U.S. stocks sharply higher as financial risks recede; focus on trend generation in each currency pair【March 31, 2023】

Fundamental Analysis

• Major U.S. stock indexes rise, as expectations of a halt in interest rate hikes combine with risk recession
• Finland’s decision to join NATO approved by Turkey’s parliament
• Russia’s rebound is inevitable; some awareness of geopolitical risks likely
• Apple reportedly considering acquisition of Disney, raising expectations for Apple stock
• U.S. Personal Consumption Expenditures will be the focus of market attention
• Eurozone CPI better than expected, expected to strengthen the euro
• Banking-related investors’ fears are dissipating and they are starting to look for other material
• April usually tends to bring major trends in currency pairs

Technical Analysis

The Australian dollar has been strengthening across the board. Yesterday in New York, the dollar weakened and the yen also sold off, leaving the dollar mostly range-bound. Today is a milestone day for Japan as it is the end of the fiscal year, fiscal year-end, and the end of the quarter. We need to be wary of actual demand flows.

The euro remains firm. In addition, a pennant shape has emerged in Gold on the daily chart, and we will be watching for further developments.

Gold (XAUUSD)

Analyzing the daily chart of Gold, the price has made several attempts at the USD 2,000 level, but has fallen back and is now struggling. However, the lows are also gradually cutting up, confirming the “pennant” chart pattern, which occurs with temporary adjustment moves in the middle of a trend generation.

This pattern is said to indicate that the trend is in progress, and the uptrend can be expected to continue. If the dollar weakens and breaks through the upper line, will the USD 2,000 level be the next stage?

Euro/Yen (EURJPY)

The 4-hour chart of Euroyen is analyzed. As a chart pattern, a double bottom shape is emerging. The yen is likely to sell off, and we expect the euroyen to rise to around JPY 146.90.

Euro Zone Consumer Price Index will be a key factor to watch.

US Dollar/Yen (USDJPY)

The dollar is selling the yen more strongly due to risk recession. The upward trend is continuing, so we are looking to buy on the upside. While year-end flows will have an impact, the US stock market rally and interest rate hikes in other countries are also likely to be considered. We expect the yen to weaken for the time being.

Today’s Important Economic Indicators

*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.