Daily Analysis

[Zforex]

Nvidia Stock Analysis by zForex Research Team - 05.23.2024

Nvidia's Strong Results and Sales Forecast Propel Tech Sector Gains

On Thursday, S&P 500 futures rose by approximately 0.7%, with the Nasdaq surging 1% and Dow Jones futures adding about 60 points, fueled by positive sentiment surrounding Nvidia's quarterly results. Nvidia surpassed earnings and revenue estimates, driven by robust demand for AI chips, and additionally announced a strong sales forecast along with a 10-for-1 stock split. This news propelled Nvidia shares nearly 7% higher in premarket trading, consequently boosting the tech sector. Other tech stocks such as Super Micro Computer (up 5.1%), Micron Technology (up 3.6%), and AMD (up 2.8%) also experienced gains.

Meanwhile, investors continued to digest a hawkish stance from the Fed, following the release of FOMC minutes indicating that policymakers require more confidence in the disinflation process and are likely to maintain elevated interest rates for some time. Among megacaps, Microsoft (up 0.9%), Apple (up 0.3%), Amazon (up 0.8%), Meta (up 1.2%), and Alphabet (up 0.4%) were all trading higher before the opening bell. On the economic front, initial claims fell more than anticipated, and Flash S&P Global PMIs will be closely watched throughout the day.

After hitting a new peak and gaining momentum, the Nasdaq's first significant resistance level is at the psychological mark of 19,000. If this level is surpassed, further resistance levels to monitor include 19,200 and 19,400. On the downside, the initial support range is between 18,930-18,950, with potential follow-up support at 18,800 and 18,650 if this range is breached.

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[Zforex]

WTI Crude Oil Analysis by zForex Research Team - 05.23.2024

WTI Crude Steady at $78 Amid Demand Concerns and Rising US Stockpiles

On Thursday, WTI crude futures held steady at $78 per barrel, a level not seen since March 12, amid concerns about demand and rising US stockpiles. The latest EIA report showed an increase in US crude inventories last week, with Cushing, Oklahoma's storage hub reaching its highest level since July. Additionally, the recent Federal Reserve minutes suggested a willingness among members to tighten policy in response to inflation spikes, which could potentially curb energy demand from the world's largest oil consumer.

Furthermore, Russia announced on Wednesday that it had exceeded its OPEC+ production quota in April due to "technical reasons" and plans to propose a plan to compensate for the oversight. Attention now shifts to the upcoming OPEC+ meeting on June 1, where major oil producers are expected to extend output cuts to prevent a global oversupply and support prices.

After a prolonged period of consolidation, oil is exhibiting a notably positive trend today. The initial support level is at $78.30, with further support levels at $77.60 and $76.90 if this level is breached. On the upside, the initial resistance level is at $79.10, with further resistance in the $79.90-$80.00 range. Beyond that, the next level to watch is $81.00.

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[Zforex]

Ethereum Analysis Provided by zForex - 05.23.2024

Ethereum Spot ETF Approval: Parallels with Bitcoin ETF Journey

As the saga of Ethereum spot ETF approval unfolds, investors and industry observers in the exchange-traded fund sector may find similarities with the journey toward the eventual approval and launch of spot Bitcoin ETFs. Initially, the Securities and Exchange Commission (SEC) approached both Ethereum and Bitcoin spot ETFs with caution. However, pressure from various stakeholders, including issuers, investors, and the evolving crypto market, has likely nudged the SEC toward considering approval.

These decisions highlight the growing recognition of the maturing cryptocurrency market and increasing institutional interest in these assets. The existence of spot Bitcoin ETFs and the potential approval of an Ethereum-based ETF indicate the SEC's acknowledgment of the rising demand from investors for regulated avenues to access these cryptocurrencies.

A notable difference between the two cases is the potentially quicker approval process for Ethereum ETFs compared to Bitcoin. This can be attributed to the legal precedent set by the August 2023 Grayscale court case, which effectively overturned the SEC’s initial rejection of the asset manager's spot Bitcoin ETF application. Both scenarios illustrate the complex journey toward approval and the increasing openness toward well-structured spot cryptocurrency ETFs.

Bitcoin, after a recent rally, is currently in a consolidation phase. The initial resistance level is at $70,700, and a breakthrough and sustained position above it could lead to levels at $72,000 and $73,700, respectively. On the downside, the first support level is at $68,850, with potential targets at $67,300 and $66,500 if it is breached.

