Markets Analysis

Fundamental Analysis

• Risk Aversion Eases Slightly, Authorities Seek to End Turmoil with Credit S Takeover
• Markets are skeptical, looking for the next risky bank
• Central banks agree to coordinate dollar supply; Japan, US, EU, UK, Canada, Switzerland
• Profit-taking is evident in the market after last week’s big volatility
• Supported First Republic Bank stocks plunge again
• Other small and mid-cap bank stocks rallied, while the equity markets were unable to establish a direction
• Market Interest in FOMC, 0.25% Rate Hike Expected, Divided on Viewpoints
• Gold breaks above $2,000, profit-taking in the market
• Slight easing of risk, but second and third risk banks may be found
• Amazon announces plan to cut around 9,000 jobs

Technical Analysis

The pound-dollar is in an all-around strong market. On the other hand, the Swiss franc is also vulnerable to selling today, and while there is a slight easing of risk, it is not a fundamental solution to the underlying concerns. The fundamentals do not seem to be conducive to continued risk appetite. The dollar is likely to be targeted for a return to the yen. In any case, we expect a small range to continue until the outcome of the FOMC meeting.

Euro-Dollar (EURUSD)

Eurodollar rallied as ECB President Lagarde emphasized the strength of financial institutions in the EU zone; there is a large resistance zone between 1.0760 and 1.0780. Looking at the equilibrium chart, the candles are rebounding at the base line and the conversion line, and the lagging line is about to cross above the candles. Also, looking at the RSI, it is above 50 and at 53. The upward trend is in an uptrend.

US Dollar-Canadian Dollar (USDCAD)

The Canadian Consumer Price Index will be released today. The forecast is 4.8%, lower than the previous forecast. If the index breaks below the equilibrium line at 1.3650, the next support line will be at CAD 1.360.

U.S. Dollar-Swiss Franc (USDCHF)

The Swiss franc has been a risk factor and is in a selling trend. Looking at the overall daily chart, the market remains range-bound and does not appear to be making any significant moves. The worst case scenario of a Credit S failure has been averted and the Swiss franc could be slightly bid. The focus will likely be on how far coordinated dollar supply and U.S. bank risk persist.

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.