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S&P 500 : FUNDAMENTALS + TECHNICAL SCENARIO FORECAST | SHORT 🔔S&P 500 retreats from 4600 on a dismal market mood, on Russia-Ukraine conflict The S&P 500, the Dow Jones, and the Nasdaq Composite recorded losses in a risk-off market mood, courtesy of Russo-Ukraine tussles. Russia insists on receiving natural gas payments in roubles, threatens to block proceedings in euros/dollars. Gold and the greenback are rising, while US Treasury yields and oil are trading in the red. US equities are recording losses in the North American session as Wall Street is about to finish March on a lower note. The S&P 500, the Dow Jones Industrial, and the tech-heavy Nasdaq Composite are falling between 0.30% and 0.43%, each one sitting at 4,576.32, 35075.94, and 15,014.01 respectively A negative market mood weighed on US equities A risk-off market mood courtesy of Russian President Vladimir Putin, and continued fighting between Russia and Ukraine, keep grabbing the headlines. Russian President Putin signed a decree establishing natural gas trade rules, like payments in roubles, new proceedings in euros and US dollar could also be blocked. If demands are not met, current contracts will be halted. Meanwhile, the greenback rose on the headline. In fact, it remains firm, as portrayed by the US Dollar Index, up 0.43%, sitting at 98.256. Contrarily, US Treasury yields continue falling for the second consecutive day, down four basis points, down at 2.316%. Aside from this, Utilities, Consumer Staples, and Real Estate are the leaders of the trading session, up 0.69%, 0.34%, and 0.27%. The laggards are Communication Services, Financials, and Consumer Discretionary, down 1.14%, 1.02%, and 0.78%. In the commodities complex, the US crude oil benchmark, WTI, is losing 5.27%, trading at $101.73 BPD, weighed by news that the Biden administration would tap 1 Million BPD from the SPR oil reserves for a period of six months. Precious metals like gold (XAU/USD) are rising 0.61%, exchanging hands at $1944.55 a troy ounce, boosted by a risk-off sentiment. The US economic docket featured the Fed’s favorite gauge of inflation, the Core PCE for February, which rose by 5.4% y/y, lower than the 5.5% estimated, while US Initial Jobless Claims for the week ending on March 26 increased by 202K, higher than the 197K expected. On Friday, April 1, the US Department of Labor will reveal the Nonfarm Payrolls report for March. Even though the NFP is one of the most important economic indicators, now that the Fed is focused on inflation, it has taken a backseat, except for Average Hourly Earnings, which could shed some light on rising inflation.
BLACKBULL:SPX500Short
by FOREXN1
1
NZD/USD: FUNDAMENTAL INFO + TECHNICAL FORECAST | SHORT 🔔NZD/USD Price Analysis: Crucial resistance of 0.7000, downside looks likely Confluence of psychological resistance of 0.7000 indicates the strength of bears. Kiwi bulls have surrendered their establishment above 61.8% Fibo retracement. The momentum oscillator RSI (14) seems losing its momentum after dropping below 60.00. The NZD/USD pair has displayed multiple failed attempts while practicing an establishment above 0.7000. The pair have witnessed an extreme responsive selling from the market participants on Tuesday, which has dragged the kiwi bulls below 0.6950. In the early Asian session, the asset is performing subdued and is expected to extend losses after slipping below Wednesday’s low at 0.6933. On a daily scale, NZD/USD has formed a ‘Gravestone Doji’ candlestick pattern, which signals a failed attempt by the bulls on driving the asset to fresh highs. The pair has failed to breach its old recurring barricade of 0.7000, which has also been encountered consecutively in the last two weeks. Apart from that, the kiwi bulls have lost their establishment above 61.8% Fibonacci retracement (placed from 21 October 2021 high at 0.7219 to 28 January low at 0.6529) at 0.6956. However, the trendline placed from the 28 January low at 0.6529 will continue to act as major support going forward.
Short
by FOREXN1
2
GOLD: FUNDAMENTALS + TECHNICAL ANALYSIS | SHORT SETUP 🔔XAU/USD is auctioning in a narrow range of $1,916.00-1,925.28 amid uncertainty over the FOMC minutes release. Gold prices are forming a diamond pattern that signals a bullish reversal after a prolonged consolidation. The DXY is approaching 100.00 amid a souring market mood. Gold (XAU/USD) is displaying a subdued performance on Wednesday after witnessing a steep fall from around $1,945 in the New York session on Tuesday. The precious metal is oscillating in a narrow range of $1,916.00-1,925.28 as investors are waiting for the release of the Federal Open Market Committee (FOMC) minutes, which are due on Wednesday. The FOMC minutes will unfold the mathematics behind the stance of the Federal Reserve (Fed) Chair Jerome Powell and his colleagues, which was taken for the monetary policy announced in March. This will also provide the status of the US economy. It is worth noting that the Fed increased the interest rate by 25 basis points (bps) in its last monetary policy meet. On Tuesday, a sheer intraday bearish move in the precious metal was the reflection of the hawkish stance dictated by the Fed policymakers. Fed Governor Lael Brainard cited that the Fed is ready for aggressive action if the indicators of inflation and inflation expectations get worsen. Also, the balance sheet reduction program will pick up soon, which will de-escalate the helicopter money from the economy. Meanwhile, the US dollar index (DXY) is aiming to kiss the psychological figure of 100.00 amid souring market sentiments on hawkish stances from the Fed officials. Also, the 10-year US Treasury yields have printed a fresh three-year high at 2.62%.
