bulls kept the haven not too far from the key $2,000-an-ounce mark on bets that the dollar will fall again soon.

Gold for June delivery on New York’s Comex settled Friday’s trade up by a dime at $1,999.10. The session high was $2,004. It was the second straight month in the black for the yellow metal and its fifth positive month in six.

The spot price of gold, which reflects physical trades in bullion and is more closely followed than futures by some traders, was down 35 cents to $1,998.65 by 14:30 ET (18:30 GMT).

Both spot gold and Comex’s most-active contract for the yellow metal are down about 2.5% or more from an April 13 peak of around $2,050. The selloff in gold came as the dollar rebounded lately on expectations that the Federal Reserve will embark on a quarter-point rate hike on May 3 when the central bank’s policy makers meet to review the effectiveness of US monetary policy in fighting inflation.

Gold bulls are, however, banking that the Fed will be done soon with its rate increases, and are keeping gold closer to the $2,000 mark for a run towards a record high should the dollar crumble at that point

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

On April’s last day, oil prices increase, returning to profitability after five months of losses.

WHAT IT HAD INFLUENCED:

CRUDE OIL

WHAT HAPPENED: Crude prices jumped on the last trading day of April to return to the black after spending the better part of the last 10 months in the red — an unexpectedly poor stretch that confounded oil bulls who had come to regard $100 a barrel as a given in a market long on OPEC hype and short on delivery.

New York-traded West Texas Intermediate, or WTI, for June delivery settled $2.02, or 2.7%, on the day at $76.78 per barrel. For the week, the U.S. crude benchmark remained in the red, with a loss of 1.4%.

For all of April though, WTI showed a return of about 1%. It was the first positive monthly closing for WTI after five previous months of losses. Earlier to that, WTI was only in the green for one month — October — after spending another four months in the red.

London-traded Brent settled $1.17, or 1.5%, at $79.45 on its June delivery contract, according to exchange data from ICE.

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

Holders of bitcoin and Ethereum are jubilant as US PCE comes in below estimates.

WHAT IT HAD INFLUENCED:

BITCOIN & ETHEREUM

WHAT HAPPENED: Bitcoin and Ethereum holders, risk asset traders rejoiced at the release of the Personal Consumption Expenditure price index.

The Core PCE Price Index rose 0.3% in March, aligned with market expectations.

The US Dollar Index was last seen rising 0.55% on the day at 102.05, while Bitcoin price hovered close to $29,500.

The release of the US Personal Consumption Expenditure (PCE) Price Index came in at market expectations. The Core PCE Price Index nosedived to 4.6% Year-on-Year (YoY) and climbed 0.3% Month-on-Month (MoM).

Bitcoin price jumped closer to $29,500 within the first few minutes of the release. BTC was trading close to $29,300 ahead of the US PCE release. Ethereum price reacted positively to the US PCE release and climbed to $1,915 within minutes of the announcement.

Crypto analysts feared US PCE numbers coming in hotter than expected as this would negatively influence trader sentiment towards risk assets like Bitcoin and Ethereum. With the April 28 release, BTC and ETH holders witnessed a positive reaction to the release.

The yearly rate eased to 4.6% from 5% in February 2023. Combined with the Core PCE Price Index coming in at market expectations, it sparked a recovery in risk assets.

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

5 KEY EVENTS TO WATCH OUT

CPI (YoY) (Apr), U.K.

WHEN: WHAT IT INFLUENCES:

02 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.

Fed Interest Rate Decision, U.S.

WHEN: WHAT IT INFLUENCES:

03 MAY 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 relative short term interest rates are a primary factor in currency valuation.
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.

RBA Interest Rate Decision (May), AUD

WHEN: WHAT IT INFLUENCES:

02 MAY 2023 AUD and its subsequent pairs

WHAT’S HAPPENING: 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.
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.

Ivey PMI (Apr), CAD

WHEN: WHAT IT INFLUENCES:

04 MAY APRIL 2023 CAD and its subsequent pairs

WHAT’S HAPPENING: The Ivey Purchasing Managers’ Index (PMI) is a diffusion index incorporating survey results conducted on companies throughout the country. 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.

Employment Change (QoQ) (Q1) NZD

WHEN: WHAT IT INFLUENCES:

03 MAY 2023 CNY and its subsequent pairs

WHAT’S HAPPENING: Employment Change measures the change in the number of people employed versus the prior period.

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

EQUITIES IN THE COMING WEEK

APPLE, INC (AAPL) to announce its Quarterly Results on 04 MAY 2023, EPS estimated to 1.43 per share while revenue estimated 92.906B.
ADVANCED MICRO DEVICES INC (AMD) to announce its Quarterly Results on 02 MAY 2023, EPS estimated to 0.56 per share while revenue estimated 5.304B.
STARBUCKS CORPORATION (SBUX) to announce its Quarterly Results on 02 MAY 2023, EPS estimated to 0.65 per share while revenue estimated 8.408B.
SHOPIFY, INC (SHOP) to announce its Quarterly Results on 04 MAY 2023, EPS estimated to –0.04 per share while revenue estimated 1.434B.
METLIFE, INC (MET) to announce its Quarterly Results on 03 MAY 2023 EPS estimated 1.83 per share while revenue estimated 16.84B.

TOP COMMODITIES IN THE COMING WEEK