IC Markets Europe Fundamental Forecast | 31 March 2023

What happened in the Asia session?

The Tokyo Core CPI y/y data release showed a 3.2% increase, beating the forecast of 3.1% and the previous reading of 3.3%. This indicates that inflation remains stubborn in Japan.

The Australian Private Sector Credit m/m data release showed a 0.3% increase, falling short of the forecasted and previous readings of 0.4%. This suggests that lending to the private sector has slowed down in Australia. However, better-than-expected Chinese Manufacturing & Non-Manufacturing PMIs could cushion the weakness of the AUD.

What does it mean for the Europe & US Sessions?

The focus for the two sessions should hinge on EUR/USD since a slew of second-tier data releases adds to the critical inflation announcements, namely the CPI Flash Estimate y/y for Europe and the Core PCE Price Index m/m for the US.

At the time of writing, the pair hovers below the recent highs around 1.0930. Higher inflation data for the Eurozone or a lower-than-expected US PCE could open a 100-pip rise towards 1.1030. A break above the psychological resistance at 1.1000 would reinforce an upward scenario.

The Dollar Index (DXY)

Key news events today

Core PCE Price Index m/m

What can we expect from DXY today?

The US Core PCE Price Index is forecasted with a 0.4% increase. Previous data showed 0.6%. A lower-than-expected figure would weaken the USD since the Fed will likely be less likely to raise rates in the face of a recovery banking turmoil.

Central Bank Notes:

• The US banking system is sound and resilient, but recent developments may result in tighter credit conditions for households and businesses.
• The Federal Reserve has raised the target range for the federal funds rate to 4-3/4 to 5 per cent, committed to returning inflation to its 2 per cent objective.
• In determining the extent of future increases in the target range, the Committee will consider various factors, including the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and economic and financial developments.
• Next meeting is on 3 May 2023

Next 24 Hours Bias

Weak Bearish

Gold (XAU)

Key news events today

No major news events.

What can we expect from Gold today?

The US Core PCE Price Index m/m is expected to increase slower, suggesting that inflationary pressures are moderating, which could reduce the demand for gold as a hedge against inflation.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

The Australian Private Sector Credit m/m data is expected to remain unchanged at 0.4%, indicating steady growth in lending to businesses and individuals. This may neutrally impact the AUD, as it does not suggest any significant changes in the lending market.

However, the Chinese Manufacturing and Non-Manufacturing PMI are forecasted to decrease from previous figures, indicating a slowdown in the sectors. This may hurt the AUD, as China is Australia’s largest trading partner. 

Central Bank Notes:

• Cash rate raised by 25 basis points to 3.60%.
• Board prioritises returning inflation to target, with a likely need for further monetary policy tightening.
• Board to closely monitor the global economy, household spending trends, inflation and labour market outlook when assessing interest rate increases.
• Next meeting on 4 April 2023

Next 24 Hours Bias

Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

While no major news event from New Zealand could significantly influence NZD’s price direction, the upcoming Australian and Chinese data could provide some volatility for the closely-linked currency.

Central Bank Notes:

• Monetary Policy Committee increased the OCR from 4.25% to 4.75%
• Higher interest rates are needed to reduce inflation and support employment sustainably
• Severe storms in North Island will increase inflation and disrupt production.
• Next meeting is on 5 April 2023

Next 24 Hours Bias

Mixed

The Japanese Yen (JPY)

Key news events today

Tokyo Core CPI y/y

What can we expect from JPY today?

A mixed implication can be expected from a slew of Japanese data releases today, including Tokyo Core CPI y/y (forecast 3.1%, previous 3.3%), Unemployment Rate: (forecast 2.4%, previous 2.4%), Prelim Industrial Production m/m (forecast 2.8%, previous -5.3%), Retail Sales y/y (forecast 5.9%, previous 5.0), Housing Starts y/y (forecast -0.5%, previous 6.6%)

Central Bank Notes:

• The bank will continue with QQE with Yield Curve Control to achieve the price stability target of 2% 
• Japan’s economy is expected to recover gradually
• The bank will not hesitate to take additional easing measures if necessary
• Next meeting is on 27 April 2023 

Next 24 Hours Bias

Mixed

The Euro (EUR)

Key news events today

CPI Flash Estimate y/y

Core CPI Flash Estimate y/y

ECB President Lagarde Speaks

What can we expect from EUR today?

Upcoming Eurozone CPI Flash Estimate y/y data is expected to decrease from 8.5% to 7.1%, indicating a cooling of inflationary pressures. However, Core CPI Flash Estimate y/y data will likely increase from 5.6% to 5.7%, suggesting underlying inflationary pressures persist. ECB President Lagarde’s remarks during the US session may also infuse volatility into the Euro.

Central Bank Notes:

• ECB raised interest rates by 50 basis points to ensure the 2% inflation target is met
• Inflation is projected to average 5.3% in 2023, with growth at 1%, and underlying price pressures remain strong
• The bank will continue to monitor market tensions closely and will be data-dependent in its policy rate decisions
• Next meeting on 4 May 2023

Next 24 Hours Bias

Mixed

The Swiss Franc (CHF)

Key news events today

Gov Board Member Maechler Speaks

What can we expect from CHF today?

The speech by Governing Board Member Maechler could provide insights into the central bank’s monetary policy stance and future decisions. Meanwhile, Switzerland’s Retail Sales y/y report is expected to improve from the previous reading of -2.2%, with a forecast of -1.0%. The KOF Economic Barometer is also likely to show a slight improvement from the prior reading of 100.0, with a forecast of 100.4. The higher-than-expected readings could lead to a stronger CHF.

Central Bank Notes:

• Raised policy rate to 1.5% to counter inflationary pressure and ensure price stability. The SNB may need to raise the policy rate further in the future
• The SNB is providing liquidity assistance to Credit Suisse, and the crisis has been halted
• The new inflation forecast assumes a policy rate of 1.5% and puts average annual inflation at 2.6% for 2023 and 2.0% for 2024 and 2025.
• Mortgage and real estate market vulnerabilities persist
• Next meeting on 11 April 2023

Next 24 Hours Bias

Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Mixed signals are expected from the second-tier UK data releases today, with slight improvements in Current Account and Nationwide HPI m/m that may support GBP, while lack of growth in Final GDP q/q may limit gains.

Central Bank Notes:

• The BoE’s MPC increased the Bank Rate by 25bps to 4.25%, with a majority of 7-2 in favour of the hike
• The UK banking system is judged to be robust and resilient.
• CPI inflation increased unexpectedly but is expected to fall sharply over the rest of the year due to lower energy prices.
• The MPC will continue to monitor inflationary pressures and adjust Bank Rate as necessary.
• Next meeting on 11 May 2023 

Next 24 Hours Bias

Mixed

The Canadian Dollar (CAD)

Key news events today

GDP m/m

What can we expect from CAD today?

The Canadian economy is expected to turn around with an anticipated growth rate of 0.4%, indicating a potential improvement from the previous period, which had declined by -0.1%. A higher-than-expected GDP growth rate in the current period could boost the CAD. 

