S&P500 (SPX) Price Analysis – March 24, 2023
Daily Price Outlook
The S&P 500 (SPX) is currently trading 0.30% higher at 3,948.72, as the market considers a Fed policy pause leading to an increase in stocks. US Treasury Secretary Janet Yellen attempted to reassure worried investors that deposits in US banks were secure and pledged that policymakers would have more capacity to deal with any crisis.
Yellen reaffirmed her intention on Thursday to take more measures to protect bank deposits if necessary, addressing one of the investors' concerns. However, the decline in bank performance followed Yellen's statement that the government would be prepared to help support regional banks.
On Friday, First Republic Bank started to fluctuate again, lowering expectations for the overall banking situation as attention shifted to the condition of local banks. As regional banks came back under pressure, the S&P 500 saw a reduction in gains.
Fed to Pause Rate Hikes
Jerome Powell, the head of the Federal Reserve, has previously stated that the ongoing difficulties in the banking sector may have an impact on the US economy and reduce the need for rate hikes, even though inflation remains an issue. The markets reacted positively and sentiment improved after the Fed hinted at a pause in rate hikes following its quarter-point rate increase on Wednesday while still aiming to combat inflation.
The benchmark 10-year Treasury note yield dropped to 3.399%, in line with more conservative rate projections, after rising in tandem with traders' estimates of the Fed fund rates.
In addition, the Dollar Index (DXY) gained momentum as initial unemployment claims for the week ending March 18 came in at 191k, which was below the predicted 197k and the previous week's 192k. The DXY is currently trading slightly higher at 102.70.
Investors gained confidence that the Federal Reserve may hold off on raising interest rates to compensate for the financial market upheaval, which led to a surge in the S&P 500 index.
Top Gainers in Stocks Market
The markets rebounded and closed higher on Thursday, recovering some of the losses from the previous day. The gainers on the S&P 500 were led by tech firms, including Netflix (NFLX), which experienced gains for the first time since October. This was due to a YipitData report that stated the company's gross adds in Canada had improved, causing its shares to increase by 9%.
Accenture Plc (ACN) announced that it would eliminate around 2.5% of its staff or 19,000 positions. More than half of the jobs to be lost would be in non-billable corporate services. This news caused Accenture's share price to increase by more than 7%.
Regeneron Pharmaceuticals Inc. (REGN) saw gains of more than 6% following promising findings from a test of its asthma medicine Dupixent on lung illness.
S&P500 Intraday Technical Levels
Support Resistance
3902 4006
3868 4074
3799 4109
Pivot Point: 3971
S&P500 – Technical Outlook
On the technical front, the SPX is currently consolidating in a narrow trading range between the $3,900 and $4,000 levels. A breakout from this range could have a significant impact on the price action of the S&P 500. If the breakout is bullish and exceeds the $4,000 level, it may expose the SPX toward the $4,080 or $4,170 levels.
Currently, support remains around the $3,920 level. On the downside, a bearish breakout below this level could create more selling pressure, leading to a potential drop toward the $3,840 or $3,765 mark. The RSI and MACD indicators support a buying trend, but failure to stay above 50 or 0 could trigger a downward movement.
Investors will be focused on a series of manufacturing and services PMI figures on Friday, which could determine further price action in the market.
Related:
* GOLD Price Analysis – March 24, 2023
NASDAQ Price Analysis – March 23, 2023
Daily Price Outlook
The NASDAQ 100 Index (NDX) experienced a 1.37% decline, trading at 12,567.15, following the Federal Reserve's 25 bps interest rate increase on Wednesday, with policymakers indicating that there would be only one more rate hike this year.
Fed Chairman Jerome Powell reiterated his commitment to combating inflation, stating that the FOMC is firmly committed to achieving its 2% inflation target. However, he noted that the ongoing banking crisis has put pressure on monetary policy, with tighter credit conditions expected to impact economic activity, hiring, and inflation.
The banking sector's stability is crucial to the Fed's rate forecast, and Powell stated that bank savings are protected by the Fed, FDIC, and Treasury. However, he noted that it is still too early to determine how monetary policy should respond to the current banking crisis.
Powell's comments had a significant impact on bank stocks, including First Republic Bancorp (FRC) and PacWest Bancorp (PACW), which experienced substantial losses on Wednesday, leading to a sell-off that impacted the NASDAQ Index.