OANDA:XAUUSDShort
by FOREXN1
5
EUR/USD:UPDATE | FUNDAMENTAL + TECHNICAL | SHORT CONTINUATION 🔔A combination of factors dragged EUR/USD to a four-week low on Wednesday. The Ukraine crisis, uncertainty over the French elections weighed on the euro. Hawkish Fed expectations, the risk-off mood boosted the safe-haven greenback. Investors now look forward to the FOMC meeting minutes for a fresh impetus. The EUR/USD pair added to its recent heavy losses and dropped to a four-week low, just below the 1.0900 mark during the Asian session on Wednesday. The shared currency was weighed down by fading hopes for a diplomatic solution to end the war in Ukraine, which, along with a strong US dollar rally, exerted downward pressure on the major. In the latest developments surrounding the Russia-Ukraine saga, the European Union announced new sanctions against Russia over its alleged war crimes in the Ukrainian town of Bucha. The sanctions include a ban on Russian coals, access to EU ports and transactions of four key Russian banks. Apart from this, worries about the outcome of the French elections turned out to be another factor that undermined the euro. The latest opinion polls indicated that French President Emmanuel Macron's far-right Eurosceptic rival, Marine Le Pen, has been closing the gap ahead of the first round on Sunday. On the other hand, the greenback continued drawing support from firming expectations that the Fed would adopt a more aggressive policy stance to combat stubbornly high inflation. The bets were reaffirmed by hawkish comments from Fed Vice Chair Lael Brainard. She said that the Fed would continue tightening monetary policy methodically through a series of interest rate increases and by starting to reduce the balance sheet at a rapid pace as soon as the May meeting. The markets quickly reacted and pushed the yield on the 2-year US government bond - which is highly sensitive to rate hike expectations - to its highest level since January 2019. Moreover, the yields on the 5-year and the benchmark 10-year bonds shot to their highest level since December 2018 and April 2019, respectively. This, along with a sell-off in the US equity markets, underpinned the safe-haven buck and further contributed to the offered tone surrounding the major. There isn't any major market-moving economic data due for release from the Eurozone on Wednesday, leaving the pair at the mercy of the USD price dynamics. Later during the US session, investors will take cues from the FOMC monetary policy meeting minutes. The incoming geopolitical developments would influence the pair and allow traders to grab some short-term opportunities.
Short
by FOREXN1
6
GOLD: FUNDAMENTALS+TECHNICAL ANALYSIS | SHORT SETUP 🔔 Gold price remains choppy within a familiar range amid mixed market sentiment. The West mulls additional punishments on Russia, US Treasury yields head south. Gold price remains stuck between two key daily averages, Fed minutes eyed for a fresh direction. Gold price defied the bullish odds and rebounded from multi-day troughs of $1,916, as the worsening Russia-Ukraine crisis and yield curve inversion infused safe-haven flows into the bright metal. Tensions surrounding the Russia-Ukraine war heightened after the US and European Union (EU) considered additional sanctions and penalties against Russia’s atrocities on innocent Ukrainian civilians. Russia, however, has denied allegations of war crimes. Investors remained on the edge while scurrying for safety in gold price, despite the US dollar’s strength. Adding to it, the US two-year Treasury yields climbed to their highest level since early-2019 while 10-year yields ticked lower, leading to the inversion of the yield curve, which usually hints at an incoming recession. Gold bulls, therefore, benefited even as Wall Street advanced on a tech stock rally. The Nasdaq and S&P 500 indices were boosted by mega-caps and a 20% jump in Twitter's shares. Gold price has tuned south once again on Tuesday, as the US dollar holds the higher ground while the yields seem to stabilize. The market mood remains mixed, with the Asian indices tracking Wall Street higher, although thin trading and Ukraine concerns keep investors on the back foot. Oil prices are firming up amid the specter of fresh sanctions on Russia, stoking inflation and growth fears. Attention now turns towards the US ISM and S&P Global Services PMIs, the UN Security Council meeting on Ukraine and the inverted Treasury yields curve for fresh impetus on gold price action. The Fed minutes this Wednesday, however, will be the key event risk, which will provide fresh insights on whether the world’s most powerful central bank will deliver a series of aggressive rate hikes to quell raging inflation.
OANDA:XAUUSDShort
by FOREXN1
3
EUR/USD:FUNDAMENTALS+TECHNICAL VIEW | SHORT SETUP 🔔EUR/USD Looks Increasingly Vulnerable To A Decline. EUR/USD fell on Monday as fresh claims of Russian war crimes in Ukraine led to increased speculation of more punitive sanctions against Russia. The news, combined with other developments over the weekend, dented hopes of a possible de-escalation in the war last week. Added downward pressure on the euro also came from firmer-than-expected US factory order data for February on what was a light day in terms of economic data. ECB Governing Council member Vasle, who hinted the ECB could raise interest rates by this year, lent little support to the euro in the current environment. The dip back below 1.10 is not just of psychological importance but also represents a break to the downside in the rising wedge pattern that has developed in recent weeks. This could be a prelude to continuing EUR/USD’s downtrend. This increases the probability that EUR/USD experiences a downside break of the longer-term symmetrical triangle pattern that has developed over recent years. Such a move could lead to an even more significant fall. EUR/USD tested the bottom end of this pattern on Mar. 8, before traders bid the pair higher. Geopolitical factors are unsurprisingly the driver of EUR/USD for the moment. Still, a host of ECB and Fed speakers this week could easily tilt the scales for the euro as much as Ukraine. Economic data could play an equally significant role as traders try to assess the impact of recent events on the euro area economy. The final March services PMI for the euro area is due for release on Tuesday and is likely to get more attention than usual in a relatively quiet week for data. The preliminary PMI dropped to 54.80 from 55.0 in April. More importance is likely to be placed on the release of the March Federal Reserve minutes on Wednesday, which is expected to outline the central bank’s plans for balance sheet reduction. A break above the 1.117 region in the coming days could lead to a more positive shift sentiment around the pair, but for the time being, the risks for EUR/USD looks increasingly tilted to the downside in terms of risk and reward.
