Daily Technical Analysis by Capital Street FX

FUNDAMENTAL AND TECHNICAL ANALYSIS REPORT – 18 November 2022

OIL REBOUNDS FOLLOWING SHARP DROPS

Asian stock market closed green on Thursday. The Shanghai Composite is up 0.95% at 3115.53 Overall, the Singapore MSCI is down 0.35% at 300.12. Over in Hong Kong, the Hang Seng Index is up 0.14% at 18,045.66. In Japan, the Nikkei 225 is down 0.11% at 27930.57, while the Topix index is up 0.43% at 1966.28 South Korea’s Kospi is up 0.06% at 2,442.90. Australia S&P/ASX 200 up 0.23% at 7135.70.

TOP NEWS OF THE DAY:

Oil prices rose on Friday after a series of bruising sessions and were set to end the week lower as hawkish signals from the Federal Reserve and rising COVID-19 cases in China brewed concerns over slowing global demand.

Crude markets plummeted on Thursday after hawkish comments from St. Louis Fed President James Bullard suggested that the bank intends to raise interest rates by at least another 150 basis points, citing a limited impact on inflation from recent hikes. This ratcheted up fears that U.S. economic growth will slow dramatically in the coming quarters, amid pressure from high-interest rates and stubborn inflation.

Oil prices were also dented by news of rising COVID-19 cases in China, which raised the prospect of more disruptive lockdown measures in the country.

TECHNICAL SUMMARY

GBPUSD TECHNICAL ANALYSIS

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TRADE SUGGESTION – BUY AT 1.19475, TAKE PROFIT AT 1.20388, SL AT 1.18407


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FUNDAMENTAL AND TECHNICAL ANALYSIS REPORT – 22 NOVEMBER 2022

OIL PRICE RISES TOWARDS $80 AFTER SAUDI DENY REPORT OF OPEC+ SUPPLY MOUNT

Asian Pacific stock markets tumbled further on Tuesday. The Shanghai Composite is down 0.13% at 3,041.37. Overall, the Singapore MSCI is down 0.87% at 278.70. Over in Hong Kong, the Hang Seng Index is down 0.43% at 17,821.00. In Japan, the Nikkei 225 is down 0.82% at 26,250.00, while the TOPIX index is down 0.89% at 1846.00. South Korea’s Kospi is down 3.02% at 2,220.94. Australia S&P/ASX 200 is down 1.60% at 6469.40.

TOP NEWS OF THE DAY:
Apple Stock fell 2.2% after Bank of America downgraded its stance on the iPhone maker to ‘neutral’ from ‘buy’, saying falling discretionary spending will result in underperformance.

The selloff in global bonds resumed and the dollar rose again after a sharp short-covering rally in risk assets on Wednesday.

Market Summary as of 21/11/2022:

European equities Monday closing. The DAX futures contract in Germany traded down 1.97% at 12,284.19, CAC 40 futures down 2.28% at 5783.42, and the UK 100 futures contract in the U.K. down 1.97% at 7,018.61.

In the U.S. on Wall Street, the Dow Jones Industrial Average closed 1.88% at 29683.42. The S&P 500 is up 1.72% at 3693.22 and the Nasdaq 100 is down 1.66% at 11311.24, NYSE closes 2.26% at 13796.99.

TECHNICAL SUMMARY

GBPUSD TECHNICAL ANALYSIS

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TRADE SUGGESTION – BUY AT 1.18850, TAKE PROFIT AT 1.20387, SL AT 1.18711


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FUNDAMENTAL AND TECHNICAL ANALYSIS REPORT – 25 NOVEMBER 2022

U.S. YIELDS FALL ALONG WITH THE DOLLAR ON DOVISH FED WAGERS, WHILE HK EQUITIES DECLINE.

Asian stock market closed green on Thursday. The Shanghai Composite is down 0.25% at 3089.31 Overall, the Singapore MSCI is up 0.19% at 294.43. Over in Hong Kong, the Hang Seng Index is up 0.78% at 17660.90. In Japan, the Nikkei 225 is up 0.95% at 28383.09, while the Topix index is up 1.21% at 2018.80 South Korea’s Kospi is up 0.96% at 2,441.34. Australia S&P/ASX 200 up 0.14% at 7241.80.

TOP NEWS OF THE DAY:

U.S. long-term Treasury yields sank to a more than seven-week trough on Friday while the dollar dropped back toward recent lows against major peers as markets continued to digest dovish signals from the Federal Reserve.

Expectations of a less aggressive pace of U.S. monetary tightening from as soon as next month continued to support some stock markets in Asia, but Hong Kong’s Hang Seng dropped as record COVID-19 infections in China dimmed the outlook.

The 10-year Treasury yield dipped to 3.65% in Tokyo trading, the lowest since Oct. 5, following Thursday’s U.S. Thanksgiving holiday. The two-year yield slipped to a one-week bottom at 4.424%.

The dollar index, which measures the greenback against the euro, yen and four other rivals, retreated 0.11% to 105.76, heading back toward Thursday’s low of 105.62.

Market Summary as per 24/11/2022:

European equities Thursday closing. The DAX futures contract in Germany traded up 0.78% at 14539.56, CAC 40 futures up 0.42% at 6707.32. UK 100 futures contract in the U.K. up 0.02 at 7466.60

In the U.S. on Wall Street, the Dow Jones Industrial Average closed up 0.28% at 34194.06. The S&P 500 up 0.53% at 4024.28 and the Nasdaq 100 also up 0.99% at 11285.32, NYSE closes 0.41% up at 15545.52.