Corporate Earnings and Active Stocks
KB Home (KBH) reported a net income of $125.5 million for the fiscal first quarter on Wednesday, resulting in a 2.7% increase in share value. The company also announced a $500 million repurchase program.
Steelcase's shares rose more than 6% following the announcement of better-than-expected sales and adjusted profits per share for the most recent quarter, along with a positive forecast for the current quarter.
In contrast, shares of Coinbase (COIN), a cryptocurrency services provider, fell almost 10% after receiving a Wells notice from the Securities and Exchange Commission regarding potential breaches of US securities law.
NASDAQ Price Chart - Source: Tradingview
NASDAQ Intraday Technical Levels
Support Resistance
12630 12808
12517 12874
12450 12986
Pivot Point: 12695
NASDAQ – Technical Outlook
The NASDAQ is currently showing a slight tendency towards bullishness, but it is facing resistance at the $12,700 level. On the other hand, the support level seems to be holding firm at around $12,450. The next major support level for the NASDAQ is at $11,850, and if it breaks below this level, it may expose the index to the next support area at $11,600.
Both the MACD and RSI indicators suggest a bearish sentiment in the market, as they are in the selling zone. Nevertheless, if the NASDAQ manages to surpass the $12,700 level, it may potentially aim for the $13,000 or $13,200 levels on the upside.
Related:
* BTC/USD Price Analysis – March 23, 2023
GBP/USD Price Analysis – March 23, 2023
Daily Price Outlook
The GBP/USD pair is currently trading up 0.52% at 1.2328. The currency pair has surged to seven-week highs due to a higher UK Consumer Price Index (CPI), which reaffirms a potential rate hike from the Bank of England (BoE). The USD has declined due to the Federal Reserve's dovish interest rate policy.
Fed Raises Rates, But Takes Dovish Stance
On Wednesday, the Federal Reserve increased its benchmark funds rate by 25 basis points to the range of 4.75% - 5.00%. However, it dropped its language about ongoing increases in favor of monitoring how the banking crisis affects the economy.
Fed Chair Jerome Powell reiterated the FOMC's commitment to getting inflation back to its 2% target. However, the market assumed that the central bank's terminal rate was near, despite the Fed increasing interest rates as expected and reaffirming its inflation control commitment.
The Fed raised interest rates while softening its tone towards tightening monetary policy, indicating that it may eventually consider halting to avoid further economic hardship.
This caused the value of the dollar against a basket of currencies to drop to its lowest level in seven weeks, with the Dollar Index (DXY) down 0.25% at 102.09. This resulted in an increase in the GBP/USD pair.
All Eyes on Bank of England (BoE) as UK Inflation Surges and Interest Rate Decision Looms
Regarding the UK, the GBP/USD is expected to remain strong as the Bank of England (BoE) prepares to increase rates for the eleventh consecutive time. Despite recent economic estimates suggesting a less hawkish stance, the BoE may be swayed towards more hawkish rate increases following the unexpected increase in UK inflation reported on Wednesday through the UK CPI Report.
In February, the country's annual inflation rate rose unexpectedly from 10.1% to 10.4%, with analysts predicting it to be 9.9%. This has created policy uncertainty, with market analysts expecting BoE Governor Andrew Bailey to raise interest rates by 25 basis points due to rising food and non-alcoholic beverage prices, and increasing energy expenses.
GBP/USD Intraday Technical Levels
Support Resistance
1.2202 1.2331
1.2140 1.2398
1.2073 1.2459
Pivot Point: 1.2269
GBP/USD – Technical Outlook
Yesterday, the GBPUSD pair showed positive trades and attempted to surpass the 1.2300 resistance level. However, it faced solid resistance there, and traders are anticipating further gains in upcoming sessions. The price is currently moving within a bullish channel on the chart, and the next target is expected to be around 1.2440.
To reach the mentioned target, the price needs to gain positive momentum. The EMA50 indicates that the bullish trend may continue within the channel. The expected range for today's trading is between 1.2210 support and 1.2390 resistance.
Related:
* BTC/USD Price Analysis – March 23, 2023
BTC/USD Price Analysis – March 23, 2023
Daily Price Outlook
The BTC/USD pair is currently trading 3.05% lower at 27,360. The price declined following the Federal Reserve's interest rate hike, as Powell emphasized the need to control inflation.
FOMC Interest Rate Decision
The US central bank raised interest rates as predicted by a quarter point on Wednesday. The Federal Open Market Committee (FOMC) made the move due to ongoing concerns about inflation. Fed Chair Jerome Powell stated that the FOMC is "strongly committed" to getting inflation back to its target of 2%. Consequently, the Committee raised the federal funds rate target range to 4-3/4 to 5 percent.
