Daily Market Analysis from ForexMart

US stocks closed higher, Dow Jones up 0.27%

At the close in the New York Stock Exchange, the Dow Jones rose 0.27% to hit a monthly high, the S&P 500 index rose 0.71%, the NASDAQ Composite index rose 1.31%.

Shares of Microsoft Corporation were the leaders of the gains among the components of the Dow Jones index in today's trading, which gained 7.02 points (2.31%) to close at 310.70. Salesforce.com Inc rose 4.25 points or 2.01% to close at 215.28. Walmart Inc rose 2.55 points or 1.78% to close at 146.00.

The losers were shares of Chevron Corp, which lost 2.96 points or 1.75% to end the session at 166.35. Dow Inc was up 0.59 points (0.91%) to close at 64.11, while JPMorgan Chase & Co was down 1.05 points (0.74%) to close at 140. .87.

Leading gainers among the S&P 500 index components in today's trading were Tesla Inc, which rose 8.03% to hit 1.00, Carnival Corporation, which gained 5.49% to close at 19.40, and Etsy Inc, which rose 4.70% to end the session at 138.54.

The biggest losers were Discovery Inc Class A, which shed 6.47% to close at 25.58. Shares of Discovery Communications C Inc shed 6.15% to end the session at 25.63. Quotes of Mosaic Co decreased in price by 4.72% to 67.97.

Leading gainers among the components of the NASDAQ Composite in today's trading were Hycroft Mining Holding Corporation, which rose 81.25% to hit 2.32, DatChat Inc, which gained 61.45% to close at 2.68, and also shares of Newegg Commerce Inc, which rose 43.41% to end the session at 7.40.

The biggest losers were Clever Leaves Holdings Inc, which shed 50.26% to close at 1.91. Neuroone Medical Technologies Corp lost 46.85% to end the session at 1.18. Quotes of Amylyx Pharmaceuticals Inc decreased in price by 35.96% to 16.01.

On the New York Stock Exchange, the number of securities that fell in price (1,715) exceeded the number of those that closed in positive territory (1,490), and quotes of 134 shares remained virtually unchanged. On the NASDAQ stock exchange, 2,051 stocks fell, 1,843 rose, and 199 remained at the previous close.

The CBOE Volatility Index, which is based on S&P 500 options trading, fell 5.67% to 19.63, hitting a new monthly low.

Gold futures for April delivery lost 1.64%, or 32.10, to hit $1.00 a troy ounce. In other commodities, WTI crude for May delivery fell 9.18%, or 10.46, to $103.44 a barrel. Brent futures for June delivery fell 9.01%, or 10.58, to $106.79 a barrel.

Meanwhile, in the forex market, the EUR/USD pair remained unchanged 0.07% to 1.10, while USD/JPY rose 1.45% to hit 123.83.

Futures on the USD index rose by 0.27% to 99.08.

Trading plan for starters of EUR/USD and GBP/USD on March 30, 2022

March 30 economic calendar
Today, the ADP report on employment in the United States is expected to be published, which is projected to grow by 450,000 in March. This is a positive signal for the labor market if the data is confirmed.

Almost simultaneously with the ADP report, the final data on the United States GDP for 2021 will be published. The data will likely be left without much attention, which will confirm the preliminary assessment.

Time targeting

ADP report - 12:15 Universal time

U.S. GDP - 12:30 Universal time

Trading plan for EUR/USD on March 30
In this situation, the local maximum at 1.1137 plays the role of resistance, which temporarily put pressure on buyers in the form of a technical pullback. In order for the upward cycle to be extended to new price levels, the quote needs to stay above 1.1180 in a four-hour period. This step will lead to further formation of a corrective move from the pivot point 1.0800. At the same time, the regular basis of the past, associated with the 1.1120/1.1180 area, may well put pressure on long positions. In this case, a slowdown in the upward cycle is possible, followed by a weakening of the euro, following the example of a price rebound on March 17th.