Short
by FOREXN1
5
GBP/USD:FUNDAMENTALS+TECHNICAL ANALYSIS | SHORT SCENARIO | 🔔 GBP/USD has started to edge lower in the early European session. The pair could face renewed bearish pressure if 1.3100 support fails. Risk perception is likely to be the primary market driver on Monday. The British pound has started the new week in a calm manner but has started to inch lower toward 1.3100 in the early European session. The technical outlook points to a bearish tilt in the short term and sellers could take action in case 1.3100 support fails. The cautious market mood early Monday is making it tough for the British pound to gather strength. The UK's FTSE 100 Index is trading flat and the US stock index futures are posting small losses. The west is reportedly looking to ramp up sanctions against Russia on accusations of Russia having committed war crimes during the military offensive near Kyiv. This development could be assessed as a factor that might make it difficult for Ukraine and Russia to find a diplomatic solution. On Saturday, one of the negotiators for Ukraine said that they made enough progress to set up a meeting between Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky to discuss a peace agreement. Nevertheless, investors remain sceptical and risk-sensitive assets stay on the back foot. There won't be any high-tier data releases from the US in the second half of the day and GBP/USD could find it hard to regain its traction unless risk flows return to markets. In the meantime, the dollar continues to capitalize on rising odds of a 50 basis points Fed rate hike in May following Friday's upbeat jobs report and hawkish Fed commentary. Nonfarm Payrolls in the US increased by 431,000 in March and the Labor Force Participation rate improved modestly to 62.4% from 62.3%. More importantly, wage inflation climbed to 5.6% on a yearly basis from 5.2% in April. Over the weekend, San Francisco Fed President Mary Daly noted that the case for a double-dose rate increase in May had grown unless there were negative surprises in data until the next meeting.
Short
by FOREXN1
5
GOLD:FUNDAMENTALS NEWS +TECHNICAL | BEARISH SCENARIO SHORT ⭐️Gold price kicks off a fresh week on a downbeat note, as bond rout extends. Hawkish Fedspeak, uptick in US wage inflation back aggressive tightening. Gold’s daily chart favors bears as Russia-Ukraine peace talks offer a ray of hope. Despite the below-forecast US Nonfarm Payrolls, the upward revisions to the previous release and hotter than expected earnings growth bolstered the US dollar’s recovery rally alongside the Treasury yields. US payrolls arrived at 431K in March vs. 490K expected and the 750K previous upward revision. A relatively upbeat US labor market report boosted aggressive Fed’s tightening expectations, weighing down on the non-interest-bearing gold price. The bond rout resumed on hopes for a double-dose rate hike at the May Fed meeting, which propelled the Treasury yields higher across the curve. Meanwhile, the worsening Ukraine crisis added to the demand for the safe-haven US dollar, exacerbating the pain in gold price. XAUUSD closed the week in the red near the $1,925 area. Gold price is extending the previous decline at the start of a fresh week this Monday, undermined by the extended bond rout, which has led to the inversion of the two-year and 10-year yield curve. Amidst holiday-thinned market conditions, with Chinese traders away, gold price is also feeling the pain from the dollar’s upside consolidative mode. Surging covid cases in China is sapping investors’ confidence, who are scurrying for safety in the buck, keeping any pullback in the US dollar index cushioned. Meanwhile, some optimism on the Russia-Ukraine front after last week’s peace talk also bodes ill for the yellow metal. A top Ukrainian negotiator said Saturday, “Ukrainian and Russian negotiators have reached an agreement on enough elements of a potential peace agreement that it is ready to be discussed between Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky.” Later in the day, the sentiment around the bond market and the incoming headlines from the scheduled peace talks will likely be the main market drivers, in absence of the top-tier US economic data releases.
OANDA:XAUUSDShort
by FOREXN1
3
GOLD:FUNDAMENTAL INFOS+TECHNICAL OUTLOOK | SHORT SETUP 🔔Bearish wedge suggests more pain for gold bulls “The US Core PCE price index is due for release later on Thursday. Hotter inflation is likely to seal in a 50-basis points May Fed rate hike. Although concerns over a potential recession, in the face of the recent yield curve inversion and aggressive Fed’s tightening could have a major impact on the dollar and gold valuations.” “Gold price has confirmed a bearish wedge formation on the four-hour chart. If the bearish momentum extends, XAU/USD could fall further towards the $1,900 mark, below which a test of the March 29 lows of $1,890 will be inevitable.”
OANDA:XAUUSDShort
by FOREXN1
2
EUR/USD:FUNDAMENTALS INFO+TECHNICAL FORECAST | SHORT SETUP 🔔EUR/USD: Risks tilted toward a larger decline – Wells Fargo Analysts at Wells Fargo forecast a period of extended weakness for the EUR, with risks tilted to the downside. They see EUR/USD trading at 1.0800 by the end of the third quarter. Key Quotes: “We forecast a period of extended euro weakness; however, the risks are potentially tilted toward a larger decline than we currently expect.” “Growth slowed significantly in late 2021, and we expect a relatively gradual rebound in growth from early 2022. However, with higher energy prices likely to weigh on consumer purchasing power and given possible Ukraine uncertainties, Eurozone economic growth could be even more sluggish than we expect.” “Eurozone inflation has surprised to the upside, although the rise in core inflation has been less marked to date. Were Ukraine uncertainties to intensify, it is possible the ECB could move more gradually to less accommodative policy than we currently forecast, which should weigh on the euro. Should these risks transpire, the euro could soften more than we currently forecast, with the EUR/USD exchange rate perhaps falling as low as $1.0000.”
Short
by FOREXN1
2
GOLD:FUNDAMENTAL NEWS+TECHNICAL SCENARIO | SHORT IDEA 🔔Gold Price Forecast: XAU/USD to shrugg off US labour data – Commerzbank Gold is trading at just shy of $1,930 again. The ADP’s labour market data will be published in the US today, giving a foretaste of Friday’s official labour market report. However, its impact on the yellow metal should be limited. Under the influence of news about Ukraine war “The response of the markets reveals how nervous they are, and how news about the Ukraine war is influencing prices.” “Jobs reports should show that the US labour market is in good shape and encouraging the US Fed in its view to raise interest rates more sharply. Bigger rate hikes are already anticipated by market participants, however, as can be seen from the Fed Fund Futures. We believe they are already priced in, meaning that the impact of the labour market data on the gold price should be limited.”
