Daily Analysis 03/04/2023


EURUSD

The EUR/USD pair traded 0.2% lower at 1.0812, after earlier touching a one-week low of 1.0788 as the dollar surged, prompted by surging oil prices that raised inflation concerns and could prompt the Fed to lift interest rates at its next meeting.

Europe's core inflation, which strips out volatile energy and food costs, accelerated to an all-time high of 5.7% in March, which was a bearish sign for the EUR/USD pair.

ECB's president Christine Lagarde stated on Friday that underlying inflation remains "significantly too high," suggesting the policymakers could hike rates in the month ahead.

Closing statement: The dollar's surge on inflation concerns weighed on the EUR/USD pair, with Europe's high core inflation and the possibility of ECB rate hikes adding to the bearish sentiment.

SMA (1D) Slightly Rising
RSI (1D) Neutral
MACD (1D) Neutral

GBPUSD

The DXY index gained 0.4% to 102.560, breaking past 103 for the first time in a week. The index had dropped 1.8% in March but concerns over the banking sector hitting economic activity caused the dollar to rise.

The Institute for Supply Management (ISM) Purchasing Managers' Index (PMI) will be announced today at 16:00 GMT+1. This announcement may influence the pair's price action in the short term.

Boston Fed President Collins's hawkish comments on Friday were supportive of the dollar as she stated that the Fed still has "more work to do" to bring inflation down.

Bank of England's member Mann stated on Wednesday that the Bank of England would have a difficult time setting monetary policy due to inflation.

GBP/USD is currently testing the Fibonacci 50% level as a support traced back from a high in June 2021. The next resistance line is at 1.2425.

Closing statement: Overall, GBP/USD remains under pressure due to concerns over inflation, and the dollar's recent strength is supporting its value against the pound. Traders will closely monitor the ISM PMI announcement today for further clues on

SMA (1D) Slightly Rising
RSI (1D) Slightly Falling
MACD (1D) Slightly Falling

CRUDE OIL

OPEC+ and Saudi Arabia's surprise decision to cut production by just over 1 million barrels per day has sent oil prices rising, changing the narrative on the market. The decision is valid from May until the end of the year.

This was the biggest daily rise in nearly a year, over 5.5% in the session.

The Biden administration said the move announced by the producers was unwise, while some analysts questioned OPEC+'s rationale for the extra production cut.

U.S. crude production rose in January to 12.46 million barrels per day (bpd), the highest since March 2020, Energy Information Administration (EIA) data showed on Friday.

Closing statement: Additionally, we want to inform our investors that the Market Opportunity suggested on March 22nd for crude oil has resulted in profits today, on April 4th, due to OPEC+ and Saudi Arabia's decision to cut production. Those who followed through with the suggestion have made profits today.

SMA (1D) Neutral
RSI (1D) Rising
MACD (1D) Rising

GOLD

Gold prices pulled back on Monday as markets locked in some profits after a strong first quarter.

U.S. consumer spending rose only moderately in February after surging the prior month, with inflation showing some signs of cooling.

Focus is now on a slew of U.S. economic readings this week, starting with manufacturing activity data for March, due today (ISM PMI).

The reading is expected to show that the U.S. manufacturing sector remained in contraction territory for a fifth straight month.

Traders will be watching for any more signs of weakness in the labour market, which could open the path for a less hawkish Federal Reserve's stance this year.

Such a scenario bodes well for gold, which largely overtook the dollar as a preferred haven over the past month.

Closing statement: The direction of gold prices in the coming days will largely depend on how the U.S. economic readings pan out, particularly the manufacturing activity data and labour market figures. Any further signs of weakness in these areas could prompt the Fed to adopt a more accommodative stance, which could be supportive for gold as a haven asset.

SMA (1D) Rising
RSI (1D) Slightly Falling
MACD (1D) Slightly Falling

NASDAQ

The Nasdaq index outperformed S&P 500 and Russell 2000, making gains on higher volume accumulation.

Expectations for an easier Federal Reserve have helped Big Tech stocks, which are seen as the biggest beneficiaries of lower rates.

Apple, Microsoft, and Google's parent Alphabet each posted double-digit gains for March.

Important economic data for investors includes job openings data on Tuesday, ADP private payrolls report on Wednesday, and the monthly jobs report on Friday.

Closing statement: We would also like to inform our investors that the NASDAQ has been performing remarkably well lately, with all indexes recording gains on higher volume accumulation. Additionally, there are several key pieces of economic data that they should watch out for this week, including job openings data on Tuesday, ADP private payrolls report on Wednesday, and the monthly jobs report on Friday. Lastly, we want to highlight that high-growth stocks like Apple, Microsoft, and Google's parent Alphabet have posted double-digit gains for March, and this trend may continue due to expectations for an easier Federal Reserve.

SMA (1D) Slightly Rising
RSI (1D) Slightly Falling
MACD (1D) Slightly Rising

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