TECHNICAL SUMMARY

GBPUSD TECHNICAL ANALYSIS

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TRADE SUGGESTION – BUY AT 1.21534, TAKE PROFIT AT 1.22772, SL AT 1.20511

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FUNDAMENTAL AND TECHNICAL ANALYSIS REPORT – 28 November 2022

CONFLICTS IN SHANGHAI AS COVID DEMONSTRATIONS SPREAD THROUGHOUT CHINA

Asian stock market closed red on Friday. The Shanghai Composite is up 0.40% at 3101.69 Overall, the Singapore MSCI is flat by 0.00% at 293.95. Over in Hong Kong, the Hang Seng Index is down 0.49% at 17573.58. In Japan, the Nikkei 225 is down 0.35% at 28283.03, while the Topix index is down 0.040% at 2018.00 South Korea’s Kospi is down 0.14% at 2,437.86. Australia S&P/ASX 200 is up 0.24% at 7259.50.
TOP NEWS OF THE DAY:
Hundreds of demonstrators and police clashed in Shanghai on Sunday night as protests over China’s stringent COVID restrictions flared for the third day and spread to several cities in the wake of a deadly fire in the country’s far west.

The wave of civil disobedience is unprecedented in mainland China since President Xi Jinping assumed power a decade ago, as frustration mounts over his signature zero-COVID policy nearly three years into the pandemic. The COVID measures are also exacting a heavy toll on the world’s second-largest economy.

Protesters also took to the streets in the cities of Wuhan and Chengdu on Sunday, while students on numerous university campuses around China gathered to demonstrate over the weekend.

Market Summary as of 25/11/2022:

European equities Friday closing. The DAX futures contract in Germany traded up 0.01% at 14541.38, and CAC 40 futures up 0.08% at 6712.48. UK 100 futures contract in the U.K. is up 0.27 at 7486.67

In the U.S. on Wall Street, the Dow Jones Industrial Average closed up 0.45% at 34347.03. The S&P 500 is up 0.08% at 4027.72 and the Nasdaq 100 is down 0.52% at 11226.36, NYSE closes 0.39% up at 15605.68.
TECHNICAL SUMMARY
GBPUSD TECHNICAL ANALYSIS
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TRADE SUGGESTION – BUY AT 1.20980, TAKE PROFIT AT 1.21917, SL AT 1.20229


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FUNDAMENTAL AND TECHNICAL ANALYSIS REPORT – 01 DECEMBER 2022

POWELL SAID THERE IS STILL TIME BEFORE PEAK RATES BUT THAT THE DECEMBER HIKE WILL BE SLOWER

Asian stock market closes in green on Wednesday. The Shanghai Composite is up 0.59% at 3151.34 Overall, the Singapore MSCI is up 0.15% at 299.75. Over in Hong Kong, the Hang Seng Index is up 2.16% at 18597.23. In Japan, the Nikkei 225 is up 1.43% at 28368.78, while the Topix index is up 0.61% at 1997.64 South Korea’s Kospi is up 1.08% at 2,499.13. Australia S&P/ASX 200 up 0.95% at 7353.60.

TOP NEWS OF THE DAY:
Federal Reserve Chairman Jerome Powell said that the pace of rate hikes is likely to slow, but the peak level of rates will be higher than previously expected as there is a long way to go to curb above-trend inflation.

“Moderating the pace of rate increases may come as soon as the December meeting,” Powell said in a speech on Wednesday at the Brookings Institution event in Washington. He added that the Fed’s monetary policy was approaching “the level of restraint that will be sufficient to bring inflation down.”

About 70% of traders expect the Fed to slow rate hikes to 50 basis points in December, down from 75 basis points seen in the prior four Fed meetings.

“We continue to expect the FOMC to slow the pace of rate hikes to 50bp in December and to 25bp in February, March, and May, raising the funds rate to a peak of 5-5.25%,” Goldman Sachs said in a note ahead of Powell’s remarks.

Market Summary as per 30/11/2022:

European equities Wednesday closing. The DAX futures contract in Germany traded up 0.29% at 14397.04, CAC 40 futures up 1.04% at 6738.55. UK 100 futures contract in the U.K. up 0.81 at 7573.05.

In the U.S. on Wall Street, the Dow Jones Industrial Average Closed up 2.18% at 34589.77. The S&P 500 up 3.09% at 4080.11 and the Nasdaq 100 up 4.41% at 11468.00, NYSE closes 2.25% up at 15780.02.

TECHNICAL SUMMARY

GBPUSD TECHNICAL ANALYSIS




TRADE SUGGESTION – BUY AT 1.21516, TAKE PROFIT AT 1.22607, SL AT 1.20531

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FUNDAMENTAL AND TECHNICAL ANALYSIS REPORT – 14 DECEMBER 2022

INFLATION IN THE UK DECREASED MORE THAN ANTICIPATED IN NOVEMBER, RELIEVING PRESSURE ON THE BOE.

Asian stock market closes in green on Tuesday. The Shanghai Composite is down 0.14% at 3176.33 Overall, the Singapore MSCI is up 0.40% at 298.00. Over in Hong Kong, the Hang Seng Index is up 0.69% at 19596.20. In Japan, the Nikkei 225 is up 0.72% at 27954.85., while the Topix index is up 0.60% at 1965.68 South Korea’s Kospi is up 1.13% at 2372.40. Australia S&P/ASX 200 up 0.67% at 7251.30.