OANDA:XAUUSDShort
by FOREXN1
2
EUR/USD:FUNDAMENTAL NEWS+TECHNICAL SCENARIO | SHORT 🔔EUR/USD pushes further and clinches new multi-week highs. The greenback remains offered as risk-on mood persists. Germany Flash Inflation Rate next of relevance in the docket. The European currency extends the optimism for another session and lifts EUR/USD to fresh 4-week highs in the vicinity of 1.1150 on Wednesday. EUR/USD up on weaker dollar, looks to Ukraine EUR/USD advances for the third consecutive session and trades in levels last seen in early March on the back of the persevering appetite for riskier assets and the investors’ exodus from the greenback. Indeed, the selling pressure in the US dollar has been exacerbated in past hours following inspiring news from the geopolitical landscape which has lifted hopes of a potential diplomatic solution to the war in Ukraine. The timing, however, remains pretty vague. The better mood in the pair is also reflected in the European money market, where the German 10y bund yields rose further and approach the 0.70% level for the first time since March 2018. Extra gains in spot came after ECB Board member Muller hinted at the idea that the bond purchases might end in Q3, while a rate hike may follow. In the same line, his colleague Kazimir suggested that the bank could hike rates at some point by year end. In addition, President Lagarde reiterated that a probable end to the APP in Q3 remains data dependent. In the domestic calendar, final figures saw the EMU Consumer Confidence at -18.7 and the Economic Sentiment at 108.5. Later in the session, all the attention will be on the release of the preliminary figures for the German inflation for the month of March. In the NA session, the final Q4 GDP and the monthly ADP report will take centre stage. What to look for around EUR EUR/USD extends recent gains and advances well north of the 1.1100 mark following renewed downside in the greenback. Pockets of strength in the single currency should appear reinforced by the speculation of the start of the hiking cycle by the ECB at some point by year end, while higher German yields, elevated inflation, the decent pace of the economic recovery and auspicious results from key fundamentals in the region are also supportive of a rebound in the euro.
Short
by FOREXN1
2
GBP/USD:FUNDAMENTAL+TECHNICAL ANALYSIS|POSSIBLE LONG SCENARIO 🔔GBP/USD rebounds from near two-week low, flat-lined below 1.3100 amid risk-on mood GBP/USD witnessed some intraday selling on Tuesday amid renewed USD buying interest. Hawkish Fed expectations, rising US bond yields continued acting as a tailwind for the buck. A positive risk tone capped gains for the safe-haven USD and helped limit losses for the pair. The GBP/USD pair quickly recovered a few pips from a near two-week low touched in the last hour and was last seen trading around the 1.3175-1.3180 region, nearly unchanged for the day. The pair struggled to preserve its modest intraday gains to the 1.3115 region and turned lower for the fifth successive day on Tuesday amid the emergence of fresh US dollar buying. Rising bets for a 50 bps rate hike at the next two FOMC meetings turned out to be a key factor that continued acting as a tailwind for the buck. The market expectations for a more aggressive policy response by the Fed to combat high inflation was reinforced by elevated US Treasury bond yields. In fact, the yield on the benchmark 10-year US government bond moved back above the 2.5% threshold, or back closer to a nearly three-year peak and underpinned the greenback. The British pound was further pressured by the overnight dovish sounding remarks by the Bank of England Governor Andrew Bailey, saying that they are seeing evidence of an economic slowdown. Bailey stuck to the tone from this monthly policy decision, wherein officials softened their language on the need for further interest rate hikes. This was seen as another factor that exerted additional pressure on the GBP/USD pair. That said, a generally positive risk tone, bolstered by hopes for progress in the Russia-Ukraine peace talks, capped the safe-haven USD and helped limit the downside for the GBP/USD pair. This, in turn, warrants some caution for bearish traders. Hence, the market focus will remain glued to fresh developments surrounding the Russia-Ukraine saga. The incoming geopolitical headlines will influence the broader market risk sentiment. This, along with the US bond yields, will drive demand for the USD and produce some short-term trading opportunities around the GBP/USD pair. Later during the early North American session, traders will take cues from the US economic docket - featuring the release of JOLTS Job Openings and the Conference Board's Consumer Confidence Index.
Long
by FOREXN1
2
EUR/USD:FUNDAMENTAL UPDATE+TECHNICAL TARGET | SHORT SETUP 🔔EUR/USD Forecast: Euro recovery likely to be capped at 1.1040 EUR/USD has regained its traction after dropping to two-week lows. The pair could find it difficult to clear the 1.1040 hurdle. Eyes on Russia-Ukraine talks, US consumer confidence data. EUR/USD has reversed its direction after having touched its weakest level in two weeks at 1.0944 on Monday. The pair is holding above 1.1000 in the early European session but it could find it difficult to break above the 1.1040 resistance. The improving market mood is not allowing the greenback to gather strength early Tuesday and helping EUR/USD clings to its recovery gains. Markets are hopeful that Russia and Ukraine will make progress toward a cease-fire at Tuesday's talks. Reflecting the risk-positive market environment, the Euro Stoxx 600 Index is rising more than 1% on a daily basis and US stock index futures are up between 0.2% and 0.3%. In case the headlines coming out of the Russia-Ukraine negotiations convince market participants that there will not be a further escalation of the conflict, risk flows could continue to provide a boost to the shared currency. In the second half of the day, the Conference Board will release the US Consumer Confidence report for March. Several FOMC policymakers, including NY Fed President John Williams and Atlanta Fed President Raphael Bostic, will be delivering speeches as well. The latest remarks from Fed officials fueled expectations of a 50 basis points rate hike in May and triggered a rally in the US T-bond yields. The fundamental outlook highlighted by the policy divergence between the Fed and the ECB should continue to favour the dollar over the euro, suggesting that the pair's recovery attempts are likely to remain technical in the near term
Short
by FOREXN1
4
GOLD:FUNDAMENTAL NEWS+TECHNICAL SETUP | SHORT CONTINUATION 🔔Gold Price Forecast: XAU/USD’s path of least resistance appears down, Ukraine updates eyed Gold bulls try their luck but upside attempts appear limited amid cautious optimism. DXY eases with yields while weaker oil prices, China’s covid support buoys sentiment. Gold price breaches key daily support, Ukraine updates could revive the dollar’s demand. Gold price kicked off a new week on a bearish note on Monday, as it tumbled nearly $35 after failing to resist above the $1,950 psychological level. The demand for the US dollar-dominated amid multiple factors, weighing negatively on the USD-denominated gold. Risk-aversion hit investors hard after mainland China's CSI300 share index plunged almost 10% as the 26-million population of Shanghai went into a 2-stage lockdown on rising coronavirus cases. Therefore, the greenback benefited from the safe-haven flows at gold’s expense. Chinese covid lockdown triggered a fresh sell-off in oil prices, reducing gold’s appeal as a hedge against inflation. Moreover, the relentless surge in the US Treasury yields, amid expectations of a 50-bps May Fed rate hike, deepened the pain in the non-yielding gold price. Another factor that could be linked to the turmoil in gold price was the hopes for progress in peace talks, as Russia and Ukraine negotiators were set to meet in Turkey for a one-on-one meeting. Gold price is making a minor recovery attempt this Tuesday, having found support just above the $1,920 barrier. Shanghai city rolled out economic measures to support the local firms, as lockdown bites. This helped improve the market mood, as the US dollar struggles amid a retreat in the yields across the curve. However, investors remain edgy amid slim chances of a meeting between the Russian and the Ukrainian leaders while cease-fire talks will likely continue. The developments surrounding the two warring nations will likely lead the market sentiment, especially after the Kremlin called US President Biden's apparent call for regime change in Moscow "a cause for concern". Meanwhile, Ukraine’s President Volodymyr Zelensky made his offer for future neutrality in return for peace.