Central Bank Notes:

• Bank of Canada maintains its target for the overnight rate at 4.5%
• Inflation eased in January, but price increases for food and shelter remain high
• BOC is prepared to increase the policy rate further to return inflation to the 2% target.
• Next meeting on 12 April 2023

Next 24 Hours Bias

Bullish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

The upcoming OPEC+ meeting on Monday is expected to see the cartel stick to its current production cuts while refraining from reacting to the recent drop in oil prices, which is being cushioned by Iraq’s export disruptions.

Next 24 Hours Bias

Bullish

DXY:

The DXY chart is currently showing bearish momentum, with prices below a major descending trendline, suggesting a continuation of the bearish trend. The first support level is at 101.89, which is a swing low support level and coincides with the 78.60% Fibonacci retracement level, making it a strong level to watch. If prices were to drop further, they could reach the second support level at 100.82, which is also a swing low support level.

On the other hand, the first resistance level is at 102.77, which is an overlap resistance level, indicating it could be a strong level to watch if prices were to rise. If the price were to break through this level, it could potentially rise towards the second resistance level at 103.46, which is also an overlap resistance level and coincides with the 38.20% Fibonacci retracement level.

EUR/USD:

The EUR/USD chart is currently showing bearish momentum, indicating a potential bearish reaction off the first resistance level at 1.0927, which is a multi-swing high resistance level and coincides with a 78.60% Fibonacci retracement. If price were to drop from this level, it could potentially reach the first support level at 1.0830, which is a multi-swing low support level.

In the event of a further drop, the second support level at 1.0763 could also come into play, as it is an overlap support level and coincides with the 38.20% Fibonacci retracement level.

On the other hand, breaking through the first resistance level could lead to a rise towards the second resistance level at 1.1030, which is a swing high resistance level and coincides with a -27% Fibonacci expansion.

GBP/USD:

The GBP/USD chart is showing a bearish momentum overall, as price has the potential to react bearishly off the first resistance and drop to the first support level.

The first support level is at 1.2343, which is a strong overlap support level. Additionally, the second support level is at 1.2279, which is also an overlap support level. These support levels are good for potential price bounces as they have held in the past and are important price levels.

On the other hand, the first resistance level is at 1.2429, which is a multi-swing high resistance level. This level has previously caused price to reverse in the past and has the potential to cause another reversal. The second resistance level is at 1.2514, which is a swing high resistance level. This level also has the potential to cause a price reversal.

USD/CHF:

The USD/CHF chart is showing bullish momentum, which indicates that prices may rise further. A bounce off the 1st support level at 0.9120 could lead to a potential move towards the 1st resistance level at 0.9208.

The 1st support level at 0.9120 is a multi-swing low support, which makes it a significant level to watch. Additionally, the 2nd support level at 0.9068 is a swing low support, which also adds to its importance.

On the resistance side, the 1st resistance level at 0.9208 is an overlap resistance and coincides with a 38.20% Fibonacci retracement. This makes it a strong level of resistance to break through. Further up, the 2nd resistance level at 0.9257 is also an overlap resistance and lines up with a 61.80% Fibonacci retracement.

USD/JPY:

The overall momentum of the USD/JPY chart is currently bearish, with price below a major descending trend line suggesting that bearish momentum is on the cards.

Looking at the chart, price could potentially continue its bearish movement towards the 1st support at 131.59, which is a strong overlap support and coincides with a 50% Fibonacci retracement level.

If price were to break below the 1st support, the next support level it could drop to is the 2nd support at 130.42, which is also a multi-swing low support.

On the resistance side, we can see that price is currently facing a major hurdle at the 1st resistance level of 133.80, which is a swing high resistance and coincides with a 50% Fibonacci retracement level.

If price were to break above the 1st resistance, the next resistance level it could move towards is the 2nd resistance at 134.85, which is an overlap resistance and coincides with a 61.80% Fibonacci retracement level.

It’s worth noting that there is an intermediate support level at 132.81, which is between where price is currently and the 1st support. A break of this intermediate support could trigger a strong bearish acceleration towards the 1st support.

AUD/USD:

The chart’s overall momentum is currently bullish, indicating that it may continue to rise. The price is expected to continue to move towards the first resistance level, suggesting a bullish continuation.

The first support level is at 0.6640, which is a good level of support due to its overlapping nature. Another good support level is at 0.6580, which is a multi-swing low support. On the other hand, the first resistance level, which is at 0.6774, is a good level of resistance as it coincides with a 38.20% Fibonacci retracement level, which strengthens the resistance. The second resistance level is at 0.6876, which is another good level of resistance due to its overlapping nature and its alignment with a 50% Fibonacci retracement level.

NZD/USD:

The NZD/USD chart has been showing bullish momentum. This could potentially continue towards the 1st resistance level. The 1st support is at 0.6209, which is a good level for a potential bounce. This level is an overlap support and is also at the 38.20% Fibonacci retracement level. If the price bounces from this level, it could potentially rise towards the 1st resistance at 0.6313. This resistance level is also an overlap resistance, and it aligns with the 50% Fibonacci retracement level. If the price manages to break this resistance level, it could rise towards the 2nd resistance level at 0.6388. This resistance level is a multi-swing high resistance, and it coincides with the 61.80% Fibonacci retracement level.

On the other hand, if the price fails to bounce off the 1st support level, it could potentially drop towards the 2nd support level at 0.6163. This support level is also an overlap support and coincides with the 61.80% Fibonacci retracement level. A break below this support level could signal a shift in momentum from bullish to bearish.

USD/CAD:

The overall momentum for the USD/CAD chart is bullish, and it could potentially make a bullish bounce off the first support level towards the first resistance level.

The first support level is at 1.3513, and it is a strong overlap support level with a 61.80% Fibonacci retracement lining up with it. This level could provide a good opportunity for a bullish bounce. The second support level is at 1.3448, and it is also an overlap support level.

The first resistance level is at 1.3568, and it is also an overlap resistance level with a 23.60% Fibonacci retracement lining up with it. If the price bounces from the first support level, it could rise towards this first resistance level. The second resistance level is at 1.3657, and it is another overlap resistance level with a 50% Fibonacci retracement lining up with it.

DJ30:

The overall momentum of the DJ30 chart is currently bearish, suggesting a potential bearish reaction off the 1st resistance level.

If price were to drop, it could find support at the 1st support level of 32573. This level is an overlap support and could potentially provide a bounce to push prices higher.

If the 1st support level were to break, the next support level to look out for is the 2nd support at 32309. This level is also an overlap support and could potentially provide another bounce.

On the other hand, if price were to rise, it could face resistance at the 1st resistance level of 32990. This level is also an overlap resistance and coincides with the 50% Fibonacci retracement.

If price were to break the 1st resistance level, the next resistance level to watch out for is the 2nd resistance at 33506. This level is also an overlap resistance.

GER30:

The GER30 chart seems to have a bearish momentum overall. However, in the short term, the price may potentially rise towards the 1st resistance before reversing and dropping towards the 1st support level.

The 1st support level at 15447.34 is an overlap support, indicating that it has been tested multiple times in the past and could provide strong support for the price. The 2nd support level at 15274.20 is also an overlap support and coincides with a 78.60% Fibonacci projection, making it another strong potential support level.

