Daily Technical Analysis Report Today By Capital Street Fx – 18 October 2021

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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

TRADE SUGGESTION – BUY AT 1.20759, TAKE PROFIT AT 1.21045, SL AT 1.20586


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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

TRADE SUGGESTION – BUY AT 1.23440, TAKE PROFIT AT 1.24294, SL AT 1.22842

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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 down 0.18% at 11313.36, NYSE 0.13% closes at 15889.27.

TECHNICAL SUMMARY​

GBPUSD TECHNICAL ANALYSIS

TRADE SUGGESTION – BUY AT 1.23990, TAKE PROFIT AT 1.24775, SL AT 1.23286

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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

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

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​

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​

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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