Trading plan for GBP/USD on March 30
In this situation, a characteristic uncertainty could arise due to the convergence of the price with the psychologically important level of 1.3000, where there was a reduction in the volume of short positions in history. The risk of a price rebound from the pivot point in the market remains, so the prolongation of the downward cycle will be considered by traders only after holding the quote below 1.3000 in a four-hour period. Until then, a variable or a local pullback is possible.

US stocks extend losses after confident rise early this week​​​​​​​

On Thursday, the main European stock indices continue to drop. However, at the beginning of the trading session, they climbed higher but later resumed the downward movement. Market participants are deeply concerned about the prospects of a slowdown in the global economy. The weakening of inflation fears amid a drawdown in oil prices limits the upward movement in European stock exchanges.

At the time of writing this article, the STOXX Europe 600 lost 0.12%, dropping to 459.63.

The shares of Swedish IT company Sinch AB (-10.7%), Polish logistics company InPost SA (-4%), as well as Telecom Italia SpA (-3.2%) incurred the biggest losses.

The largest gainers were the stocks of Russian gold mining company - Polymetal International (+8.1%) and Orpea SA (+4.8%).

On Thursday, the DAX index is down by 0.04%. The FTSE MIB shed 0.2%, the IBEX 35 decreased by 0.15%, the FTSE 100 slid down by 0.04%, and the CAC 40 dropped by 0.16%.

Despite a constant decrease in recent days, the leading European indices will end March on a positive note. The Stoxx 600 grew by 4%, while the DAX rose by 5%.

H&M shares nosedived by 8.5%. Despite the company's upbeat earnings report in the first quarter of the current financial year, the net profit was lower than analysts' forecasts.

The capitalization of UK investment company Brewin Dolphin Holdings instantly soared by more than 60% on the news that the Royal Bank of Canada agreed to buy it for $ 2.1 billion.

During Wednesday's trading session, the major EU indices closed in the red after a spectacular rise a day earlier. The day before, market participants assessed the prospects of a recovery in the global economy amid the geopolitical woes in Eastern Europe.

As a result, the STOXX Europe 600 index sank by 0.41% to 460.19.

The shares of UK advertising company S4 Capital Plc logged the steepest drop among the companies included in the index. Its stock collapsed by 36%. S4 Capital Plc announced another delay in the publication of the earnings report due to problems with the PricewaterhouseCoopers audit.

The CAC 40 index lost 0.74% on Wednesday, the DAX shed 1.45%, the FTSE MIB decreased by 0.03%, and the IBEX 35 slid down by 0.74%. Only the FTSE 100 index grew by 0.55%.

Yesterday, the stocks of companies doing business in Russia also incurred losses. French conglomerates Societe Generale and BNP Paribas sank by 2.5% and 2.3%, respectively. Renault shares fell by 4%.

The shares of Swiss financial holding UBS Group AG dropped by 1.5%. Even the announcement of the launch of a new share-buyback program of up to $6 billion the day before did not boost the company's shares. The program is scheduled to begin today. It will stay in effect for two years,

The main reason for a sharp decline in the DAX index was the outlook for Germany's economy. Earlier, analysts lowered its GDP outlook for the current year amid the escalation of the conflict between Ukraine and Russia. Thus, the growth of gross domestic product may total only 1.8%. In November 2021, economists predicted an increase in GDP by 4.6% in 2022.

As for macroeconomic figures for Germany, in March, the inflation rate soared to 7.3% in annual terms from 5.1% in February. According to the Federal Statistical Office, the indicator hit an all-time high.

Inflation in Spain surged to 9.8% in March from 7.6% in February, notching the highest level since 1985. At the same time, experts predicted an increase of only 8%.

According to preliminary data, in March, the consumer confidence index in Sweden plunged to 73.5 from February 89, reaching a 30-year low.

Another bearish factor for the DAX index was a dazzling rise in oil prices on Wednesday. Crude oil increased by 3%, while gas prices in Europe jumped by 9%.