On the other hand, the 1st resistance level at 15667.58 is a multi-swing high resistance, indicating that it has been a significant area of resistance in the past. This resistance level also lines up with a 161.80% Fibonacci projection, making it a potential area of strong resistance. The 2nd resistance level at 15931.56 is a swing high resistance, which could also provide some resistance to the price.

BTC/USD:

The BTC/USD chart is currently showing bearish momentum, with potential for a continuation towards the 1st support level at 25966. This support level is considered strong as it has acted as an overlap support in the past.

In the event that the price were to break below the 1st support level, the next level it could drop to is the 2nd support at 24526. This support level is also significant as it lines up with the 50% Fibonacci retracement.

On the other hand, the 1st resistance level at 29373 is considered strong as it has acted as a swing high resistance in the past. If the price were to bounce from the 1st support level, it could potentially rise towards this resistance level.

There is also a 2nd resistance level at 30202 which is a swing high resistance and could potentially offer additional resistance if the price were to rise towards it.

US500

The US500 chart shows strong bullish momentum as price is currently above a major ascending trend line, indicating further bullish movement may be expected.

Price may potentially make a bullish continuation towards the 1st resistance at 4077. This level is a strong overlap resistance that has held in the past. If price manages to break through this level, it could head towards the 2nd resistance at 4161, which is a multi-swing high resistance.

On the downside, there is a 1st support at 4011, which is an overlap support. If price were to break below this level, it could head towards the 2nd support at 3924, which is also an overlap support.

ETH/USD:

 The overall momentum of the ETH/USD chart is neutral. This means that there is no clear bullish or bearish trend at the moment.

Price could potentially fluctuate between the 1st resistance and 1st support level. The 1st support level is at 1667.31, and it is an overlap support and a 38.20% Fibonacci retracement. The 2nd support level is at 1558.42, and it is an overlap support.

On the other hand, the 1st resistance level is at 1852.01, and it is a multi-swing high resistance.

WTI/USD:

WTI crude oil prices have shown bearish momentum on the charts. Currently, the price may react bearishly towards the first resistance at 74.07, and drop towards the first support at 71.15. The first support is a significant overlap support while the second support is an overlap support and a 78.60% Fibonacci retracement. On the other hand, the first resistance is an overlap resistance with a 61.80% Fibonacci retracement. Additionally, the second resistance at 77.39 is a swing high resistance with a 78.60% Fibonacci retracement. There is also an intermediate support at 72.61, which is also an overlap support.

Furthermore, RSI is displaying bearish divergence versus the price, which suggests that there may be a reversal soon. It’s important to keep an eye on these levels and RSI for any potential breakouts or reversals in the coming days or weeks.

XAU/USD (GOLD):

XAU/USD sees bearish momentum with potential for a bearish reaction off the 1st resistance and a drop towards the 1st support.

The 1st support level is at 1936.00, which is an overlap support and coincides with a 38.20% Fibonacci retracement. If price were to break below this level, it could drop towards the 2nd support at 1910.00, which is also an overlap support and lines up with a 50% Fibonacci retracement.

On the other hand, the 1st resistance level at 1985.00 is a strong overlap resistance and has a 23.60% Fibonacci retracement lining up with it. If price were to bounce from the 1st support, it could potentially rise towards this level. However, there is a possibility that the resistance level could trigger a bearish reaction, pushing prices back down towards the 1st support.

The 2nd resistance level at 2002.00 is a multi-swing high resistance, and if price were to break above the 1st resistance level, it could rise towards this level.

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IC Markets Asia Fundamental Forecast | 31 March 2023

What happened in the US session?

The US Final GDP q/q was 2.6%, lower than the forecasted and previous values of 2.7%. The Unemployment Claims came in at 198K, higher than the predicted value of 196K (previous 191K).

What does it mean for the Asia Session?

A fair share of the volatility will likely be split between the AUD and the JPY since the data releases for the session are centred around the two. Positive surprises for the Japanese Yen could see USD/JPY defend 133, while favourable Chinese data could see AUD/USD break out of consolidation and head higher towards 0.6750.

The Dollar Index (DXY)

Key news events today

Core PCE Price Index m/m

What can we expect from DXY today?

The US Core PCE Price Index is forecasted with a 0.4% increase. Previous data showed 0.6%. A lower-than-expected figure would weaken the USD since the Fed will likely be less likely to raise rates in the face of a recovery banking turmoil.

Central Bank Notes:

• The US banking system is sound and resilient, but recent developments may result in tighter credit conditions for households and businesses.
• The Federal Reserve has raised the target range for the federal funds rate to 4-3/4 to 5 per cent, committed to returning inflation to its 2 per cent objective.
• In determining the extent of future increases in the target range, the Committee will consider various factors, including the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and economic and financial developments.
• Next meeting is on 3 May 2023

Next 24 Hours Bias

Weak Bearish

Gold (XAU)

Key news events today

No major news events.

What can we expect from Gold today?

The US Core PCE Price Index m/m is expected to increase slower, suggesting that inflationary pressures are moderating, which could reduce the demand for gold as a hedge against inflation.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

The Australian Private Sector Credit m/m data is expected to remain unchanged at 0.4%, indicating steady growth in lending to businesses and individuals. This may neutrally impact the AUD, as it does not suggest any significant changes in the lending market.

However, the Chinese Manufacturing and Non-Manufacturing PMI are forecasted to decrease from previous figures, indicating a slowdown in the sectors. This may hurt the AUD, as China is Australia’s largest trading partner. 

Central Bank Notes:

• Cash rate raised by 25 basis points to 3.60%.
• Board prioritises returning inflation to target, with a likely need for further monetary policy tightening.
• Board to closely monitor the global economy, household spending trends, inflation and labour market outlook when assessing interest rate increases.
• Next meeting on 4 April 2023

Next 24 Hours Bias

Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

While no major news event from New Zealand could significantly influence NZD’s price direction, the upcoming Australian and Chinese data could provide some volatility for the closely-linked currency.

Central Bank Notes:

• Monetary Policy Committee increased the OCR from 4.25% to 4.75%
• Higher interest rates are needed to reduce inflation and support employment sustainably
• Severe storms in North Island will increase inflation and disrupt production.
• Next meeting is on 5 April 2023

Next 24 Hours Bias

Mixed

The Japanese Yen (JPY)

Key news events today

Tokyo Core CPI y/y

What can we expect from JPY today?

A mixed implication can be expected from a slew of Japanese data releases today, including Tokyo Core CPI y/y (forecast 3.1%, previous 3.3%), Unemployment Rate: (forecast 2.4%, previous 2.4%), Prelim Industrial Production m/m (forecast 2.8%, previous -5.3%), Retail Sales y/y (forecast 5.9%, previous 5.0), Housing Starts y/y (forecast -0.5%, previous 6.6%)

Central Bank Notes:

• The bank will continue with QQE with Yield Curve Control to achieve the price stability target of 2% 
• Japan’s economy is expected to recover gradually
• The bank will not hesitate to take additional easing measures if necessary
• Next meeting is on 27 April 2023 

Next 24 Hours Bias

Mixed

The Euro (EUR)

Key news events today

CPI Flash Estimate y/y

Core CPI Flash Estimate y/y

ECB President Lagarde Speaks

What can we expect from EUR today?

