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Friday 22nd March 2024: Asian markets hit highs amidst inflation surge and global optimism
Friday 22nd March 2024: Asian markets hit highs amidst inflation surge and global optimism

Friday 22nd March 2024: Asian markets hit highs amidst inflation surge and global optimism

379914   March 22, 2024 15:26   ICMarkets   Market News  

Global Markets:

  •  Asian Stock Markets : Nikkei up 0.15%, Shanghai Composite down 0.85%, Hang Seng down 2.32% ASX down 0.15%
  • Commodities : Gold at $2172.5 (-0.56%), Silver at $24.67 (-1.13%), Brent Oil at $85.23 (-0.62%), WTI Oil at $80.55 (-0.64%)
  • Rates : US 10-year yield at 4.24, UK 10-year yield at 4.024, Germany 10-year yield at 2.418

News & Data:

  • (USD) Federal Funds Rate 5.5% vs 5.5% expected

Markets Update:

Japan’s Nikkei 225 surged to a new all-time high, briefly surpassing 41,000 on Friday, driven by accelerated inflation in February. The country’s headline inflation rate rose to 2.8%, up from 2.2% in the previous month, with core inflation, excluding fresh food prices, also climbing to 2.8%. The Bank of Japan expressed confidence in achieving its 2% price stability target.

Despite the initial surge, the Nikkei retreated slightly to close just below 41,000, ending with a modest gain of 0.18%. Hong Kong’s Hang Seng index plunged by 2%, while Mainland China’s CSI 300 experienced a decline of 1.05%. The Hang Seng Tech index saw a significant drop of 4%, with Li Auto shares plummeting by 10% after slashing its first-quarter deliveries forecast.

In Australia, the S&P/ASX 200 slipped by 0.15%, while the Taiwan Weighted Index traded close to flatline levels following the central bank’s unexpected decision to raise its policy rate. In the United States, all three major indexes reached new highs, extending the rally from Thursday after the Federal Reserve’s decision to maintain steady rates and uphold its rate cut forecast for 2024.

The Dow Jones Industrial Average surged by 269.24 points, or 0.68%, to close at 39,781.37. The S&P 500 advanced by 0.32% to reach 5,241.53, while the Nasdaq Composite edged up by 0.20% to finish at 16,401.84. Jay Woods, chief global strategist at Freedom Capital Markets, remarked that investors have faith in the Fed’s actions, believing that rate cuts are forthcoming, leading to a positive market sentiment.

Upcoming Events: 

  • 1:00 PM GMT – USD Fed Chair Powell Speaks

The post Friday 22nd March 2024: Asian markets hit highs amidst inflation surge and global optimism first appeared on IC Markets | Official Blog.

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IC Markets Europe Fundamental Forecast | 22 March 2024
IC Markets Europe Fundamental Forecast | 22 March 2024

IC Markets Europe Fundamental Forecast | 22 March 2024

379900   March 22, 2024 14:45   ICMarkets   Market News  

IC Markets Europe Fundamental Forecast | 22 March 2024

What happened in the Asia session?

Japan’s national core CPI rose to an annual rate of 2.8% in February which was in line with market estimates. This index jumped from 2.0% from the previous month to mark the highest reading in four months. This re-acceleration in core inflation raises concerns that the Bank of Japan (BoJ) will now be forced to maintain a hawkish stance and potentially raise its key policy rate once more. The Japanese yen strengthened upon this news release with USD/JPY dropping from 151.85 to slide under 151.50 – this currency pair could continue to edge lower for the first half of the day.

What does it mean for the Europe & US sessions?

Retail sales in the UK rebounded strongly in January, increasing 3.4% MoM following December’s steep decline of 3.3%. The estimate for February points to choppy sales figures as it is now forecasted to tumble 0.4%. Should sales unexpectedly disappoint market expectations, the Pound is likely to be hit again causing GBP/USD to resume its downward slide.

Federal Reserve Chairman Jerome Powell is due to deliver the opening remarks at a Fed Listens event in Washington DC while Federal Reserve Governor Michael Barr will be speaking on international economic and monetary design at the Transnational Law Virtual Conference where audience questions are expected. Following Wednesday’s FOMC press conference, traders will be looking out for any fresh clues from the Fed Chair as well as Governor Barr with respect to the outlook on monetary policy. Once again, they have the ability to jawbone bond yields and the dollar towards their intended direction whether it’s lower or higher.

The Dollar Index (DXY)

Key news events today

Fed Chair Powell Speaks (1:00 pm GMT)

FOMC Member Barr Speaks (4:00 pm GMT)

What can we expect from DXY today?

Federal Reserve Chairman Jerome Powell is due to deliver the opening remarks at a Fed Listens event in Washington DC while Federal Reserve Governor Michael Barr will be speaking on international economic and monetary design at the Transnational Law Virtual Conference where audience questions are expected. Following Wednesday’s FOMC press conference, traders will be looking out for any fresh clues from the Fed Chair as well as Governor Barr with respect to the outlook on monetary policy. Once again, they have the ability to jawbone bond yields and the dollar towards their intended direction whether it’s lower or higher.

Central Bank Notes:

  • The Federal Funds Rate target range remained unchanged at 5.25% to 5.50% for the fifth meeting in a row.
  • The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals are moving into better balance.
  • The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks; inflation has eased over the past year but remains elevated.
  • Recent indicators suggest that economic activity has been expanding at a solid pace while job gains have remained strong, and the unemployment rate has remained low.
  • In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks and does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%.
  • In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans.
  • Next meeting runs from 30 April to 1 May 2024.

Next 24 Hours Bias

Medium Bullish


Gold (XAU)

Key news events today

Fed Chair Powell Speaks (1:00 pm GMT)

FOMC Member Barr Speaks (4:00 pm GMT)

What can we expect from Gold today?

Federal Reserve Chairman Jerome Powell is due to deliver the opening remarks at a Fed Listens event in Washington DC while Federal Reserve Governor Michael Barr will be speaking on international economic and monetary design at the Transnational Law Virtual Conference where audience questions are expected. Following Wednesday’s FOMC press conference, traders will be looking out for any fresh clues from the Fed Chair as well as Governor Barr with respect to the outlook on monetary policy. Once again, they have the ability to jawbone bond yields and the dollar towards their intended direction whether it’s lower or higher.

Next 24 Hours Bias

Medium Bearish


The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

Following yesterday’s blowout employment figures, the Aussie has reversed all of its prior gains as it dived from 0.6600 to fall under 0.6550 as Asian markets came online. This currency pair was under heavy selling pressure and this bearish momentum is likely to extend further today.

Central Bank Notes:

  • The RBA kept the cash rate target unchanged at 4.35%, marking the seventh pause out of the last eight board meetings.
  • The headline monthly CPI indicator was steady at 3.4% over the year to January, with momentum easing over recent months, driven by moderating goods inflation. Services inflation remains elevated, and is moderating at a more gradual pace.
  • The central forecasts are for inflation to return to the target range of 2–3% in 2025, and to the midpoint in 2026.
  • While recent data indicate that inflation is easing, it remains high. The Board expects that it will be some time yet before inflation is sustainably in the target range.
  • The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the Board is not ruling anything in or out.
  • Next meeting is on 7 May 2024.

Next 24 Hours Bias

Strong Bearish


The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Along with its Pacific neighbour, the Kiwi was one of the weakest currency pairs at the beginning of the Asia session. Strong overhead pressures continue to build for the Kiwi as it tumbled towards the 0.6000-threshold.

Central Bank Notes:

  • The Monetary Policy Committee kept the OCR unchanged at 5.50% for the fifth meeting in a row.
  • The Committee remains confident that the current level of the OCR is restricting demand. However, a sustained decline in capacity pressures in the New Zealand economy is required to ensure that headline inflation returns to the 1 to 3% target.
  • Core inflation and most measures of inflation expectations have declined, and the risks to the inflation outlook have become more balanced.
  • However, headline inflation remains above the 1 to 3% target band, limiting the Committee’s ability to tolerate upside inflation surprises.
  • The outlook for the China economy, New Zealand’s top trading partner, remains particularly weak relative to recent historical norms, with structural factors constraining long-term growth.
  • Next meeting is on 22 May 2024.

Next 24 Hours Bias

Medium Bearish


The Japanese Yen (JPY)

Key news events today

National Core CPI (11:30 pm GMT 21st March)

What can we expect from JPY today?

Japan’s national core CPI rose to an annual rate of 2.8% in February which was in line with market estimates. This index jumped from 2.0% from the previous month to mark the highest reading in four months. This re-acceleration in core inflation raises concerns that the Bank of Japan (BoJ) will now be forced to maintain a hawkish stance and potentially raise its key policy rate once more. The Japanese yen strengthened upon this news release with USD/JPY dropping from 151.85 to slide under 151.50 – this currency pair could continue to edge lower for the first half of the day.

Central Bank Notes:

  • The Bank considers that the policy framework of Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control and the negative interest rate policy to date have fulfilled their roles. With the price stability target of 2%, it will conduct monetary policy as appropriate, guiding the short-term interest rate as a primary policy tool.
  • The Bank of Japan decided on the following measures:
    1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0 to 0.1% while continuing its JGB purchases with broadly the same amount as before.
    2. In addition, the Bank will discontinue purchases of exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) and will also gradually reduce the amount of purchases of CP and corporate bonds and will discontinue the purchases in about one year.
  • Underlying CPI inflation is likely to increase gradually toward achieving the price stability target of 2%, as the output gap turns positive and as medium- to long-term inflation expectations and wage growth rise.
  • Japan’s economy is likely to continue recovering moderately for the time being, supported by factors such as the materialization of pent-up demand, although it is expected to be under downward pressure stemming from a slowdown in the pace of recovery in overseas economies.
  • Next meeting is on 26 April 2024.

Next 24 Hours Bias

Weak Bullish


The Euro (EUR)

Key news events today

German ifo Business Climate (9:00 am GMT)

What can we expect from EUR today?

The German ifo Business Climate has stabilized over the last couple of months as sentiment among German companies has brightened somewhat due to lower levels of pessimistic expectations. The manufacturing sector declined while the business climate in the services sector improved. Should the readings for the month of March beat market expectations, it could provide a much-needed lift for the Euro.

Central Bank Notes:

  • The ECB kept the three key interest rates unchanged for a fourth consecutive meeting, keeping the main refinancing rate on hold at 4.50%.
  • Since the last Governing Council meeting in January, inflation has declined further while the latest ECB staff projections show inflation has been revised down, in particular for 2024, which mainly reflects a lower contribution from energy prices.
  • The projections for inflation excluding energy and food have also been revised down and average 2.6% for 2024, 2.1% for 2025 and 2.0% for 2026. Although most measures of underlying inflation have eased further, domestic price pressures remain high, in part owing to strong growth in wages. 
  • Financing conditions are restrictive and the past interest rate increases continue to weigh on demand, which is helping push down inflation. Staff have revised down their growth projection for 2024 to 0.6%, with economic activity expected to remain subdued in the near term.
  • The Governing Council will continue to follow a data-dependent approach to determining the appropriate level and duration of restriction. In particular, the Governing Council’s interest rate decisions will be based on its assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission.
  • Next meeting is on 11 April 2024.