TOP NEWS OF THE DAY: –
U.K. inflation fell by more than expected in November, easing the pressure on the Bank of England to keep raising interest rates against the backdrop of a recession.

The consumer price index rose by 0.4% on the month, down from an alarming 2.0% in October that was caused by the adjustment of regulated household energy prices. Analysts had expected an increase of 0.6% ahead of time.

That brought the year-on-year rate down to 10.7% from 11.1%.

Stripping out volatile fuel and energy components, the core CPI rate also eased by more than expected, rising only 0.3%, rather than the 0.5% forecast. In annual terms, core inflation is now running at 6.3%, down from 6.5% last month.

The figures come only hours before the Bank of England is set to announce its latest policy decisions.

Market Summary as per 13/12/2022:

European equities Tuesday closing. The DAX futures contract in Germany traded up 1.34% at 14497.89, CAC 40 futures up 1.42% at 6744.98. UK 100 futures contract in the U.K. up 0.76 at 7502.89

In the U.S. on Wall Street, the Dow Jones Industrial Average Closed up 0.30% at 34108.64. The S&P 500 up 0.73% at 4019.65 and the Nasdaq 100 up 1.01% at 11256.81, NYSE closes 0.61% up at 15562.54.


TECHNICAL SUMMARY
GBPUSD TECHNICAL ANALYSIS

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FUNDAMENTAL AND TECHNICAL ANALYSIS REPORT – 15 DECEMBER 2022

HONG KONG CENTRAL BANK RAISES RATES AFTER FED HIKE

Asian stock market closes in red on Wednesday. The Shanghai Composite is down 0.25% at 3176.53 Overall, the Singapore MSCI is down 0.09% at 298.40. Over in Hong Kong, the Hang Seng Index is down 1.42% at 19673.45. In Japan, the Nikkei 225 is down 0.37% at 28156.21., while the Topix index is down 0.18% at 1973.90 South Korea’s Kospi is down 1.60% at 2399.25. Australia S&P/ASX 200 is down 0.64% at 7204.80.
TOP NEWS OF THE DAY: –
The Hong Kong Monetary Authority (HKMA) said on Thursday it would raise its base rate charged through the overnight discount window by 50 basis points to 4.75%, hours after the U.S. Federal Reserve delivered a rate hike of the same margin.

The U.S. central bank raised interest rates by half a percentage point. It projected at least an additional 75 basis points of increases in borrowing costs by the end of 2023, as well as a rise in unemployment and a near-stalling of economic growth.

“Rate hike in the U.S. will not affect the financial and monetary stability of Hong Kong,” HKMA Chief Executive Eddie Yue told reporters. “Our monetary and financial markets continue to operate in a smooth and orderly manner. The Linked Exchange rate system (LERS) continues to work well.”

Hong Kong’s monetary policy moves in lock-step with U.S. policy as the city’s currency is pegged to the greenback in a tight range of 7.75-7.85 per dollar.

Market Summary as of 14/12/2022:

European equities Wednesday closing. The DAX futures contract in Germany traded down 0.26% at 14460.20, and CAC 40 futures were down 0.21% at 6730.79. UK 100 futures contract in the U.K. is down 0.09 at 7495.93

In the U.S. on Wall Street, the Dow Jones Industrial Average closed down 0.42% at 33966.35. The S&P 500 is down 0.61% at 3995.32 and the Nasdaq 100 is down 0.76% at 11170.89, NYSE closes 0.43% down at 15494.98.

TECHNICAL SUMMARY

GBPUSD TECHNICAL ANALYSIS
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TRADE SUGGESTION – BUY AT 1.22900, TAKE PROFIT AT 1.24074, SL AT 1.22443


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Fundamental News And Technical Analysis Report – 19 December 2022

OIL INCREASES ON EXPECTATIONS OF CHINESE DEMAND AND U.S. SPR REPLENISHMENT

Asian stock market closes in red on Friday. The Shanghai Composite is down 0.02% at 3167.86 Overall, the Singapore MSCI is down 1.82% at 289.40. Over in Hong Kong, the Hang Seng Index is up 0.42% at 19450.67. In Japan, the Nikkei 225 is down 1.87% at 27527.12. While the Topix index is down 1.20% at 1950.21 South Korea’s Kospi is down 0.04% at 2360.02. Australia S&P/ASX 200 is down 0.78% at 7148.70.

TOP NEWS OF THE DAY: –
Oil prices rose on Monday, recovering from steep losses in the prior session as markets bet on a demand recovery fuelled by China’s economic reopening, while the Biden administration’s pledge to begin refilling its strategic reserve also brightened the outlook for prices.

Crude markets were buoyant as several Chinese officials, including President Xi Jinping, vowed to shore up economic growth after a year of COVID-19 lockdowns battered the world’s second-largest economy.

The country has now begun relaxing several anti-COVID measures, with recent road and air transport metrics showing that fuel demand is already picking up.

But China is also grappling with a large spike in COVID-19 infections, which analysts warn could spur market volatility amid conflicting signals over an economic reopening.

An announcement by the U.S. Energy Department on Friday that it will begin repurchasing crude oil for the Strategic Petroleum Reserve also supported the outlook for stronger prices.

This will be the United States’ first purchase since this year’s record 180-million-barrel release from the stockpile.