The FTSE 100 was up amid a rally in the commodity market. As a result, the oil and gas industries in the eurozone expanded by 3.3% and 2.4%, respectively. The capitalization of French energy giant TotalEnergies, UK Petroleum, and Glencore rose by 2.5%, 3.1%, and 4.2%, respectively.

Geopolitical tensions, which began more than a month ago, have adversely affected stock markets worldwide. In addition, analysts are confident that the Russia-Ukraine conflict will slow down the expansion of the global economy as well as trigger a surge in inflation and shortages of raw materials in some countries.

Hot forecast for GBP/USD on 04/04/2022​​​​​​​

Given the content of the report of the United States Department of Labor, it is only surprising that the pound's decline on Friday was more of a symbolic nature. And so, 460,000 new jobs were not created outside of agriculture, but 431,000. But even this is still almost twice as much as is necessary to maintain a stable unemployment rate. Which by the way decreased from 3.8% to 3.6%, with a forecast of 3.7%. And it looks like it will continue to decline. There are practically no doubts about this. And apparently, the pound was supported by the single European currency, the decline of which also turned out to be rather modest. However, this appears to be just a temporary phenomenon. Macroeconomic data is clearly in favor of the US dollar. Europe, on the other hand, cannot boast of such figures. As it is much worse. And the dynamics is rather exclusively negative. Whereas in the United States, macroeconomic statistics are more often encouraging than disappointing. So there is no doubt that the pound will gradually lose its positions against the US dollar.

Unemployment rate (United States):

The GBPUSD currency pair continues to move in the 1.3105/1.3180 range, despite the bears' attempts to overcome its lower limit. Long-term price movement in a closed range leads to the process of accumulation of trading forces, which can lead to acceleration in the market.

The RSI technical instrument is moving along the middle line 50 in a four-hour period, which indicates a stagnation. RSI D1 is moving in the lower area of the 30/50 indicator, signaling the high interest of traders in a downward move.

The Alligator H4 indicator has a lot of crossovers between the moving MA lines, which confirms the signal of stagnation. Alligator D1 signals a downward trend, MA moving lines are directed downwards.

Expectations and prospects:

In this situation, traders are still considering the trading tactics of breaking through one or another flat border. In this regard, long positions will be valid after keeping the price above 1.3185 in a four-hour period, and short positions would be valid after keeping the price below 1.3100 in a four-hour period.

Complex indicator analysis has a variable signal in the short-term and intraday periods due to stagnation. Indicators in the medium term give a sell signal due to a downward trend.

Trading plan for EUR/USD and GBP/USD on April 5, 2022​​​​​​​

The pound has been marking time for a whole week, although there is no talk of any lull in the foreign exchange market. The single European currency, for example, has been steadily going down for several days now. At the same time, the UK cannot boast of any remarkable macroeconomic data, so the behavior of the British currency is no longer surprising, but fearful.

The market cannot stand still for so long, and even for no apparent reason. This only speaks of an excessive speculative component, which will inevitably make itself felt. It is most logical to assume that the British pound will move downwards, following the euro. But due to the excessive speculative component, upward movement is also possible. And this scenario seems to be the most realistic. That is, first a sharp jump up, and then a rapid reversal and a rapid upward movement.

But all this needs a reason. Given that the macroeconomic calendar is empty, and in general the pound ignores statistics, everything will depend on the general information background. Therefore, it is worth keeping a close eye on the news feed of the largest media outlets. Any news that in one way or another will affect the UK and its economy can become the very trigger that starts this whole process.

But the euro seems to have finally realized that there is a serious gap between the United States and the European Union in terms of macroeconomic statistics. And not much in favor of the euro area. In general, the single European currency steadily went down during the American session. This shows that European traders still deny the reality, while American traders look at things a little more rationally.

The euro continues to be under serious pressure, and it is not yet clear when it will be able to break out of this state. More specifically, what can help it. Macroeconomic indicators are increasingly suggesting that Europe is bearing the greatest losses due to the sanctions confrontation between the West and Russia.