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[Zforex]

EUR/USD Analysis Provided by zForex - 05.28.2024​

EUR/USD Gains Momentum, Approaching Key Resistance Levels​

The EUR/USD currency pair has gained momentum after breaking the short-term intraday downtrend, reaching the daily downtrend resistance. To sustain this upward movement, the pair needs to surpass the 1.0880-1.0900 range. If it successfully breaks and maintains above this range, the next resistance levels to watch are 1.0950-1.0960 and 1.1000. However, if the pair encounters selling pressure, the first support level is at 1.0860. Below this, the 1.0830-1.0835 range is crucial, and a break below it could push the price down to test the 1.0800-1.0810 range.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1000	1.0950	1.0880	1.0860	1.0830	1.0800

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[Zforex]

USD/JPY Analysis Provided by zForex - 05.28.2024​

USD/JPY Shows Modest Upward Movement Amid Core Inflation Data​

The USD/JPY pair, maintaining its muted momentum, saw an upward move of approximately 20 pips after core inflation fell below expectations. If this upward trend continues and the pair breaks above 157.00, it would indicate the short-term downtrend has been broken. The next levels to monitor would be 157.50 and 158.00. Conversely, if the pair moves downward, the first support zone to watch is the 156.50-156.40 range. A breach below this range would highlight 156.00 and 155.00 as subsequent support levels.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
158.00	157.50	157.00	156.40	156.00	155.00

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[Zforex]

GBP/USD Analysis Provided by zForex - 05.28.2024​

GBP/USD Tests Resistance at 1.2780-1.2800​

In the past two days, the GBP/USD currency pair has gained momentum and approached the resistance level on the daily chart. The 1.2780-1.2800 range stands out as the key resistance zone. If this zone is breached and sustained above, the next resistance levels to monitor are 1.2850-1.2860 and then 1.2900. However, if profit-taking occurs, the first support level to watch is 1.2740. Should this level be breached, the subsequent support levels are 1.2700 and 1.2670.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.2900	1.2860	1.2800	1.2740	1.2700	1.2670

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[Zforex]

USD/Yen Analysis Provided by zForex - 05.30.2024​

Dollar Steady Above 105; Yen Strengthens as Asia-Pacific Markets Fall​

On Thursday, the dollar index maintained levels above 105 after registering a 0.5% increase in the prior session. This increase was driven by rising Treasury yields due to weak demand at a bond auction and expectations of prolonged high US interest rates. Recent comments from a Federal Reserve official hinted at the possibility of further rate hikes in response to potential inflationary pressures. Additionally, May's unexpected improvement in US consumer confidence added to the sentiment. The market focus now shifts to revised US GDP figures scheduled for Thursday and the US PCE price index report set for release on Friday. Forecasts now suggest December as the potential start of the easing cycle, marking a significant shift from earlier projections of a September rate cut. Following that, the dollar reached its highest levels in two weeks against a basket of major currencies.

Gold approached the $2,330 per ounce mark, marking a further decline. Fed Atlanta President Bostic's remarks on Wednesday, highlighting uncertainties regarding achieving 2% inflation and the significance of price increases, added to the sentiment. Minneapolis Fed President Kashkari's statement on delaying rate cuts until inflation improves and not ruling out rate hikes if inflation stays high further impacted market sentiment. The initial jobless claims data for the week ending May 25 will also provide insights into the central bank's policy outlook.

On Thursday, Asia-Pacific markets continued their decline, mirroring the performance of Wall Street, as investors braced for a barrage of economic indicators scheduled for release from the region on Friday. Japan's Nikkei 225 experienced a decline of approximately 1.6%, while the Topix index fell by 0.8%. Similarly, South Korea's Kospi dropped by 0.72%, with the smaller cap Kosdaq slipping by 0.3%. Industrial production figures from Japan and South Korea are slated for release on Friday, along with China's official purchasing managers index for May. Additionally, inflation data for Tokyo will also be disclosed.