Next 24 Hours Bias

Medium Bearish


The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

In a surprise move, the Swiss National Bank (SNB) unexpectedly cut its key policy rate by 25 basis points, lowering it from 1.75% to 1.50%. For some months now, inflation has been back below 2% and thus in the range the SNB equates with price stability. The policy rate cut also supports economic activity and thus ensures that monetary conditions remain appropriate. This easing of monetary policy by the SNB initially weakened the Swiss franc, sending USD/CHF as high as 0.8975 in the immediate aftermath of the release of the statement. This currency pair hit an overnight high of 0.8994 and is likely to climb higher today.

Central Bank Notes:

  • The SNB eased monetary policy by lowering its key policy rate by 25 basis points, going from 1.75% to 1.50% in March.
  • For some months now, inflation has been back below 2% and thus in the range the SNB equates with price stability.
  • According to the new forecast, inflation is also likely to remain in this range over the next few years.
  • The forecast puts average annual inflation at 1.4% for 2024, 1.2% for 2025 and 1.1% for 2026, based on the assumption that the SNB policy rate is 1.5% over the entire forecast horizon.
  • Swiss GDP growth was moderate in the fourth quarter of last year and it is likely to remain modest in the coming quarters.
  • Overall, Switzerland’s GDP is likely to grow by around 1% this year.
  • Next meeting is on 20 June 2024.

Next 24 Hours Bias

Medium Bullish


The Pound (GBP)

Key news events today

Retail Sales (7:00 am GMT)

What can we expect from GBP today?

The Bank of England (BoE) kept its official bank rate on hold at 5.25% with a majority vote of 8 to 1 with one member preferring to reduce the bank rate by 25 basis points, to 5.0%. The Pound took a hit as GBP/USD tumbled from 1.2780 to an overnight low of 1.2650 following this dovish outcome.

Retail sales in the UK rebounded strongly in January, increasing 3.4% MoM following December’s steep decline of 3.3%. The estimate for February points to choppy sales figures as it is now forecasted to tumble 0.4%. Should sales unexpectedly disappoint market expectations, the Pound is likely to be hit again causing GBP/USD to resume its downward slide.

Central Bank Notes:

  • The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8-to-1 to maintain its Official Bank Rate at 5.25% for the fifth consecutive meeting.
  • One member preferred to reduce the Bank Rate by 25 basis points to 5.0%.
  • Twelve-month CPI inflation fell to 3.4% in February from 4.0% in January and December while Services consumer price inflation has declined but remains elevated, at 6.1% in February.
  • CPI inflation is projected to fall to slightly below the 2% target in 2024 Q2, marginally weaker than previously expected owing to the freeze in fuel duty announced in the Budget.
  • In the February Report projection, CPI inflation had been expected to fall temporarily to the 2% target in 2024 Q2 before increasing again in Q3 and Q4, to around 2.75%.
  • Having declined through the second half of last year, UK GDP and market sector output are expected to start growing again during the first half of this year while the fiscal measures in Spring Budget 2024 are likely to increase the level of GDP by around 0.25% over coming years.
  • Next meeting is on 9 May 2024.

Next 24 Hours Bias

Medium Bearish


The Canadian Dollar (CAD)

Key news events today

Retail Sales (12:30 pm GMT)

What can we expect from CAD today?

After growing strongly for the month of December (rising 0.9% MoM), Canada’s retail sales are now expected to fall 0.4% in January to mark the first decline in five months. This would also register the largest monthly drop since March 2023. Should sales print worse than originally anticipated, the Loonie could face heavy selling pressures causing USD/CAD to potentially move higher.

Central Bank Notes:

  • The Bank of Canada held its target for the overnight rate at 5.0% for the fourth meeting in a row while continuing its policy of quantitative tightening.
  • Canada’s economy grew in the fourth quarter by more than expected, although the pace remained weak and below potential.
  • CPI inflation eased to 2.9% in January as goods price inflation moderated further but shelter price inflation remains elevated and is the biggest contributor to inflation.
  • Underlying inflationary pressures persist: year-over-year and three-month measures of core inflation are in the 3.0% to 3.5% range, and the share of CPI components growing above 3.0% declined but is still above the historical average. The Bank continues to expect inflation to remain close to 3.0% during the first half of this year before gradually easing.
  • The Governing Council is still concerned about risks to the outlook for inflation, particularly the persistence in underlying inflation and wants to see further and sustained easing in core inflation and continues to focus on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour.
  • Next meeting is on 10 April 2024.

Next 24 Hours Bias

Medium Bullish


Oil

Key news events today

No major news events.

What can we expect from Oil today?

Crude oil prices pulled back overnight on news of growing hopes for a ceasefire in Gaza as well as a stronger dollar. A Reuters report stated that the US is set to table a U.N. draft resolution on Friday demanding an immediate ceasefire in Gaza lasting about six weeks which has overshadowed the shrinking the inventory levels as reported by the API and EIA earlier this week – higher drawdowns in these stockpiles typically signal stronger demand for crude oil in the US. WTI oil retreated away from the $82-level and dropped towards $81 per barrel as Asian markets came online.

Next 24 Hours Bias

Medium Bearish


The post IC Markets Europe Fundamental Forecast | 22 March 2024 first appeared on IC Markets | Official Blog.

Full Article

Friday 22nd March 2024: Technical Outlook and Review
Friday 22nd March 2024: Technical Outlook and Review

Friday 22nd March 2024: Technical Outlook and Review

379889   March 22, 2024 12:09   ICMarkets   Market News  

DXY:

The dollar index (DXY) chart currently demonstrates an overall bullish momentum. In this context, there is a potential scenario for price to rise towards the pivot before potentially making a bearish reaction and pull back towards the 1st support.

The pivot level at 104.18 is identified as an overlap resistance where price could potentially pull back from to drop lower. The 1st support level at 103.17 is marked as an overlap support that aligns close to the 61.80% Fibonacci Retracement level, reinforcing its significance as a key support level.

On the resistance side, the 1st resistance level at 104.43 is noted as a pullback resistance that aligns with the 78.60% Fibonacci Retracement level, potentially limiting any further upward movement.

EUR/USD:

The EUR/USD chart currently demonstrates an overall bearish momentum. In this context, there is a potential scenario for price to continue falling towards the pivot before potentially making a weak bullish reaction.

The pivot level at 1.0841 is identified as a pullback support that aligns with the 50.00% Fibonacci Retracement level where price could potentially bounce from to move higher. The 1st resistance level at 1.0911 is noted as a pullback resistance, potentially limiting any further upward movement.

On the support side, the 1st support level at 1.0805 is marked as a pullback support that aligns with the 61.80% Fibonacci Retracement level, reinforcing its significance as a key support level.

.

EUR/JPY:

The EUR/JPY chart currently demonstrates an overall bullish momentum. In this context, there is a potential scenario for price to potentially bounce off the pivot to rise towards the 1st resistance.

The pivot level at 164.61 is identified as an overlap support where price could potentially bounce from to rise higher. The 1st resistance level at 165.63 is noted as a resistance level that aligns with the 161.80% Fibonacci Extension level, potentially limiting any further upward movement.

On the support side, the 1st support level at 163.71 is marked as an overlap support, reinforcing its significance as a key support level.

EUR/GBP:

The EUR/GBP chart currently demonstrates an overall bullish momentum. In this context, there is a potential scenario for price to potentially bounce off the pivot to rise towards the 1st resistance.

The pivot level at 0.8570 is identified as a pullback where price could potentially bounce from to rise higher. The 1st resistance level at 0.8589 is noted as a pullback resistance, potentially limiting any further upward movement.

On the support side, the 1st support level at 0.8558 is marked as a pullback support, reinforcing its significance as a key support level.

GBP/USD:

The GBP/USD chart currently demonstrates an overall bearish momentum. In this context, there is a potential scenario for price to break under the pivot and fall towards the 1st support.

The pivot level at 1.2657 is identified as a pullback support where price could potentially break under to continue the bearish momentum. The 1st support level at 1.2607 is marked as a pullback support that aligns with the 78.60% Fibonacci Retracement level, reinforcing its significance as a key support level.

On the resistance side, the 1st resistance level at 1.2690 is noted as a pullback resistance, potentially limiting any further upward movement.

GBP/JPY:

The GBP/JPY chart currently demonstrates an overall bullish momentum. In this context, there is a potential scenario for price to potentially bounce off the pivot to rise towards the 1st resistance.

The pivot level at 191.32 is identified as a pullback support that aligns with the 38.20% Fibonacci Retracement level where price could potentially bounce from to rise higher. The 1st resistance level at 193.38 is noted as a pullback resistance, potentially limiting any further upward movement.

On the support side, the 1st support level at 190.13 is marked as an overlap support that aligns with the 61.80% Fibonacci Retracement level, reinforcing its significance as a key support level.

USD/CHF:

The USD/CHF chart currently demonstrates an overall bullish momentum. In this context, there is a potential scenario for price to potentially bounce off the pivot to rise towards the 1st resistance.

The pivot level at 0.8907 is identified as a pullback support that aligns close to the 50.00% Fibonacci Retracement level where price could potentially bounce from to rise higher. The 1st resistance level at 0.8999 is noted as a resistance level that aligns with the 78.60% Fibonacci Projection level, potentially limiting any further upward movement.

On the support side, the 1st support level at 0.8848 is marked as an overlap support that aligns close to the 50.00% Fibonacci Retracement level, reinforcing its significance as a key support level.

USD/JPY:

The USD/JPY chart currently demonstrates an overall bullish momentum. In this context, there is a potential scenario for price to potentially break above the pivot to rise towards the 1st resistance.

The pivot level at 151.78 is identified as a pullback resistance where price could potentially break above to rise higher. The 1st resistance level at 153.56 is noted as a resistance level that aligns with the 161.80% Fibonacci Extension level, potentially limiting any further upward movement.

On the support side, the 1st support level at 150.65 is marked as an overlap support that aligns close to the 23.60% Fibonacci Retracement level, reinforcing its significance as a key support level.

USD/CAD:

The USD/CAD chart currently demonstrates an overall bullish momentum. In this context, there is a potential scenario for price to rise towards the pivot and make a weak bearish reaction from here.

The pivot level at 1.3552 is identified as a pullback resistance that aligns with the 61.80% Fibonacci Retracement level where price could potentially make a weak bearish reaction. The 1st resistance level at 1.3592 is noted as a pullback resistance that sits above the 78.60% Fibonacci Retracement level, potentially limiting any further upward movement.

On the support side, the 1st support level at 1.3509 is marked as an overlap support, reinforcing its significance as a key support level.

AUD/USD:

The AUD/USD chart currently demonstrates an overall bearish momentum. In this context, there is a potential scenario for price to break under the pivot and fall towards the 1st support.

The pivot level at 0.6565 is identified as a pullback support where price could potentially break under to drop lower. The 1st support level at 0.6515 is marked as a pullback support that aligns with the 78.60% Fibonacci Retracement level, reinforcing its significance as a key support level.

On the resistance side, the 1st resistance level at 0.6625 is noted as a pullback resistance that aligns close to the 78.60% Fibonacci Retracement level, potentially limiting any further upward movement.