OANDA:XAUUSDShort
by FOREXN1
3
NZD/USD:FUNDAMENTAL ANALYSIS + TECHNICAL VIEW | SHORT SETUP NZD/USD bears in control as US dollar firms NZD/USD under pressure as US dollar firms. RBNZ pricing vs. the Fed is the focus. At 0.6944, NZD/USD is trading lower on the day so far by some 0.23% after sliding from a high of 0.6963. The US dollar is firm in the open following its sixth weekly gain in the past seven. DXY, an index that measures the US dollar vs. a basket of currencies is trading 0.3% higher at 99.100. The dollar has benefited from its status as a safe haven and the conflict in Ukraine has driven expectations the Federal Reserve will hike interest rates. Meanwhile, the New Zealand dollar has ensconced itself in what seems like a comfortable “groove” in the mid to high 0.69s, analysts at ANZ Bank said. ''Very little is going on domestically but markets now pretty fully priced for upcoming hikes (although 50bp hikes aren’t fully priced in, a high risk of them is). Rates aren’t likely to do a lot more (themselves or for the NZD) until we actually get the RBNZ decision on 13 April.'' However, the analysts added, ''but it’s a different story across the Tasman, where odds of RBA hikes continue to grow, with a full hike priced in by June and “6½” hikes priced in by year-end. This is actually what seems to be driving the NZD at present, and it looks like the question is, does NZD/USD break higher?'' RBNZ pricing With respect to the Reserve bank of New Zealand and pricing in the market, analysts at Westpac argued that markets are now overpricing the likely extent of OCR hikes over the next couple of years. ''If we’re right about that though, what would prompt the market to correct? We think it will come down to the evidence that monetary policy is already getting enough traction – cooling down the housing market, and ultimately slowing consumer demand to more sustainable levels,'' the analysts added. ''We’re already seeing the evidence on that first part, with house prices falling by 3% over the last three months. We expect further declines as the higher level of mortgage rates continues to do its work, and we’re forecasting house prices to drop by around 10% in total over the next two years."
Short
by FOREXN1
GBP/JPY:FUNDAMENTAL+TECHNICAL ANALYSIS | SHORT SETUP 🔔GBP/JPY eases from 6-year high, rally may be losing steam GBPJPY reached a fresh six-year high of 161.48 earlier today but the price has now pulled back to around 160.75. The pair has risen sharply from the two-month trough of 150.97 plumbed on March 8. However, the momentum indicators suggest the latest upswing is cooling. Both the RSI and the stochastic oscillator have entered overbought territory, warning that a near-term correction is due. The stochastics have been holding above 80 for more than a week now, while the RSI, which only crossed above 70 a few days ago, is pointing down. Nevertheless, the indicators have held in their respective overbought zones for longer durations in the past so a big downwards reversal may not be a foregone conclusion. The price is currently trying to establish a foothold at the 138.2% Fibonacci extension of the February-March downleg at 160.76. Should it fail to do so, the 123.6% Fibonacci of 159.73 is the next line of defence that could prevent a steeper correction. Otherwise, the pair would probably slip back towards the February peak of 158.05, restoring the neutral longer-term trend. Even lower, the 61.8% Fibonacci retracement of 155.35, where the 50-day moving average is also converging, is the next critical support that needs to be watched as slipping below this area would intensify the downside risks. To sum up, the positive short-term bias is in danger of fading and turning negative, while in the broader outlook, the rally has some way to go still before a clear bullish structure is formed.