Upcoming Eurozone CPI Flash Estimate y/y data is expected to decrease from 8.5% to 7.1%, indicating a cooling of inflationary pressures. However, Core CPI Flash Estimate y/y data will likely increase from 5.6% to 5.7%, suggesting underlying inflationary pressures persist. ECB President Lagarde’s remarks during the US session may also infuse volatility into the Euro.

Central Bank Notes:

• ECB raised interest rates by 50 basis points to ensure the 2% inflation target is met
• Inflation is projected to average 5.3% in 2023, with growth at 1%, and underlying price pressures remain strong
• The bank will continue to monitor market tensions closely and will be data-dependent in its policy rate decisions
• Next meeting on 4 May 2023

Next 24 Hours Bias

Mixed

The Swiss Franc (CHF)

Key news events today

Gov Board Member Maechler Speaks

What can we expect from CHF today?

The speech by Governing Board Member Maechler could provide insights into the central bank’s monetary policy stance and future decisions. Meanwhile, Switzerland’s Retail Sales y/y report is expected to improve from the previous reading of -2.2%, with a forecast of -1.0%. The KOF Economic Barometer is also likely to show a slight improvement from the prior reading of 100.0, with a forecast of 100.4. The higher-than-expected readings could lead to a stronger CHF.

Central Bank Notes:

• Raised policy rate to 1.5% to counter inflationary pressure and ensure price stability. The SNB may need to raise the policy rate further in the future
• The SNB is providing liquidity assistance to Credit Suisse, and the crisis has been halted
• The new inflation forecast assumes a policy rate of 1.5% and puts average annual inflation at 2.6% for 2023 and 2.0% for 2024 and 2025.
• Mortgage and real estate market vulnerabilities persist
• Next meeting on 11 April 2023

Next 24 Hours Bias

Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Mixed signals are expected from the second-tier UK data releases today, with slight improvements in Current Account and Nationwide HPI m/m that may support GBP, while lack of growth in Final GDP q/q may limit gains.

Central Bank Notes:

• The BoE’s MPC increased the Bank Rate by 25bps to 4.25%, with a majority of 7-2 in favour of the hike
• The UK banking system is judged to be robust and resilient.
• CPI inflation increased unexpectedly but is expected to fall sharply over the rest of the year due to lower energy prices.
• The MPC will continue to monitor inflationary pressures and adjust Bank Rate as necessary.
• Next meeting on 11 May 2023 

Next 24 Hours Bias

Mixed

The Canadian Dollar (CAD)

Key news events today

GDP m/m

What can we expect from CAD today?

The Canadian economy is expected to turn around with an anticipated growth rate of 0.4%, indicating a potential improvement from the previous period, which had declined by -0.1%. A higher-than-expected GDP growth rate in the current period could boost the CAD. 

Central Bank Notes:

• Bank of Canada maintains its target for the overnight rate at 4.5%
• Inflation eased in January, but price increases for food and shelter remain high
• BOC is prepared to increase the policy rate further to return inflation to the 2% target.
• Next meeting on 12 April 2023

Next 24 Hours Bias

Bullish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

The upcoming OPEC+ meeting on Monday is expected to see the cartel stick to its current production cuts while refraining from reacting to the recent drop in oil prices, which is being cushioned by Iraq’s export disruptions.

Next 24 Hours Bias

Bullish

Markets Still Positive As ‘No News is Good News – Nasdaq Up 0.7%

Global Markets continued to move in a positive direction over the course of the trading day yesterday as investors look to put the recent banking crisis firmly in their rear-view mirror. Global stock markets all finished the day well in the black with the main US indices closing the day comfortably up although off their daily highs, the Dow finished up 0.43%, the S&P 0.57% and the tech-heavy Nasdaq once again outperformed up 0.73%. The dollar continued to slide against the majors as its safe-haven luster has lost appeal and US treasury yields fell, the 110-yeardown 1.7bps on the day. 

Key US Data the Focus for Investors

Things are looking very rosy in the markets again as market sentiment has completely flipped from a couple of weeks ago and we can all relax as the banking crisis was just a minor squall for the ‘good ship global growth’. A nice story, but let’s be honest we could well be living in a bit of a dream world and tonight’s key PCE data out of the US may be the catalyst that brings us back to reality with a bit of a bump – especially as it comes out as liquidity starts to thin into the weekend. It’s well documented that the FOMC pays very close attention to this number and if we get a number higher than the expected 0.4% then the market could take it hard as rate hike expectations come right back into investor focus. 

Busy Trading Day into the Weekend

Investors are hoping for another strong day in the markets to the round of the week style. There are however a few potential banana skins on the horizon with a plethora of macroeconomic data due out over the next few sessions. In, Asia there will be a big focus on the latest Chinese PMI numbers which is followed by a raft lower tier data in Europe with the highlight being the CPI Flash estimates. The main events though probably come once the New York session gets going with the PCE data, the Canadian GDP number and several FOMC members giving us their latest updates. Things could get a bit messy if anyone throws a spanner in the works of what has so far been a much more positive week for investors.

Global Markets:

• Asian Stock Markets : Nikkei down 0.36%, Shanghai Composite up 0.65%, Hang Seng up 0.56%, ASX up 1.02%
• Commodities : Gold at $1985.65 (+0.06%), Silver at $23.78 (+1.35%), Brent Oil at $77.76 (+0.22%), WTI Oil at $73.19 (+0.30%)
• Rates : US 10-year yield at 3.547, UK 10-year yield at 3.456, Germany 10-year yield at 2.246

News & Data:

• (EUR) Spanish Flash CPI y/y 3.30% vs 3.90% expected
• (USD) Pending Home Sales m/m 0.80% vs -2.90% expected
• (AUD) CPI y/y 6.80% vs 7.20% expected

Markets Update:

 Asian markets ended the first quarter on a positive note, as investors shrugged off concerns about rising COVID-19 cases and tighter lockdowns in some countries and focused on the prospects of a global economic recovery. The Federal Reserve’s dovish tone after its latest rate hike also boosted sentiment, as it signaled a more gradual and cautious approach to monetary policy normalization. The Bank of England is expected to tighten policy further later in the day.

Among the major indices, Australia’s S&P/ASX 200 added 1.0%. The index was lifted by gains in energy, materials and financials sectors, as commodity prices remained elevated and bank stocks recovered from recent losses. South Korea’s Kospi rose 0.7%, Hong Kong’s Hang Seng gained 0.6%, and China’s Shanghai Composite advanced 0.7%. Japan’s Nikkei 225 was the only laggard, shedding 0.4%. The index was weighed down by concerns about Japan’s slow vaccination rollout and rising COVID-19 infections, which prompted some local governments to impose stricter measures to curb the spread of the virus. The index was also pressured by a stronger yen, which appreciated against the US dollar, as investors sought safety amid global market volatility.

