How confident is the market right now?

GBPUSD – technical overview

Signs have emerged of the market wanting to put in a longer-term base after collapsing to a record low in September 2022. The recent weekly close back above the September high at 1.1739 strengthens this prospect. Any setbacks should now be well supported ahead of 1.1500. Next key resistance comes in at 1.2668.

• R2 1.2400– Figure – Medium
• R1 1.2344 – 23 March high– Medium
• S1 1.2167 – 20 March low– Medium
• S2 1.2010 – 15 March low – Strong

GBPUSD – fundamental overview

The Pound extended its recent run after the BOE went ahead and hiked rates 25 basis points while signaling the likelihood for further rate increases ahead. At the same time, the split 7-2 vote did open some selling into the rally. Key standouts on Friday’s calendar come from UK retail sales, German and Eurozone PMI reads, UK PMI reads, Canada retail sales, and US durable goods orders.

USDJPY – technical overview

The major pair has seen a nice recovery following the massive correction out from multi-year highs. Setbacks have finally been well supported ahead of 125.00 in the 127s thus far. At this stage, it looks like the market could be wanting to resume the bigger picture uptrend and head back towards a retest of that multi-year high from October 2022 up at 151.95. Look for any weakness to continue to be well supported in favor of higher lows along the way.

• R2 135.12 – 15 March high – Strong
• R1 133.83 – 16 March high – Medium
• S1 130.05 – 24 March low – Medium
• S2 129.81 – 10 February low – Strong

USDJPY – fundamental overview

The Yen has continue to hold up well on positive Japan data and safe haven bid appeal. Key standouts on Friday’s calendar come from UK retail sales, German and Eurozone PMI reads, UK PMI reads, Canada retail sales, and US durable goods orders.

AUDUSD – technical overview

There are signs of the potential formation of a longer-term base following the late 2022 surge back above 0.6500. The recent weekly close back above previous support now turned resistance at 0.6682 strengthens the outlook for a bullish structural shift. Next key resistance comes in at 0.7284. Setbacks should be well supported ahead of 0.6500.

• R1 0.6784 – 1 March high – Strong
• R2 0.6760 – 22 March high – Medium
• S1 0.6564– 9 March low – Medium
• S2 0.6500 – Psychological – Strong

AUDUSD – fundamental overview

Earlier today, Aussie PMI reads came in below forecast. At the same time, well supported commodities prices and broad US Dollar selling have managed to offset. Key standouts on Friday’s calendar come from UK retail sales, German and Eurozone PMI reads, UK PMI reads, Canada retail sales, and US durable goods orders.

USDCAD – technical overview

A recent surge back above 1.3000 signals an end to a period of bearish consolidation and suggests the market is in the process of carving out a more significant longer-term base. Next key resistance now comes in up into the 1.4000 area. Setbacks should be very well supported down into the 1.3000 area.

• R2 1.3900– Figure – Medium
• R1 1.3863 – 10 March high – Medium
• S1 1.3631 – 23 March low – Medium
• S2 1.3555 – 3 March low – Strong

USDCAD – fundamental overview

Earlier this week, The Bank of Canada summary of deliberations showed it agreed to 'emphasize the conditionality' of its pause although it saw 'clear signals' hikes were impacting demand. The central bank acknowledged government spending grew more than anticipated in Q4 at 3.9%. There was no mention of a hike. All of this has weighed on the Loonie, though broad US Dollar selling on the Fed repricing and better bid commodities have helped to offset. Key standouts on Friday’s calendar come from UK retail sales, German and Eurozone PMI reads, UK PMI reads, Canada retail sales, and US durable goods orders.

NZDUSD – technical overview

Overall pressure remains on the downside with the market once again stalling out on a run up into the 0.6500 area. Ultimately, a break back above 0.6577 would be required to take the immediate pressure off the downside.

• R2 0.6300 – Figure – Strong
• R1 0.6295 – 23 March high – Medium
• S1 0.6139– 16 March low – Medium
• S2 0.6084 – 8 March low – Strong

NZDUSD – fundamental overview

The RBNZ economist was out the other day with some balance speak saying rate hikes were having the desired effect, but that the central bank was ready to do more if the cyclone rebuild added to inflation. Key standouts on Friday’s calendar come from UK retail sales, German and Eurozone PMI reads, UK PMI reads, Canada retail sales, and US durable goods orders.

US SPX 500 – technical overview

Longer-term technical studies are in the process of unwinding from extended readings off record highs. Look for rallies to be well capped in favor of lower tops and lower lows. A monthly close back above 4300 will be required at a minimum to take the immediate pressure off the downside. Next major support comes in at 3763.

• R2 4198 – 2 February/2023 high – Strong
• R1 4080 – 6 February high – Medium
• S1 3806 – 13 March low – Medium
• S2 3763 – 22 December low – Strong

US SPX 500 – fundamental overview

We've finally reached a point in the cycle where the Fed recognizes unanchored inflation expectations pose a greater downside risk than over-tightening. This is significant, as it means less investor friendly monetary policy that risks potential recession in the months ahead. Overall, we expect inflation to continue to be a problem in H1 2023 that results in downside pressure into rallies.

GOLD (SPOT) – technical overview

The 2019 breakout above the 2016 high at 1375 was a significant development, opening the door for fresh record highs. Setbacks should now be well supported above 1600 on a monthly close basis ahead of the next major upside extension. The recent break back above 1808 strengthens the bullish outlook. Next major resistance comes in at the record high from 2020 at 2076.

• R2 2010 – 20 March high – Strong
• R1 2000 – Psychological – Medium
• S1 1804 – 28 February low – Medium
• S2 1719 – 23 November 2022 low – Strong

GOLD (SPOT) – fundamental overview

The yellow metal continues to be well supported on dips with solid demand from medium and longer-term accounts. These players are more concerned about inflation risk and a less upbeat global growth outlook. All of this should keep the commodity well supported, with many market participants also fleeing to the hard asset as the grand dichotomy of record high equities and record low yields comes to an unnerving climax.