FORECAST FOR AUD/USD ON MARCH 31, 2023

The Australian dollar broke through the upper limit of the neutral range that started back on March 17. AUD climbed out of this range this morning.

It could fall to the lower limit of the range, like it did on the 23rd, but the ascending Marlin oscillator creates an advantage for the growth option, at first to 0.6790 and then, under the favorable circumstances, to 0.6873.

On the four-hour chart, the price is in an active position to rise above the indicator lines, the Marlin is growing at an even angle, with an optimal speed to enter the overbought zone. After consolidating above 0.6730, we can expect the price to rise further. However, this plan can potentially be hindered by the price breaking through the MACD line, below the 0.6693 mark.

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FORECAST FOR EUR/USD ON APRIL 4, 2023

The euro changed its bearish mood on Friday, and jumped by 120 pips on Monday from the low of the day, from the support of the target level, or more precisely, the upper limit of the target range of 1.0758/87. The price is consolidating above the MACD indicator line below the upper limit of the green price channel. Climbing above the 1.0930 reference level will make 1.0990 the next target.

Bears, if they don't want to give up easily and have control of the situation, must consolidate under the MACD line on the daily chart, below 1.0867. In this case, a divergence with the Marlin oscillator will unfold, and simultaneously, the signal line of the oscillator will leave the wedge and move down. The price will move towards the range of 1.0758/87.

On the four-hour chart, a double divergence of the price with the oscillator has already been formed. This is an effective sign of a reversal, but it's not enough. In the current conditions, the price needs to cross the support of the MACD line, around 1.0857, which is 10 pips below the MACD line on the daily chart. We have to wait what scenario the market will choose in the near future.

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FORECAST FOR EUR/USD ON APRIL 6, 2023

On Wednesday, the euro fell by 49 points, showing an intention to turn down in the short or medium term. However, this behavior has signs of a false movement.

There is no price divergence with the Marlin oscillator on the daily chart, which is rare for the saw-toothed movement of the oscillator signal line. There may be another final surge of the oscillator and the price, even if it doesn't reach the target level of 1.1033. At least (while there is no divergence), the price should settle below the MACD indicator line to create a sign of reversal, and that will take at least a day. If the bears succeed, the price will move to the target range of 1.0758/87. Meanwhile, the price can still try to overcome the April 4 high.

On the four-hour chart, the price falls below the MACD line, but the main support is the line of the higher chart (1.0872). The Marlin oscillator is already in the area of the downtrend, but there can also be a breakthrough.

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BTCUSD, Daily | Potential reversal from 1st resistance?

The BTC/USD chart currently reflects a bearish momentum in the cryptocurrency market, and Bitcoin seems to be following the trend. The chart suggests that the price of Bitcoin could face resistance at the 1st resistance level of 28343, which has previously been an important level as an overlap resistance. If Bitcoin fails to break through this level, it may result in a bearish reaction causing the price to drop towards the 1st support level of 25249. This level, being a pullback support, could act as a strong support for the price of Bitcoin.

In the event that the price of Bitcoin breaks through the 1st resistance level, the next resistance level it could face is the 2nd resistance level of 32843, which is a pullback resistance. Conversely, if Bitcoin breaks below the 1st support level, the next support level it could drop to is the 2nd support level of 23925. This level, also being a pullback support, could potentially act as a strong support for the price of Bitcoin.

Additionally, there is an intermediate support level at 26598, which is a swing low support and is accompanied by a 23.60% Fibonacci retracement. This level could potentially provide support to the price of Bitcoin if it drops towards the 1st support level. Overall, the BTC/USD chart's momentum is bearish, indicating that the price is expected to continue falling in the near term.

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Technical Analysis of Intraday Price Movement of Nasdaq 100 Index, Wednesday April 12, 2023

With the appearance of deviation between Nasdaq 100 index price movement with Stochastic Oscillator indicator on the 4 hour chart then it is high likely for #NDX will depreciated for some time in the future up to the area level of 12705,8-12617,7 however during the decline not exceed below the level of 12517,9 then #NDX still has the potential to back to rallying upwards up to the level of 13238,0.

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Forecast for EUR/USD on April 14, 2023

Yesterday's rise in the dollar index by 0.57% and the euro's rise by 0.49% were largely based on expectations for today's quarterly reports from the biggest US banks. As expected, JPMorgan Chase, Wells Fargo, Citigroup, and PNC Financial Services will show good profits, which is important for demonstrating the resilience of the banking sector. Meanwhile, there may be some difficulties with the world's largest asset management company, BlackRock, which is also set to report today, since its in a haste to get rid of bad Credit Suisse assets.

