Previous Trading Day’s Events (04.05.2024)
The threat of supply disruptions from prolonged conflict in the Middle East kept Brent oil futures above $90 a barrel, a level not seen since last October, with prices heading for their second weekly gain.
In Europe, the STOXX index of 600 companies dropped 1.2% to 504.7 points, after Tuesday’s lifetime high of 515.77 points.
A cooling U.S. services sector and comments this week from Fed Chair Jerome Powell reinforced the view that rate cuts were likely to commence at some point this year. However, some other Fed officials have taken a more conservative view, saying.. rate cuts might not be required this year if inflation continues to stall.
Source:
https://www.reuters.com/markets/global-markets-wrapup-1-2024-04-05/
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Winners vs Losers
Silver leads with 3.67% gains for the week and month so far. AUD pairs (AUD as the base) reached the top. The U.S. dollar experienced a weakening this week.
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News Reports Monitor – Previous Trading Day (04.04.2024)
Server Time / Timezone EEST (UTC+03:00)
- Midnight – Night Session (Asian)
No important announcements, no special scheduled figures to be released.
- Morning – Day Session (European and N. American Session)
Services PMIs:
Eurozone:
The Spanish service sector expands at the fastest rate in nearly a year supported by a marked and accelerated increase in new business volumes.
Italy’s service economy expanded during March for a third successive month, supported by a rapid increase in new work. Ongoing recruitment, with firms stating a preference for part-time workers. A faster uptick in demand even when price pressures remained strong. Confidence towards the outlook for activity strengthened.
The French services economy remains in contraction with PMI reported under 50, at 48.3 points. Activity continued to shrink at the end of the first quarter. Sustained weakness in the broader economy weighed on sales performances. Contractions in output and new orders remained considerably softer than those seen in the second half of 2023.
In Germany, the service sector ended the first quarter on a more stable footing. Firms turned increasingly optimistic about the outlook. Sustained job creation amongst service providers amid reports of strategic hiring. Wage pressures continued to drive up businesses’ costs, but the rates of price growth slowed noticeably.
The Eurozone economy returns to growth for the first time since May 2023. Renewed growth in business activity was aided by a stabilisation of demand and continued efforts to clear backlogs of work. Gain in net euro area employment was also recorded amid a continued resurgence in business confidence.
The Swiss consumer price index (CPI) remained unchanged in March 2024 compared with the previous month at 107.1 points (December 2020 = 100). Inflation was +1.0% compared with the same month of the previous year. CHF suffered depreciation because of this 0% change. USDCHF jumped 40 pips.
General Verdict:
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FOREX MARKETS MONITOR
EURUSD (04.04.2024) 15m Chart Summary
Server Time / Timezone EEST (UTC+03:00)
Price Movement
The pair was climbing early while being above the 30-period MA amid the releases of the improved services PMIs for the Eurozone and EUR appreciation against the dollar. It is clear that the USD drove most of the path though. Unemployment claims changed only a little but were lower than expected causing a slight dollar depreciation. After reaching resistance at near 1.0877, the EURUSD dropped as the USD started gaining back strength crossing the MA on its way down and reversing quite aggressively from the upside.
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CRYPTO MARKETS MONITOR
BTCUSD (Bitcoin) Chart Summary 1H
Server Time / Timezone EEST (UTC+02:00)
Price Movement
Since the 22nd of March, Bitcoin experienced a good comeback with the price moving On the 1st of April, the price broke the wedge to the downside and dropped heavily back to support near 69K USD. That support was broken twice as Bitcoin eventually on the 2nd of April saw heavy drops. Around the same time as the drawdown, Bitcoin exchange-traded funds (ETFs) posted a net outflow of $86 million, breaking a four-day positive inflow streak, per FarSide data.
Source: https://cointelegraph.com/news/bitcoin-price-flash-crash-leverage-positions-liquidated
On the 3rd of April, we see some retracement, something to expect after a rapid fall in price. It settled at 66,360 USD and remained stable close to that level. On the 4th of April, the price saw a rapid increase and after finding a strong resistance at 19,300 USD a reversal took place back to the MA.
