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Bitcoin Jumps above $30,000

Sentiment towards cryptocurrencies following Easter holidays is positive with major coins as well as smaller altcoins trading higher. Bitcoin is drawing a lot of attention today as the coin is testing a psychological $30,000 area and is trading at the highest level since early-June 2022. Bitcoin has already gained more than 90% off the early-November 2022 low. A near-term level to watch is the resistance zone ranging below $31,500, which marked the upper limit of a short-term trading range in May-June 2022.
BITCOIN trades above $30,000 for the first time since June 2022.

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AUDUSD

1. US indices finished yesterday's trading mostly higher. S&P 500 gained 0.10%, Dow Jones moved 0.3% higher and Russell 2000 rallied 1%. Nasdaq was a laggard and finished flat
2. Indices in Asia-Pacific traded mostly higher today - Nikkei and S&P/ASX 200 gained around 1.2% each, Kospi rallied 1.4% and Nifty 50 traded 0.6% higher
3. Indices from China traded 0.1-0.5% lower
4. DAX futures point to a higher opening of the European cash session today
5. New Bank of Japan Governor Ueda said that a small rate hike would not be a problem for the Japanese financial system. Ueda also said that he agreed with PM Kishida that there is no need to revise government-BoJ joint statement
6. AUD gains after Australia and China reached agreement on barley exports and Australia suspended WTO dispute against China
7. Fed Williams said he expects inflation to get back under 2% by 2025
8. Citigroup expects oil to drop below $70 per barrel amid slower-than-expected demand recovery in China and significant production potential in Iraq and Venezuela
9. Chinese CPI inflation decelerated from 1.0 to 0.7% YoY in March (exp. 1.0% YoY). PPI inflation came in at -2.5% YoY as expected (-1.4% YoY previously)
10. Bitcoin jumps 3% and trades above $30,000 mark for the first time since June 2022
11. Energy commodities trade mixed - oil gains 0.5% while US natural gas prices drop 0.3%
12. Precious metals benefit from USD weakness - gold gains 0.5%, silver trades 0.6% higher and platinum adds 0.4%
13. AUD and EUR are the best performing major currencies while USD and NZD lag the most

AUDUSD bounced off the 0.6630 support zone and climbed back above the 0.6660 area. Improvement in Australia-China trade relations is driving today's upward move on the pair.

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DE30

European stock market indices launched the first cash trading session after Easter break higher. Blue chips indices from Western Europe trade 0.5-1.0% higher, following an upbeat Asian session earlier today. However, part of gains has been erased already with DAX dropping back below 15,700 pts. Taking a look at DAX futures at H1 interval (DE30) we can see that bulls failed to break above 15,900 pts area and a double top has been painted. Today's bullish price gap has been filled already and should ongoing pullback deepen further, the 15,650 pts support zone will be the first potential target for sellers. This zone is not only marked with previous price reactions but also with the neckline of the aforementioned double top. Textbook range of the downside breakout from this pattern shows a possibility of a drop to as low as 15,360 pts.


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NATGAS

US natural gas prices (NATGAS) trade around 2.5% higher today. NATGAS has already jumped more than 10% off the Thursday low. New set of weather forecasts for the United States can be named as a reason behind improved sentiment towards natural gas this week. As one can see on the image below, a new set of forecasts (issued on April 10, 2023) shows that temperatures in many US states, including the key Midwest heating region, are expected to be below-average in the next 8-14 day period. Above-average temperatures are only expected to hold in the southern states while forecasts issued on April 3, 2023 were for above-average temperatures in almost all across the United States.

Taking a look at NATGAS chart at H1 interval, we can see that the price climbed to and tested $2.24 per MMBTu resistance zone today, marked with previous price reactions and a 23.6% retracement of the downward impulse launched in early-March 2023. However, the first attempt to break above it turned out to be a failure.

Weather outlook for the United States grew colder over the past week (April 3 forecast - left, April 10 forecast - right).

