Markets Analysis

U.S. economy is active again; stronger-than-expected economic indicators may lead to more rate hikes?【April 24, 2023】

April 24, 2023

Markets Analysis

Fundamental Analysis

  • Major U.S. stock indexes rebound slightly; U.S. economic indicators beat market expectations
  • Strong Manufacturing Index and PMI for April, possibility of multiple rate hikes in April and beyond
  • USD/JPY moves to JPY134 but falls back; yen buying likely to persist until BOJ meeting
  • EUR/USD forms a moderate uptrend but fails to break through $1.10 due to lack of materials
  • Pound dollar also formed a range, waiting for the next material
  • Oceania currencies are vulnerable to sell-off, while the JPY is relatively strong in cross currency markets
  • Gold is falling back, possibility of multiple rate hikes in the future

Technical Analysis

The JPY tends to buy strongly at the beginning of the week. With the BOJ policy meeting coming up on Friday, this may be yen buying on expectations of a change in policy by overseas investors. The dollar surged to the low JPY 134 in New York last Friday. However, the JPY 135 level is still firm and cannot be broken through.

The dollar-yen may have a lot of downside risk this week. However, we expect the probability of the BOJ actually changing its policy rate to be low. We believe that a push-back opportunity could be targeted.

Bitcoin (BTCUSD)

Bitcoin has fallen sharply in response to upbeat U.S. economic indicators. It reached USD 30,000 at one point, but many bearish factors, such as continued U.S. interest rate hikes, make it difficult to buy aggressively. Furthermore, there are reports that stricter regulations on virtual currencies are being considered, which is also a tailwind to the bearish market.

Analysis of the 4-hour chart shows that the price is approaching the 240 moving average. If the uptrend is maintained, the price is likely to rebound at the moving average. On the other hand, if the current uptrend ends, the uptrend will eventually break below the moving average. The movement near the moving average line will be closely watched.

[BTCUSD / H4]

Estimated rangeUSD 26,320 – USD 28,670
Resistance lineUSD 28,550
Support lineUSD 26,900

Dollar-Yen (USDJPY)

Analyzing the 4-hour chart of the dollar-yen, the 240 moving average is in awareness, but it is gradually turning lower. The moving average is currently acting as a support line, but once it breaks below it, it will become a resistance zone. if the price does not break above JPY 135 , the price will remain in a range around JPY 134. The downside is firm and the upside is heavy.

Caution is needed as the possibility of violent fluctuations in either direction due to some material is increasing.

[USDJPY / H4]
Estimated rangeJPY 132.75 – JPY 135.22
Resistance lineJPY 134.60
Support lineJPY 133.45

Australian-Dollar (AUDUSD)

Although the Australian dollar is rising in the short term, it has failed to cross the 240 moving average line and can be seen as forming a bearish pennant. In this case, a break below the trend line would likely result in a significant decline.

With the release of the Consumer Price Index this Wednesday, all eyes will be on what the results will be.

[AUDUSD / D1]
Estimated rangeUSD 0.6621 – USD 0.6761
Resistance lineUSD 0.6700
Support lineUSD 0.6656

Today’s Important Economic Indicators

Economic Indicators and EventsJST (Japan Standard Time)
None in particular

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

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