Market News Today

Market Overview

In the coming week, at the start of the first quarter, the economic calendar is at peace with only some major decisions to be heard from a few FED speakers and the Bank of England decisions. We also have a couple of Aussie news coming in. 

We experienced a slowdown for the US economy come the first quarter close, further prolonging the expected FED rate cuts. 

The US economy grew at an annualized rate of 1.6% in the first quarter of 2024; A slowdown from the 3.4% growth seen in the previous quarter and the 2.2% growth from the first quarter of 2023, and below the forecasts of a 2.5% growth.

Consumer spending grew at a 2.5% rate, down from 3.3% in the previous quarter, mainly due to a fall in goods consumption (-0.4% vs 3%) while spending on services rose faster (4% vs 3.4%). Non-residential investment also eased, growing at 2.9% compared to 3.7% in the prior quarter, due to a decline in structures investment (-0.1% vs 10.9%) while equipment investment rebounded (2.1% vs -1.1%) and intellectual property products investment accelerated (5.4% vs 4.3%).

Government spending rose way less (1.2% vs 4.6%), and exports slowed sharply (0.9% vs 5.1%) while imports soared (7.2% vs 2.2%).

Overall, the slowdown was attributed to moderating consumer spending, weaker government outlays, and a drag from net trade, though the economy remained resilient amid strong productivity, robust employment, and buoyant domestic demand.

A rise in imports may spell a change in the demand for the US dollar and a changing direction for the US government, trying its best to put out the US dollars from the country. This sharp increase may also foretell an attempt to strengthen foreign relations and investments in coherence with the solidification of international alliances due to rising tensions.

We see yields pulling back and the VIX drop sharply to under 16 as the FED announced confidence in the economy not moving to hawkish rates. This announcement also slowed Oil prices down and led to the growth and recovery of the equities. 

While the first quarter did not equate to higher levels for the equities, we do see a better positioning for entering the markets. 

GOLD - We see the GOLD create new highs in the first quarter as talks of an overvalued GOLD make things difficult for traders and investors, while others mention an oversold GOLD from where the price is stagnating. Other analysts also mention the potential for the drop to go further before a continuation. On our side of things, we view the potential for GOLD to test the demand zone at 2261.156 and 2227.561. However, we do not view the second quarter for GOLD prices to drop, but as a continuation of the bullish market. There may be chances for GOLD to stagnate in price, however, while the Middle East tensions continue to pester us from behind, we cannot rule out investor's and CB's confidence in the purchase of GOLD.

SILVER -In the SILVER market, we see the market go up, respecting the monthly range, and stay below 29.900. There is huge potential for the market to stagnate for the coming quarter, however, similar to GOLD, we cannot rule out the possibility of a sudden price hike correlated to tensions.

DXY -We see a recovery for the DXY from last quarter's close. Market structure after this quarters close continues to suggest a bullish trend however, we continue to watch the double-top pattern forming at the peak of this quarter. Our bias remains bullish for as long as structures hold. We want to see a break beyond 106.848 before a call for continuation. A further drop may call for the price to test 102.775.  We do view the overall trend of the market to be bullish.

GBPUSD - The market is comfortably sitting inside its range as the price broke briefly out of it and quickly returned to attempt to reach the anchor point. However, the price may potentially continue its downward trend as we see an M pattern forming. A break below 1.20389 will confirm this. Overall, no aggressive move in this move away from the previous quarters levels.

AUDUSD - The price has dropped since last quarters close. While we see the current price to range, the price still chooses to respect 0.63407, a hard structure to break. With prices still stuck between 0.66145 and 0.64427, we cannot call a bias for the AUD other than a potential for it to rise again from structure, or force itself to go beyond the floor.

NZDUSD - This market has a strong selling structure holding the price down. We do see the price currently retraced, giving us an opportunity to hop into the market at a better price. Price stagnated overall as it did not create new higher highs or lows from the previous quarter.

EURUSD -We can now see prices stagnate within the price range created from last quarter. We see the price retrace from 1.06356, attempting to reach the daily trendline. We still see the market bearish as the structure continues to create lower highs and lower lows. While several major structures are holding up, we do not view this negatively.

USDJPY - The Yen has grown considerably weaker from last quarters close, forcing the BoJ to intervene in the market to control currency strength. We must practice caution as other investors have chosen to stay away from the Yen temporarily until the BoJ announces their contentment, as they do choose to trade aggressively during quiet hours to easily control prices and sentiment.

USDCHF - With the price not moving beyond the previous quarters high, we can see the price break below the channel. From here, we can see the price move away and stagnate above 0.88886, with the potential for the price to continue upward during this quarter. We remain bullish on the UCHF for as long as the prices continue to be held up by structure.

USDCAD -The price has failed to break above the previous quarters high and got held back by 1.38402. This may entail a weakened currency this coming quarter however, we continue to view this market strongly as the bullish structure continues to hold up for the coming quarter, and this aligns with all other readings with the USD. 

Reminder:

The first quarter of the year has just closed, giving us fresh momentum coming into the markets. With this, it is imperative we keep our eyes fresh and our structures relevant. You may choose to redraw your structures and construct technical analysis and insights from the new structures of this quarter. 

COT Reports Analysis

CAD - Weak (3/5)

CHF - Weak (5/5)

GBP - Weak (4/5)

JPY - Weak (3/5)

EUR - Weak (3/5)

AUD - Weak (2/5)

NZD - Strong (2/5)

USD - Mixed

US10Y - Weak (3/5)

US05Y - Weak (5/5)

US02Y - Weak (5/5)

NASDAQ - Weak (2/5)

S&P500 Consolidated - Strong (2/5)

Russel E-Mini - Weak (5/5)

Nikkei Stock Average - Weak (5/5)

BTC - Mixed

Silver - Strong (3/5)

GOLD - Strong (4/5)

Crude Oil - Weak (5/5)