NZD/USD

The NZD/USD chart currently demonstrates an overall bearish momentum. In this context, there is a potential scenario for price to break under the pivot and fall towards the 1st support.

The pivot level at 0.6041 is identified as a pullback support where price could potentially break under to drop lower. The 1st support level at 0.6011 is also marked as a pullback support, reinforcing its significance as a key support level.

On the resistance side, the 1st resistance level at 0.6072 is noted as a pullback resistance, potentially limiting any further upward movement.

DJ30:

The Dow Jones chart (DJ30) currently demonstrates an overall bullish momentum. In this context, there is a potential scenario for price to break above the pivot and rise towards the 1st resistance.

The pivot level at 39,817.48 is identified as a level where price could potentially break above to rise higher. The 1st resistance level at 40,178.47 is noted as a resistance level that aligns with the 78.60% Fibonacci Projection level, potentially impeding any further bullish movement.

On the support side, the 1st support level at 39,186.86 is marked as a pullback support, reinforcing its significance as a key support level.

GER40:

The DAX chart (GER40) currently demonstrates an overall bullish momentum. In this context, there is a potential scenario for price to fall towards the pivot before making a bullish bounce towards the 1st resistance.

The pivot level at 18,039.70 is identified as an overlap support where price could potentially reverse from to bounce higher. The 1st resistance level at 18,261.01 is noted as a resistance level that aligns with the 61.80% Fibonacci Projection level, potentially impeding any further bullish movement.

On the support side, the 1st support level at 17,899.30 is marked as an overlap support, reinforcing its significance as a key support level.

US500: 

The S&P 500 chart (US500) currently demonstrates an overall bullish momentum. In this context, there is a potential scenario for price to break above the pivot and rise towards the 1st resistance.

The pivot level at 5,256.42 is identified as a level where price could potentially break above to rise higher. The 1st resistance level at 5,361.25 is noted as a resistance level that aligns with the 78.60% Fibonacci Projection level, potentially impeding any further bullish movement.

On the support side, the 1st support level at 5,185.97 is marked as a pullback support, reinforcing its significance as a key support level.

BTC/USD:

The Bitcoin chart (BTC/USD) currently demonstrates an overall bearish momentum. However, there is a potential scenario for price to rise towards the pivot and reverse to drop lower towards the 1st support.

The pivot level at 68,816.14 is identified as a pullback support that aligns with the 61.80% Fibonacci Retracement level where price could potentially make a bearish reversal and drop lower. The 1st support level at 60,981.92 is marked as a pullback support that aligns close to the 61.80% Fibonacci Retracement level, reinforcing its significance as a key support level.

To the upside, the 1st resistance level at 73,304.38 is noted as a swing-high resistance at the all-time high, further reinforcing its significance as a potential barrier to further bullish movement.

ETH/USD: 

The Ethereum chart (ETH/USD) currently demonstrates an overall bearish momentum. However, there is a potential scenario for price to rise towards the pivot and reverse to drop lower towards the 1st support.

The pivot level at 3,755.03 is identified as a pullback support that aligns close to the 61.80% Fibonacci Retracement level where price could potentially make a bearish reversal and drop lower. The 1st support level at 3,111.04 is marked as a pullback support that aligns with the 50.00% Fibonacci Retracement level, reinforcing its significance as a key support level.

To the upside, the 1st resistance level at 4,056.59 is noted as a swing-high resistance, further reinforcing its significance as a potential barrier to further bullish movement.

WTI/USD:

The WTI (West Texas Intermediate) oil chart currently demonstrates an overall bullish momentum. However, there is a potential scenario for price to fall towards the pivot before making a bullish bounce to rise towards the 1st resistance.

The pivot level at 80.32 is identified as an overlap support that aligns with the 50.00% Fibonacci Retracement level where price could potentially make a bullish bounce to climb higher. The 1st resistance level at 83.52 is noted as a pullback resistance, further reinforcing its significance as a potential barrier to further bullish movement.

To the downside, the 1st support level at 78.55 is marked as an overlap support that aligns close to the 78.60% Fibonacci Retracement level, reinforcing its significance as a key support level.

XAU/USD (GOLD):

The Gold (XAU/USD) chart currently demonstrates an overall bullish momentum. However, there is a potential scenario for price to fall towards the pivot before making a bullish bounce to rise towards the 1st resistance.

The pivot level at 2,146.16 is identified as a pullback support where price could potentially make a bullish bounce to climb higher. The 1st resistance level at 2,205.48 is noted as a pullback resistance that is situated close to the all-time high, further reinforcing its significance as a potential barrier to further bullish movement.

To the downside, the 1st support level at 2,125.17 is marked as a pullback support that aligns close to the 38.20% Fibonacci Retracement level, reinforcing its significance as a key support level.

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The post Friday 22nd March 2024: Technical Outlook and Review first appeared on IC Markets | Official Blog.

Full Article

IC Markets Asia Fundamental Forecast | 22 March 2024
IC Markets Asia Fundamental Forecast | 22 March 2024

IC Markets Asia Fundamental Forecast | 22 March 2024

379888   March 22, 2024 11:56   ICMarkets   Market News  

IC Markets Asia Fundamental Forecast | 22 March 2024

What happened in the US session?

In a surprise move, the Swiss National Bank (SNB) unexpectedly cut its key policy rate by 25 basis points, lowering it from 1.75% to 1.50%. For some months now, inflation has been back below 2% and thus in the range the SNB equates with price stability. The policy rate cut also supports economic activity and thus ensures that monetary conditions remain appropriate. This easing of monetary policy by the SNB initially weakened the Swiss franc, sending USD/CHF as high as 0.8975 in the immediate aftermath of the release of the statement. This currency pair hit an overnight high of 0.8994 and is likely to climb higher today.

Moving over to the UK, the Bank of England (BoE) kept its official bank rate on hold at 5.25% with a majority vote of 8 to 1 with one member preferring to reduce the bank rate by 25 basis points, to 5.0%. The Pound took a hit as GBP/USD tumbled from 1.2780 to an overnight low of 1.2650 following this dovish outcome.

Meanwhile, unemployment claims in the US continue to signal a resilient labour market as the figure of 210K came in lower than the estimate of 212K while the flash Composite PM reading for the month of March also beat market expectations to highlight strong economic expansion. Both of these data points functioned as a bullish catalyst for the dollar index (DXY) as it broke above the 104-threshold overnight.

What does it mean for the Asia Session?

Despite a dovish outcome at the recent FOMC meeting, dollar bulls have returned following strong US data overnight as the DXY was rising towards 104.20 this morning while gold prices came under pressure. Spot prices for this precious metal dipped under the threshold of $2,200/oz to hit a low of $2,165/oz during the US session. Overhead pressures remain for gold and it could resume the pullback as the day progresses.

The Dollar Index (DXY)

Key news events today

Fed Chair Powell Speaks (1:00 pm GMT)

FOMC Member Barr Speaks (4:00 pm GMT)

What can we expect from DXY today?

Federal Reserve Chairman Jerome Powell is due to deliver the opening remarks at a Fed Listens event in Washington DC while Federal Reserve Governor Michael Barr will be speaking on international economic and monetary design at the Transnational Law Virtual Conference where audience questions are expected. Following Wednesday’s FOMC press conference, traders will be looking out for any fresh clues from the Fed Chair as well as Governor Barr with respect to the outlook on monetary policy. Once again, they have the ability to jawbone bond yields and the dollar towards their intended direction whether it’s lower or higher.

Central Bank Notes:

  • The Federal Funds Rate target range remained unchanged at 5.25% to 5.50% for the fifth meeting in a row.
  • The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals are moving into better balance.
  • The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks; inflation has eased over the past year but remains elevated.
  • Recent indicators suggest that economic activity has been expanding at a solid pace while job gains have remained strong, and the unemployment rate has remained low.
  • In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks and does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%.
  • In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans.
  • Next meeting runs from 30 April to 1 May 2024.

Next 24 Hours Bias

Medium Bullish


Gold (XAU)

Key news events today

Fed Chair Powell Speaks (1:00 pm GMT)

FOMC Member Barr Speaks (4:00 pm GMT)

What can we expect from DXY today?

Federal Reserve Chairman Jerome Powell is due to deliver the opening remarks at a Fed Listens event in Washington DC while Federal Reserve Governor Michael Barr will be speaking on international economic and monetary design at the Transnational Law Virtual Conference where audience questions are expected. Following Wednesday’s FOMC press conference, traders will be looking out for any fresh clues from the Fed Chair as well as Governor Barr with respect to the outlook on monetary policy. Once again, they have the ability to jawbone bond yields and the dollar towards their intended direction whether it’s lower or higher.

Next 24 Hours Bias

Medium Bearish


The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

Following yesterday’s blowout employment figures, the Aussie has reversed all of its prior gains as it dived from 0.6600 to fall under 0.6550 as Asian markets came online. This currency pair was under heavy selling pressure and this bearish momentum is likely to extend further today.

Central Bank Notes:

  • The RBA kept the cash rate target unchanged at 4.35%, marking the seventh pause out of the last eight board meetings.
  • The headline monthly CPI indicator was steady at 3.4% over the year to January, with momentum easing over recent months, driven by moderating goods inflation. Services inflation remains elevated, and is moderating at a more gradual pace.
  • The central forecasts are for inflation to return to the target range of 2–3% in 2025, and to the midpoint in 2026.
  • While recent data indicate that inflation is easing, it remains high. The Board expects that it will be some time yet before inflation is sustainably in the target range.
  • The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the Board is not ruling anything in or out.
  • Next meeting is on 7 May 2024.

Next 24 Hours Bias

Strong Bearish


The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Along with its Pacific neighbour, the Kiwi was one of the weakest currency pairs at the beginning of the Asia session. Strong overhead pressures continue to build for the Kiwi as it tumbled towards the 0.6000-threshold.

Central Bank Notes:

  • The Monetary Policy Committee kept the OCR unchanged at 5.50% for the fifth meeting in a row.
  • The Committee remains confident that the current level of the OCR is restricting demand. However, a sustained decline in capacity pressures in the New Zealand economy is required to ensure that headline inflation returns to the 1 to 3% target.
  • Core inflation and most measures of inflation expectations have declined, and the risks to the inflation outlook have become more balanced.
  • However, headline inflation remains above the 1 to 3% target band, limiting the Committee’s ability to tolerate upside inflation surprises.
  • The outlook for the China economy, New Zealand’s top trading partner, remains particularly weak relative to recent historical norms, with structural factors constraining long-term growth.
  • Next meeting is on 22 May 2024.

Next 24 Hours Bias

Medium Bearish


The Japanese Yen (JPY)

Key news events today

National Core CPI (11:30 pm GMT 21st March)

What can we expect from JPY today?

Japan’s national core CPI rose to an annual rate of 2.8% in February which was in line with market estimates. This index jumped from 2.0% from the previous month to mark the highest reading in four months. This re-acceleration in core inflation raises concerns that the Bank of Japan (BoJ) will now be forced to maintain a hawkish stance and potentially raise its key policy rate once more. The Japanese yen strengthened upon this news release with USD/JPY dropping from 151.85 to slide under 151.50 – this currency pair could continue to edge lower for the first half of the day.