Market Summary as of 16/12/2022:

European equities Friday closing. The DAX futures contract in Germany traded down 0.67% at 13893.07, and CAC 40 futures were down 1.08% at 6452.63. UK 100 futures contract in the U.K. is down 1.27 at 7332.12

In the U.S. on Wall Street, the Dow Jones Industrial Average closed down 0.85% at 32920.46. The S&P 500 is down 1.11% at 3852.36 and the Nasdaq 100 is down 0.97% at 10705.41, NYSE closes 1.08% down at 15018.17.

TECHNICAL SUMMARY
GBPUSD TECHNICAL ANALYSIS

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TRADE SUGGESTION – BUY AT 1.22183, TAKE PROFIT AT 1.23384, SL AT 1.21159

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FUNDAMENTAL NEWS AND TECHNICAL ANALYSIS REPORT - 02 JANUARY

THE FINANCE MINISTER OF GERMANY FORECASTS 7% INFLATION IN 2023

Asian stock market closes in green on Friday. The Shanghai Composite is up 0.51% at 3073.70. Overall, the Singapore MSCI is flat 0.00% at 288.35. Over in Hong Kong, the Hang Seng Index is up 0.20% at 19741.14. In Japan, the Nikkei 225 is flat 0.00 at 26093.67. While the Topix index is down 0.19% at 1895.27 South Korea’s Kospi is down 0.48% at 2236.40. Australia S&P/ASX 200 up 0.26% at 7020.10.

TOP NEWS OF THE DAY:
Germany’s finance minister expects inflation in Europe’s biggest economy to drop to 7% this year and to continue falling in 2024 and beyond, but believes high energy prices will become the new normal.

“The target remains 2%. This must be a top priority for the European Central Bank and the German government,” Christian Lindner said in an interview with Bild newspaper published on Sunday.

Pushed by spiking energy prices following Russia’s invasion of Ukraine and falling Russian energy exports, Germany’s year-on-year inflation has slowed slightly in November to 11.3% from a high of 11.6% the month prior.

Lindner said Germany needs an “unbiased” energy policy in order to keep industry ticking, adding that domestic gas and oil fracking and nuclear energy should be considered in the energy sources mix along with renewables.

TECHNICAL SUMMARY

GBPUSD TECHNICAL ANALYSIS

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Fundamental News And Technical Analysis Report – 24 January 2023

THE DOLLAR STRUGGLES AS THE EURO APPROACHES A NINE-MONTH HIGH AND THE YEN RISE.

Asian stock market closes in green on Monday. The Shanghai Composite is up 0.76% at 3264.81. Overall, the Singapore MSCI is up 0.69% at 303.88. Over in Hong Kong, the Hang Seng Index is up 1.82% at 22044.65. In Japan, the Nikkei 225 is up 1.33 at 26906.04. While the Topix index is up 0.96% at 1945.38 South Korea’s Kospi is up 0.63% at 2395.26. Australia S&P/ASX 200 is up 0.68% at 7457.30.

TOP NEWS OF THE DAY:
The dollar hovered near a nine-month low to the euro and gave back recent gains against the yen on Tuesday, as traders weighed the risks of a U.S. recession and the path for Federal Reserve policy.

The U.S. dollar index – which measures the greenback against a basket of six peers, including the euro and yen – slipped 0.12% to 101.89, heading back towards the 7-1/2-month low of 101.51 reached last week.

The euro added 0.08% to $1.0880, taking it closer to Monday’s peak of $1.0927, the strongest since April.

“The U.S. is no longer the cleanest shirt in the global economic laundry,” said Ray Attrill, head of the foreign-exchange strategy at National Australia Bank (OTC: NABZY), who expects the dollar index to fall to 100 by end-March and the euro to rise to $1.10.

“That’s integral to our bearish U.S. dollar view, that the U.S. is not going to be the global growth leader.”

Money market traders see only two more quarter-point rate hikes by the Fed to a peak of around 5% by June, with two quarter-point cuts following before year-end. The Fed has insisted 75 basis points of more tightening is likely on the way.

By contrast, Europe’s single currency has been buoyed by comments from European Central Bank officials pointing to further aggressive policy tightening.

The latest was ECB President Christine Lagarde, who on Monday reiterated that the central bank will keep raising interest rates quickly to slow inflation, which remains far too high.

TECHNICAL SUMMARY
GBPUSD TECHNICAL ANALYSIS

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Fundamental News And Technical Analysis Report – 26 January 2023

THE DOLLAR SWAYS CLOSE TO AN EIGHT-MONTH LOW AHEAD OF CENTRAL BANK MEETINGS.
Asian stock market closes in green on Wednesday. The Shanghai Composite is up 0.76% at 3264.81. Overall, the Singapore MSCI is down 0.51% at 298.38. Over in Hong Kong, the Hang Seng Index is up 1.82% at 22044.65. In Japan, the Nikkei 225 is up 0.35 at 27395.01. While the Topix index is up 0.39% at 1980.69, South Korea’s Kospi is up 1.39% at 2428.57. Australia S&P/ASX 200 is down 0.30% at 7468.30.

TOP NEWS OF THE DAY:
The dollar held close to an eight-month low against its peers on Thursday, as a gloomy U.S. corporate earnings season stoked recession fears and as traders stayed on guard ahead of a slew of central bank meetings next week.

The U.S. dollar index, which measures the greenback against a basket of currencies, inched 0.1% higher to 101.65, after falling as low as 101.52 earlier in the session, testing last week’s eight-month trough of 101.51.

Trading was thin, with Australia out for a holiday and some parts of Asia still away for the Lunar New Year.

