Market Update by Solidecn.com

[Solid ECN]

GBPUSD Gained after higher than expected UK CPI reading!

• UK CPI (M/M) Mar: 0.8% (est 0.5%; prev 1.1%)
• UK CPI (Y/Y) Mar: 10.1% (est 9.8%; prev 10.4%)
• UK CPI Core (M/M) Mar: 0.9% (est 0.6%; prev 1.2%)
• UK CPI Core (Y/Y) Mar: 6.2% (est 6.0%; prev 6.2%)

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Details of today's inflation report. High UK inflation is largely driven by food prices. This is likely to prompt the BoE to make another 25bp hike.



Details of today's inflation report. High UK inflation is largely driven by food prices. This is likely to prompt the BoE to make another 25bp hike.

[Solid ECN]

AUDUSD

The Australian dollar is one of the best performing major currencies today. RBA minutes turned out to be neither dovish, nor hawkish. On one hand, the document showed that RBA members considered a rate hike before ultimately deciding on leaving rates unchanged. On the other hand, the document noted that the Bank should reassess whether there is still need to undertake additional tightening. AUD, however, caught a bid following release of better-than-expected GDP data from China. The Chinese economy grew at a pace of 4.5% YoY in Q1 2023, much faster than 4.0% YoY expected by economists. Moreover, retail sales data for March showed a 10.6% YoY jump - also better than the 8.0% YoY increase expected. Industrial production data for March missed estimates but showed higher growth than in February.



Taking a look at AUDUSD chart at D1 interval, we can see that the pair bounced off an important mix of support today - an intersection of 50- and 200-session moving average (orange circle). Demand side reaction to this technical support hints that another upward impulse may be about to start. In such a scenario, resistance zone in the 0.6780 area, marked with 38.2% retracement of October 2022 - January 2023 upward move may be the next target for the bulls.

[Solid ECN]

Oil

OIL.WTI is retreating by almost 2.5% today as a result of several factors. One is the US dollar, which has not been this strong for a long time as a result of rising yields. Another is the US reserve sales of over 1 million barrels last week. This is not much, but it shows that the US may want to stabilize the oil market. Perhaps the most important factor is Russia's powerful exports at levels last seen before the attack on Ukraine. Russia's exports are doing well, primarily to Asian countries, including India, from where fuel in turn flows to Europe in record volumes.




A massive bump in WTI oil. After a test of 80 USD, the upper limit of the upward gap can be expected to be tested.

[Solid ECN]

EURUSD

Bulls are losing momentum this session, while the euro against the dollar pulls back below the 1.10 level. The correction in the U.S indices is supporting the USD’s recovery, however, the pair is currently testing an important support zone. If the price stays above the uptrend line, the bullish scenario could resume again. However, if a breakout of this zone appears, then a further pullback cannot be excluded.

[Solid ECN]

CHNCOMP

Indices from Asia-Pacific gained during the first trading session of a new week. Chinese indices were top-performers with CHNComp gaining over 3% and CH50cash adding 2.4%. Hong Kong shares also performed well with HKComp adding over 2%. There were no specific news behind the jump. However, there was data from China on new home prices for March released over the weekend. While on an annual basis prices were 0.8% YoY lower, month-over-month data showed a 0.5% MoM increase, This was the third monthly increase in a row and the fastest pace of price growth in 21 months. It could be a hint that demand and overall situation in the Chinese property market may be improving.





Indices from China may also see some moves during the next Asian session as some top-tier economic reports from the country are scheduled for release. Monthly activity data for March (industrial production, retail sales and urban investments) as well as Q1 GDP report will be released at 3:00 am BST. Economists expect improvement in monthly readings for March, especially in retail sales and industrial production. Also, Q1 GDP growth is seen reaching 2.2% QoQ, after a lack of growth (0.0% QoQ) in Q4 2022. On an annual basis, Chinese GDP is expected to have grown by 4% YoY in Q1 2023.