Central Bank Notes:

  • The Bank considers that the policy framework of Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control and the negative interest rate policy to date have fulfilled their roles. With the price stability target of 2%, it will conduct monetary policy as appropriate, guiding the short-term interest rate as a primary policy tool.
  • The Bank of Japan decided on the following measures:
    1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0 to 0.1% while continuing its JGB purchases with broadly the same amount as before.
    2. In addition, the Bank will discontinue purchases of exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) and will also gradually reduce the amount of purchases of CP and corporate bonds and will discontinue the purchases in about one year.
  • Underlying CPI inflation is likely to increase gradually toward achieving the price stability target of 2%, as the output gap turns positive and as medium- to long-term inflation expectations and wage growth rise.
  • Japan’s economy is likely to continue recovering moderately for the time being, supported by factors such as the materialization of pent-up demand, although it is expected to be under downward pressure stemming from a slowdown in the pace of recovery in overseas economies.
  • Next meeting is on 26 April 2024.

Next 24 Hours Bias

Weak Bullish


The Euro (EUR)

Key news events today

German ifo Business Climate (9:00 am GMT)

What can we expect from EUR today?

The German ifo Business Climate has stabilized over the last couple of months as sentiment among German companies has brightened somewhat due to lower levels of pessimistic expectations. The manufacturing sector declined while the business climate in the services sector improved. Should the readings for the month of March beat market expectations, it could provide a much-needed lift for the Euro.

Central Bank Notes:

  • The ECB kept the three key interest rates unchanged for a fourth consecutive meeting, keeping the main refinancing rate on hold at 4.50%.
  • Since the last Governing Council meeting in January, inflation has declined further while the latest ECB staff projections show inflation has been revised down, in particular for 2024, which mainly reflects a lower contribution from energy prices.
  • The projections for inflation excluding energy and food have also been revised down and average 2.6% for 2024, 2.1% for 2025 and 2.0% for 2026. Although most measures of underlying inflation have eased further, domestic price pressures remain high, in part owing to strong growth in wages. 
  • Financing conditions are restrictive and the past interest rate increases continue to weigh on demand, which is helping push down inflation. Staff have revised down their growth projection for 2024 to 0.6%, with economic activity expected to remain subdued in the near term.
  • The Governing Council will continue to follow a data-dependent approach to determining the appropriate level and duration of restriction. In particular, the Governing Council’s interest rate decisions will be based on its assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission.
  • Next meeting is on 11 April 2024.

Next 24 Hours Bias

Weak Bearish


The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

In a surprise move, the Swiss National Bank (SNB) unexpectedly cut its key policy rate by 25 basis points, lowering it from 1.75% to 1.50%. For some months now, inflation has been back below 2% and thus in the range the SNB equates with price stability. The policy rate cut also supports economic activity and thus ensures that monetary conditions remain appropriate. This easing of monetary policy by the SNB initially weakened the Swiss franc, sending USD/CHF as high as 0.8975 in the immediate aftermath of the release of the statement. This currency pair hit an overnight high of 0.8994 and is likely to climb higher today.

Central Bank Notes:

  • The SNB eased monetary policy by lowering its key policy rate by 25 basis points, going from 1.75% to 1.50% in March.
  • For some months now, inflation has been back below 2% and thus in the range the SNB equates with price stability.
  • According to the new forecast, inflation is also likely to remain in this range over the next few years.
  • The forecast puts average annual inflation at 1.4% for 2024, 1.2% for 2025 and 1.1% for 2026, based on the assumption that the SNB policy rate is 1.5% over the entire forecast horizon.
  • Swiss GDP growth was moderate in the fourth quarter of last year and it is likely to remain modest in the coming quarters.
  • Overall, Switzerland’s GDP is likely to grow by around 1% this year.
  • Next meeting is on 20 June 2024.

Next 24 Hours Bias

Medium Bullish


The Pound (GBP)

Key news events today

Retail Sales (7:00 am GMT)

What can we expect from GBP today?

The Bank of England (BoE) kept its official bank rate on hold at 5.25% with a majority vote of 8 to 1 with one member preferring to reduce the bank rate by 25 basis points, to 5.0%. The Pound took a hit as GBP/USD tumbled from 1.2780 to an overnight low of 1.2650 following this dovish outcome.

Retail sales in the UK rebounded strongly in January, increasing 3.4% MoM following December’s steep decline of 3.3%. The estimate for February points to choppy sales figures as it is now forecasted to tumble 0.4%. Should sales unexpectedly disappoint market expectations, the Pound is likely to be hit again causing GBP/USD to resume its downward slide.

Central Bank Notes:

  • The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 8-to-1 to maintain its Official Bank Rate at 5.25% for the fifth consecutive meeting.
  • One member preferred to reduce the Bank Rate by 25 basis points to 5.0%.
  • Twelve-month CPI inflation fell to 3.4% in February from 4.0% in January and December while Services consumer price inflation has declined but remains elevated, at 6.1% in February.
  • CPI inflation is projected to fall to slightly below the 2% target in 2024 Q2, marginally weaker than previously expected owing to the freeze in fuel duty announced in the Budget.
  • In the February Report projection, CPI inflation had been expected to fall temporarily to the 2% target in 2024 Q2 before increasing again in Q3 and Q4, to around 2.75%.
  • Having declined through the second half of last year, UK GDP and market sector output are expected to start growing again during the first half of this year while the fiscal measures in Spring Budget 2024 are likely to increase the level of GDP by around 0.25% over coming years.
  • Next meeting is on 9 May 2024.

Next 24 Hours Bias

Medium Bearish


The Canadian Dollar (CAD)

Key news events today

Retail Sales (12:30 pm GMT)

What can we expect from CAD today?

After growing strongly for the month of December (rising 0.9% MoM), Canada’s retail sales are now expected to fall 0.4% in January to mark the first decline in five months. This would also register the largest monthly drop since March 2023. Should sales print worse than originally anticipated, the Loonie could face heavy selling pressures causing USD/CAD to potentially move higher.

Central Bank Notes:

  • The Bank of Canada held its target for the overnight rate at 5.0% for the fourth meeting in a row while continuing its policy of quantitative tightening.
  • Canada’s economy grew in the fourth quarter by more than expected, although the pace remained weak and below potential.
  • CPI inflation eased to 2.9% in January as goods price inflation moderated further but shelter price inflation remains elevated and is the biggest contributor to inflation.
  • Underlying inflationary pressures persist: year-over-year and three-month measures of core inflation are in the 3.0% to 3.5% range, and the share of CPI components growing above 3.0% declined but is still above the historical average. The Bank continues to expect inflation to remain close to 3.0% during the first half of this year before gradually easing.
  • The Governing Council is still concerned about risks to the outlook for inflation, particularly the persistence in underlying inflation and wants to see further and sustained easing in core inflation and continues to focus on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour.
  • Next meeting is on 10 April 2024.

Next 24 Hours Bias

Medium Bullish


Oil

Key news events today

No major news events.

What can we expect from Oil today?

Crude oil prices pulled back overnight on news of growing hopes for a ceasefire in Gaza as well as a stronger dollar. A Reuters report stated that the US is set to table a U.N. draft resolution on Friday demanding an immediate ceasefire in Gaza lasting about six weeks which has overshadowed the shrinking the inventory levels as reported by the API and EIA earlier this week – higher drawdowns in these stockpiles typically signal stronger demand for crude oil in the US. WTI oil retreated away from the $82-level and dropped towards $81 per barrel as Asian markets came online.

Next 24 Hours Bias

Medium Bearish


The post IC Markets Asia Fundamental Forecast | 22 March 2024 first appeared on IC Markets | Official Blog.

Full Article

Ex-Dividend 22/03/2024
Ex-Dividend 22/03/2024

Ex-Dividend 22/03/2024

379886   March 22, 2024 11:49   ICMarkets   Market News  

1
Ex-Dividends
2
22/3/2024
3
Indices Name
Index Adjustment Points
4
Australia 200 CFD
AUS200
5
IBEX-35 Index ES35
6
France 40 CFD F40
7
Hong Kong 50 CFD
HK50 1.03
8
Italy 40 CFD IT40
9
Japan 225 CFD
JP225
10
EU Stocks 50 CFD
STOXX50 4.61
11
UK 100 CFD UK100
12
US SP 500 CFD
US500 0.26
13
Wall Street CFD
US30
14
US Tech 100 CFD
USTEC
15
FTSE CHINA 50
CHINA50
16
Canada 60 CFD
CA60 0.19
17
Germany Tech 40 CFD
TecDE30
18
Germany Mid 50 CFD
MidDE50
19
Netherlands 25 CFD
NETH25
20
Switzerland 20 CFD
SWI20
21
Hong Kong China H-shares CFD
CHINAH
22
Norway 25 CFD
NOR25
23
South Africa 40 CFD
SA40
24
Sweden 30 CFD
SE30 8.19
25
US 2000 CFD US2000 0.06

The post Ex-Dividend 22/03/2024 first appeared on IC Markets | Official Blog.

Full Article

General Market Analysis 22/03/2024
General Market Analysis 22/03/2024

General Market Analysis 22/03/2024

379877   March 22, 2024 10:40   ICMarkets   Market News  

Strong US Data Pushes Markets to Record Highs Again – Dow up 0.7%

Another set of strong numbers in the US helped to push stock indices to fresh record highs yet again yesterday. The S&P hit its 20th record high this year as it gained another 0.32% on the day, the Dow and Nasdaq also registered record levels, adding 0.68% and 0.20% respectively. FX markets saw increased volatility again as the dollar initially continued its post-Fed decline before rallying strongly later in the day on the back of stronger US numbers and other central bank updates. US treasury yields gained on the day, the 2-year adding 3.2 basis points to move up to 4.636% and the 10-year grinding up to 4.272%. Oil prices drifted slightly lower, but probably the standout move on the day came in Gold which touched a new record high again at $2,222.39 before dropping back down to finish close to yesterday’s open.

Dollar Swiftly Back in Favour with FX Traders

The dollar swiftly reversed its post-Fed losses in trading yesterday as strong data prints confirmed a resilient US economy. The Philly Fed Manufacturing Index, Flash PMI, Existing Home Sales, and the weekly unemployment claims numbers all came in better than expected to push the dollar higher just a day after a more dovish FOMC led to strong losses for the greenback. Earlier in the day, a shock cut from the Swiss National Bank and a more dovish outlook from the Bank of England helped to push their respective currencies lower against the dollar aiding its initial move back up, but it was the local data that really pushed the move. Traders will continue to monitor data closely after Wednesday’s Fed meeting conclusion and FX markets can be relied upon to be first out of the blocks to push markets to where they should be based on the data rather than central bank rhetoric.