Downbeat earnings and guidance from U.S. companies and a string of tech sector layoffs have deepened fears of a sharp economic downturn in the United States, leading investors to pare back expectations on how much longer the Federal Reserve will need to aggressively raise interest rates.

“There are now signs the U.S. economy may be slowing in a more meaningful manner,” said economists at Wells Fargo.

“With the Fed no longer leading the charge on interest rate hikes and U.S. economic trends set to worsen, we now believe the U.S. dollar has entered a period of cyclical depreciation against most foreign currencies.”

The Fed’s policy-setting committee will begin a two-day meeting next week, and markets have priced in a 25-basis-point (bps) interest rate hike, a step down from the central bank’s 50 bps and 75 bps increases seen last year.

Market Summary as per 25/01/2023:

European equities Wednesday closing. The DAX futures contract in Germany traded down 0.08% at 15081.64, CAC 40 futures down 0.09% at 7043.88. UK 100 futures contract in the U.K. down 0.16 at 7744.87

In the U.S. on Wall Street, the Dow Jones Industrial Average closed up 0.03% at 33743.84. The S&P 500 down 0.02% at 4016.22 and the Nasdaq 100 was down 0.18% at 11313.36, NYSE 0.13% close at 15889.27.

TECHNICAL SUMMARY

GBPUSD TECHNICAL ANALYSIS

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Fundamental News And Technical Analysis Report – 27 January 2023


BOJ USES THE FUNDS-SUPPLY WEAPON ONCE MORE AS YIELDS BEGIN TO RISE.

Asian stock market closes in green on Thursday. The Shanghai Composite is up 0.76% at 3264.81. Overall, the Singapore MSCI is up 0.68% at 308.52. Over in Hong Kong, the Hang Seng Index is up 2.37% at 22566.78. In Japan, the Nikkei 225 is down 0.12 at 27362.75. While the Topix index is down 0.12% at 1978.40, South Korea’s Kospi is up 1.65% at 2468.65. Australia S&P/ASX 200 down 0.30% at 7468.30.

TOP NEWS OF THE DAY: –

The Bank of Japan said on Friday it will extend five-year loans against collateral to financial institutions, the second time it has made such an offer after ramping up the funds-supply operation this month to defend its yield control policy.

The announcement underscores the central bank’s resolve to prevent simmering market speculation of a near-term interest rate hike from pushing up bond yields too much.

The BOJ will conduct the funds-supply operation on Tuesday, under which it will offer loans with a five-year duration from Feb. 1, it said in a statement.

The amount of loans to be offered will be announced on Tuesday, it added.

The announcement came after the 10-year Japanese government bond (JGB) yield crept up near the BOJ’s 0.5% cap on Friday, partly on data showing core consumer inflation in the capital Tokyo hit a near 42-year high of 4.3% in January.

In the previous offer made on Monday, the BOJ extended five-year loans worth 3.13 trillion yen ($24.09 billion). The minimum bid interest rate was 0.110%.

At this month’s policy meeting, the BOJ amended rules for the funds-supply operation, so it can pump funds extending up to 10 years to financial institutions against collateral.

Market Summary as per 26/01/2023:

European equities Thursday closing. The DAX futures contract in Germany traded up 0.34% at 15132.85, CAC 40 futures up 0.74% at 7095.99. UK 100 futures contract in the U.K. up 0.21 at 7761.11

In the U.S. on Wall Street, the Dow Jones Industrial Average Closed up 0.61% at 33949.41. The S&P 500 up 1.10% at 4060.43 and the Nasdaq 100 up 1.76% at 11512.41, NYSE 0.61% closes at 15985.87.

TECHNICAL SUMMARY

GBPUSD TECHNICAL ANALYSIS

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TRADE SUGGESTION – BUY AT 1.24245, TAKE PROFIT AT 1.24800, SL AT 1.23571

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Fundamental News And Technical Analysis Report – 15 February 2023

JAPANESE PRIME MINISTER SAYS HE HOPES NEW BOJ CHIEF WILL HEED GOVERNMENT GOAL OF HIGHER WAGES

Asian stock market closes in green on Tuesday. The Shanghai Composite is in green 0.28% at 3293.28. Overall, the Singapore MSCI is down 0.05% at 300.95. Over in Hong Kong, the Hang Seng Index is down 0.24% at 21113.76. In Japan, the Nikkei 225 is up 0.64 at 27602.77. While the Topix index is up 0.78% at 1993.09, South Korea’s Kospi is up 0.53% at 2465.64. Australia S&P/ASX 200 up 0.18% at 7430.90.

TOP NEWS OF THE DAY: –

Japanese Prime Minister Fumio Kishida said on Wednesday he hoped the central bank’s new leadership will take into account the government’s goal of achieving higher wages and sustained economic growth, in guiding monetary policy.

Kishida also said it was premature to say whether the government and the Bank of Japan (BOJ) should revise a joint policy statement, which commits the BOJ to achieve its 2% inflation target at the earliest date possible.

“We’d like to achieve structural wage growth and sustainable economic growth. I hope the new BOJ leadership guide policy taking account our policy direction,” Kishida told parliament.

The government on Tuesday named academic Kazuo Ueda as its pick to become next central bank governor, a surprise choice that could heighten the chance of an end to its unpopular yield control policy.

Market Summary as per 14/02/2023:

European equities Tuesday closing. The DAX futures contract in Germany traded down 0.11% at 15380.56, CAC 40 futures up 0.07% at 7213.81. UK 100 futures contract in the U.K. up 0.08 at 7953.85.