The Japanese yen strengthened beyond 157 per dollar, rebounding from four-week lows as a sell-off in risky assets led investors to seek it as a safe haven. Rising domestic yields also provided support to the yen, with Japan's 10-year benchmark yield hitting 1.1% this week, marking its highest level since July 2011. Earlier comments from BoJ member Seiji Adachi hinted that the central bank might consider raising interest rates if significant declines in the yen lead to increased inflation. Market participants are now focused on Tokyo's inflation data on Friday, considered a leading indicator of nationwide price trends. However, the yen continued to face pressure from a robust dollar and Treasury yields with growing expectations of prolonged higher US interest rates.

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[Zforex]

EUR/USD Analysis Provided by zForex - 05.30.2024​

EUR/USD Drops to 1.0800 on High Rate Expectations​

Yesterday, the expectation that interest rates would remain elevated for some time yields led to a strong close on 10-year government bonds, which devaluated the EUR/USD currency pair. With the expected breach of 1.0835, the pair saw the 1.0800 level. The initial support expected for today stands at the 200-day moving average level of 1.0780. If this level is breached with momentum from news flow, the focus may shift to the 1.0750-1.0760 range, followed by the 1.0710 level. However, in an upward reversal, the 1.0815 level will pose as resistance. If this level is broken with momentum, the subsequent levels to watch are the 1.0830-1.0835 range and the 1.0860 level.

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Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.0860	1.0835	1.0815	1.0780	1.0750	1.0710

 

[Zforex]

Gold Analysis Provided by zForex - 05.30.2024​

Gold Retests Support at 2320-2325 with Dollar Strength​

With the strengthening of the dollar, the yellow metal retested the major support level around the 2320-2325 range. If this range is breached, the first level to monitor would be the 2308-2300 range. If this level is also broken, the 2280 major support level may come into play. However, in the event of positive news flow from the United States, prompting an upward movement in prices, the first major resistance above 2355 would be the 2370-2375 range. The third level to watch above this range would be 2395.

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Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
2395	2375	2355	2320	2300	2280

 

[Zforex]

Daily Analysis Provided by zForex - 06.04.2024​

US Economic Data Drives Dollar and Gold Movements​

On Tuesday, the dollar index remained steady at around 104, marking its lowest level in almost two months. This drop was fueled by indications of economic weakness in the US, bolstering expectations for Federal Reserve interest rate cuts. Despite forecasts for a slight improvement, data released on Monday revealed a further contraction in US manufacturing activity in May. Consequently, market sentiment shifted, with the probability of a Fed rate cut in September rising to approximately 52%, compared to about 42% on Friday. Investors are now eagerly awaiting key economic reports scheduled for later this week, including the ISM Services PMI, JOLTS Job Openings, and the highly anticipated monthly jobs report, for additional guidance. Additionally, markets are anticipating the European Central Bank's policy decision on Thursday, with expectations leaning toward rate reductions. While the dollar remained at multi-month lows against most major currencies, it only experienced modest declines against the Australian dollar and Japanese yen, trading at two-week lows.

Gold prices remained steady at around $2,348 per ounce, following gains in the previous session, supported by increasing expectations of relaxed monetary policies from major central banks. Monday's data revealed a second consecutive slowdown in US manufacturing activity in May, alongside an unexpected decline in construction spending for April, primarily driven by drops in non-residential activity. These developments fueled speculation that the Federal Reserve has the flexibility to implement rate cuts later this year. Currently, traders are estimating a 52% likelihood of a rate cut in September, according to the CME FedWatch tool. Simultaneously, the European Central Bank is anticipated to lower interest rates this week, with similar expectations for easing policies from the Bank of Canada and the People's Bank of China. Investors are now awaiting Wednesday's ADP employment report and Friday's non-farm payrolls data to gauge the health of the US economy and its potential impact on the Fed's policy trajectory.

On Tuesday, WTI crude futures dropped below $74 per barrel, marking their fifth consecutive decline to the lowest level in four months amidst concerns about a potential increase in global supply later in the year. OPEC+ reached an agreement on Sunday to extend most of their supply cuts into 2025 but introduced the possibility of gradual unwinding of voluntary cuts from eight member countries starting in October. It is anticipated that over 500,000 barrels per day will re-enter the market by December, with a total of 1.8 million barrels per day returning by June 2025. Additionally, signs of economic weakness in the United States, the world's largest oil consumer, added pressure to oil prices after US manufacturing activity continued to contract in May. Furthermore, recent fears that the US Federal Reserve may refrain from cutting interest rates this year have further weighed on oil markets, potentially slowing economic growth and reducing oil demand.

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