Another Busy Trading Day Ahead to Close out the Week

Traders are expecting more volatility ahead in the final few sessions of what has already been a hectic week for markets. Asian investors will get a bit of relief on Friday with nothing major on the calendar in the day’s first trading session. But early in the European day, the focus will be back on the UK, which saw big market moves yesterday post the BOE rate call, as the latest Retail Sales numbers are released. Canadian Retail Sales data is also due out early in the North American session, but we are likely to see more action south of the border later in the day as we hear from Fed Chair Jerome Powell when he speaks at a Fed event in Washington DC. FOMC members Michael Barr and Raphael Bostic are also scheduled to speak later in the day, although expect the Chair’s comments to dominate market moves.

The post General Market Analysis 22/03/2024 first appeared on IC Markets | Official Blog.

Full Article

IC Markets Europe Fundamental Forecast | 21 March 2024
IC Markets Europe Fundamental Forecast | 21 March 2024

IC Markets Europe Fundamental Forecast | 21 March 2024

379556   March 21, 2024 14:26   ICMarkets   Market News  

IC Markets Europe Fundamental Forecast | 21 March 2024

What happened in the Asia session?

Employment growth in Australia exploded for the month of February as a whopping 116.5K jobs were added versus the estimate of just 40K while the unemployment rate dropped from 4.1% to 3.7%, also lower than its forecast of 4.0%. This robust report functioned as an additional tailwind for the Aussie as it briefly climbed above the 0.6100-threshold – this currency pair should continue to climb higher as the day progresses.

What does it mean for the Europe & US sessions?

The Swiss National Bank (SNB) is expected to maintain its key policy rate on hold at 1.75% for the third consecutive meeting – no surprises here. SNB Governor Thomas Jordan will then deliver his press conference following the release of the monetary policy statement where traders will be watching out for any additional clues. Should he communicate a ‘dovish’ outlook on future monetary policy action, this current downward slide in USD/CHF could slow during the European session as demand for the Swiss franc may pick up slightly.

Not only have unemployment claims trended lower since February, most of the results have also printed lower than their respective forecasts which signals a robust labour market. This week’s estimate of 212K hints at a continuation of this downtrend and should claims print lower than this estimate, it could potentially function as a short-term boost for the dollar.

The Dollar Index (DXY)

Key news events today

Unemployment Claims (12:30 pm GMT)

Composite PMI (1:45 pm GMT)

What can we expect from DXY today?

Not only have unemployment claims trended lower since February, most of the results have also printed lower than their respective forecasts which signals a robust labour market. This week’s estimate of 212K hints at a continuation of this downtrend and should claims print lower than this estimate, it could potentially function as a short-term boost for the dollar.

The flash readings for the Composite PMI for the month of March point to another month of expansion for the manufacturing as well as the services sector. Overall output has expanded since early 2023 despite the high interest rate environment. Should the flash readings signal another month of robust growth, it could provide an additional tailwind for the dollar.

Central Bank Notes:

  • The Federal Funds Rate target range remained unchanged at 5.25% to 5.50% for the fifth meeting in a row.
  • The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals are moving into better balance.
  • The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks; inflation has eased over the past year but remains elevated.
  • Recent indicators suggest that economic activity has been expanding at a solid pace while job gains have remained strong, and the unemployment rate has remained low.
  • In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks and does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%.
  • In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans.
  • Next meeting runs from 30 April to 1 May 2024.

Next 24 Hours Bias

Medium Bearish


Gold (XAU)

Key news events today

Unemployment Claims (12:30 pm GMT)

Composite PMI (1:45 pm GMT)

What can we expect from Gold today?

Not only have unemployment claims trended lower since February, most of the results have also printed lower than their respective forecasts which signals a robust labour market. This week’s estimate of 212K hints at a continuation of this downtrend and should claims print lower than this estimate, it could potentially function as a short-term boost for the dollar.

The flash readings for the Composite PMI for the month of March point to another month of expansion for the manufacturing as well as the services sector. Overall output has expanded since early 2023 despite the high interest rate environment. Should the flash readings signal another month of robust growth, it could provide an additional tailwind for the dollar. It is bound to be another volatile period for gold prices during the US session.

Next 24 Hours Bias

Medium Bullish


The Australian Dollar (AUD)

Key news events today

Labour Force Report (12:30 am GMT)

What can we expect from AUD today?

Employment growth in Australia exploded for the month of February as a whopping 116.5K jobs were added versus the estimate of just 40K while the unemployment rate dropped from 4.1% to 3.7%, also lower than its forecast of 4.0%. This robust report functioned as an additional tailwind for the Aussie as it briefly climbed above the 0.6100-threshold – this currency pair should continue to climb higher as the day progresses.

Central Bank Notes:

  • The RBA kept the cash rate target unchanged at 4.35%, marking the seventh pause out of the last eight board meetings.
  • The headline monthly CPI indicator was steady at 3.4% over the year to January, with momentum easing over recent months, driven by moderating goods inflation. Services inflation remains elevated, and is moderating at a more gradual pace.
  • The central forecasts are for inflation to return to the target range of 2–3% in 2025, and to the midpoint in 2026.
  • While recent data indicate that inflation is easing, it remains high. The Board expects that it will be some time yet before inflation is sustainably in the target range.
  • The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the Board is not ruling anything in or out.
  • Next meeting is on 7 May 2024.

Next 24 Hours Bias

Strong Bullish


The Kiwi Dollar (NZD)

Key news events today

GDP (9:45 pm GMT 20th March)

What can we expect from NZD today?

New Zealand’s economy declined 0.1% QoQ in the fourth-quarter of 2023, missing the estimate of a 0.1% GDP growth. Despite a struggling economy, the Kiwi was lifted following a ‘dovish’ rhetoric by Federal Reserve Chairman Jerome Powell as it hit an overnight high of 0.6085 and is likely to remain elevated today.

Central Bank Notes:

  • The Monetary Policy Committee kept the OCR unchanged at 5.50% for the fifth meeting in a row.
  • The Committee remains confident that the current level of the OCR is restricting demand. However, a sustained decline in capacity pressures in the New Zealand economy is required to ensure that headline inflation returns to the 1 to 3% target.
  • Core inflation and most measures of inflation expectations have declined, and the risks to the inflation outlook have become more balanced.
  • However, headline inflation remains above the 1 to 3% target band, limiting the Committee’s ability to tolerate upside inflation surprises.
  • The outlook for the China economy, New Zealand’s top trading partner, remains particularly weak relative to recent historical norms, with structural factors constraining long-term growth.
  • Next meeting is on 22 May 2024.

Next 24 Hours Bias

Medium Bullish


The Japanese Yen (JPY)

Key news events today

National Core CPI (11:30 pm GMT)

What can we expect from JPY today?

Inflation in Japan, particularly the core CPI, has moderated lower since the third quarter of 2023 easing to a growth rate of 2.0% YoY in January – the lowest level since March 2022. However, February’s estimate of 2.8% hints at a re-acceleration of core inflation which is likely to spur another strong rally in the Japanese yen and potentially drive USD/JPY lower.

Central Bank Notes:

  • The Bank considers that the policy framework of Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control and the negative interest rate policy to date have fulfilled their roles. With the price stability target of 2%, it will conduct monetary policy as appropriate, guiding the short-term interest rate as a primary policy tool.
  • The Bank of Japan decided on the following measures:
    1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0 to 0.1% while continuing its JGB purchases with broadly the same amount as before.
    2. In addition, the Bank will discontinue purchases of exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) and will also gradually reduce the amount of purchases of CP and corporate bonds and will discontinue the purchases in about one year.
  • Underlying CPI inflation is likely to increase gradually toward achieving the price stability target of 2%, as the output gap turns positive and as medium- to long-term inflation expectations and wage growth rise.
  • Japan’s economy is likely to continue recovering moderately for the time being, supported by factors such as the materialization of pent-up demand, although it is expected to be under downward pressure stemming from a slowdown in the pace of recovery in overseas economies.
  • Next meeting is on 26 April 2024.

Next 24 Hours Bias

Medium Bearish


The Euro (EUR)

Key news events today

Composite PMI (9:00 am GMT)

What can we expect from EUR today?

The March estimate for the Composite PMI shows overall activity contracting once more in the Eurozone – economic output has been depressed since mid-2023. Should the flash figures print lower than the estimates, this result could cap some of the recent gains seen in the Euro following the outcome of the FOMC meeting overnight.

Central Bank Notes:

  • The ECB kept the three key interest rates unchanged for a fourth consecutive meeting, keeping the main refinancing rate on hold at 4.50%.
  • Since the last Governing Council meeting in January, inflation has declined further while the latest ECB staff projections show inflation has been revised down, in particular for 2024, which mainly reflects a lower contribution from energy prices.
  • The projections for inflation excluding energy and food have also been revised down and average 2.6% for 2024, 2.1% for 2025 and 2.0% for 2026. Although most measures of underlying inflation have eased further, domestic price pressures remain high, in part owing to strong growth in wages. 
  • Financing conditions are restrictive and the past interest rate increases continue to weigh on demand, which is helping push down inflation. Staff have revised down their growth projection for 2024 to 0.6%, with economic activity expected to remain subdued in the near term.
  • The Governing Council will continue to follow a data-dependent approach to determining the appropriate level and duration of restriction. In particular, the Governing Council’s interest rate decisions will be based on its assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission.
  • Next meeting is on 11 April 2024.

Next 24 Hours Bias

Medium Bullish


The Swiss Franc (CHF)

Key news events today

SNB Monetary Policy Assessment (8:30 am GMT)

SNB Press Conference (9:00 am GMT)

What can we expect from CHF today?

The Swiss National Bank (SNB) is expected to maintain its key policy rate on hold at 1.75% for the third consecutive meeting – no surprises here. SNB Governor Thomas Jordan will then deliver his press conference following the release of the monetary policy statement where traders will be watching out for any additional clues. Should he communicate a ‘dovish’ outlook on future monetary policy action, this current downward slide in USD/CHF could slow during the European session as demand for the Swiss franc may pick up slightly.

Central Bank Notes:

  • The SNB kept the policy rate unchanged at 1.75% for a second consecutive meeting in December.
  • The inflation forecast puts average annual inflation at 2.1% for 2023, 1.9% for

2024 and 1.6% for 2025.

  • GDP growth is likely to be weak in the coming quarters; subdued demand from abroad and the tighter financing conditions are having a dampening effect.
  • Switzerland’s GDP is likely to grow by around 1% this year. For 2024, the SNB currently expects growth of between 0.5% and 1%.
  • Next meeting is on 21 March 2024.

Next 24 Hours Bias

Medium Bearish


The Pound (GBP)

Key news events today

Composite PMI (9:30 am GMT)

What can we expect from GBP today?

The Composite PMI output returned to expansion in November 2023 as a robust services sector pulled up overall economic activity in the UK. The flash reading for the month of March points to overall activity expanding strongly for the fifth month in a row – this result is likely to provide additional tailwinds for the Pound as GBP/UDS rose above the key threshold of 1.2800 as Asian markets came online.

Central Bank Notes:

  • The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 6-to-3 to maintain its Official Bank Rate at 5.25% for the fourth consecutive meeting.
  • Two members preferred to increase the Bank Rate by 0.25% to 5.50% while one member preferred to reduce Bank Rate by 0.25% to 5.00%.
  • CPI inflation remains well above the 2% target, with twelve-month CPI inflation increasing from 3.9% in November to 4.0% in December 2023 while wage growth has eased across a number of measures and is projected to decline further in coming quarters, although still elevated.
  • This downside news has been broad-based, reflecting lower fuel, core goods and services price inflation.
  • CPI inflation is projected to be 2.3% in two years’ time and 1.9% in three years.
  • Next meeting is on 21 March 2024.