Overall, investors have an appetite for risk, and the euro may reach the target level of 1.1185 – which is the peak of March 31, 2022, and the low of November 24, 2021. Yesterday, the price overcame the first resistance at 1.1033, and the Marlin oscillator slightly turned downward. EUR may take a quick break and consolidate at this level as it braces to rise further.

On the four-hour chart, the price is vigorously growing above the rising indicator lines, the Marlin oscillator has slowed down and is ready to edge down, discharging before further growth.

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Forecast for GBP/USD on April 18, 2023

Yesterday, the British pound showed strong volatility, closing the day with a loss of 38 points. On the daily chart, the signal line of the Marlin oscillator has approached the limit of the downtrend, so to break through it, the price should settle below the MACD indicator line (1.2322). Consolidating below support will open the next target at 1.2155 - the peak of November 2022.

On the four-hour chart, we can see that yesterday's trading range was formed below the target level of 1.2422. The balance indicator line in red also helped the level.

This is a sign of strong resistance, so in the near future, I expect the price to cross the support level of 1.2322. The Marlin oscillator is also set to fall further.

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EUR/USD. Trapped in a wide-ranging flat: traders are stuck within the range of the 9th figure

The euro-dollar pair is trading in a broad price range, but at the same time, it is effectively stagnating, reflecting the indecisiveness of both buyers and sellers. Despite the fairly strong volatility, traders are unable to leave the area of the 9-figure range to develop either an upward or downward movement. This price dynamic is due to the contradictory fundamental background that has emerged for the EUR/USD pair.

Initiative changes hands

Overall, the pair this week mirrors the trajectory of the US dollar index: on Monday, the greenback strengthened its positions across the market, causing the EUR/USD price to "visit" the 8-figure area. On Tuesday, the dollar was under pressure, which the pair's buyers took advantage of. Dollar bulls are again dictating their rules of the game, pulling the pair towards the base of the 9th price level. These "roller coaster" fluctuations are primarily related to the strengthening/weakening of risk-off sentiments in the markets. In addition, traders are quite sensitive to the strengthening/weakening of hawkish expectations regarding the further actions of the Fed/ECB. All other fundamental factors play a more supporting role.

I would like to remind you that initially, the greenback's position was strengthened by Fed representative Christopher Waller, who during his Friday speech, allowed for several interest rate hikes this year. Considering the fact that the market had "come to terms" with one final increase in May, this remark triggered strong volatility among dollar pairs. The hawkish signal came against the backdrop of a decline in overall inflation in the US, a slowdown in the producer price index and the core PCE index. The only concern is the core consumer price index, which accelerated to 5.6% in March (previously, the indicator had been declining consecutively for three months).

The Fed's median forecast, updated at the March meeting, assumes one more rate hike by the end of this year. The probability of a 25 basis point increase following the May meeting is now at 89%. However, the market is doubtful that the Federal Reserve will take further steps in this direction. Most Fed representatives are in favor of tightening monetary policy but only in the context of the May increase. Further decisions will depend on incoming data, primarily in the area of inflation.

For example, Federal Reserve Bank President Raphael Bostic recently stated that his baseline forecast assumes that rates will remain unchanged after the next (May) increase. The head of the St. Louis Fed, who is a consistent "hawk," allowed for a rate increase to 5.75%. However, he called for avoiding broad forward guidance at the May meeting. Federal Reserve Bank of San Francisco President Mary Daly voiced a rather vague formulation, the essence of which is that subsequent decisions will depend on the dynamics of inflation. According to her, the tightening of monetary policy is now at the stage where "the central bank does not expect further rate hikes at every meeting." Richmond Fed President Thomas Barkin expressed confidence that inflation had already peaked, but he wants to see more evidence that it is returning to the target level. Several other Fed representatives also spoke in the same vein. Notably, New York Fed President John Williams even allowed for a rate cut at the end of the year, "if inflation slows down sufficiently."

As we can see, at the moment, we can only speak with some certainty about the May rate hike (as eloquently evidenced by the CME FedWatch Tool). The further prospects for tightening monetary policy look uncertain, considering the side effects of measures already taken and the decline in key inflation indicators.

Taking into account such uncertainty, EUR/USD traders should be very cautious about hawkish statements from Federal Reserve representatives, as the influence of their messages is short-term in nature. Moreover, the European Central Bank also demonstrates a hawkish stance, discussing whether to raise rates in May by 25 or 50 basis points.

Don't trust price fluctuations

It's worth noting that the US dollar index reacts not only to the statements of Fed members. The agenda is also determined by the overall market sentiment, which reflects the degree of interest in risk assets or defensive instruments. These are quite shaky, unreliable, and highly variable fundamental arguments.

For example, yesterday the dollar was under pressure due to the release of strong GDP growth data from China. Macroeconomic reports, which were almost all in the "green," confirmed the recovery of the Chinese economy after the lifting of quarantine restrictions and the abandonment of the zero-tolerance policy towards COVID-19. This fact returned optimism to the market and contributed to the overall improvement of market sentiment. The safe-haven greenback was, as they say, "out of the picture" – the dollar index lost its gained positions.