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US Index

US Dollar weakened after International Monetary Fund's (IMF) global economy outlook report, and the current US situation at the Washington summit was also commented by US Treasury Secretary Janet Yellen. The content of the commentary was in line with what today's Axios analysis and didn't surprised financial markets. Yellen emphasized the resilience and strength of the U.S. economy and the stability of the banking sector but the comment failed to help the dollar index (USDIDX).
The situation in the US economy was again commented on by John C. Williams, head of the New York Fed. The dollar index is weakening as investors following the IMF analysis saw the Fed's rate hike cycle coming to an end which may herald the lack of significant support for the dollar's strength that has been building since 2022, with US systemic uncertainty in the background. Although the chances of a hike in May increased after the NFP data, its fate is still uncertain and its impact on USD strength almost 'theoretical'.

IMF

1. IMF head of markets research Gourinchas conveyed that the Fed, the European Central Bank and the Bank of England are nearing the end of their rate hike cycles;
2. The IMF expects U.S. economic growth to reach 1.6% in 2023, compared to the 1.4% estimated in January, and 1.1% y/y growth in 2024 (a staggered slowdown).

Yellen

1. The banking system in the United States is healthy, with strong capital and liquidity positions, the global financial system is resilient;
2. Given the war in Ukraine and recent pressures on banking systems, we remain cautious on inflation risks;
3. Price pressures in the United States remain excessive, but have declined over the past six months.

Fed Williams

1. I don't think we need to change our balance sheet policy in the near term. QT is proceeding at a rapid pace;
2. The banking system has really stabilized after the last crisis. If inflation falls, we will have to lower interest rates.
3. One more rate hike is reasonable but we will watch the data including retail sales and CPI inflation;
4. If inflation becomes more persistent, we will have to adjust policy accordingly;
5. Bank failures have increased uncertainty about the outlook. We need to see a decline in core inflation;
6. We have brought policy to a restrictive level. The impact of the credit turmoil in the banks is uncertain and it is too early to estimate its impact.

USDIDX chart, H4 interval. The dollar index reacted by falling below the 38.2 Fibonacci retracement of the wave started in Q1 2021, near 105 points. Since mid-March, when investors learned the extent of the banking sector's problems, the bulls have had a clear problem with rising above the SMA100 (black line).

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Solana

The Solana is gaining 12% today, thanks to Thursday's scheduled launch of the Saga phone, running Android powered by Solana's blockchain. Solana developers can create decentralized financial applications (DeFi) and token projects (NFT) on its blockchain. The rally supported Bitcoin's rise above $30,000, which sent a bullish signal for the entire crypto market. Nevertheless, altcoin's gains remain somewhat muted:

1. Solana's rapid rise was supported by liquidations of $2.7 million worth of short positions on the contracts. The market expects the Saga smartphone to allow users to create their own NFTs from anywhere and access an ecosystem of Solana-based applications and projects driving adoption. The estimated price of the device in June is expected to be around $1,000;
2. The total blocked value (TVL) in DeFi applications increased by nearly 40% from $208 million in Q1 2022 to $294 million according to DeFiLlam. It is worth pointing out that the increase came at a very difficult time for the cryptocurrency market as a whole. On the other hand, however, the volume of NFT token trading fell from around $30 million in January to $20 million in March

Weekly trading volume of NFT tokens on Solan.

SOLANA chart, H4 interval. The price of the cryptocurrency has climbed above the SMA200 and the 23.6 Fibonacci retracement of the December 2022 downward wave. Bulls may want to test $26 level, which indicates the local peaks after the cascading sell-off caused by the collapse of FTX.