In commodities, gold firmed up above $1,970 an ounce, as the Fed’s dovish tone boosted its appeal as a hedge against inflation and currency weakness. Crude oil fell below $70 a barrel, as rising US inventories and OPEC+ supply weighed on the market. The US dollar index, which measures the greenback against a basket of six major currencies, slipped to 91.8, as investors pared back their expectations for more rate hikes this year.

Upcoming Events:

• 12:30 PM GMT – (USD) Final GDP q/q
• 12:30 PM GMT – (USD) Unemployment Claims
• 12:30 PM GMT – (USD) Final GDP Price Index q/q
• 04:00 PM GMT – (CHF) Gov Board Member Maechler Speaks
• 07:45 PM GMT – (USD) Treasury Sec Yellen Speaks
• 11:30 PM GMT – (JPY) Tokyo Core CPI y/y

IC Markets Europe Fundamental Forecast | 30 March 2023

What happened in the Asia session?

The ANZ Business Confidence data for New Zealand is -43.4, while the previous value was -43.3, suggesting that business confidence in New Zealand has declined slightly in the given period.

What does it mean for the Europe & US Sessions?

A higher-than-expected German Prelim CPI m/m could bring the EUR/USD out of consolidation towards the recent highs of around 1.0930.  Likewise, better than expected figures for the US Final GDP q/q Unemployment Claims could see the pair head towards 1.0750 

The Dollar Index (DXY)

Key news events today

Final GDP q/q

Unemployment Claims

What can we expect from DXY today?

The forecasted and previous data show no change in the US final GDP q/q at 2.7%. However, Unemployment Claims are expected to increase from 191K to 196K. This could indicate weakness in the labour market and the overall economy, negatively impacting the USD. 

Central Bank Notes:

• The US banking system is sound and resilient, but recent developments may result in tighter credit conditions for households and businesses.
• The Federal Reserve has raised the target range for the federal funds rate to 4-3/4 to 5 per cent, committed to returning inflation to its 2 per cent objective.
• In determining the extent of future increases in the target range, the Committee will consider various factors, including the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and economic and financial developments.
• Next meeting is on 3 May 2023

Next 24 Hours Bias

Weak Bearish

Gold (XAU)

Key news events today

No major news events.

What can we expect from Gold today?

The latest CPI y/y for Australia showed a consecutive drop, suggesting an easing global inflation situation and potentially leading to a decrease in gold prices.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

No major news event for AUD today. The price direction could draw from the previous CPI y/y data release, which showed a consecutive drop to 6.8%.

Central Bank Notes:

• Cash rate raised by 25 basis points to 3.60%.
• Board prioritises returning inflation to target, with a likely need for further monetary policy tightening.
• Board to closely monitor the global economy, household spending trends, inflation and labour market outlook when assessing interest rate increases.
• Next meeting on 4 April 2023

Next 24 Hours Bias

Weak Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

The NZ Building Consents m/m data showed a 9.0% decline, far below the previous figure of 5.2%. This suggests a slowdown in the construction industry and may lead to a depreciation in the NZD. A drop in the upcoming release of the ANZ Business Confidence (previous -43.3) could exacerbate a downward price movement.

Central Bank Notes:

• Monetary Policy Committee increased the OCR from 4.25% to 4.75%
• Higher interest rates are needed to reduce inflation and support employment sustainably
• Severe storms in North Island will increase inflation and disrupt production.
• Next meeting is on 5 April 2023

Next 24 Hours Bias

Mixed

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

There is no major news event for JPY today, so price direction may depend on expectations for upcoming data releases. Tokyo Core CPI y/y is expected at 3.1%, down from the previous 3.3%. The anticipated drop in consumer prices could lead to a decline in JPY.

Central Bank Notes:

• The bank will continue with QQE with Yield Curve Control to achieve the price stability target of 2% 
• Japan’s economy is expected to recover gradually
• The bank will not hesitate to take additional easing measures if necessary
• Next meeting is on 27 April 2023 

Next 24 Hours Bias

Weak Bearish

The Euro (EUR)

Key news events today

German Prelim CPI m/m

What can we expect from EUR today?

The forecasted data is 0.6%, slightly lower than the previous month’s figure of 0.8%. If the actual figure comes in below the forecast, it may signal lower inflationary pressures but could lead only to a slight decrease in the value of the EUR since the ECB expressed hawkishness even amid the banking crisis.

Central Bank Notes:

• ECB raised interest rates by 50 basis points to ensure the 2% inflation target is met
• Inflation is projected to average 5.3% in 2023, with growth at 1%, and underlying price pressures remain strong
• The bank will continue to monitor market tensions closely and will be data-dependent in its policy rate decisions
• Next meeting on 4 May 2023

Next 24 Hours Bias

Mixed

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

As there is no major news event for the currency today, the price direction of CHF is likely to draw from the previously released Credit Suisse Economic Expectations data that showed a value of -41.3 (previous -12.3). This indicates that there has been a significant drop in economic expectations over the given time frame, which could lead to a decrease in the value of CHF.

Central Bank Notes:

• Raised policy rate to 1.5% to counter inflationary pressure and ensure price stability. The SNB may need to raise the policy rate further in the future
• The SNB is providing liquidity assistance to Credit Suisse, and the crisis has been halted
• The new inflation forecast assumes a policy rate of 1.5% and puts average annual inflation at 2.6% for 2023 and 2.0% for 2024 and 2025.
• Mortgage and real estate market vulnerabilities persist
• Next meeting on 11 April 2023

Next 24 Hours Bias

Weak Bearish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

MPC member Mann’s speech stated that reducing UK services inflation from 6% to 2% will be challenging, causing uncertainty and potentially reducing GBP’s value against other major currencies. The long-term impact is still being determined, but the BoE’s strong track record of managing inflation will likely prevent significant changes, despite the persistent core inflation remaining.

Central Bank Notes:

• The BoE’s MPC increased the Bank Rate by 25bps to 4.25%, with a majority of 7-2 in favour of the hike
• The UK banking system is judged to be robust and resilient.
• CPI inflation increased unexpectedly but is expected to fall sharply over the rest of the year due to lower energy prices.
• The MPC will continue to monitor inflationary pressures and adjust Bank Rate as necessary.
• Next meeting on 11 May 2023 

Next 24 Hours Bias

Weak Bearish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

Governor Council Member Gravelle suggests large-scale GOC bond purchases if faced with severe dysfunction, while Canada’s well-regulated financial system may still be affected by global events. Support for the system would be provided in times of widespread stress. 

Central Bank Notes:

• Bank of Canada maintains its target for the overnight rate at 4.5%
• Inflation eased in January, but price increases for food and shelter remain high
• BOC is prepared to increase the policy rate further to return inflation to the 2% target.
• Next meeting on 12 April 2023

Next 24 Hours Bias

Mixed

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Crude Oil Inventories decreased by 7.5M barrels, surpassing the forecasted and previous numbers of 1.8M and 1.1M barrels, respectively. This implies a reduction in supply and could lead to increased oil prices.

Next 24 Hours Bias

Bullish

Join Pamela Ambler on IC Your Trade as she discusses the impact of the ongoing banking crisis on gold prices with resident expert Alex Holmes from Oxford Economics and special guest Shaokai Fan, head of Asia Pacific and Gold Head of Central Banks at the World Gold Council. In this episode, they explore the factors that influence the demand for gold and the reasons behind the current gold buzz.