But now the US currency has regained strength, as traders' risk appetite began to weaken amid caution due to the quarterly earnings season in the US economy. In addition, the dollar is strengthening against the backdrop of rising Treasury yields (in particular, the yield on 10-year bonds was around 3.63% - the highest level since March 22).

As a rule, such fundamental factors "flare up brightly but quickly fade." During one trading day, interest in risk can increase or decrease, providing support or pressure on the EUR/USD pair. Conclusions

The euro-dollar pair demonstrates increased volatility, but traders cannot determine the direction of the price movement. Therefore, any trading decisions (both towards the south and the north) are inherently risky, as the pair traces a wave-like trajectory.

In my opinion, the pair has not exhausted its growth potential, so long positions remain a priority: the dollar temporarily strengthens its positions on shaky foundations and cannot break the northern trend. However, considering long positions is advisable only after EUR/USD buyers consolidate above the 1.1000 mark (Kijun-sen line on the four-hour chart). The next (main) target of the northern movement in this case will be the 1.1100 mark – this is the upper line of the Bollinger Bands indicator on the daily chart.

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Euro has proven everything to everyone

A strong economy means a strong currency. The soar of the composite business activity index in the Eurozone in April to an 11-month high has become further proof of the accelerating economy of the currency bloc. It doesn't matter that it entirely relies on the service sector, with the gap between its PMI and the manufacturing sector becoming the largest since 2009. What's important is that the region will avoid a recession, and its resilience opens the door for the ECB to further raise interest rates, which positively reflects on EURUSD.

Dynamics of European business activity

Germany is once again becoming the locomotive of European economic growth: the Purchasing Managers' Indices for both Germany and France have exceeded forecasts. At the same time, ECB Vice President Luis de Guindos noted that core inflation in the Eurozone turned out to be persistently high, even more persistent than the market expected. For the European Central Bank not to lose confidence, the indicator should decrease. Such rhetoric implies that the regulator does not intend to rest on its laurels. Most likely, market forecasts about raising borrowing costs to 3.75% are accurate or slightly underestimated.

Bank of Ireland Governor Gabriel Makhlouf also argued that it was too early for the ECB to pause the monetary policy tightening process. He referred to the data available to the European Central Bank, based on which the pause seems premature. It seems that Christine Lagarde's opinion that the European Central Bank has little way ahead is at odds with the views of the Governing Council members. The ECB will undoubtedly raise the deposit rate at the May meeting. The question is by how much, 25 or 50 basis points?

Meanwhile, in the US, the situation is unfolding like a textbook: after rapid GDP growth, the Fed's monetary policy tightens, and then the American economy starts to wobble. Disappointing statistics on existing home sales, manufacturing activity from the Philadelphia Fed, and unemployment benefit claims suggest that a recession is near. If the US faces a downturn and the Eurozone avoids it, why sell EURUSD?

For the week leading up to April 21, the economic calendar will present investors with another puzzle. The key events will be the releases of German and European GDP data for the first quarter, the flash estimate of April inflation in Germany, and statistics on the Personal Consumption Expenditures Index – the Fed's preferred inflation indicator. Almost all important figures will be released at the end of the five-day period, so most of it will involve buying on the facts. The question is, what will be purchased: the US dollar or the euro? Technically, the EURUSD pair has approached the upper limit of the fair value range of 1.08-1.101 at arm's length. A successful assault will open the way for the "bulls" to restore the upward trend towards 1.12 and will form the basis for establishing long positions.

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Forecast for EUR/USD on April 26, 2023

EUR/USD
The euro did not take the chance to overcome the nearest peak of April 14 at 1.1076, and so its high was 1.1068. Thus, there will be no divergence. In this case, the growth of the last five days takes on the role of correction from the fall of April 14-17. The price clearly shows the intention to reach the support of the MACD line, coinciding with the low of April 17 at 1.0910. When the price reaches this target, the Marlin oscillator will already be in negative territory, which will help in overcoming this level to attack the lower support of 1.0872 - on the embedded line of the green downtrend channel.

The First Republic Bank reported a loss of 102 billion in client funds. The bank's shares collapsed by 49.38%, pulling the S&P 500 down by 1.58%. Yields on US government bonds fell, and the market probability of the Federal Reserve raising the rate by 0.25% next week also decreased (76.2% vs. 88.1% the day before), but markets are already preparing for a new wave of crisis (in the US), which is expected to start this summer. The dollar will strengthen in this crisis, as demonstrated yesterday, in the role of a protective asset.