The EURUSD currency pair has reached a variable pivot in the form of the 1.0940/1.0965 area during an intensive downward movement. This led to a slight slowdown with signs of a possible pullback. The subsequent increase in the volume of short positions is expected after holding the price below the value of 1.0940 in a four-hour period. Until then, the risk of a rebound remains.

The GBPUSD currency pair has been moving in the 1.3100/1.3180 side channel for almost a week now. This indicates uncertainty and possible speculative activity in the future. Trading tactics consider the method of breaking through one or another border with confirmation in a four-hour period.

Hot forecast for GBP/USD on 06/04/2022​​​​​​​

The pound stayed for a long time, and has demonstrated incredible stability. But yesterday everything changed, and it finally followed the single European currency. That is, to the downside. At the same time, it completely repeated the typical scenario for the last few days for the euro. The British currency stood still during the European session, and after the opening of the US one, it went down. But yesterday, both major European currencies had enough reasons to fall. Although to be precise, there is only one reason. The notorious energy carriers. Just at the opening of the US trading session, publications appeared in the media on the topic that the new block of European sanctions against Russia would include restrictions on coal supplies. We are not talking about a complete ban on imports. It is planned to reduce the volume of deliveries by about 4 billion euros, which is about a third of all coal supplies from Russia to Europe. Naturally, an extremely simple question immediately arises - how does Europe plan to compensate for the falling volumes. Moreover, Europe is already facing an unprecedented increase in fuel prices and inflation. There is no doubt that this decision, if of course it is made, will cause Europe the most serious damage. Including an even greater increase in inflation. The sanctions themselves should be adopted today or tomorrow. And if this issue is delayed, the pressure on the pound will only increase. Uncertainty scares investors the most. But in any case, at least today, the pound will remain under pressure.

The long-playing 1.3105/1.3180 horizontal channel for the GBPUSD pair was broken through on a downward trajectory. This led to speculation in the market, where the pound fell to the area of 1.3060. In fact, the bears tried to return the quote to the support level of 1.3000, playing a 100% corrective move.

The RSI technical instrument moves in the lower area of the 30/50 indicator in a four-hour period, which signals a high interest of traders in short positions.

The Alligator H4 indicator has a primary sell signal after a long intertwining between the moving MA lines. Alligator D1 is signaling a downward trend, MA moving lines are directed to the downside.

Expectations and prospects:

At the moment, the quote has slightly slowed down the downward movement, where the 1.3050/1.3060 area serves as a variable support. Keeping the price below these values is highly likely to lead to a further decline towards the support level of 1.3000. Until then, a rollback to the lower border of the passed flat is possible.

Comprehensive indicator analysis gives a sell signal in the short, intraday and medium term due to the rapid downward movement.

Tips for beginner traders in EUR/USD and GBP/USD on April 13, 2022

Economic calendar for April 13
Data on the UK inflation were published today, which saw an acceleration in consumer price growth from 6.2% to 7.0% with a forecast of 6.7%. Such high inflation is damaging the economy, which is a negative factor for the pound sterling.

During the American trading session, the producer price index in the United States will be published, which is expected to grow from 10.0% to 10.6%. Rising prices will lead to further inflation, which is already at historical levels.

All this is a negative factor for the US economy.

Time targeting

US producer price index - 12:30 UTC

Trading plan for EUR/USD on April 13
In this situation, holding the price below the level of 1.0800 in a four-hour period will indicate a continuation of the trend. This may lead to a subsequent movement towards the local minimum of 2020.

An alternative scenario for the development of the market considers another slowdown in the downward move within 1.0800. This may lead to a temporary pullback, but not to a change in trading interests.

Trading plan for GBP/USD on April 13
The price stagnation within the deviation of the 1.3000 level will soon end. With a high degree of probability, it will become a lever for speculators in the upcoming acceleration in the market. It is worth considering that the signal of prolongation of the downward trend will be confirmed only after the price is kept below the value of 1.2950 in a four-hour period.