AUDJPY

1. Indices on Wall Street ended yesterday's session in mixed sentiment. Investor sentiment was weighed down primarily by uncertainty over the US CPI inflation reading scheduled for today, which will be one of the final key clues creating the FOMC's decision at its next meeting in May.
2. The S&P 500 ended trading unchanged on a daily basis. The Dow Jones gained 0.29%, and the Russell 2000 small-cap index gained 0.8%. The Nasdaq index of technology companies was the weakest performer, losing 0.43%.
3. Asia-Pacific indices traded mostly higher - the Nikkei gained 0.6%, the S&P/ASX 200 gained 0.4%, the Kospi gained 0.2% and the Nifty 50 traded 0.15% higher.
4. In the FX market, we are seeing capital outflows to the currencies of the antipodes, namely the New Zealand dollar and the Australian dollar. The EURUSD pair is trading slightly up and testing the resistance zone at 1.093. At the moment, the Japanese yen and the US dollar are experiencing the biggest declines.
5. Federal Reserve and ECB bankers have warned that we may see elevated inflationary pressures all the time, current inflation targets should remain in place, and higher interest rates may be present for an extended period.
6. Wells Fargo warned that the S&P500 index could experience a near 10% correction due to deteriorating economic conditions in the US.
7. Elon Musk stated that Twitter will be a profitable business as early as next quarter.
8. Yields on Chinese 10-year Treasury bonds fell to their lowest levels since November 2022, due to increased expectations of continued interest rate cuts in the country. Yesterday, China reported a sharp decline in inflation growth to 0.7%, compared to an earlier reading of 1%.
9. An index measuring construction activity in China in March reached its highest level in more than a decade.
10. Deutsche Bank analysts expect Bank of Japan Governor Ueda to end the YCC in 2 weeks.
11. Australian weekly consumer confidence surprised on the upside with a reading of 79.3 (previously 78.2).
12. The lower house of the Swiss parliament rejects a CHF 109 billion bailout package for Credit Suisse.
13. Energy commodities are trading at mixed levels this morning. WTI crude oil is gaining 0.21%, while natural gas is off 1.0%.
14. Gold continues its recent upward momentum and is currently breaking out above the 2019 USD level.
15. There is weak sentiment in the cryptocurrency market. Bitcoin is currently losing nearly 1%, and Ethereum is losing 1.5%.

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US500

Today, investors' attention turns primarily to the US CPI inflation report, which, along with the labor market data we have learned, will be a major factor in determining what the Fed will do at the next FOMC meeting in May.

Analyst consensus assumes that the headline reading for CPI inflation will drop significantly, coming in at 5.2% y/y versus the last reading of 6% y/y. The opposite is true for core inflation, which is expected to rise to 5.6% y/y vs. the last reading of 5.5%. While the headline reading is highly likely to show a decline (due in part to the high base effect), the core reading remains less certain.

The standard deviation of the consensus compiled by Bloomberg is close to 0.1%, and the analysts themselves mathematically lean more in favor of the scenario of keeping inflation unchanged/increasing to 5.6%.


How will the market react? A lower inflation reading may support market bulls, who will react positively to the resulting lower reading lowering expectations for a continuation of the interest rate hike cycle. On the other hand, however, if inflation remains high and the underlying reading manages to surprise the consensus with a reading significantly above the expected value, markets on Wall Street may react with declines, in the face of condensed uncertainty stemming from weak macro data, the prospect of further tightening and the deepening specter of recession.

From a technical point of view, the US500 index remains in the zone outlined by medium-term trend patterns, which in the past have been important zones of support and resistance. The reaction to today's data and the Fed's Minutes reading scheduled for this evening may determine the future direction of this market.



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EURUSD

The US CPI report for March was released today at 1:30 pm BST. Report was expected to show a steep deceleration in headline price growth as well as slight acceleration in core measure. However, as headline CPI was expected to drop below core CPI for the first time since late-2020, it was the core gauge that was especially on watch today.

Actual report showed headline inflation more than expected, from 6.0% to 5.0% YoY, while core gauge matched expectations by accelerating to 5.6% YoY. It looks like investors acted on softer headline reading with market reaction being clearly dovish - USD slumped while US index futures jumped.

Markets odds for a 25 basis point Fed rate hike at May meeting dropped from around 73% prior to data release to around 60% now.