In the U.S. on Wall Street, the Dow Jones Industrial Average Closed down 0.46% at 34089.27. The S&P 500 down 0.03% at 4136.13 and the Nasdaq 100 up 0.57% at 11960.14, NYSE 0.17% closes down at 16025.11.


TECHNICAL SUMMARY
GBPUSD TECHNICAL ANALYSIS

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TRADE SUGGESTION – SELL AT 1.21328, TAKE PROFIT AT 1.20566, SL AT 1.21836

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Fundamental News And Technical Analysis Report - 17 February 2023

WITH HAWKISH FED REMARKS, THE DOLLAR JUMPS TO A SIX-WEEK HIGH

Asian stock market closes in green on Thursday. The Shanghai Composite is in red 0.96% at 3249.03. Overall, the Singapore MSCI is up 1.41% at 301.45. Over in Hong Kong, the Hang Seng Index is up 0.84% at 20987.67. In Japan, the Nikkei 225 is up 0.71 at 27696.44. While the Topix index is up 0.67% at 2001.09, South Korea’s Kospi is up 1.96% at 2475.48. Australia S&P/ASX 200 up 0.79% at 7410.30.

TOP NEWS OF THE DAY: –

The U.S. dollar surged to a six-week high in early European trade Friday, after strong U.S. economic data and hawkish comments from Federal Reserve policymakers pointed to more interest rate hikes.

At 02:00 ET (07:00 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.5% higher at 104.345, on track for a third consecutive week of gains.

Data released Thursday pointed to a resilient U.S. economy, as the number of Americans filing for unemployment benefits declined unexpectedly last week, while producer prices accelerated in January.

This was followed on from retail sales rebounding sharply in January after two straight monthly declines and consumer inflation coming in stronger than expected earlier in the week.

“The data provides ammunition for the Fed to remain in hawkish mode and for the market to continue to price two to three more 25bp Fed rate hikes by the summer,” said analysts at ING, in a note.

Market Summary as per 16/02/2023:

European equities Thursday closing. The DAX futures contract in Germany traded up 0.18% at 15533.64, and CAC 40 futures up 0.89% at 7366.16. UK 100 futures contract in the U.K. is up 0.18 at 8012.53.

In the U.S. on Wall Street, the Dow Jones Industrial Average closed down 1.26% at 33696.85. The S&P 500 was down 1.38% at 4090.41 and the Nasdaq 100 was down 1.78% at 11855.83, NYSE 0.89% closes at 15873.78.


TECHNICAL SUMMARY

GBPUSD TECHNICAL ANALYSIS

TRADE SUGGESTION – SELL AT 1.20090, TAKE PROFIT AT 1.19608, SL AT 1.20262


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Fundamental News And Technical Analysis Report - 24 February 2023

GERMANY’S FOURTH-QUARTER GDP SHRANK BY 0.4%
Asian stock market closes in red on Thursday. The Shanghai Composite is in red by 0.11% at 3287.48. Overall, the Singapore MSCI is in red 1.01% at 295.15. Over in Hong Kong, the Hang Seng Index is down 0.35% at 20351.35. In Japan, the Nikkei 225 is down 1.34 at 27104.32. While the Topix index is down 1.11% at 1975.25, South Korea’s Kospi is up 0.89% at 2439.09. Australia S&P/ASX 200 up 0.27% at 7304.90.

TOP NEWS OF THE DAY: –
The German economy contracted at the end of the year, as inflation and the energy crisis took their toll on household consumption and capital investment.

The German economy shrank by 0.4% in the fourth quarter of 2022 compared with the previous three months, the statistics office said on Friday.

Preliminary data from the office had pointed to a 0.2% quarter-on-quarter contraction adjusted for price and calendar effects. In the third quarter of 2022, GDP saw slight growth of 0.5% compared to the three months prior.

After relief measures such as the fuel discount and the 9-euro transport ticket ended, consumers spent less on consumption in the fourth quarter than in the third quarter, the statistics office said. Household spending was down 1.0%.

Market Summary as per 23/02/2023:

European equities Thursday closing. The DAX futures contract in Germany traded up 0.49% at 15475.69, and CAC 40 futures up 0.25% at 7317.43. UK 100 futures contract in the U.K. is down 0.29 at 7907.72.

In the U.S. on Wall Street, the Dow Jones Industrial Average closed up 0.33% at 33153.91. The S&P 500 up 0.53% at 4012.32 and the Nasdaq 100 up 0.72% at 11590.40, NYSE is up 0.35% closing at 15584.92.

TECHNICAL SUMMARY

GBPUSD TECHNICAL ANALYSIS


TRADE SUGGESTION – SELL AT 1.20156, TAKE PROFIT AT 1.19912, SL AT 1.20366


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Fundamental Analysis Report With Charting Trends - 07 March 2023

MARKET UPDATE:

The market started the week quietly yesterday, as many participants had anticipated, with most items trading in well-known ranges. There was little excitement for the Asian open as all the main American indices concluded the day nearly flat. Most of the major currencies continued to trade in very narrow ranges against the dollar, and US government yields concluded the day somewhat higher.

Despite a very dull (and expected) start to the week, traders anticipate ending it in a little more jaded manner due to the onslaught of economic data and central bank releases they will face as the sessions go on. The big event of the day will be Jerome Powell’s semi-annual testimony before Congress, and because the markets have been leaning more hawkish in response to recent US data, every word the Fed Chair says will be heavily scrutinized. Any changes in the recent outlook and language could cause some strong moves across all markets, as benchmark US rates are currently near multiyear highs.