As for the upward development of the price, traders consider this scenario as a local rebound of the price from the support level of 1.3000. The signal for action will come from the market at the moment the price is held above the value of 1.3055. In the future, this move may lead to the 1.3105 mark, after which a price reversal is not excluded.

Hot forecast for EUR/USD on 14/04/2022

The single European currency showed a rather unexpected growth yesterday. Although it was insignificant, nonetheless. Moreover, the producer price index in the United States rose from 10.3% to 11.2%. But just a day earlier, a stronger than expected increase in inflation in the United States led to a rise in the dollar, as it finally convinced everyone that the Federal Reserve would actively raise the refinancing rate. The producer price index is a leading indicator for inflation, so it will continue to grow. Therefore, it is quite possible that by the end of this year the refinancing rate will be raised as much as 3.0%.

Producer Price Index (United States):

But the fact is that simultaneously with the release of these data, new forecasts for inflation in the UK were published. The Bank of England expects inflation to peak just in April, stopping at 7.2%. After that, it will gradually decrease. But investment banks think otherwise, and in their opinion, inflation will accelerate to 9.0%, which is quite different from the forecast of the Bank of England. Given the current inflationary dynamics, the forecast from the banking sector seems more realistic. And in this case, the Bank of England will have to react somehow. Of course, we are talking about a further increase in the refinancing rate. This was the reason for the pound's growth, which has already pulled the euro. This is clearly seen by the fact that the pound grew more actively than the euro.

Data on retail sales in the United States will be published today, the growth rate of which may slow down from 17.6% to 11.0%. However, this news will be ignored in principle, since European Central Bank President Christine Lagarde's press conference will begin at the same time. The main event of the day is the meeting of the Board of the ECB. Interest rates, of course, will remain unchanged, as will all other parameters of the monetary policy pursued by the central bank. Only subsequent comments are of interest. If, as before, nothing is said about plans to raise the refinancing rate, then the dollar will resume its growth. But if Lagarde at least hints at the possibility of an increase in interest rates before the end of this year, then in this case the euro will begin to grow actively.

Retail Sales (United States):

The EURUSD currency pair, after the control convergence with the support level of 1.0800, the volume of short positions has sharply decreased. This led to a local stagnation, and then to a price rebound by about 100 points. A comparative analysis of the two trading instruments EURUSD and GBPUSD showed the possibility of a positive correlation, where due to the sharp strengthening of the British currency, there could be a rush to buy the euro.

The technical instrument RSI H4 crossed the 50 middle line during the strengthening of the euro. This signal indicates a corrective move.

The Alligator H4 indicator has a primary intersection between the moving lines, which also allows for a corrective move. Alligator D1 indicates a downward trend, MA moving lines are directed to the downside.

Expectations and prospects:

In this situation, much will depend on the external background, in particular, the results of the ECB meeting. As for the technical levels, the 1.0940 coordinate variable on the bulls' way, which can play the role of resistance if the hype for long positions subsides. If the price stays above 1.0950, it is highly likely that the correction will continue to form towards the psychological level of 1.1000.

Complex indicator analysis gives a signal to buy in the short-term and intraday periods due to the rapid growth of the euro. Indicators in the medium term have a sell signal due to a downward trend.

Gold went into the shadow of a strong dollar

This week, the demand for safe-haven assets has increased significantly. Gold has benefited from another spike in US inflation. But it seems that bullion is starting to seriously lose to the more reliable dollar.

Yesterday's trading on the New York COMEX was the last one this week. Today, many US markets are closed due to the Good Friday holiday.

Gold finished the shortened working week with an increase. Since Monday, its quotes have increased by 1.5%. The main growth driver for the yellow asset was the statistics on consumer prices in the US for March.

Last month, inflation in America accelerated to 8.5% year on year. This is a new 40-year high. The last time the rate was at such a high level was in January 1982.

The record price increase not only increased the value of the precious metal, but also reinforced the Fed's intention to raise interest rates more sharply at its next meeting.