US, CPI inflation for March

1. Headline (annual): 5.0% YoY vs 5.2% YoY expected (6.0% YoY previously)
2. Headline (monthly): 0.1% MoM vs 0.2% MoM expected
3. Core (annual): 5.6% YoY vs 5.6% YoY expected (5.5% YoY previously)
4. Core (monthly): 0.4% YoY vs 0.4% MoM expected

Headline US CPI inflation slowed below the pace of core US CPI inflation in March.

EURUSD jumped above April 4 highs following softer than expected US CPI data for March.

US500 caught a bid following US CPI data and is attempting to make a break above the resistance zone ranging between 50% retracement and 4,165 pts mark.

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USDCAD

The Bank of Canada did not change interest rates as widely expected. Current interest rate remains at 4.50%. This is the second meeting during which interest rates have not been raised. According to analysts, a series of aggressive hikes has yet to be fully reflected within the economy therefore, there is no need to continue raising interest rates at the moment.

The Latest inflation data fell sharply to 5.2% in February compared to the 5.9% in January. And according to forecasts, the next inflation data in April is expected to be even lower, between 4.1 and 4.4%. On the other hand labour market remains tight fueling the economic growth, which in the first quarter seems to be stronger that it was projected in January.

BoC stated that it continues to assess whether monetary policy is sufficiently restrictive to reliance price pressures and remains prepare to raise interest rates further if needed. Governing Council stressed that bringing back inflation target to the 2% has the highest priority.

CAD firms after Bank of Canda Policy decision. USDCAD is down 0.2% at 1.34379 versus 1.34670 ahead of the decision.

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Oil

Official US report on oil inventories was released today at 3:30 pm BST. API estimates released yesterday pointed to an unexpected 0.38 million barrel build (exp. -1.3 mb). However, a Department of Energy report showed that US oil inventories actually grew over the past week by 0.6 million barrels. Gasoline and distillate inventories dropped less than expected. Market reaction was fairly muted with oil trading little changed in the first minutes after release.

US oil inventories

1. Oil inventories: +0.60 mb vs -1.3 mb expected (API: +0.38 mb)
2. Gasoline inventories: -0.61 mb vs -1.5 mb expected (API: +0.45 mb)
3. Distillate inventories: -0.33 mb vs -0.7 mb expected (API: -1.98 mb)

While oil has been fairly muted following the release of DOE data, crude prices are on the rise today. Brent (OIL) is attempting to make a break above the upper limit of the Overbalance structure in the $87.00 per barrel area.

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AUDUSD

1. US indices finished yesterday's trading lower with major indices erasing all of the gains from the beginning of the session. S&P 500 dropped 0.41%, Dow Jones moved 0.11% lower and Nasdaq declined 0.85%. Russell 2000 dropped 0.72%
2. FOMC minutes showed that some Fed officials saw holding rates unchanged as appropriate at the March meeting amid banking turmoil. However, decision to hike by 25 basis points was ultimately unanimous
3. Markets are pricing in an almost-70% chance of 25 basis point rate hike at next FOMC meeting in May
4. Indices from Asia-Pacific traded mixed today - Nikkei gained, Kospi traded flat while Nifty 50 and S&P/ASX 200 pulled back. Indices from China traded slightly lower
5. DAX futures point to a slightly lower opening of the European cash session today
6. North Korea launched what seemed to be a new weapon system, possibly ICBM, towards the East Sea. Japanese authorities ordered residents of Hokkaido island, where the missile could land, to seek shelter inside buildings or underground. Evacuation order was later lifted
7. BoJ Governor Ueda said that inflation in Japan is likely to slow and the BoJ will continue with monetary easing until inflation target is reached stably and sustainably
8. RBA Deputy Governor Bullock said that pause in rate hikes in driven by job preservation and policy lags, rather than being a reaction to banking turmoil
9. AUD caught a bid after a solid jobs report for March - employment increased by 53k (exp. +20.6k) while the unemployment rate stayed unchanged at 3.5% (exp. 3.6%)
10. Chinese exports in USD terms increased 14.8% YoY in March (exp. -7.1% YoY) while imports were 1.4% YoY lower (exp. -6.4% YoY)
11. Cryptocurrencies are trading mixed - Bitcoin gains 0.4%, Ethereum drops 0.1% while Dogecoin adds 0.6%
12. Energy commodities traded lower - oil drops 0.3-0.4% while US natural gas prices decline 0.2%
13. Precious metals trade a touch higher with gold adding 0.1%
14. AUD and GBP are the best performing major currencies while CHF and JPY lag the most