Next 24 Hours Bias

Medium Bullish


The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

A ‘dovish’ press conference by Federal Reserve Chairman Jerome Powell sent USD/CAD crashing overnight. This currency pair dived from 1.3580 to as low as 1.3470 at the beginning of the Asia session, shedding over 100 pips in the process. Overhead pressures remain and USD/CAD is likely to slide lower as the day progresses.

Central Bank Notes:

  • The Bank of Canada held its target for the overnight rate at 5.0% for the fourth meeting in a row while continuing its policy of quantitative tightening.
  • Canada’s economy grew in the fourth quarter by more than expected, although the pace remained weak and below potential.
  • CPI inflation eased to 2.9% in January as goods price inflation moderated further but shelter price inflation remains elevated and is the biggest contributor to inflation.
  • Underlying inflationary pressures persist: year-over-year and three-month measures of core inflation are in the 3.0% to 3.5% range, and the share of CPI components growing above 3.0% declined but is still above the historical average. The Bank continues to expect inflation to remain close to 3.0% during the first half of this year before gradually easing.
  • The Governing Council is still concerned about risks to the outlook for inflation, particularly the persistence in underlying inflation and wants to see further and sustained easing in core inflation and continues to focus on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour.
  • Next meeting is on 10 April 2024.

Next 24 Hours Bias

Medium Bullish


Oil

Key news events today

No major news events.

What can we expect from Oil today?

Following the larger-than-expected drawdown in API stockpiles, the EIA oil inventories also declined strongly as 2.0M barrels of crude were removed from storage – a figure that was double of the estimate of a 0.9M-draw. Although prices for crude oil pulled back yesterday with WTI oil reversing from Tuesday’s high $83.75, this commodity found support around the region of $81.50 per barrel overnight and could edge higher today.

Next 24 Hours Bias

Weak Bullish


The post IC Markets Europe Fundamental Forecast | 21 March 2024 first appeared on IC Markets | Official Blog.

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Thursday 21st March 2024 : Asian Markets Reach New Highs on Fed’s Rate Cut Forecast
Thursday 21st March 2024 : Asian Markets Reach New Highs on Fed’s Rate Cut Forecast

Thursday 21st March 2024 : Asian Markets Reach New Highs on Fed’s Rate Cut Forecast

379555   March 21, 2024 14:26   ICMarkets   Market News  

Global Markets:

  •  Asian Stock Markets : Nikkei up 2.08%, Shanghai Composite up 0.02%, Hang Seng up 2.28% ASX up 2.12%
  • Commodities : Gold at $2209.5 (2.26%), Silver at $25.87 (3.13%), Brent Oil at $86.43 (0.52%), WTI Oil at $81.7 (0.59%)
  • Rates : US 10-year yield at 4.27, UK 10-year yield at 4.054, Germany 10-year yield at 2.432

News & Data:

  • (USD) Federal Funds Rate 5.5% vs 5.5% expected

Markets Update:

On Thursday, Japan’s stock market hit a new all-time high, buoyed by Asian markets following the Federal Reserve’s decision to maintain its forecast for three rate cuts this year. The Fed kept rates steady at 5.25%-5.5% during its latest meeting, with its “dot plot” indicating the expectation of three cuts, though without specifying their timing. The updated dot plot also hinted at three cuts in 2025, one fewer than previously projected.

Asia’s markets soared, with South Korea’s Kospi surging over 2.35% to its highest level since April 2022, and Japan’s Nikkei 225 climbing 2.08% to reach a fresh all-time high. Hong Kong’s Hang Seng index saw a robust gain of 1.74%, while mainland China’s CSI 300 experienced a slight dip of 0.17%. In Australia, the S&P/ASX 200 advanced by 2.12%, supported by positive flash data indicating accelerated business activity in March.

In the U.S., all three major indexes closed higher overnight, with the Dow Jones Industrial Average rallying by 1.03% to finish at 39,512.13 and the S&P 500 gaining 0.89% to close at 5,224.62, surpassing the 5,200 mark for the first time. The Nasdaq Composite also surged by 1.25%, driven primarily by megacap tech stocks.

Overall, the global market sentiment remains optimistic, with investors reacting positively to the Fed’s decision and economic indicators pointing towards continued growth. Japan’s record high and the strong performance across Asian and U.S. markets reflect this upbeat outlook, despite some fluctuations and uncertainties.

Upcoming Events: 

  • 12:00 PM GMT – GBP Official Bank Rate
  • 12:00 PM GMT – GBP Monetary Policy Summary
  • 12:30 PM GMT – USD Unemployment Claims

The post Thursday 21st March 2024 : Asian Markets Reach New Highs on Fed’s Rate Cut Forecast first appeared on IC Markets | Official Blog.

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Thursday 21st March 2024 : Technical Outlook and Review
Thursday 21st March 2024 : Technical Outlook and Review

Thursday 21st March 2024 : Technical Outlook and Review

379526   March 21, 2024 11:21   ICMarkets   Market News  

DXY:

For DXY, in alignment with the overall bullish momentum of the chart, there’s a potential scenario indicating a bullish bounce off the pivot level, possibly leading towards the 1st resistance.

The pivot at 103.04 serves as a significant pullback support, reinforced by the 61.80% Fibonacci Retracement, suggesting a level where buying interest may emerge, potentially driving the price higher.

Additionally, the 1st support at 102.21 acts as multi-swing low support, indicating historical significance as a level where buyers have intervened previously, further strengthening the bullish bias.

On the upside, the 1st resistance at 104.14 presents a barrier to further upward movement, supported by multi-swing high resistance.

EUR/USD:

For EUR/USD, reflecting the prevailing bearish momentum, there’s a possibility of a bearish reaction from the pivot level, potentially leading to a decline towards the 1st support.

The pivot at 1.0951 indicates multi-swing high resistance, suggesting a significant level where selling pressure might intensify, potentially triggering a bearish move.

Supporting this view, the 1st support at 1.0900 serves as a pullback support, indicating a historical level where buying interest has emerged previously, potentially slowing down the downward momentum.

On the upside, the 1st resistance at 1.0998 forms multi-swing high resistance, reinforced by the 127.20% Fibonacci Extension, acting as a barrier to further upward movement.

EUR/JPY:

For EUR/JPY, reflecting the prevailing bullish momentum, there’s a potential for a bullish bounce from the pivot level, indicating a move towards the 1st resistance.

The pivot at 163.70 serves as an overlap support, suggesting a significant level where buying interest may emerge, further bolstered by its historical significance.

Additionally, the 1st support at 162.89 acts as pullback support, coinciding with the 50% Fibonacci Retracement level, indicating a confluence of support factors that could attract buyers and potentially fuel upward movement.

Conversely, the 1st resistance at 165.17 forms a barrier to further upward movement, supported by swing high resistance, suggesting a level where selling pressure might intensify.

EUR/GBP:

For EUR/GBP, with the chart indicating neutral momentum, there’s a likelihood of price fluctuating between the 1st support and 1st resistance levels.

The 1st support at 0.8532 is significant, serving as an overlap support, indicating historical significance as a level where buying interest has intervened previously.

Conversely, the 1st resistance at 0.8558 acts as multi-swing high resistance, forming a barrier to upward movement. 

GBP/USD:

For GBP/USD, aligning with the bearish momentum, there’s a potential scenario indicating a bearish reaction from the pivot level, possibly leading to a decline towards the 1st support.

The pivot at 1.2805 signifies an overlap resistance, reinforced by the 61.80% Fibonacci Retracement, suggesting a significant level where selling pressure could strengthen.

Supporting this outlook, the 1st support at 1.2700 acts as an overlap support, indicating historical significance as a level where buying interest has emerged previously, potentially providing a floor for the price decline.

On the resistance side, the 1st resistance at 1.2894 serves as swing high resistance, suggesting a barrier to further upward movement.

.

GBP/JPY:

For GBP/JPY, in line with the bullish momentum, there’s a potential scenario indicating a bullish bounce from the pivot level, possibly aiming towards the 1st resistance.

The pivot at 191.29 is significant, identified as pullback support, reinforced by the 38.20% Fibonacci Retracement, suggesting a pivotal level where buying interest might emerge. Additionally, the 1st support at 189.66 serves as overlap support, indicating historical significance as a level where buyers intervened.

On the resistance side, the 1st resistance at 193.37 presents a barrier to upward movement, supported by swing high resistance, potentially prompting profit-taking or selling pressure near this level.

USD/CHF:

For USD/CHF, in line with the bullish momentum, there’s a potential scenario suggesting a bullish bounce from the pivot level, possibly leading to an advance towards the 1st resistance.

The pivot at 0.8818 signifies an overlap support, indicating a significant level where buying interest may emerge, potentially providing a foundation for a bullish move.

Supporting this outlook, the 1st support at 0.8753 acts as multi-swing low support, indicating historical significance as a level where buyers have previously intervened, further strengthening the potential for a bounce.

On the resistance side, the 1st resistance at 0.8885 is noted as pullback resistance, suggesting a barrier where selling pressure might increase, potentially limiting further upward movement. 

USD/JPY:

For USD/JPY, in alignment with the prevailing bullish momentum, there’s a potential for a bullish bounce from the pivot level, indicating a move towards the 1st resistance.

The pivot at 149.53 acts as pullback support, reinforced by the 50% Fibonacci Retracement, suggesting a significant level where buying interest may emerge.

Supporting this outlook, the 1st support at 147.80 serves as an overlap support, indicating historical significance as a level where buyers have intervened, potentially providing additional support for a bullish move.

On the resistance side, the 1st resistance at 150.82 acts as pullback resistance, suggesting a barrier where selling pressure could increase, potentially limiting further upward movement. 

USD/CAD:

The USD/CAD chart currently demonstrates an overall bearish momentum. However, there is a potential scenario for price to make a weak bullish bounce off the pivot and rise towards the 1st resistance.

The pivot level at 1.3461 is identified as a pullback resistance that aligns with the 78.60% Fibonacci Retracement level where price could potentially make a weak bullish bounce and climb higher. The 1st resistance level at 1.3509 is noted as an overlap resistance, potentially limiting any further upward movement.

On the support side, the 1st support level at 1.3435 is marked as a multi-swing-low support, reinforcing its significance as a key support level.

AUD/USD:

The AUD/USD chart currently demonstrates an overall bullish momentum. In this context, there is a potential scenario for price to rise towards the pivot before potentially making a bearish reaction and pull back towards the 1st support.

The pivot level at 0.6639 is identified as a pullback resistance that aligns close to the 78.60% Fibonacci Retracement level where price could potentially pull back from to drop lower. The 1st support level at 0.6591 is marked as a pullback support, reinforcing its significance as a key support level.

On the resistance side, the 1st resistance level at 0.6667 is noted as a swing-high resistance, potentially limiting any further upward movement.

