Daily Analysis 29/03/2023


EURUSD

EUR/USD fell 0.1% to 1.0831, with German consumer sentiment set to nudge up in April, but by less than expected, according to data from the GfK institute on Wednesday.

The attention is now turning back on whether the Federal Reserve policymakers will be sufficiently confident to continue their rate-hiking cycle in early May.

Closing Statement: The Euro's performance against the US dollar was negatively impacted by the lower-than-expected increase in German consumer sentiment, as reported by the GfK institute. The focus has now shifted to the upcoming Federal Reserve meeting and whether policymakers will continue with their rate-hiking cycle in May.

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

GBPUSD

GBP/USD fell 0.1% to 1.2328 but maintained recent gains after Bank of England Governor Andrew Bailey emphasized the importance of tackling inflation and signalled readiness for more monetary tightening.

The DXY, which tracks the dollar against six other currencies, traded 0.2% higher at 102.328, following drops in the past two sessions, while Federal Reserve Bank of Minneapolis President Neel Kashkari warned of the economic impact of a credit crunch amid the recent bank turmoil, increasing the risk of a U.S. recession.

Closing Statement: The market will continue to monitor the developments in the banking sector and the impact on the economy, which may influence the Federal Reserve's monetary policy decisions and the dollar's movement against other currencies. In addition, any signs of inflationary pressures or credit crunch may also affect GBP/USD's performance in the near term.

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

CRUDE OIL

Oil prices rose on Wednesday, extending their gains for the third consecutive day.

The rise came after industry data showed a surprisingly large draw in U.S. crude stocks, pointing to tighter supply in the near-term.

According to data from the American Petroleum Institute, U.S. crude oil inventories fell by just over 6 million barrels in the week ended on March 24, compared with an expected small rise.

The U.S. Energy Information Administration is set to release its official weekly report of crude oil inventories later today.

Closing statement: The oil market seems to be tightening with the unexpected decline in crude oil inventories, and investors are eagerly waiting for the U.S. Energy Information Administration's weekly report to confirm the trend.

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

GOLD

Gold prices fell in Asian trade on Wednesday, following an overnight surge in Treasury yields and as regulators further downplayed concerns over a widespread U.S. banking crisis.

The U.S. dollar attempted to arrest its two-day losses, edging higher in early European trade on Wednesday. However, it remained fragile as growing confidence in the health of the global banking sector persisted.

Fed policy is likely to be a key factor for gold over the medium term, and investors continue to build long positions on gold prices due to concerns that the recent collapse of several U.S. banks could leave lasting scars on the economy.

Closing statement: The movements of the U.S. dollar and the global banking sector will continue to have an impact on the price of gold, as investors closely watch for any signs of economic instability or monetary policy changes.

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

NASDAQ

Fed Vice Chair for Supervision Michael Barr said at a Senate Banking Committee hearing on Tuesday that the U.S. banking system is "sound and resilient", trying to reassure investors that the collapse of some regional banks would not cause widespread contagion.

With the anticipation of rate cuts from the Fed, big tech is expected to overperform relatively.

The analysts highlight the resistance at 12,856 and initial support at 11,776. A deeper pullback may test long-term support around 10,600.

If the NASDAQ100 pulls back, it will result in mega-cap stocks such as Microsoft (NASDAQ:MSFT), Apple (AAPL), Amazon (NASDAQ:AMZN), Nvidia (NASDAQ:NVDA), and Alphabet (NASDAQ:GOOGL) also undergoing corrections after a period of outperformance.

Closing statement: The NASDAQ100 may experience a pullback with analysts highlighting resistance and support levels while Fed officials reassure investors about the health of the U.S. banking system. The market anticipates rate cuts from the Fed, and big tech is expected to overperform relatively.

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

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