Taking a look at CHNComp chart at D1 interval, we can see that the index is making another attempt at breaking above the resistance zone marked with 23.6% retracement in the 7,120 pts area. From a technical point of view, a break above could trigger an upward move towards the 7,850 pts area - above a year-to-date high from late January.

[Solid ECN]

German index breaks above 16 000 pts for the first time in 15 months


New week on the global financial markets began in upbeat moods with indices from Asia-Pacific, especially China, trading higher today. European futures also traded higher throughout the Asian session but have caught an additional bid after opening of the European cash session. German DAX (DE30) is trading 0.5% higher and trades above the 16,000 pts mark for the first time in 15-months! The next resistance zone in-line is marked with all-time highs in the area ranging below 16,300 pts mark - less than 2% above current market price.

[Solid ECN]

DOGECOIN

Elon Musk has told Morgan Stanley analysts that he wants to make Twitter the world's largest financial institution. Although the process is a long way off and its finale uncertain, Twitter announced yesterday that it will indirectly make stock and cryptocurrency trading available to users. The beneficiary of this news was Dogecoin, a cryptocurrency associated with Elon Musk and Twitter. The likeness of a dog that is the symbol of Dogecoin, recently at the initiative of Musk himself, momentarily changed the well-known Twitter logo.





The platform is set to begin a partnership with eToro and will start sharing price information from TradingView. Musk noted that almost all of the companies that have left the platform in recent months have already returned to it although Stellaantis and Volkswagen are still dangling. Ultimately, Twitter is expected to offer investors a range of functions through travel arrangements to financial services. In China, for example, payments giant Tencent offers payments through its WeChat messaging app. Cryptocurrency investors are hoping that Dogecoin will find its unique place on Musk's platform. The market is anticipating the next move from Musk, and any news of a possible promotion of Dogecoin payments on Twitter could result in a euphoric bump.

[Solid ECN]

NZDUSD

The New Zealand dollar is the best performing currency in the G10 today. This is mainly due to the weakness of the USD, which discounted following the release of PPI inflation data from the US, which showed a decline in the headline reading from 4.6% to 2.7% y/y. Thus, the NZDUSD pair took advantage of the favorable technical situation and filled the inverted head-and-shoulders, bearish pattern that appeared on the H1 interval.




This type of price formation usually heralds a trend reversal - in this case to an upward one. After crossing the level of 0.6455, the upward movement accelerated, and the stock is currently struggling with the 61.8% measurement set on the last downward wave. In the case of a breakout above, the bulls can direct their attention towards the next resistance zone at 0.6335. On the other hand, in the event of a pullback and selling pressure, support remains at the level of 0.6245.

[Solid ECN]

Palladium

Looking technically at the chart, PALLADIUM price is approaching key short-term resistance at $1578, which penetrates from the upper limit of the local 1:1 pattern, as well as previous price reactions. In the event of an upward breakout, an upward movement toward $1730 could be triggered.

[Solid ECN]

NATGAS

US natural gas prices took a hit yesterday as analysts mounted their calls that the end of the heating season in the United States is near. While recent weather forecasts pointed to a period of below-average temperatures, average temperatures in this period of the year are usually high enough for demand for heating to drop significantly. Expectations for today's EIA natural gas storage report (3:30 pm BST) also strongly hint that the heating season in the US is drawing to close - median estimate is for a 25 billion cubic feet increase in stockpiles. If confirmed, this would be the second inventory build of 2023 and the first one since mid-January.



Taking a look at NATGAS chart at H4 interval, we can see that price has halted recent upward correction at the resistance zone marked with $2.24 handle and the 23.6% retracement of the downward move launched at the beginning of March 2023. Price launched a pullback and move back to the $2.08 per MMBTu. After a few hours of struggle in the area, sellers managed to push the price below the $2.08 mark this morning. Volatility on the NATGAS market is likely to be elevated around 3:30 pm BST when the EIA report is released. Should analysts be mistaken with their forecasts and US natural gas inventories actually drop, NATGAS could see a price spike.