Crypto sorted by Highest Market Cap:
The market for Crypto is currently stable at lower levels. For the last 7 days, the market experienced losses as it corrected heavily from the upside.
Source: https://www.investing.com/crypto/currencies
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EQUITY MARKETS MONITOR
S&P500 (SPX500) 4-Day Chart Summary
Server Time / Timezone EEST (UTC+03:00)
Price Movement
On the 1st of April, the market opened with a gap upwards. Correction followed with a heavy drop until the support near 5,234 USD. Retracement followed with the price approaching and staying close to the 30-period MA. On the 2nd of April, the index suffered another drop, confirming a downtrend, and it was sharp enough. After finding support near 5,186 USD it retraced near the MA. While the dollar weakened, U.S. stocks gained. The downtrend halted and stocks saw the upside. The index moved above the 30-period MA. (SPX500 chart H1). The crossover took place when the dollar plunged on the 3rd of April. On the 4th of April, the index continued upwards but at some point after 19:00 it experienced a rapid drop. Retracement now is possible before the NFP as depicted with the Fibo retracement levels, back to the 61.8 Fibo.
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COMMODITIES MARKETS MONITOR
USOIL (WTI) 4-Day Chart Summary
Server Time / Timezone EEST (UTC+02:00)
Price Movement
On the 1st of April, after the news regarding the expansion of the U.S. manufacturing sector, Crude oil actually jumped higher and remained on the upside.
The latest news shows that production cuts indeed take place. Reuters Survey Shows OPEC Output Reduced in March:
On the 2nd of April Crude oil continued on the uptrend. The RSI currently shows a bearish divergence with those lower highs. However, a halt of an uptrend requires that the price drops below the 30-period MA. This would further support the halt and a future sideways movement, or even the start of a downtrend (H4 retracement to 83 USD).
OPEC-JMMC meetings: OPEC+ ministers kept oil supply policy unchanged and pressed some countries to increase compliance with output cuts, a decision that spurred international crude prices to their highest in five months at nearly 90 USD/b:
On the 4th of April, the price jumped over 86.5 USD/b and after finding resistance it reversed. 85.5 USD/b probably is the next support level. The NFP report today will shake the markets and change that.
XAUUSD (Gold) 4-Day Chart Summary
Server Time / Timezone EEST (UTC+03:00)
Price Movement
On the 1st of April, the price lowered and despite the manufacturing PMI favourable for the USD release that caused the price to drop heavily, Gold could not remain on the downside. An uptrend was formed and kept stable for some time. On the 2nd of April, its price reached 2,288 USD/oz and on the 3rd of April, it retraced to the MA. There is currently an upward wedge. Gold continues to move along the wedge to the upside without a breakout. The Dollar index plunged after 17:00 on the 3rd of April. Gold obviously moved higher with the release of the worsening ISM services PMI figure. On the 4th of April, Gold moved lower and crossed the 30-period MA while moving to the 5th of April signalling the end of the uptrend. Will the dollar appreciate enough today causing Gold to remain sideways or change trend direction? Let’s see after the NFP.
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News Reports Monitor – Today Trading Day (05 April 2024)
Server Time / Timezone EEST (UTC+03:00)
- Midnight – Night Session (Asian)
No important announcements, no special scheduled figures to be released.
- Morning – Day Session (European and N. American Session)
The NFP will take place at 15:30 as usual with Canada’s employment data released at the same time. An interesting pair to watch is the USDCAD. Canada’s employment change is expected to remain in growth and roughly stable. The unemployment rate is expected to rise. A less NF employment change is expected for the U.S. with a stable unemployment rate figure. USD and CAD pairs will probably see a shock. Eyes will be on the NFP report as the Fed is expecting economic data to support interest rate cuts. Cooling of the NF employment change could affect their decisions to proceed as scheduled at least.
General Verdict:
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