On the four-hour chart, the price has consolidated below the MACD indicator line, and the Marlin oscillator has moved towards the decline. I expect the price to fall to the nearest target of 1.0910. However, market participants are waiting for comments from the Fed representatives regarding the current situation, so despite the technical prerequisites, we do not expect a significant decline until May 3rd.

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EUR/USD. "The specter of stagflation": the US economy weakens, inflation grows

The American economy in the first quarter disappointed, but the dollar is strengthening its positions across the market, including the euro pair. After impulsive growth to the middle of the 10th figure, the EUR/USD pair turned 180 degrees and headed south. At the moment, bears are testing the nearest support level of 1.1000, corresponding to the Tenkan-sen line on the daily chart. Such an anomalous, at first glance, reaction of the greenback is due primarily to the strengthening of hawkish expectations regarding the Fed's further actions. The dollar is growing amid the threat of stagflation in the US, as today's release shows that consumer spending is still strong, and inflationary pressure remains at an unacceptably high level.

In the language of dry numbers

US GDP growth in the first quarter of this year was almost twice as bad as expected. According to forecasts, the US economy was supposed to grow by 2.0%, reflecting a downward trend (in the fourth quarter of 2022, growth was recorded at 2.6%). However, GDP volume increased by only 1.1%, which is much lower than economists' expectations.

Notably, after the publication, the likelihood of a 25-point increase in the Fed's interest rate at the May meeting rose to 82%. That is, the market is virtually confident that the regulator will increase the rate to 5.25% next week, despite the "red hue" of the headline indicator in today's report.

As they say, the devil is in the details. The release structure shows that the US economy is slowing down amid high inflation. For example, the GDP price deflator in the first quarter increased by 4.0% YoY, while economists expected this component to grow by 3.7% YoY (I recall that in the fourth quarter, the indicator grew by 3.9% YoY). The core GDP price deflator in the first quarter was also in the "green zone," rising by 4.9% YoY, with a forecast of 4.7% YoY growth (fourth quarter result – 4.4% YoY). That is, consumer spending, which accounts for a large part of GDP, grew at the highest rate since the second quarter of 2021; the volume of government spending increased at the highest rate since the beginning of the year before last.

What the release says

It should be recalled that the core consumer price index excluding food and energy prices in March started to gain momentum again. In annual terms, the indicator rose to 5.6% in March. Over the previous five months, the core CPI had been declining – from 6.6% (in September 2022) to 5.5% (in February 2023). For the first time in the last six months, the growth rates of the core index accelerated. At the same time, overall inflation, the producer price index, the import price index – all these inflation indicators came out in the "red zone," reflecting active downward dynamics.

In other words, all conditions for another round of the Fed's interest rate hike have been met today. The "last puzzle" will be the publication of core PCE inflation indicators (the release is scheduled for tomorrow, April 28). If Friday's numbers also come out in the green zone, the results of the May meeting will be virtually predetermined.

Indirect support for the greenback was provided by the US labor market data released today. It turned out that the number of initial jobless claims increased by 230,000 last week. The indicator showed an upward trend for two weeks in a row (+240, +246 thousand), but a decline was recorded today.

However, the US housing market continues to disappoint dollar bulls. It became known today that the volume of pending home sales in the US in March fell by 5.2% (in monthly terms), with a forecast of 0.8% growth. In annual terms, transactions fell by 23.2%, compared to analysts' forecast of a 22.8% decline. I recall that earlier released reports in this area also reflected negative dynamics. In particular, the volume of home sales in the secondary market in March decreased by 2.4% (the weakest result since November 2022). The indicator of building permits issued in the States in March fell by 8.8%, indicating that the high cost of borrowing is putting pressure on this sector of the economy.

Conclusions

The GDP growth report published today reflects the threat of stagflation in the US: the country's economy is growing at a weak pace, while inflationary components are gaining momentum. Therefore, today's release de facto ended up on the side of the dollar, as it strengthened investors' confidence that the Federal Reserve will indeed decide on another rate hike.

At the same time, this fact is already largely priced in, so the current strengthening of the greenback is likely to be temporary.

It should also be recalled that on the eve of the May meeting, another bank in the US (with a market capitalization of $1.06 billion) was on the verge of collapse. First Republic, whose securities fell by almost 50%, risks repeating the fate of Silicon Valley, Signature Bank, and Silvergate. The bank reported that clients withdrew $100 billion from accounts, and deposits decreased by more than 40%. In light of such news, the Federal Reserve is unlikely to be aggressive next week, so as a result of the May meeting, the dollar may come under strong pressure, even despite the fact of a 25 basis point rate hike.

Thus, in my opinion, it is advisable to use southern price pullbacks on the EUR/USD pair to open long positions with the first target at 1.1050 (upper Bollinger Bands line on the daily chart) and the main target at 1.1100.

Analysis are provided by InstaForex.

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