AUDUSD jumped following solid jobs data for March from Australia. However, bulls failed to sustain a break above the 0.6710 price zone and a return below this area can be observed at press time.

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NATGAS

US natural gas prices took a hit yesterday as analysts mounted their calls that the end of the heating season in the United States is near. While recent weather forecasts pointed to a period of below-average temperatures, average temperatures in this period of the year are usually high enough for demand for heating to drop significantly. Expectations for today's EIA natural gas storage report (3:30 pm BST) also strongly hint that the heating season in the US is drawing to close - median estimate is for a 25 billion cubic feet increase in stockpiles. If confirmed, this would be the second inventory build of 2023 and the first one since mid-January.
Taking a look at NATGAS chart at H4 interval, we can see that price has halted recent upward correction at the resistance zone marked with $2.24 handle and the 23.6% retracement of the downward move launched at the beginning of March 2023. Price launched a pullback and move back to the $2.08 per MMBTu. After a few hours of struggle in the area, sellers managed to push the price below the $2.08 mark this morning. Volatility on the NATGAS market is likely to be elevated around 3:30 pm BST when the EIA report is released. Should analysts be mistaken with their forecasts and US natural gas inventories actually drop, NATGAS could see a price spike.

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Ethereum

Ethereum gains after US lower PPI reading and finished Shanghai update

1. Risky assets 'anti-dollar' on wave of weak dollar, after lower than expected PPI inflation reading from US
2. The highly anticipated Shanghai Hard Fork did not cause Ethereum's declines
3. Vitalik Buterin, the Ethereum founder, indicated that after the Shanghai update, the project has already passed the main milestones necessary for further development
4. The second largest cryptocurrency, Ethereum soared above key resistance on a wave of rising risk sentiment. The headline PPI inflation reading from the U.S. came in well below expectations, coming in at 2.7% versus 3% forecast and 4.6% previously. The data supported sentiment among risk assets and increased the chances of no Fed rate hike in May. Along with the cryptocurrency market, Wall Street index futures also gained today.

The Ethereum Shanghai modification introduced yesterday, contrary to the predictions of many analysts including JP Morgan, did not cause a cascading sell-off and rapid withdrawals of Ethereum from the Beacon chain. In the face of a definite increase in risk sentiment, the market did not see the Ethereum fork as a 'catalyst' for profit realization. The modification has ensured that investors will get the opportunity to 'staking' Ethereum smoothly, without having to lock up their funds on the network for years to come. By many analysts, Ethereum is pointed out as the main candidate to 'dethrone' Bitcoin in the next few years, mainly because of its technological superiority and utility functions. Among other things, decentralized applications and smart contracts are built on the ETH blockchain.

Looking at the chart of ETHEREUM, on the H4 interval, we see that Ethereum has reached the euphoria peak of the summer of 2022. On March 13, the price broke above the SMA200 (red line) signaling a further bullish trend. Since the beginning of the year, the price of ETH has risen nearly 67% against Bitcoin's 82% rise.

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AUDUSD

Looking technically at the chart of the AUDUSD currency pair, the quotation broke out of the downward channel at the top some time ago, and we are currently observing a test of the key resistance in the area of 0.6785. If it is overcome, the way towards 0.6885 may be opened.

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Palladium

Looking technically at the chart, PALLADIUM price is approaching key short-term resistance at $1578, which penetrates from the upper limit of the local 1:1 pattern, as well as previous price reactions. In the event of an upward breakout, an upward movement toward $1730 could be triggered.