Short
by FOREXN1
3
NZD/USD:FUNDAMENTAL+TECNICAL ANALYSIS | SHORT SETUP 🔔NZD/USD struggles below 0.7000 on mixed concerns over Ukraine, inflation NZD/USD fades recent recovery following a volatile day with the first negative close in three. NATO criticized Russian invasion and braced for Ukraine help, G7 showed diplomacy while US pushed to remove Moscow from G20. Yields stayed firmer even as US data came in mixed, Jobless Claims favored equities. Light calendar keeps focus on the risk catalysts for fresh impulse. NZD/USD dribbles around 0.6960 during the early Friday morning in Asia, after an active Thursday that snapped a two-day uptrend. The market sentiment remains mixed with a rebound in equities failing to justify firmer yields amid indecision over the key risk catalysts surrounding Ukraine and inflation. US President Joe Biden’s European visit offered multiple macros suggesting the Western readiness for more sanctions but the bloc’s leaders and other G7 members showed mixed reactions. That said, US President Biden pushed for removing Russia from the Group of 20 (G20) whereas the North Atlantic Treaty Organization (NATO) members criticized the Russian invasion of Ukraine, as well as China’s friendly relations with Russia. It’s worth noting that the Russian Foreign Ministry denounced NATO’s artillery help to Ukraine and turned down the US decision to levy sanctions on gold transactions with the Russian central bank. Elsewhere, fresh fears of covid in China and Europe, with the BA.2 variant tightening grip in the bloc, also weigh on the NZD/USD prices. On the positive side, a slump in the Weekly Jobless Claims to the levels not seen since 1969 joined firmer US Markit PMIs for February to favor the market’s optimism. However, downbeat prints of US Durable Goods Orders and fears of inflation weighed on the sentiment. Additionally defending NZD/USD prices are the comments from ANZ saying, “Yesterday the IMF published its regular Article IV report on the NZ economy. It concluded that ‘significant increases in the official cash rate in the near term are appropriate,’ but warned that a weakening global economy and the withdrawal of monetary and fiscal stimulus would contribute to moderating growth, predicting 2.7% in 2022 (ANZ: 2.1%).” Amid these plays, Wall Street benchmarks ended Thursday on the positive side whereas the US 10-year Treasury yields rose 3.5% around 2.37% by the end of Thursday’s North American session. Moving on, second-tier US data may entertain NZD/USD traders but headlines concerning Russia and Inflation will be crucial to watch for fresh impulse.
Short
by FOREXN1
1
FTSE UK100:FUNDAMENTAL+TECHNICAL ANALYSIS|LONG SETUP ⭐️FTSE 100 remains green but pegged back by Next disappointment, US markets open higher US stocks open higher but the positive US tech sentiment isn't global FTSE 100 up 11 points at 7,471 Sunak holds back £32bn 'war chest' claim P&O boss may accept bonuses despite mass and immoral sacking As expected, US stocks opened slightly higher, rebounding from some of the losses they have taken over the last few days. The Dow Jones was up 186 points, or 0.54% to 34,544, while the tech-laden Nasdaq gained 0.28%, climbing 38 points to 13,960. S&P 500 was inched 0.55%, rising 24 points to 4,480. The Nasdaq’s positive start has done little for the Scottish Mortgage Investment Trust, however, which continued to fall in afternoon trading. The trust was down 2.80%, changing hands at 997p, offsetting some of the gains made over the last week or so. Positive tech sentiment in the US isn’t echoed globally, with Hang Seng down 0.94% to 21,945 points, a 208 point decline. 2.19pm: One month since Russia invaded Ukraine A month on from Russia’s invasion of Ukraine, stocks market globally are generally better off than just before the invasion, which shouldn’t come as a surprise according to Lee Wild, head of equity strategy at interactive investor. Footsie has regained most of its losses, and is only 20 points behind the close on 23 February, the night before the invasion began, having fallen as low as 6,959 in the week after war broke out. Over in America, the Dow Jones is up nearly 2.38% or roughly 2,600 points over the same period. “If anyone doubted the resilience of stock markets, the past month has demonstrated just how quickly they are able to overcome the impact of shocking events, and this can be uncomfortable for some.” “History proves this to be the case over the long term. Just look at stock markets over the past 100 years. World Wars, pandemics, terrorism, and financial crashes have been brushed aside. Why would massive economic sanctions and threat of nuclear war in 2022 be any different?” 1.51pm: Calls for crypto regulation The Bank of England urged for tighter cryptocurrency regulation on worries of the potential detrimental impact it could have on global financial markets. Its Financial Policy Committee insisted the regulators of the £1.3tn digital currency market must grow and become more coordinated. Deputy governor Sam Woods wrote to several lenders to flag up that crypto long-term regulation would need to be significantly altered to prevent threats to worldwide economic stability. It also said it will advise the Treasury on how best to oversee digital assets – something beyond the realms of the Financial Conduct Authority. 1.20pm: British Airways owner and Wizz Air retreat on Deutsche Bank downgrade International Consolidated Airlines Group (LSE:IAG) SA, owner of British Airways, fell 3.1% on Deutsche Bank’s downgrade of its stock from a ‘buy’ recommendation to ‘hold.’ Wizz Air Holdings PLC (AIM:WIZZ), which is not FTSE 100-listed but also received the same demotion, retreated 2.6% and had its price target slashed to 2,900p from 5,450p – still a 16% premium on Thursday afternoon’s share price though. The German-based investment bank also lowered easyJet PLC’s target to 570p from 680p, which caused a 1.1% drop in its share price. 12.47pm: FTSE remains stagnant The FTSE 100 remained relatively flat, up 10 points to 7,469, as the Budget reaction continued to flood in and Russia opened its stock market, for limited trading, for the first time since it invaded Ukraine. Mexican-based gold and silver miner, Fresnillo PLC (LSE:FRES), led the risers - up 3.3% - while global investment manager M&G PLC (LSE:MNG) was close behind with a 2.7% climb. Shell PLC (LSE:SHEL, NYSE:SHEL) and BP PLC (LSE:BP.) continued to advance, 0.6% and 0.8% respectively, following Rishi Sunak’s Wednesday announcement of a record 5p fuel duty slash to alleviate soaring prices. Meanwhile, British Airways owner International Consolidated Airlines fell 3.31% to 134p, with Schroders PLC (LSE:SDR) also down about 3%, with share changing hands at 3,125p in afternoon trading. 12.16pm: US preview US stocks look set to open higher on Thursday, rebounding from losses in recent days, though gains are likely to be capped amid ongoing worries over high oil and commodity prices and as investors look toward US weekly jobless figures and manufacturing data. Futures for the Dow Jones Industrial Average were up 0.5% on Thursday, while those for the S&P 500 added 0.6% and contracts for the tech-heavy Nasdaq-100 rose 0.7%. Among commodities, international benchmark Brent crude added 0.3% to $118.09 a barrel, while gold gained 0.4% to $1,945.30 a troy ounce. US major averages took a breather on Wednesday as concerns over the war in Ukraine and its impact on oil prices, and economic uncertainty at home continue to undermine investor sentiment. ‘’There is little sign the pedal is coming off the accelerator for energy prices amid a fresh round of volatility that has hit markets after Russia moved to retaliate in the economic war being waged,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown. In a tit-for-tat move, Moscow announced yesterday that it will only accept payment for its exports in roubles after its foreign currency reserves were frozen. “This (Russia’s move) has sent European futures surging and the fear is that this move would deepen the energy crisis and clog agreements worth hundreds of millions of euros every day. In simple words, we are likely to see higher energy prices which means more inflation and gold traders are watching that closely,” said Naeem Aslam, chief market analyst at AvaTrade. Economic data due out later will keep investors sidelined, Aslam added, forecasting weekly jobless claims at around 210,000 and US durable goods orders down by 0.5%. “Investors are (also) keeping a close watch on the NATO's emergency meeting. President Joe Biden is traveling to Europe to increase pressure on Russia and provide support for a ceasefire,” he concluded. 