NZD/USD

The NZD/USD chart currently demonstrates an overall bearish momentum. However, there is a potential scenario for price to rise towards the pivot before reversing to fall towards the 1st support.

The pivot level at 0.6098 is identified as a pullback resistance that aligns close to the 38.20% Fibonacci Retracement level where price could potentially reverse from and drop lower. The 1st support level at 0.6072 is marked as a pullback support, reinforcing its significance as a key support level.

On the resistance side, the 1st resistance level at 0.6139 is noted as an overlap resistance that aligns close to the 61.80% Fibonacci Retracement level, potentially limiting any further upward movement.

DJ30:

The Dow Jones chart (DJ30) currently demonstrates an overall bullish momentum. In this context, there is a potential scenario for price to rise towards the pivot and make a bearish reaction to pull back towards the 1st support.

The pivot level at 39,817.48 is identified as a resistance level that aligns with the 61.80% Fibonacci Projection level where price could potentially reverse from and drop lower. The 1st support level at 39,186.86 is marked as a pullback support, reinforcing its significance as a key support level.

The 1st resistance level at 40,178.47 is noted as a resistance level that aligns with the 78.60% Fibonacci Projection level, potentially impeding any further bullish movement.

GER40:

The DAX chart (GER40) currently demonstrates an overall bullish momentum. In this context, there is a potential scenario for price to rise towards the pivot and make a bearish reaction to pull back towards the 1st support.

The pivot level at 18,263.22 is identified as a resistance level that aligns with the 61.80% Fibonacci Projection level where price could potentially reverse from and drop lower. The 1st support level at 18,005.20 is marked as a pullback support, reinforcing its significance as a key support level.

The 1st resistance level at 18,431.16 is noted as a resistance level that aligns with the 78.60% Fibonacci Projection level, potentially impeding any further bullish movement.

US500: 

The S&P 500 chart (US500) currently demonstrates an overall bullish momentum. In this context, there is a potential scenario for price to rise towards the pivot and make a bearish reaction to pull back towards the 1st support.

The pivot level at 5,304.80 is identified as a resistance level that aligns with the 61.80% Fibonacci Projection level where price could potentially reverse from and drop lower. The 1st support level at 5,189.10 is marked as a pullback support, reinforcing its significance as a key support level.

The 1st resistance level at 5,361.57 is noted as a resistance level that aligns with the 78.60% Fibonacci Projection level, potentially impeding any further bullish movement.

BTC/USD:

The Bitcoin chart (BTC/USD) currently demonstrates an overall bearish momentum. However, there is a potential scenario for price to rise towards the pivot and reverse to drop lower towards the 1st support.

The pivot level at 68,816.14 is identified as a pullback support that aligns with the 61.80% Fibonacci Retracement level where price could potentially make a bearish reversal and drop lower. The 1st support level at 60,981.92 is marked as a pullback support that aligns close to the 61.80% Fibonacci Retracement level, reinforcing its significance as a key support level.

To the upside, the 1st resistance level at 73,304.38 is noted as a swing-high resistance at the all-time high, further reinforcing its significance as a potential barrier to further bullish movement.

ETH/USD: 

The Ethereum chart (ETH/USD) currently demonstrates an overall bearish momentum. However, there is a potential scenario for price to rise towards the pivot and reverse to drop lower towards the 1st support.

The pivot level at 3,755.03 is identified as a pullback support that aligns close to the 61.80% Fibonacci Retracement level where price could potentially make a bearish reversal and drop lower. The 1st support level at 3,111.04 is marked as a pullback support that aligns with the 50.00% Fibonacci Retracement level, reinforcing its significance as a key support level.

To the upside, the 1st resistance level at 4,056.59 is noted as a swing-high resistance, further reinforcing its significance as a potential barrier to further bullish movement.

WTI/USD:

The WTI (West Texas Intermediate) oil chart currently demonstrates an overall bullish momentum. In this context, there is a potential scenario for price to rise towards the pivot and make a bullish breakout to rise towards the 1st resistance.

The pivot level at 82.53 is identified as a pullback resistance where price could potentially make a bullish breakout and climb higher. The 1st resistance level at 84.08 is noted as an overlap resistance that aligns close to the 78.60% Fibonacci Projection level, further reinforcing its significance as a potential barrier to further bullish movement.

To the downside, the 1st support level at 81.33 is marked as an overlap support that aligns close to the 38.20% Fibonacci Retracement level, reinforcing its significance as a key support level.

XAU/USD (GOLD):

For XAU/USD, in line with the bullish momentum, there’s a potential for a bullish bounce from the pivot level, indicating a move towards the 1st resistance.

The pivot at 2186.35 acts as pullback support, suggesting a significant level where buying interest may emerge. This level is further reinforced by its role as a pivot, indicating potential market sentiment shifts.

Supporting this, the 1st support at 2146.54 serves as multi-swing low support, highlighting its historical significance as a level where buyers have previously intervened, adding further credibility to the potential bullish move.

On the resistance side, the 1st resistance at 2225.66 is identified by the 161.80% Fibonacci Extension, suggesting a level where selling pressure might increase, potentially acting as a barrier to further upward movement

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The post Thursday 21st March 2024 : Technical Outlook and Review first appeared on IC Markets | Official Blog.

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IC Markets Asia Fundamental Forecast | 21 March 2024
IC Markets Asia Fundamental Forecast | 21 March 2024

IC Markets Asia Fundamental Forecast | 21 March 2024

379523   March 21, 2024 11:17   ICMarkets   Market News  

IC Markets Asia Fundamental Forecast | 21 March 2024

What happened in the US session?

As widely anticipated, the Federal Reserve held the Fed Funds rate on hold at 5.25% to 5.50% once again – this marked the fifth consecutive meeting where rates remained unchanged. The latest FOMC statement was quite similar to the one that was released during the January meeting, with the most notable change related to job gains. From “moderated since early last year but remain strong” to just “job gains have remained strong”, highlighting the resilience of the labour market despite higher rates.

Meanwhile, the dot plot – which is the primary forecast tool for monetary policy – seems to suggest a slightly hawkish outlook based on the central tendency projections. However, during his press conference, Chairman Jerome Powell appeared to be unfazed by the monthly acceleration in CPI and PPI for the months of January and February and reiterated the Fed’s forecast of having three 25 basis points rate cuts in 2024.

From the moment the statement was released, the dollar index (DXY) tumbled from 103.90 to as low as 103.38 by the end of Chairman Powell’s conference while spot prices for gold surged on the ‘dovish’ rhetoric, soaring past the threshold of $2,200/oz to hit an overnight high of $2,222.87/oz.

What does it mean for the Asia Session?

As Asian markets digested this latest salvo by the Fed, the DXY stabilized around the region of 103.25 and was edging higher while gold prices pulled back quite sharply to dip under the $2,200/oz-threshold. Although markets are moving in opposite direction to the initial move following the outcome of the FOMC meeting, they could potentially reverse course in the latter half of the day.

The Dollar Index (DXY)

Key news events today

Unemployment Claims (12:30 pm GMT)

Composite PMI (1:45 pm GMT)

What can we expect from DXY today?

Not only have unemployment claims trended lower since February, most of the results have also printed lower than their respective forecasts which signals a robust labour market. This week’s estimate of 212K hints at a continuation of this downtrend and should claims print lower than this estimate, it could potentially function as a short-term boost for the dollar.

The flash readings for the Composite PMI for the month of March point to another month of expansion for the manufacturing as well as the services sector. Overall output has expanded since early 2023 despite the high interest rate environment. Should the flash readings signal another month of robust growth, it could provide an additional tailwind for the dollar.

Central Bank Notes:

  • The Federal Funds Rate target range remained unchanged at 5.25% to 5.50% for the fifth meeting in a row.
  • The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals are moving into better balance.
  • The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks; inflation has eased over the past year but remains elevated.
  • Recent indicators suggest that economic activity has been expanding at a solid pace while job gains have remained strong, and the unemployment rate has remained low.
  • In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks and does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%.
  • In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans.
  • Next meeting runs from 30 April to 1 May 2024.

Next 24 Hours Bias

Medium Bearish


Gold (XAU)

Key news events today

Unemployment Claims (12:30 pm GMT)

Composite PMI (1:45 pm GMT)

What can we expect from Gold today?

Not only have unemployment claims trended lower since February, most of the results have also printed lower than their respective forecasts which signals a robust labour market. This week’s estimate of 212K hints at a continuation of this downtrend and should claims print lower than this estimate, it could potentially function as a short-term boost for the dollar.

The flash readings for the Composite PMI for the month of March point to another month of expansion for the manufacturing as well as the services sector. Overall output has expanded since early 2023 despite the high interest rate environment. Should the flash readings signal another month of robust growth, it could provide an additional tailwind for the dollar. It is bound to be another volatile period for gold prices during the US session.

Next 24 Hours Bias

Medium Bullish


The Australian Dollar (AUD)

Key news events today

Labour Force Report (12:30 am GMT)

What can we expect from AUD today?

Employment growth in Australia has been mixed over the past four months while the unemployment rate has generally edged higher over the same period. However, the estimates for February point to an overall improvement in the labour market with nearly 40K jobs expected to be added while the unemployment rate edges lower. Should the latest labour force report signal a rebound in employment figures, the Aussie could receive another boost following the ‘dovish’ outcome of the latest FOMC meeting overnight.

Central Bank Notes:

  • The RBA kept the cash rate target unchanged at 4.35%, marking the seventh pause out of the last eight board meetings.
  • The headline monthly CPI indicator was steady at 3.4% over the year to January, with momentum easing over recent months, driven by moderating goods inflation. Services inflation remains elevated, and is moderating at a more gradual pace.
  • The central forecasts are for inflation to return to the target range of 2–3% in 2025, and to the midpoint in 2026.
  • While recent data indicate that inflation is easing, it remains high. The Board expects that it will be some time yet before inflation is sustainably in the target range.
  • The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the Board is not ruling anything in or out.
  • Next meeting is on 7 May 2024.

Next 24 Hours Bias

Strong Bullish


The Kiwi Dollar (NZD)

Key news events today

GDP (9:45 pm GMT 20th March)

What can we expect from NZD today?

New Zealand’s economy declined 0.1% QoQ in the fourth-quarter of 2023, missing the estimate of a 0.1% GDP growth. Despite a struggling economy, the Kiwi was lifted following a ‘dovish’ rhetoric by Federal Reserve Chairman Jerome Powell as it hit an overnight high of 0.6085 and is likely to remain elevated today.

Central Bank Notes:

  • The Monetary Policy Committee kept the OCR unchanged at 5.50% for the fifth meeting in a row.
  • The Committee remains confident that the current level of the OCR is restricting demand. However, a sustained decline in capacity pressures in the New Zealand economy is required to ensure that headline inflation returns to the 1 to 3% target.
  • Core inflation and most measures of inflation expectations have declined, and the risks to the inflation outlook have become more balanced.
  • However, headline inflation remains above the 1 to 3% target band, limiting the Committee’s ability to tolerate upside inflation surprises.
  • The outlook for the China economy, New Zealand’s top trading partner, remains particularly weak relative to recent historical norms, with structural factors constraining long-term growth.
  • Next meeting is on 22 May 2024.

