BITCOIN holds around $40000 level, could bounce back?
S&P500
S&P500 gave up the gains towards the final hour of trading on Tuesday and closed in the red. The focus of the markets was on the fresh CPI Data. And the US CPI data was the key event of the week. And it has made the way for banks earning season to start from today onwards. The CPI data in the US is used to calculate inflation. It is the measure of the average change over time in the prices of consumer goods and services. Or it measures what Americans pay for everyday items. Whereas inflation is the overall general upward price movement of the goods and services in an economy.
Investors are grappling with the likelihood of aggressive and hawkish moves from the Fed officials to combat inflation. 50 basis point hike in the upcoming meeting is very likely and the market is already discounting the hike as Fed has expressed its strong desire to curb inflation. The possibility of a wider recession is discussed more widely by strategists and economists. While it is too early to make a call, the signals are there, and the possibility of recession is still on the table.
S&P 500 Index
Inflation at its Peak?
According to the US government data released on Tuesday, April 12th the Inflation boosted to 8.5% a new high in March and its quickest annual pace in over 40 years, the highest since 1981. The US CPI increased 1.2% in March majorly pushed by soaring oil prices (18.3%), increasing food prices (1%), and housing costs rising by (0.5%) on monthly basis.
The year-on-year increase in Gas prices is at 48%, food prices are up by 8.8% and housing costs advanced to 5% from a year earlier. Several analysts expect that the March data mark the inflation at its peak while the Ukraine war is far from over, renewed lockdowns in China are putting pressure on oil prices, and supply chain bottlenecks persist that are together weighing on the Consumer Prices.
Is inflation at its peak?
USO/USD
Oil prices recovered and changed their course as the market remains nervous about the Russian Supply. As per the data on April 10th, the Russian oil production is already down by roughly 1 million barrels per day as a smaller number of refineries running in the country and this will reduce the export of refined products, especially diesel as the market is already running short of diesel.
The big price swings in oil prices are a result of too many unknowns and too many variables in the equation like uncertain demand in China and the US, Supply shortfall from Russia, the Iran deal possibility, European oil embargo on Russia, and Opec’s possible deployment of spare production capacity.
USOIL / WTI Crude Oil chart
Technical analysis
The US oil charts show that the prices dropped from the key Resistance level of $113 to hit the Key Support level at $94.00 in about 13 Sessions. The fall in the oil prices was a relief for the broader economy. However, it seems the prices are now bouncing back to test the Resistance levels. If oil prices manage to stay above the $100 mark for the most part of the year. Then there is a possibility of prices heading towards $115 to $120 by the end of this year and staying around that level (Tradingview).
Trade Insights – USO/USD –Viable Long positions above the Key Support Level $94 targeting first the Pivot point at $104.00 and advancing towards the Resistance level at $113 and later testing the $115 mark.
Alternatively, Short positions below the Pivot Point at $104.00 if prices do not manage to advance through this level. Target the Key Support level at $94.00 and head downwards to test the support zone at $88.00 to $86.00 if the war is over.
XAU/USD
Gold prices are rising in tandem with the US dollar. Despite the core CPI data missing the Dollar Index code DXY, soared to a new high of 100.42 at the time of analysis of the levels. It saw in May 2020 when the dollar dropped sharply. US Bond yields also declined to 2.71% from the three-year peak of 2.83%. The annual inflation rate in the US accelerated to 8.5% in March. There are expectations in the markets of sharper interest rate hikes to cool off the overheated economy. Gold prices are thriving in these conditions.
US 10 Year Note Bond Yield
Technical Analysis:
Gold is finding tailwinds from the geopolitics as Russia Ukraine talks are reaching no conclusions. The gold bulls are setting their eyes on the $2000 level that the pair touched in March 2022. Gold has been keeping above the $1920 level. it has been consolidating for about the past 16 sessions to now advancing towards the Resistance levels on the chart.
Trade Insights – XAU/USD –Viable Long positions above the Pivot at $1920 targeting the Key Resistance at $1980. Then later testing the Resistance Zone at $2000 to $2010.
Alternatively, Short positions below the Key Resistance Level at $1980 if gold fails to break through the resistance and slides down. Traders could first target the Key Support level at $1920. Then the Support Zone is at $1835 to $1825.
XAU/USD Chart shows the prices are trading above the rising 50 Day SMA and 200 Day SMA averages. they indicate a bullish bias of the market. The RSI indicator after being flat for a few weeks is now rising towards 60 points. And it shows every drop in the pair is currently a possible buying opportunity.
The information provided is of a general nature and is not intended to be personalised financial advice. The information provided is not intended to be a substitute for professional advice. You may seek appropriate personalised financial advice from a qualified professional to suit your individual circumstances.
Trading in Rockfort Markets derivative products may not be suitable for everyone as derivative products may be considered as high risk. Please ensure that you understand the risks involved. A Product Disclosure Statement can be obtained here and should be considered before trading with us.