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Gold

1. Wall Street indices rallied over 1% yesterday and USD sank as soft PPI reading boosted hopes that end of high inflation is near
2. S&P 500 gained 1.33%, Dow Jones moved 1.14% higher, Nasdaq rallied 2% and Russell 2000 traded 1.3% higher
3. Indices from Asia-Pacific traded mostly higher today - Nikkei gained 1.2%, S&P/ASX 200 advanced 0.5%, Kospi added 0.4% and Nifty 50 traded 0.1% higher. Indices from China gained as well
4. DAX futures point to a higher opening of the European cash session today
5. Fed Chair Powell and People's Bank of China Governor Yi Gang spoke on the phone on Tuesday and discussed economic and financial situation in the United States and China
6. ECB Nagel said that core inflation remains very high and that another rate hike is coming in May
7. BoJ Governor Ueda said he expects Japanese inflation to drop below 2% in the second half of current fiscal year (April 2023 - March 2024)
8. ECB Wunsch said that considerations for the May meeting are between 25 and 50 basis point rate hike and final decision will depend on April inflation. Wunsch said that market pricing is of ECB terminal rate seems reasonable but it is unlikely that quick rate cuts will follow rate peak
9. Yi Gang, PBoC Governor, expects Chinese GDP growth at around 5% in 2023
10. Reuters reports that London Stock Exchange will offer regulated trading and clearing in Bitcoin futures and options
11. Morgan Stanley's base-case scenario for 2023 is for S&P 500 to end the year at 3,900 pts after painting a cycle low in the 3,000-3,300 pts area
12. New Zealand's manufacturing PMI dropped from 52.0 to 48.1 in March
13. Cryptocurrencies are trading higher - Bitcoin gains 1.7%, Ethereum rallies 5.7% and Dogecoin jumps 4.3%
14. Energy commodities trade slightly higher - oil gains 0.1% while US natural gas prices climb 0.5%
15. CHF and EUR are the best performing major currencies while AUD and USD lag the most

Gold continues to rally on weak USD. Precious metals is testing $2,050 resistance zone marked with 2020 and 2022 highs.

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DOGECOIN

Elon Musk has told Morgan Stanley analysts that he wants to make Twitter the world's largest financial institution. Although the process is a long way off and its finale uncertain, Twitter announced yesterday that it will indirectly make stock and cryptocurrency trading available to users. The beneficiary of this news was Dogecoin, a cryptocurrency associated with Elon Musk and Twitter. The likeness of a dog that is the symbol of Dogecoin, recently at the initiative of Musk himself, momentarily changed the well-known Twitter logo.

The platform is set to begin a partnership with eToro and will start sharing price information from TradingView. Musk noted that almost all of the companies that have left the platform in recent months have already returned to it although Stellaantis and Volkswagen are still dangling. Ultimately, Twitter is expected to offer investors a range of functions through travel arrangements to financial services. In China, for example, payments giant Tencent offers payments through its WeChat messaging app. Cryptocurrency investors are hoping that Dogecoin will find its unique place on Musk's platform. The market is anticipating the next move from Musk, and any news of a possible promotion of Dogecoin payments on Twitter could result in a euphoric bump.

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US500

US500 trades slightly lower ahead of US retail sales print but remains close to recent local highs. Meanwhile, TNOTE averts drop (inverted axis), which hints that a potential negative reaction on US500 is looming. Of course, should retail sales data surprise to the upside, index futures should see positive reaction as it would hint that the US economy is not in recession, at least not yet.

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German index breaks above 16 000 pts for the first time in 15 months

New week on the global financial markets began in upbeat moods with indices from Asia-Pacific, especially China, trading higher today. European futures also traded higher throughout the Asian session but have caught an additional bid after opening of the European cash session. German DAX (DE30) is trading 0.5% higher and trades above the 16,000 pts mark for the first time in 15-months! The next resistance zone in-line is marked with all-time highs in the area ranging below 16,300 pts mark - less than 2% above current market price.

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