Gold is a versatile investment that acts like both a commodity and a currency. Traders use it to store value, hedge against riskier assets, and speculate. The banking crisis has increased uncertainty and unease, causing investors to flock to gold as a safe-haven asset. Furthermore, the potential impact on monetary policy, especially if the Fed pauses or reverses its interest rate policy, may also be contributing to gold’s rise.

The US inflation rate and the Fed’s willingness to raise rates are also important factors affecting the price of gold. Interest rates are generally a headwind for gold, but not the only factor affecting its price. The strength or weakness of the US dollar, underlying supply and demand factors, and market concern and uncertainty also drive demand for gold.

Central banks are accumulating large quantities of gold, indicating that they view it as a safe-haven asset amidst geopolitical risks and concerns over asset safety. In 2022, central banks bought a record 1100 tons of gold on a net basis, reflecting their increased focus on the security of their assets.

In summary, while the banking crisis and potential changes in monetary policy may be driving gold prices higher, the demand for gold is influenced by a range of factors. Join Pamela, Alex, and Shaokai as they delve into the gold market and discuss the impact of these factors on the price of gold.

The price of gold has surged in 2023, fuelled by uncertainty about the global banking system, coupled with ongoing inflationary pressures.

Traders can use gold as a store of value, as a hedge against riskier assets and perhaps most commonly, for speculation.

The World Gold Council says that the shaky market conditions are putting gold back into sharp focus.

There’s a level of market concern and uncertainty in general which drives people to gold as a safe haven asset. So interest rates are definitely part of the equation, but not the only part of the equation for gold.

The spot gold price hovered near all-time highs during March 2023 and momentarily broke through the US$2,000 per ounce barrier.

However, it was unable to maintain its position, pulling back below the US$2,000/oz threshold shortly after.

The gold price is also impacted by the outlook for interest rate movements by the US Federal Reserve.

Oxford Economics is forecasting another 50 basis points of rate increases, before the Federal Reserve begins to cut rates by the end of the year.

Uncertainty about inflation has also fuelled gold purchases by central banks.

The World Gold Council data shows that central bank gold purchases rose to record levels in 2022. Central banks purchased about 1,100 tonnes of gold on a net basis in 2022.

The net purchases of gold by central banks is also indicative of political risk emerging from the ongoing conflict between Russia and the Ukraine.

“There’s been a shift in how central banks are viewing the political risk now, because after the Russian invasion of Ukraine, there were sanctions placed on the Central Bank of Russia, which is a step that many central banks did not anticipate,” said Mr Fan.

Geopolitical tensions haven’t impacted the price of Bitcoin in the same way as the physical asset.

Bitcoin is often referred to as “digital gold”, but the World Gold Council points out that the crypto asset didn’t follow the same upwards trajectory when Russia invaded Ukraine.

“All you have to do is rewind to the day that Russia invaded Ukraine and look at the difference in performance of the two different asset classes,” said Mr Fan.

The World Gold Council highlights the structural shifts in gold markets over the past 30 years, which have seen gold trading become more ubiquitous.

In particular, the introduction of gold ETFs, which allow anyone to easily trade gold on most online trading platforms.

Another major structural change for gold has been the central banks becoming net buyers of gold over the past 13 years, basically since the Global Financial Crisis (GFC) in 2008.

Before the GFC, central banks were actually net sellers of gold.

The gold market has undergone extensive transformation in the past 30 years, with gold now being sought by buyers of physical gold as well as being more extensively traded in derivatives markets.

Gold is one of the oldest commodities to be traded in the world and continues to carve out new meaning in modern financial markets.

DXY:

The DXY index is currently experiencing a strong bearish momentum, as it is trading below a major descending trend line. This suggests that there is further room for the price to drop.

In terms of potential price movement, the index could potentially continue its bearish momentum towards the 1st support level at 101.93. This level is a multi-swing low support and is also in confluence with the 78.60% Fibonacci retracement level. If price were to break this support level, it could drop further towards the 2nd support level at 100.82, which is a swing low support.

On the other hand, if price were to rise, it could face resistance at the 1st resistance level of 103.46, which is an overlap resistance level and also coincides with the 38.20% Fibonacci retracement level. A break of this resistance level could potentially lead to the next resistance level at 104.60, which is also an overlap resistance level.

EUR/USD:

The EUR/USD chart is currently experiencing bearish momentum, with the potential for a continuation towards the 1st support level.

The 1st support level is located at 1.0741, which is an overlap support and could potentially act as a barrier to further price declines. Additionally, this support level lines up with a 61.80% Fibonacci retracement, adding further weight to its significance. Should the price break through this level, the next support level is located at the same 1.0741 level, which is a multi-swing low support.

On the resistance side, we have the 1st resistance level at 1.0927, which is a swing high resistance. This level could potentially prevent the price from rising further. In addition to the 1st resistance level, there is an intermediate resistance level at 1.0845. This level is a multi-swing high resistance and lines up with a 61.80% Fibonacci retracement. A break above this level could trigger a bullish acceleration towards the 1st resistance level.

GBP/USD:

The overall momentum for the GBP/USD chart is bearish, with price potentially making a continuation towards the first support level.

Price is currently testing the first resistance at 1.2343, which is a multi-swing high resistance level. If price were to fail to break through this resistance, it could trigger a bearish move towards the first support at 1.2185. This level is a strong overlap support and has a 38.20% Fibonacci retracement lining up with it. If price were to break the first support, it could continue its bearish momentum towards the second support at 1.2127, which is also an overlap support and has a 38.20% Fibonacci retracement lining up with it.

There are two strong resistance levels that price could encounter on its way up. The first is at 1.2343, which has already been mentioned. The second resistance is at 1.2445, which is a multi-swing high resistance level. If price were to break through these two resistance levels, it could potentially shift the momentum to a bullish one.

It’s worth noting that there isn’t an intermediate resistance level between the current price and the first resistance level. This means that if price were to break through the first resistance, it could potentially trigger a strong bullish move towards higher resistance levels.

USD/CHF:

The USD/CHF pair is currently experiencing a bearish momentum on the chart, with price potentially continuing its bearish movement towards the first support. The pair’s overall momentum is bearish, and this is due to it being below a major descending trend line.

If the price continues its bearish momentum, it could potentially reach the first support at 0.9120. This level is a swing low support and could potentially halt the price’s drop. In case the price breaks through the first support, it could potentially reach the second support level at 0.9068. This level is a multi-swing low support and has held the price up several times in the past.

On the other hand, if the price manages to reverse its bearish momentum, it could potentially reach the first resistance at 0.9208. This level is an overlap resistance and could potentially push the price down. If the price manages to break through the first resistance, it could potentially reach the second resistance at 0.9257. This level is an overlap resistance and has a 61.80% Fibonacci retracement lining up with it.

USD/JPY:

The overall momentum of the USD/JPY chart remains bearish, with the price potentially making a bearish reaction off the 1st resistance and dropping towards the 1st support. The 1st support at 131.59 is a strong level, as it coincides with an overlap support and a 38.20% Fibonacci retracement. If the price were to break below this support, the next support level it could drop to is the 2nd support at 129.61, which is a multi-swing low support and a 78.60% Fibonacci retracement.