11.45am: P&O boss may accept bonuses despite mass and immoral sacking P&O boss Peter Hebblethwaite admitted he receives a £325,000 base salary per year and is in contention for two bonus schemes, which he was undecided on whether to accept. When questioned on bonuses by MPs following the company’s mass sacking of 800 employees without any notice, Hebblethwaite commented "I can't tell you how far that is from my thoughts." "I don't know the answer to that. I don't know," he added, which brought uproar on the potential of his acceptance of possible bonuses. He also admitted that the company’s average hourly pay for new workers is £5.15 an hour, and when asked if he could survive on that, he failed to respond. Hebblethwaite said it did not consult unions as the company knew they would not approve the sackings. 11.10am: Barratt, Berkeley and Persimmon fall as they're urged to fund cladding repair Housebuilders Barratt Developments PLC (LSE:BDEV), Berkeley Group Holdings PLC (LSE:BKG) and Persimmon PLC (LSE:PSN) are all down today as one of the city’s largest investment firms call on them to fund the cladding repair. According to Sky News, a letter from abrdn to the Footsie listed companies said it wanted them to “carefully consider providing additional financing for all affected buildings built by in the last 30 years, regardless of their height or current ownership, in order to accelerate remediation work to remove the burden on leaseholders". Pressure from the investment company adds to comments made by Michael Gove earlier this year, who wanted the industry to pay £4bn to repair the properties across the country that required improved cladding. A paper commissioned by PwC earlier this month, however, estimated the bill to come in at less than £1bn which boosted the property developers at the time. The report also noted that the government and private companies would be expected to chip in, with the former to contribute because of regulatory failing that allowed the housebuilders to cut corners in the name of profits in the first place. Barratt is down 1.12% to 530p, Berkeley is down 0.58% to 3,960p and Persimmon is down 0.31% to 2,220p. 10.38am: Shell to invest in green energy Shell PLC (LSE:SHEL, NYSE:SHEL) rose 1% on news that it intends to plough £25bn into UK energy over the next decade, with 75% of that on low-carbon products including hydrogen and offshore wind. "These investments, subject to board approval, aim to propel the UK closer to net-zero and help to ensure security of supply whilst stimulating economic growth and jobs," David Bunch, Shell UK country chairperson, said. He added that it will need “stable political discourse” and urgency from the government to accelerate the shift away from non-renewable energy sources. This came following the company’s decision to sever ties with Russia, via its vows to stop buying the country’s oil, offload its Rosneft (LSE:ROSN) stake and end its Gazprom joint venture, following its invasion of Ukraine. 10.05am: UK sanctions 65 more elite Russian individuals and businesses The UK foreign secretary announced a further 65 sanctions on Russian individuals and businesses, targeting strategic industries, banks and business elites. According to a statement, the sanctions “target key industries supporting Russia’s illegal invasion, including Russian Railways and defence company Kronshtadt, the main producer of Russian drones.” “Six more banks are targeted, including Alfa Bank whose cofounders include previously sanctioned oligarchs Mikhail Fridman, Petr Aven and German Khan. The world’s largest diamond producer Alrosa is also sanctioned.” “Individuals sanctioned include the billionaire oil tycoon Eugene Shvidler, and Galina Danilchenko, who was installed by Russia as the ‘mayor’ of Melitopol is also sanctioned - the first time an individual has been sanctioned for collaboration with Russian forces currently in Ukraine.” Foreign secretary Liz Truss said “All those sanctioned today will have their assets in the UK frozen which means no UK citizen or company can do business with them, and individuals subject to travel bans are also prohibited from travelling to or from the UK.” “Today’s sanctions will bring the total global asset value of the banks the UK has sanctioned since the invasion to £500bn and the net worth of the oligarchs and family members in excess of £150bn.” 9.45am: Oil stocks lead Footsie Footsie continue to trade healthily led by oil stocks after the crude price headed up towards US$120 barrel overnight. Results were mixed though private equity firm Bridgepoint was an early riser on its results. Shares have been disappointing performers since its float but perked up 12% today as revenues rose by 41% and underlying profits by 72%. The group’s main private equity funds committed €1.9bn to new investments and returned €2.9bn to its fund investors. FTSE 100 up 21 at 7,482. 08:40:Footsie heads higher The FTSE 100 was nudged higher in early trade on Thursday, though it was being put in the shade by the stock market in Moscow, which leapt higher after being closed for a month. One month on from Russia's invasion of Ukraine the siege continues, with world leaders today convening for emergency summits of Nato, EU and European Council. Moscow marked the passing of the month with the reopening of its stock market, which fell 45% on the first day of the invasion before being shutters, and was up 10% in early trade today, with a ban on short-selling and Russian brokerages also banned from allowing foreign clients sell securities. Back in London, blue-chip shares had less support, but the Foosie was up 22 points or 0.3% to 7,483. Top of the leaderboard were precious metals miner Fresnillo PLC (LSE:FRES) and drinks bottler Coca-Cola HBC, which has larges exposure to Russia. Clothes retailer Next PLC (LSE:NXT) was down 3% after cutting it profits and sales forecasts for 2022/23 on the back of the war in Ukraine and slowing growth (read more). 6.32am: Slight rise expected The FTSE 100 was being called slightly higher before trading got underway with picking over Rishi Sunak’s Budget likely to be the main focus. Financial spread bet firms had the index up 11 points an hour before trading got underway, but that leaves a lot of time for the mood to change. BP and Unilever going ex-dividend will also be a drag on the early movements. The day after the Budget (read more) is often more instructive than the big headlines as economists pore over the detail, which is where the devil normally lies. Already the Telegraph has pointed out that the chancellor is raising £33bn through an effective stealth tax on students after freezing the level at which their loan repayments begin. This will help more than pay for the income tax cut planned for 2024 and the rise in national insurance thresholds, added the paper. Elsewhere, US markets weakened after the hawkish tone of recent statements from Fed chair Jerome Powell concerning interest rates. Asian markets were mixed towards the end of trading with Japan ahead but Hong Kong still overhung by the uncertainty over the Evergrande situation.