Next 24 Hours Bias

Medium Bullish


The Japanese Yen (JPY)

Key news events today

National Core CPI (11:30 pm GMT)

What can we expect from JPY today?

Inflation in Japan, particularly the core CPI, has moderated lower since the third quarter of 2023 easing to a growth rate of 2.0% YoY in January – the lowest level since March 2022. However, February’s estimate of 2.8% hints at a re-acceleration of core inflation which is likely to spur another strong rally in the Japanese yen and potentially drive USD/JPY lower.

Central Bank Notes:

  • The Bank considers that the policy framework of Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control and the negative interest rate policy to date have fulfilled their roles. With the price stability target of 2%, it will conduct monetary policy as appropriate, guiding the short-term interest rate as a primary policy tool.
  • The Bank of Japan decided on the following measures:
    1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0 to 0.1% while continuing its JGB purchases with broadly the same amount as before.
    2. In addition, the Bank will discontinue purchases of exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) and will also gradually reduce the amount of purchases of CP and corporate bonds and will discontinue the purchases in about one year.
  • Underlying CPI inflation is likely to increase gradually toward achieving the price stability target of 2%, as the output gap turns positive and as medium- to long-term inflation expectations and wage growth rise.
  • Japan’s economy is likely to continue recovering moderately for the time being, supported by factors such as the materialization of pent-up demand, although it is expected to be under downward pressure stemming from a slowdown in the pace of recovery in overseas economies.
  • Next meeting is on 26 April 2024.

Next 24 Hours Bias

Medium Bearish


The Euro (EUR)

Key news events today

Composite PMI (9:00 am GMT)

What can we expect from EUR today?

The March estimate for the Composite PMI shows overall activity contracting once more in the Eurozone – economic output has been depressed since mid-2023. Should the flash figures print lower than the estimates, this result could cap some of the recent gains seen in the Euro following the outcome of the FOMC meeting overnight.

Central Bank Notes:

  • The ECB kept the three key interest rates unchanged for a fourth consecutive meeting, keeping the main refinancing rate on hold at 4.50%.
  • Since the last Governing Council meeting in January, inflation has declined further while the latest ECB staff projections show inflation has been revised down, in particular for 2024, which mainly reflects a lower contribution from energy prices.
  • The projections for inflation excluding energy and food have also been revised down and average 2.6% for 2024, 2.1% for 2025 and 2.0% for 2026. Although most measures of underlying inflation have eased further, domestic price pressures remain high, in part owing to strong growth in wages. 
  • Financing conditions are restrictive and the past interest rate increases continue to weigh on demand, which is helping push down inflation. Staff have revised down their growth projection for 2024 to 0.6%, with economic activity expected to remain subdued in the near term.
  • The Governing Council will continue to follow a data-dependent approach to determining the appropriate level and duration of restriction. In particular, the Governing Council’s interest rate decisions will be based on its assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation and the strength of monetary policy transmission.
  • Next meeting is on 11 April 2024.

Next 24 Hours Bias

Medium Bullish


The Swiss Franc (CHF)

Key news events today

SNB Monetary Policy Assessment (8:30 am GMT)

SNB Press Conference (9:00 am GMT)

What can we expect from CHF today?

The Swiss National Bank (SNB) is expected to maintain its key policy rate on hold at 1.75% for the third consecutive meeting – no surprises here. SNB Governor Thomas Jordan will then deliver his press conference following the release of the monetary policy statement where traders will be watching out for any additional clues. Should he communicate a ‘dovish’ outlook on future monetary policy action, this current downward slide in USD/CHF could slow during the European session as demand for the Swiss franc may pick up slightly.

Central Bank Notes:

  • The SNB kept the policy rate unchanged at 1.75% for a second consecutive meeting in December.
  • The inflation forecast puts average annual inflation at 2.1% for 2023, 1.9% for

2024 and 1.6% for 2025.

  • GDP growth is likely to be weak in the coming quarters; subdued demand from abroad and the tighter financing conditions are having a dampening effect.
  • Switzerland’s GDP is likely to grow by around 1% this year. For 2024, the SNB currently expects growth of between 0.5% and 1%.
  • Next meeting is on 21 March 2024.

Next 24 Hours Bias

Medium Bearish


The Pound (GBP)

Key news events today

Composite PMI (9:30 am GMT)

What can we expect from GBP today?

The Composite PMI output returned to expansion in November 2023 as a robust services sector pulled up overall economic activity in the UK. The flash reading for the month of March points to overall activity expanding strongly for the fifth month in a row – this result is likely to provide additional tailwinds for the Pound as GBP/UDS rose above the key threshold of 1.2800 as Asian markets came online.

Central Bank Notes:

  • The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 6-to-3 to maintain its Official Bank Rate at 5.25% for the fourth consecutive meeting.
  • Two members preferred to increase the Bank Rate by 0.25% to 5.50% while one member preferred to reduce Bank Rate by 0.25% to 5.00%.
  • CPI inflation remains well above the 2% target, with twelve-month CPI inflation increasing from 3.9% in November to 4.0% in December 2023 while wage growth has eased across a number of measures and is projected to decline further in coming quarters, although still elevated.
  • This downside news has been broad-based, reflecting lower fuel, core goods and services price inflation.
  • CPI inflation is projected to be 2.3% in two years’ time and 1.9% in three years.
  • Next meeting is on 21 March 2024.

Next 24 Hours Bias

Medium Bullish


The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

A ‘dovish’ press conference by Federal Reserve Chairman Jerome Powell sent USD/CAD crashing overnight. This currency pair dived from 1.3580 to as low as 1.3470 at the beginning of the Asia session, shedding over 100 pips in the process. Overhead pressures remain and USD/CAD is likely to slide lower as the day progresses.

Central Bank Notes:

  • The Bank of Canada held its target for the overnight rate at 5.0% for the fourth meeting in a row while continuing its policy of quantitative tightening.
  • Canada’s economy grew in the fourth quarter by more than expected, although the pace remained weak and below potential.
  • CPI inflation eased to 2.9% in January as goods price inflation moderated further but shelter price inflation remains elevated and is the biggest contributor to inflation.
  • Underlying inflationary pressures persist: year-over-year and three-month measures of core inflation are in the 3.0% to 3.5% range, and the share of CPI components growing above 3.0% declined but is still above the historical average. The Bank continues to expect inflation to remain close to 3.0% during the first half of this year before gradually easing.
  • The Governing Council is still concerned about risks to the outlook for inflation, particularly the persistence in underlying inflation and wants to see further and sustained easing in core inflation and continues to focus on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour.
  • Next meeting is on 10 April 2024.

Next 24 Hours Bias

Strong Bearish


Oil

Key news events today

No major news events.

What can we expect from Oil today?

Following the larger-than-expected drawdown in API stockpiles, the EIA oil inventories also declined strongly as 2.0M barrels of crude were removed from storage – a figure that was double of the estimate of a 0.9M-draw. Although prices for crude oil pulled back yesterday with WTI oil reversing from Tuesday’s high $83.75, this commodity found support around the region of $81.50 per barrel overnight and could edge higher today.

Next 24 Hours Bias

Weak Bullish


The post IC Markets Asia Fundamental Forecast | 21 March 2024 first appeared on IC Markets | Official Blog.

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General Market Analysis 21/03/2024
General Market Analysis 21/03/2024

General Market Analysis 21/03/2024

379516   March 21, 2024 10:29   ICMarkets   Market News  

Dovish Fed Spurs Markets to Fresh Highs – Nasdaq up 1.25%

A dovish conclusion to the latest Federal Reserve meeting helped spur US indices to new record highs on Wall Street yesterday. The Fed kept rates on hold as predicted but indicated that they would still be cutting three times this year which helped to erase investor fears after recent sticky inflation data. The Dow closed up 1.03%, the S&P up 0.89% to hit a new record high close at 5,224.62 and the Nasdaq added another 1.25%. Both the dollar and US treasury yields dropped after the meeting, the Dxy losing 0.34% on the day, 2-year yields lost 5.6 basis points to trade down to 4.621% and the benchmark 10-year slipped 2 basis points, closing the session at 4.277%. Oil also lost some ground, with demand concerns outweighing a lower dollar, Brent dropping 1.64% and WTI falling 2.14%. Gold fully embraced the lower dollar, jumping 1.2% on the day to trade around the $2,183 level by the New York close.

FOMC Shrugs off Inflation Concerns

Investors were pleasantly surprised with the Federal Reserve’s reaction to recent higher inflation points as they kept their dot plot on target for 3 interest rate cuts this year. There had been concerns that recent CPI, PPI, and PCE Index numbers would push the FOMC to put out a slightly more cautious statement, but they maintained their stance from the previous meeting advising that the road to lower inflation will be “sometimes bumpy”. Investors took the update as a green light for more stock market growth and pushed the S&P to another record high whilst the dollar took a bit of a bath against most of the majors. Traders will now move back to data-watching with the next updates on inflation likely to see stronger moves in the market.

Another Busy Thursday for Traders Ahead

Traders will get little chance to take a breather today as they must digest the latest update from the Fed as well as deal with a plethora of fresh data hits and the small matter of another 2 major central bank updates. The action has already kicked off in the APAC session with Kiwi GDP numbers coming in below expected and focus will swiftly jump across the Tasman to Australia where the latest key employment numbers are due out. There are Flash PMI numbers out in all sessions today, with Australia, the EU, the UK, France, Germany, and the US all set for releases. Those data prints are, however, likely to be overshadowed by rate calls from both the Swiss National Bank and the Bank of England during the European trading session. The New York session also has more data inputs for Wall Street to take on board with the release of the usual weekly unemployment claims numbers as well as the Existing Homes Sales data release.

The post General Market Analysis 21/03/2024 first appeared on IC Markets | Official Blog.

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Ex-Dividend 21/03/2024
Ex-Dividend 21/03/2024

Ex-Dividend 21/03/2024

379316   March 20, 2024 20:17   ICMarkets   Market News  

1
Ex-Dividends
2
21/3/2024
3
Indices Name
Index Adjustment Points
4
Australia 200 CFD
AUS200 0.53
5
IBEX-35 Index ES35
6
France 40 CFD F40
7
Hong Kong 50 CFD
HK50
8
Italy 40 CFD IT40
9
Japan 225 CFD
JP225
10
EU Stocks 50 CFD
STOXX50
11
UK 100 CFD UK100 6.31
12
US SP 500 CFD
US500 0.12
13
Wall Street CFD
US30
14
US Tech 100 CFD
USTEC
15
FTSE CHINA 50
CHINA50
16
Canada 60 CFD
CA60
17
Germany Tech 40 CFD
TecDE30
18
Germany Mid 50 CFD
MidDE50
19
Netherlands 25 CFD
NETH25
20
Switzerland 20 CFD
SWI20
21
Hong Kong China H-shares CFD
CHINAH
22
Norway 25 CFD
NOR25
23
South Africa 40 CFD
SA40
24
Sweden 30 CFD
SE30 5.37
25
US 2000 CFD US2000 0.06

The post Ex-Dividend 21/03/2024 first appeared on IC Markets | Official Blog.

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