On the other hand, the 1st resistance at 132.81 is also a significant level, as it lines up with an overlap resistance and a 38.20% Fibonacci retracement. If the price were to break above this resistance, it could potentially rise towards the 2nd resistance at 134.55, which is an overlap resistance and a 61.80% Fibonacci retracement.

AUD/USD:

The overall momentum of AUD/USD is currently bearish. The price could potentially continue its bearish trend towards the first support at 0.6640, which is an overlap support. The second support at 0.6549 is a swing low support and could serve as a strong level if the price were to continue to drop.

On the other hand, the first resistance at 0.6774 is an overlap resistance and coincides with a 38.20% Fibonacci retracement. A breakout from this resistance level could signal a reversal of the current bearish momentum. The second resistance at 0.6876 is also an overlap resistance that the price may struggle to break through.

There is an intermediate resistance at 0.6712 between the current price and the first support. This is a multi-swing high resistance that aligns with a 61.80% Fibonacci retracement. If the price were to break this intermediate resistance level, it could trigger a strong bullish move towards the first resistance.

NZD/USD:

The NZD/USD chart is currently exhibiting bearish momentum, with the price potentially making a bearish continuation towards the 1st support. The first support is at 0.6180, which is a multi-swing low support that has held up in the past. If the price were to break through this support level, the next level it could drop to is the 2nd support at 0.6144. This support level is an overlap support and coincides with the 78.60% Fibonacci retracement, making it a strong level of support.

On the resistance side, the first resistance level is at 0.6266, which is an overlap resistance. The second resistance level is at 0.6388, which is also an overlap resistance. These levels could potentially hold up and prevent the price from rising any further.

USD/CAD:

The USD/CAD chart is showing overall bullish momentum, with price potentially bouncing off the 1st support level at 1.3521 and heading towards the 1st resistance level at 1.3657.

The first support level is a strong overlap support and could provide a solid foundation for the price to bounce back up. Additionally, there’s an intermediate support level at 1.3560 that coincides with the 50% Fibonacci retracement, adding to its strength as a potential support level.

On the resistance side, the 1st resistance level is also an overlap resistance and coincides with the 38.20% Fibonacci retracement, adding to its significance as a potential level for price to encounter resistance. If price were to break through the 1st resistance level, the next level it could potentially face is the 2nd resistance level at 1.3804, which is a multi-swing high resistance level.

DJ30:

The DJ30 chart has shown a bullish momentum lately, with prices potentially continuing to rise towards the 1st resistance level. Currently, the price is above both the Ichimoku cloud and an ascending trend line, providing support for a bullish continuation.

Looking at the support and resistance levels, we can see that the 1st support level is at 32,247.39, which is an overlap support. The 2nd support level is at 31,754.50, which is a multi-swing low support. These levels provide strong support for the price to potentially bounce off and head towards the 1st resistance level.

The 1st resistance level is at 32,990.69, which is an overlap resistance, and is also at the 50% Fibonacci retracement level. The 2nd resistance level is at 33,506.11, which is also an overlap resistance. The intermediate resistance level at 32,736.24 is a multi-swing high resistance and is at the 61.80% Fibonacci retracement level.

It’s important to note that while the chart has a bullish bias, there is still potential for the price to drop towards the support levels. However, if the price can bounce off the support levels, the momentum could carry the price towards the resistance levels.

GER30:

Overall, the momentum of the GER30 chart is bullish, as price is currently above the bullish Ichimoku cloud. This suggests that there is good support in place, contributing to the bullish momentum.

Price could potentially make a bullish continuation towards the first resistance level. However, it’s important to note that the overall momentum of the chart is always subject to change.

The first support level is located at 14960.89, which is an overlap support level. If the price falls towards this level, it is likely to find support and bounce back up. The second support level is at 14807.31, which is another overlap support level and coincides with the 61.80% Fibonacci retracement level. This support level may also provide a good buying opportunity.

On the other hand, the first resistance level is at 15241.58, which is an overlap resistance level. If the price rises towards this level, it is likely to face some selling pressure. The second resistance level is at 15488.32, which is also an overlap resistance level. If the price manages to break above this level, it could signal a strong bullish momentum and potential buying opportunity.

In summary, the overall momentum of the GER30 chart is bullish, and the price could potentially make a bullish continuation towards the first resistance level. The first and second support levels are at 14960.89 and 14807.31, respectively, while the first and second resistance levels are at 15241.58 and 15488.32, respectively. These levels are important to keep an eye on for potential buying or selling opportunities.

BTC/USD:

The overall momentum of BTC/USD remains bullish, as the price has the potential to continue its rise towards the first resistance level.

At present, the first support level is at 25966, which is a good multi-swing low support and coincides with the 38.20% Fibonacci retracement level. The second support is at 24526, which is another overlap support and coincides with the 50% Fibonacci retracement level. If the price bounces from the first support, it could rise to the first resistance level at 29373, which is a swing high resistance.

In addition, there is an intermediate resistance level at 28690, which is a good multi-swing high resistance level. If the price breaks through this intermediate resistance, it could potentially trigger a stronger bullish acceleration towards the first resistance.

US500

The US500 chart is currently showing bullish momentum, as the price is above a major ascending trend line. There are two potential support levels that could see the price bounce off and continue the bullish trend. The first support is located at 3903.06 and it is a multi-swing low support level. The second support is located at 3843.60 and it is also a multi-swing low support level.

On the other hand, there are also two potential resistance levels that the price could reach. The first resistance level is at 4038.30 and it is an overlap resistance level, with 78.60% Fibonacci retracement. The second resistance level is at 4077.26 and it is also an overlap resistance level.

If the price continues to show bullish momentum, it could potentially reach the first resistance level and bounce off it, continuing the uptrend. However, if the momentum turns bearish, the price could potentially drop to the first support level or even lower, breaking the ascending trend line and indicating a reversal of the overall bullish trend.

ETH/USD:

The overall momentum of the ETH/USD chart is bullish, indicating that there may be further upside potential in the near term. This is due to the fact that price is currently above a major ascending trend line, suggesting that bullish momentum is on the cards.

Looking at the potential price action, there is a possibility for a bullish continuation towards the first resistance level at 1852.01. Before that, the price could potentially bounce off the first support at 1667.31, which is a good level of support and also coincides with the 38.20% Fibonacci retracement level. If the price falls further, it could find support at the second level at 1558.42.

In terms of resistance, the first level at 1852.01 is a good level of overlap resistance. If the price manages to break above this level, it could potentially head towards the next resistance level at an overlap resistance of 1972.94.

WTI/USD:

WTI remains in a bearish momentum as the price could potentially make a bearish continuation towards its first support. The first support is seen at 71.46, which is an overlap support and a 38.20% Fibonacci retracement level. If the price breaks below this level, it could continue to drop towards the second support at 66.98, which is another overlap support.

On the upside, the first resistance is seen at 74.07, which is an overlap resistance and a 61.80% Fibonacci retracement level. If the price manages to break above this level, it could head towards the second resistance at 77.39, which is a multi-swing high resistance and a 78.60% Fibonacci retracement level.