Market Insight - Inflation at its Peak?
Market Insight – March 13th April 2022.
S&P500
S&P500 gave up the gains towards the final hour of trading on Tuesday and closed in the red. The focus of the markets was on the fresh CPI Data. And the US CPI data was the key event of the week. And it has made the way for banks earning season to start from today onwards. The CPI data in the US is used to calculate inflation. It is the measure of the average change over time in the prices of consumer goods and services. Or it measures what Americans pay for everyday items. Whereas inflation is the overall general upward price movement of the goods and services in an economy.
Investors are grappling with the likelihood of aggressive and hawkish moves from the Fed officials to combat inflation. 50 basis point hike in the upcoming meeting is very likely and the market is already discounting the hike as Fed has expressed its strong desire to curb inflation. The possibility of a wider recession is discussed more widely by strategists and economists. While it is too early to make a call, the signals are there, and the possibility of recession is still on the table.
Inflation at its Peak?
According to the US government data released on Tuesday, April 12th the Inflation boosted to 8.5% a new high in March and its quickest annual pace in over 40 years, the highest since 1981. The US CPI increased 1.2% in March majorly pushed by soaring oil prices (18.3%), increasing food prices (1%), and housing costs rising by (0.5%) on monthly basis.
The year-on-year increase in Gas prices is at 48%, food prices are up by 8.8% and housing costs advanced to 5% from a year earlier. Several analysts expect that the March data mark the inflation at its peak while the Ukraine war is far from over, renewed lockdowns in China are putting pressure on oil prices, and supply chain bottlenecks persist that are together weighing on the Consumer Prices.
USO/USD
Oil prices recovered and changed their course as the market remains nervous about the Russian Supply. As per the data on April 10th, the Russian oil production is already down by roughly 1 million barrels per day as a smaller number of refineries running in the country and this will reduce the export of refined products, especially diesel as the market is already running short of diesel.
The big price swings in oil prices are a result of too many unknowns and too many variables in the equation like uncertain demand in China and the US, Supply shortfall from Russia, the Iran deal possibility, European oil embargo on Russia, and Opec’s possible deployment of spare production capacity.
Technical analysis
The US oil charts show that the prices dropped from the key Resistance level of $113 to hit the Key Support level at $94.00 in about 13 Sessions. The fall in the oil prices was a relief for the broader economy. However, it seems the prices are now bouncing back to test the Resistance levels. If oil prices manage to stay above the $100 mark for the most part of the year. Then there is a possibility of prices heading towards $115 to $120 by the end of this year and staying around that level (Tradingview).
Trade Insights – USO/USD –Viable Long positions above the Key Support Level $94 targeting first the Pivot point at $104.00 and advancing towards the Resistance level at $113 and later testing the $115 mark.
Alternatively, Short positions below the Pivot Point at $104.00 if prices do not manage to advance through this level. Target the Key Support level at $94.00 and head downwards to test the support zone at $88.00 to $86.00 if the war is over.
XAU/USD
Gold prices are rising in tandem with the US dollar. Despite the core CPI data missing the Dollar Index code DXY, soared to a new high of 100.42 at the time of analysis of the levels. It saw in May 2020 when the dollar dropped sharply. US Bond yields also declined to 2.71% from the three-year peak of 2.83%. The annual inflation rate in the US accelerated to 8.5% in March. There are expectations in the markets of sharper interest rate hikes to cool off the overheated economy. Gold prices are thriving in these conditions.
Technical Analysis:
Gold is finding tailwinds from the geopolitics as Russia Ukraine talks are reaching no conclusions. The gold bulls are setting their eyes on the $2000 level that the pair touched in March 2022. Gold has been keeping above the $1920 level. it has been consolidating for about the past 16 sessions to now advancing towards the Resistance levels on the chart.
Trade Insights – XAU/USD –Viable Long positions above the Pivot at $1920 targeting the Key Resistance at $1980. Then later testing the Resistance Zone at $2000 to $2010.
Alternatively, Short positions below the Key Resistance Level at $1980 if gold fails to break through the resistance and slides down. Traders could first target the Key Support level at $1920. Then the Support Zone is at $1835 to $1825.
XAU/USD Chart shows the prices are trading above the rising 50 Day SMA and 200 Day SMA averages. they indicate a bullish bias of the market. The RSI indicator after being flat for a few weeks is now rising towards 60 points. And it shows every drop in the pair is currently a possible buying opportunity.
Click to see Chart of the Week: Chart Of The Week - XBT/USD – BITCOIN Holds Around $40000 Level, Could Bounce Back?
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The information provided is of a general nature and is not intended to be personalised financial advice. The information provided is not intended to be a substitute for professional advice. You may seek appropriate personalised financial advice from a qualified professional to suit your individual circumstances.
Vishal, R.
April 13, 2022
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