ULong
by INDEX_INSIDERS
FR40 CAC40:FUNDAMENTAL NEWS+TECHNICAL VIEW | LONG 🔔France: Growth Slows as Repercussions of Russia-Ukraine Conflict Darken Inflation and Fiscal Outlooks Rising spending in dealing with economic and geopolitical repercussions of Russia’s further incursion in the Ukraine additionally weigh on France’s already weakened fiscal outlook as recovery slows, exacerbating long-run credit challenges. Our baseline economic forecast of France is for modest recovery with real growth of 3.6% for 2022 before 2.1% in 2023 (-0.3pps), as growth slows across the euro area. Under a more stressed economic scenario, with higher and more long-lasting price pressures, output growth slows more significantly. However, we assume the energy price shock proves temporary, given futures of oil and gas prices indicating a downward price trend over a next 12 months. One of the main knock-on effects is pressure on government to mitigate inflation and raise defence expenditure One of the main adverse knock-on effects of Russia’s further invasion of the Ukraine for France is pressure the government at this stage faces in mitigating impact of rising inflation as well as to raise defence spending – just as, moreover, recovery from the Covid-19 crisis and associated revenue growth have started slowing. The resulting excess deficit puts pressure on French public finances, which have already deteriorated under the context of the Covid-19 crisis, leaving the country with limited room to raise spending further. French general government debt reached around 115% of GDP in 2021, up from 98% of GDP in 2019. On 16 March, the government announced a fresh package of measures aimed at provision of relief for households and firms hit by rising energy and other prices, including a discount of 15-euro cents a litre on petrol between April and July, energy-price related subsidies for firms and the strengthening of state-backed corporate liquidity facilities. Including previously introduced budgetary support since last September, these measures amount to an aggregate cost of EUR 25bn (circa 1% of GDP). The government has as well started discussion around an increase of civil service salaries in response to rising costs. France does have the advantage, as compared with Germany especially, of comparatively low reliance on oil and gas imports, given Electricité de France’s large park of nuclear power stations, helping ultimately contain France’s rate of inflation as compared with that of the rest of the euro area and expected to cap additional government compensation paid to households and businesses.
OANDA:FR40EURLong
by INDEX_INSIDERS
1
S&P500:FUNDAMENTAL ANALYSIS+TECHNICAL SETUP|LONG 🔔S&P 500 Takes Aggressive Fed Rate Hike Bets in Stride The S&P 500 jumped sharply as investors piled into big tech, shrugging off an ongoing rise in yields amid growing expectations for the Federal Reserve to turn more aggressive on rate hikes. The S&P 500 rose 1%, the Dow Jones Industrial Average gained 0.6%, or 200 points, the Nasdaq rose 1.8%. Federal Reserve Bank of St. Louis President James Bullard stressed the need for the Fed to move faster and more aggressively on rate hikes to curb the pace of inflation. The remarks arrived a day after Fed Chairman Jerome Powell said the central bank would be prepared to hike by more than 25 basis points at upcoming meetings to “ensure a return to price stability.” Wall Street was quick to price in steeper hikes following Powell’s comments, with Goldman Sachs now forecasting a 50 basis point hike at the Fed’s May and June meetings. Regional banks paired some of their recent losses helping the broader financials sector rise more than 1% as rising rates boost the net interest margin of banks. SVB Financial (NASDAQ:SIVB), Wells Fargo (NYSE:WFC), and First Republic Bank (NYSE:FRC) led the move higher. Growth sectors of the market including tech didn’t waver under the pressure of the rising yields. Meta Platforms (NASDAQ:FB) Amazon (NASDAQ:AMZN) Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), and Apple (NASDAQ:AAPL) climbed more than 2%. Chinese tech stocks were also in the ascendency, supported by a surge in Alibaba Group (NYSE:BABA) after the e-commerce announced boosted its share buyback program to a record $25 billion. JD.com (NASDAQ:JD) and Pinduoduo (NASDAQ:PDD) also rose on Tuesday. Tesla (NASDAQ:TSLA), meanwhile, jumped more than 5% after the electric vehicle maker officially opened its Gigafactory in Berlin. The move is expected to boost Tesla’s market share in Europe. The opening of Giga Berlin “should further vault its market share within Europe over the coming years as more consumers aggressively head down the EV path,” Wedbush said in a note Monday. On the earnings front, Nike (NYSE:NKE), a sizeable Dow Jones index component, rose more than 3% after reporting better-than-expected quarterly results. “Recent results and commentary from senior leadership of the company show clearly that NKE is managing well various external headwinds, including ongoing supply chain distributions and geopolitical tensions, across the globe,” Oppenheimer said in a note. “We are optimistic that money will soon flow back into NKE shares.” Energy stocks gave back some of their gains from a day earlier as oil prices turned negative. But losses were kept in check by fears of an oil supply shortage as the European Union mulls joining the U.S. in banning Russian oil.
ULong
by INDEX_INSIDERS
2