Looking ahead to today’s trade, the RBA starts off for the Asian session with its most recent cash rate announcement and statement. Another 25 bps are largely anticipated from them, but any change in Governor Phillip Lowe’s forward guidance may cause market volatility. Until we hear from the Fed Chair later in the day, it’s rather calm during the European session and into the North American time zone.

HOW DID THE US SESSION GO?

Ivey PMI for Canada dropped to 51.6 from 60.1, below the predicted value of 55.9. $ Factory Orders m/m declined by 1.6%, less than the previous value of 1.7% but better than the expected -1.8% decrease. The data shows that both currencies’ economic performance has been inconsistent, with a modest negative skew.

WHAT DOES IT MEAN FOR THE ASIAN SESSION?
The RBA’s interest rate decision (anticipated to increase by 25 basis points) and its forecast for the rate hike path would take centre stage. The Australian dollar could fall below the five-day range, or about between 0.6700 and 0.6780, in response to a dovish rate statement.

THE DOLLAR INDEX (DXY)
KEY NEWS EVENTS TODAY
Fed Chair Powell Testifies

TECHNICAL OUTLOOK
GBPUSD
https://www.earnforex.com/forum/prox...06c13aeaf735a3

Price is being driven lower by a descending resistance line approaching our first support, multiple-swing low support at 1.1923. It’s important to note that the Ichi Moku cloud is also exhibiting negative momentum, which may strengthen our belief that the price will continue to decline.

Our first resistance, which is a multiple swing high resistance and coincides with the 61.8% Fibonacci retracement, is at 1.2144.


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Fundamental Analysis Report With Charting Trends- 16 March 2023

MARKET UPDATE:

Credit Suisse loses 25% and crashes the market.

Last night, as the share price of Swiss multinational Credit Suisse plummeted by almost 25% in a single trading session, concerns about contagion in the banking sector came true. Though not to the extent that some investors may have anticipated earlier in the day, American stock indices suffered, with the Dow ending the day down 0.87%, the S&P down 0.7%, and the Nasdaq only managing to finish in the black. On hearing the news, Haven Gold and the USD rose, while the Euro and Swiss fell.

ECB Important Rate Decision

As the European Central Bank is ready to announce its most recent rate decision, the timing of yesterday’s market turbulence could not have been worse. At the start of yesterday’s session, we would have been confidently talking about a rate hike but chances of that dropped dramatically during the day, from 90% chance of a 50bp hike down to 20% by the close. It would be a shock to the market if we see 25bps or even no change, but these are once again unprecedented times for both traders and indeed central banks, so be prepared for more moves in the single currency in the days ahead.

Another Day of Market Chaos Upcoming?

Looking ahead to the rest of the trading day, anticipate once more that investors will be examining each new news on the banking industry. In terms of economic data releases, the Asian session already saw an unexpectedly positive outcome for Australian employment numbers. The regular weekly US employment claims numbers come out later in the day, and the critical ECB rate announcement with its accompanying statement and press conference comes right after.

What does it mean for the Asian Session?

The rebound of risky assets is likely to be constrained by lingering worries about the risks of contagion from the American financial industry. More banks, even those outside the US, might report problems if history is any indication. In this case, it is very likely that investors will seek “safe haven” in the Swiss Franc, Japanese Yen, and gold.
TECHNICAL OUTLOOK
GBPUSD
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The price of the pound presently could move between the first support level at 1.1927 and the first resistance level at 1.2139 on the GBP/USD chart.

An overlap support level at 1.1927 acts as the first support level and could offer the price significant support if it declines. Moreover, there is an overlap support level at 1.2010 that coincides with a 50% Fibonacci retracement, serving as an intermediate support level.

The initial resistance level, however, which is at 1.2139, is an overlap resistance level. Price may move upward towards the second resistance level at 1.2208 if it were to break through this level.


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Fundamental Analysis Report With Charting Trends- 27 March 2023

MARKET UPDATE:

Continued Volatility on the Stock Markets


As a result of the upheaval in the banking sector and central bank activity, the investor roller coaster persisted on Friday as global market indices remained volatile. At the end of another long week, the US market defied the trend by seeing all three major indices close higher: the Dow rose 0.41%, the S&P gained 0.56%, and the Nasdaq gained 0.3%. There was a sea of red on European and Asian stock exchanges. Fed speakers who all gave the market assurances about the soundness of the banking system supported US markets, and the dollar’s recovery from the post-Fed decline was continued. Treasury’s remained in their current levels, and gold concluded the day marginally lower.

Dollar in Favour: Friday’s gains were 0.5% higher

The dollar suffered a little last week as currency markets focused on the likely end of the FOMC’s rapid tightening cycle after the Federal Reserves raised expectations by 25 basis points. The dollar gained much of its lost territory versus the majors back during the last few trading days of the week, though. As central banks seek confidence in the wake of recent banking sector concerns, traders are currently searching for the next catalyst for currency changes. In terms of interest rate differentials, this appears to be a difficult call in the short term. Greater concerns have mainly overshadowed US statistics for the past few weeks, but at the end of last week we had two stronger prints: the weekly unemployment claims and the PMI numbers. If these readings continue to indicate to higher inflation in the US, anticipate the currency to increase.

This week’s market will be dominated by investor worries.