XAU/USD (GOLD):

The price of XAU/USD is currently experiencing bearish momentum, indicating that it may potentially move towards the 1st support level. The overall momentum of the chart is bearish.

The 1st support level is at 1936, which is a good support level because it is an overlap support and coincides with the 38.20% Fibonacci retracement level. The 2nd support level at 1910 is also a good support level as it coincides with the 50% Fibonacci retracement level and is also an overlap support.

On the resistance side, the 1st resistance level is at 1980, which is a good resistance level as it is an overlap resistance and coincides with the 61.80% Fibonacci retracement level. The 2nd resistance level at 2022 is also a good resistance level as it is a multi-swing high resistance.

end.

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IC Markets Asia Fundamental Forecast | 30 March 2023

What happened in the US session?

The US Pending Home Sales m/m data release indicates a positive change of 0.8% (forecast -2.9%, previous 8.1%) in the number of homes under contract for sale in the last month, suggesting an improvement amid the slowdown of the housing market.

What does it mean for the Asia Session?

The data-light session will likely see the major pairs consolidate in the ranges established during the prior session.

The Dollar Index (DXY)

Key news events today

Final GDP q/q

Unemployment Claims

What can we expect from DXY today?

The forecasted and previous data show no change in the US final GDP q/q at 2.7%. However, Unemployment Claims are expected to increase from 191K to 196K. This could indicate weakness in the labour market and the overall economy, negatively impacting the USD. 

Central Bank Notes:

• The US banking system is sound and resilient, but recent developments may result in tighter credit conditions for households and businesses.
• The Federal Reserve has raised the target range for the federal funds rate to 4-3/4 to 5 per cent, committed to returning inflation to its 2 per cent objective.
• In determining the extent of future increases in the target range, the Committee will consider various factors, including the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and economic and financial developments.
• Next meeting is on 3 May 2023

Next 24 Hours Bias

Weak Bearish

Gold (XAU)

Key news events today

No major news events.

What can we expect from Gold today?

The latest CPI y/y for Australia showed a consecutive drop, suggesting an easing global inflation situation and potentially leading to a decrease in gold prices.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

No major news event for AUD today. The price direction could draw from the previous CPI y/y data release, which showed a consecutive drop to 6.8%.

Central Bank Notes:

• Cash rate raised by 25 basis points to 3.60%.
• Board prioritises returning inflation to target, with a likely need for further monetary policy tightening.
• Board to closely monitor the global economy, household spending trends, inflation and labour market outlook when assessing interest rate increases.
• Next meeting on 4 April 2023

Next 24 Hours Bias

Weak Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

The NZ Building Consents m/m data showed a 9.0% decline, far below the previous figure of 5.2%. This suggests a slowdown in the construction industry and may lead to a depreciation in the NZD. A drop in the upcoming release of the ANZ Business Confidence (previous -43.3) could exacerbate a downward price movement.

Central Bank Notes:

• Monetary Policy Committee increased the OCR from 4.25% to 4.75%
• Higher interest rates are needed to reduce inflation and support employment sustainably
• Severe storms in North Island will increase inflation and disrupt production.
• Next meeting is on 5 April 2023

Next 24 Hours Bias

Mixed

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

There is no major news event for JPY today, so price direction may depend on expectations for upcoming data releases. Tokyo Core CPI y/y is expected at 3.1%, down from the previous 3.3%. The anticipated drop in consumer prices could lead to a decline in JPY.

Central Bank Notes:

• The bank will continue with QQE with Yield Curve Control to achieve the price stability target of 2% 
• Japan’s economy is expected to recover gradually
• The bank will not hesitate to take additional easing measures if necessary
• Next meeting is on 27 April 2023 

Next 24 Hours Bias

Weak Bearish

The Euro (EUR)

Key news events today

German Prelim CPI m/m

What can we expect from EUR today?

The forecasted data is 0.6%, slightly lower than the previous month’s figure of 0.8%. If the actual figure comes in below the forecast, it may signal lower inflationary pressures but could lead only to a slight decrease in the value of the EUR since the ECB expressed hawkishness even amid the banking crisis.

Central Bank Notes:

• ECB raised interest rates by 50 basis points to ensure the 2% inflation target is met
• Inflation is projected to average 5.3% in 2023, with growth at 1%, and underlying price pressures remain strong
• The bank will continue to monitor market tensions closely and will be data-dependent in its policy rate decisions
• Next meeting on 4 May 2023

Next 24 Hours Bias

Mixed

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

As there is no major news event for the currency today, the price direction of CHF is likely to draw from the previously released Credit Suisse Economic Expectations data that showed a value of -41.3 (previous -12.3). This indicates that there has been a significant drop in economic expectations over the given time frame, which could lead to a decrease in the value of CHF.

Central Bank Notes:

• Raised policy rate to 1.5% to counter inflationary pressure and ensure price stability. The SNB may need to raise the policy rate further in the future
• The SNB is providing liquidity assistance to Credit Suisse, and the crisis has been halted
• The new inflation forecast assumes a policy rate of 1.5% and puts average annual inflation at 2.6% for 2023 and 2.0% for 2024 and 2025.
• Mortgage and real estate market vulnerabilities persist
• Next meeting on 11 April 2023

Next 24 Hours Bias

Weak Bearish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

MPC member Mann’s speech stated that reducing UK services inflation from 6% to 2% will be challenging, causing uncertainty and potentially reducing GBP’s value against other major currencies. The long-term impact is still being determined, but the BoE’s strong track record of managing inflation will likely prevent significant changes, despite the persistent core inflation remaining.

Central Bank Notes:

• The BoE’s MPC increased the Bank Rate by 25bps to 4.25%, with a majority of 7-2 in favour of the hike
• The UK banking system is judged to be robust and resilient.
• CPI inflation increased unexpectedly but is expected to fall sharply over the rest of the year due to lower energy prices.
• The MPC will continue to monitor inflationary pressures and adjust Bank Rate as necessary.
• Next meeting on 11 May 2023 

Next 24 Hours Bias

Weak Bearish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

Governor Council Member Gravelle suggests large-scale GOC bond purchases if faced with severe dysfunction, while Canada’s well-regulated financial system may still be affected by global events. Support for the system would be provided in times of widespread stress. 

Central Bank Notes:

• Bank of Canada maintains its target for the overnight rate at 4.5%
• Inflation eased in January, but price increases for food and shelter remain high
• BOC is prepared to increase the policy rate further to return inflation to the 2% target.
• Next meeting on 12 April 2023

Next 24 Hours Bias

Mixed

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Crude Oil Inventories decreased by 7.5M barrels, surpassing the forecasted and previous numbers of 1.8M and 1.1M barrels, respectively. This implies a reduction in supply and could lead to increased oil prices.

Next 24 Hours Bias

Bullish

Dear Trader,

Please find our updated Trading schedule as Australia will end Daylight Savings Time on Sunday , 02nd April, 2023.

While trading for most products will remain unaffected, there will be a change in the trading hours of some products.

MT4/MT5:

cTrader:

Kind regards,

IC Markets