In March, the US central bank raised rates by 25 bp for the first time in four years. Now that inflationary pressures have increased, it is highly likely that the Fed's next move will be to raise the rate by 50 bps.

This version was confirmed on Thursday by New York Fed President John Williams. He said raising interest rates by half a percentage point in May would be a "smart option" for the US central bank.

The hawkish rhetoric of Fed officials has fueled US Treasury yields across the curve. This acted as fuel for the dollar.

Yesterday the greenback index jumped 0.5% against its main competitors. The currency broke through the psychologically important level of 100 points.

The steep dive of the euro also helped the greenback to strengthen. The EU currency fell sharply on the European Central Bank's dovish position. Yesterday, the ECB's meeting for monetary policy took place. The central bank decided to leave its course unchanged for the time being.

Another driver for the dollar was the release of the consumer sentiment index of the University of Michigan. In April, the indicator rose sharply to 65.7 from the March value of 59.4 points.

The powerful momentum that the greenback received had a negative impact on gold quotes. On Thursday, the asset fell 0.5%, or $9.80. The price dropped to $1,974.90. This is the first drop in the value of the precious metal in six trading sessions.

Recall that in the outgoing week, bullion tested a critical level on the way to $2,000. But, according to analysts, gold will not be able to break out of the current price range in the near future. The main obstacle is the dollar.

Now we are seeing strong bullish dynamics of the US currency. According to forecasts, it will continue in the short term. As long as the greenback index remains above 100, the yellow asset has almost no chance of approaching $2,000.

What can help gold?
In the foreseeable future, the gold market will continue to follow the rhetoric of the world's central banks, many of which are hawkish. The Bank of England's interest rate decision is particularly important now.

Tightening the policy of major central banks may lead to a weakening of the US currency. This is a favorable factor for the precious metal.

In addition to the fall of the dollar, bullion may receive support from geopolitics. Currently, most experts predict a further escalation of the military conflict in Eastern Europe.

This week, Russia threatened to deploy nuclear weapons and hypersonic missiles if Sweden and Finland join NATO. The comment came from the Deputy Chairman of the Security Council of the Russian Federation Dmitry Medvedev.

This happened just a day after US President Joe Biden announced that America would provide Kiev with additional firepower, including heavy artillery, worth $800 million.

If the situation in Ukraine continues to heat up, gold may come close to $2,000. However, traders should be prepared for the opposite situation.

The settlement of the conflict in Eastern Europe or the reduction of inflationary risks may lead to a significant drop in the value of the precious metal – up to $1,900.

Bitcoin (BTC) will not fall below $24,500

Bitcoin is declining for the second week in a row under the influence of the negative dynamics of the stock market. The main decline in BTC last week occurred on Monday against the backdrop of a noticeable drawdown in US stock indices.

The leaders of the world's largest crypto exchanges, interviewed by CNBC, said that they have recently noticed signs of a "crypto thaw", expressed in a changing attitude towards cryptocurrencies from governments.

The Central Bank of Portugal granted the bank the country's first license to work with crypto assets. Bison Bank has become the first bank in Portugal to offer custody and trading services for cryptocurrencies for large clients.

Tesla CEO Elon Musk said recently that he intends to buy Twitter. Cardano founder Hoskinson suggested that Musk join forces to create a decentralized social network if Twitter refuses the deal.

The 12th DOGE cryptocurrency will become the most used cryptocurrency for online payments, said Robinhood CEO Vlad Tenev. However, to do this, developers must increase the speed of transaction processing.

The Ministry of Finance of the Russian Federation finalized the draft law on mining and circulation of digital assets. The government of the Russian Federation submitted to the State Duma a draft law on the taxation of digital assets by three types of taxes.

The creator of the Stock-to-Flow (S2F) model PlanB believes that bitcoin will no longer fall to $24,500. His optimism regarding the asset remains unchanged. According to PlanB, BTC could reach $100,000 by the end of the year.