Apart from the German IFO Business Climate statistics today, there isn’t much scheduled to spook the scoreboard this coming week in terms of economic data releases. Investors will be able to assess the recent weeks’ extraordinary volatility and perhaps begin to anticipate the emergence of a clearer picture as a result. There are, of course, no assurances in this, and there is still a high likelihood of abrupt, aggressive changes, so as we move into what we hope will be slightly more favorable market conditions, traders should anticipate being heavily focused on the newswires.

TECHNICAL OUTLOOK

GBPUSD

https://www.earnforex.com/forum/prox...c3a1924a67f62d

The general momentum of the GBP/USD chart is currently neutral, indicating that the price may move back and forth between the first resistance and first support levels.

The first support level is located at 1.1630 and is an overlap support that lines up with a 38.20% Fibonacci retracement. This level can serve as a significant region of buying interest. In addition, a pullback support level at 1.1826 is an intermediate support level that might be used if the price were to decline from the current level.

On the resistance side, the first resistance level, which is a swing-high resistance, is located at 1.2440. Price could experience selling pressure at this level if it were to rise from its current level. 1.2671 is the second resistance level, which is also an overlap resistance.

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Fundamental Analysis Report With Charting Trends- 12 April 2023

FUNDAMENTAL REPORT FORECAST

MARKET UPDATE:

1. As investors awaited critical inflation data and the unofficial start of the first-quarter reporting season, Wall Street equities lost momentum late in the session and ended the day with a mixed performance.
2. It’s the quiet before the storm, said Detrick. “Traders are adopting a wait-and-see strategy to see how the inflation data comes in, given the importance of tomorrow’s inflation data, the impending release of the Fed minutes, and the impending earnings season.”
3. Analysts predict that the headline and core CPI will decline to 0.2% and 0.4%, respectively, monthly. The core measure, which excludes volatile food and energy costs, is anticipated to gather steam, climbing to 5.6% from 5.5%, even though consensus projections call for a considerable decline in the headline number – to 5.2% from 6.0%.
4. West Texas Intermediate (WTI) crude increased by 1.5% to $90.18 per barrel, while Brent crude increased by 1.3% to $94.12 per barrel. Concerns about supply disruptions in important producing nations and growing demand as the world economy keeps improving were the main factors driving the increase in oil prices.
5. Spot gold rose barely 0.1% to $1,776.25 an ounce, remaining virtually unchanged as investors adopted a wait-and-see attitude in the face of conflicting market sentiment.
6. The US Dollar Index, which gauges the dollar’s strength against a basket of other currencies, fell 0.1% to 96.62, showing the dollar’s marginally declining value relative to other important currencies.

Technical Outlook
GBPUSD
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The price of the GBP/USD currency pair has broken below an ascending support line, which may be a sign that a negative move is possible. The chart of the pair is currently displaying bearish momentum.

The first support level, which is located at 1.2349, is an overlap support level, meaning that it has previously served as support and may do so again in the future.

At 1.2274, the second support level—also an overlap support level—is located. At this level, the price might also find support if it were to keep dropping.

The 50% Fibonacci retracement level and the first resistance level, which is an overlap resistance level, are both located at 1.2439. Price might perhaps encounter resistance at this level and start to decline in the direction of the support levels if it were to increase.

The second resistance level is located at 1.2526 and is a multi-swing high resistance level, meaning it has previously served as resistance and might do so again in the future.

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Fundamental Analysis Report With Charting Trends- 30 May 2023

MARKET UPDATE:

MARKETS BOOSTED BY DEAL OPTIMISM FOR DEBT

Yesterday’s bullish day for the world’s markets was fuelled by hope for a Washington, DC, debt ceiling agreement. Numerous important financial markets were closed due to bank holidays, but futures markets managed to edge up. The S&P futures were up 0.3%, and the Nasdaq futures moved up by 0.4%. These advances came on top of big gains on Friday when Wall Street was last open. As markets begin to further price in another rate hike from the Fed, Treasury futures have likewise adopted a more aggressive tone. The dollar experienced a rather stagnant session as FX traders took advantage of the holidays to relax, but things might pick up today.

AFTER A LONG WEEKEND, MARKETS ARE EXPECTED TO MOVE.

Today’s opening of the financial markets follows a long weekend for several major cities. Although a significant portion of the European and North American markets were closed yesterday, the Asian market was open, and investors anticipate that today’s markets will be more liquid and volatile than usual. The agreement on the debt ceiling was undoubtedly the main news over the weekend coming out of the US, and further reports yesterday have been encouraging, so anticipate that attitude to lead as markets reopen. In the Asian and European sessions, there aren’t many data releases today, but the CB Consumer Confidence data will start the tier 1 figures in the New York session, with the market anticipating a 99.1 print.

TECHNICAL OUTLOOK
GBPUSD
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A bearish symmetrical triangle pattern on the GBP/USD chart indicates a bearish momentum now.

A considerable support area, known as overlap support, is provided by the first support level at 1.2279.

A second support level at 1.2192 similarly overlaps support, and it is also present. This level’s usefulness as a possible support region is further supported by prior occurrences of price movement bouncing off it.

On the resistance side, an overlap resistance is represented by the first resistance level at 1.2377. The bearish trend may temporarily stall or retrace because this level acts as a temporary barrier to price increases.

A second resistance level at 1.2470 is also present and is known as an overlap resistance. It has been demonstrated in the past that this level is significant as a price level when selling pressure has developed.

EURUSD

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