However, the FOMC also acknowledged the current banking crisis in a statement that accompanied Wednesday's announcement. The statement indicated that recent events could result in tighter credit conditions for households and companies, affecting economic activity, hiring, and inflation.
As expected, the dollar fell to almost a seven-week low as the Fed increased interest rates. The US Dollar Index (DXY) is currently trading at 102.10.
The cryptocurrency market was optimistic that Powell would either not raise rates or make highly dovish comments. However, Bitcoin declined after an earlier surge as Powell predicted that rate cuts in 2023 were unlikely due to the Fed's decision to raise interest rates.
SEC’s Action on Coinbase
The US Securities and Exchange Commission (SEC) has recently been actively pursuing cryptocurrency companies, with Coinbase being the latest target of SEC investigations.
On March 22, the SEC sent Coinbase a Wells Notice, expressing concerns over their listed digital assets, staking services, and other issues. A Wells Notice serves as a warning to a business that enforcement action may be taken against them for potential securities law violations.
However, Coinbase remains confident in the legitimacy of its assets and services.
The SEC's investigation of Coinbase has put pressure on the broader crypto industry, leading to a fall in both the BTC/USD and the overall cryptocurrency market.
BTC/USD Intraday Technical Levels
Support Resistance
26318 28511
25372 29758
24125 30704
Pivot Point: 27565
BTC/USD – Technical Outlook
Bitcoin experienced a downside correction after reaching the resistance zone of $28,500. However, it found support at around $26,600 and is now trying to increase again. The failure to clear the resistance zone of $28,500, coupled with the Fed's decision to increase rates from 4.75% to 5%, resulted in a bearish reaction that caused BTC to fall below the support zone of $27,500.
The next significant resistance level is around $28,000, and if BTC manages to close above this level, it could signal the start of another major increase, potentially pushing the price toward $28,500 or even the resistance zone of $28,850.
On the other hand, the next major support level is around $26,600, and if BTC falls further, it could test the support zone of $26,000. The next significant support level is around $25,200.
Related:
* GBP/USD Price Analysis – March 23, 2023
S&P500 (SPX) Price Analysis – March 22, 2023
Daily Price Outlook
The S&P 500 (SPX) is currently trading 1.30% higher at 4,002.9. The index is increasing as investors shift their focus towards the Fed's policy meeting, and the volatility in the bank sector decreases ahead of the event.
Banking Fears Cool Down
The stock market experienced a cautious rebound on Wednesday as fears regarding the banking industry eased ahead of the Federal Reserve's critical policy meeting. Bank shares rose overnight, indicating that US Treasury Secretary Janet Yellen's efforts to ease tensions were successful.
Yellen stated that the Federal Reserve's new Bank Term Funding facility and discount window loans were providing the banking industry with liquidity, which helped alleviate worries about liquidity.
Furthermore, the stock of First Republic Bank (FRC) rose by 29.47% to $15.77. Yellen's promise of further support for banks fueled an increase in the S&P 500, particularly in bank stocks, especially those owned by First Republic.
FOMC Meeting Ahead
At the current two-day monetary policy meeting, members of the FOMC will assess economic forecasts, and they are expected to raise the Fed funds target rate by another 25 basis points as part of their continuous efforts to control inflation.
However, market experts anticipate that more attention will be paid to Chairman Jerome Powell's remarks about the economy, inflation, and how he would handle worries about recent banking issues, rather than the rate rise itself.
In addition to this, the Fed's predictions for the direction of future interest rate rises will also be of interest to investors, even though markets are already pricing in reductions later this year.
The gains made by the S&P 500 Index coincide with the start of the Fed meeting, and many anticipate that it will result in a quarter-point rate rise on Wednesday.
Most Active Stocks
Major US stock indices experienced an increase on Wednesday, with the energy and banking sectors showing particularly strong growth. Following discussions between JPMorgan CEO Jamie Dimon and other major banks regarding investment in First Republic Bank, its shares increased by 29.47%.
Several regional banks, including U.S. Bancorp (USB), Comerica Inc (CMA), and KeyCorp (KEY), also saw significant price increases, with the latter experiencing a gain of over 9%. Furthermore, according to data on automobile registrations, Tesla Inc. was poised to report one of its strongest quarters in China, contributing to a 7.82% increase in the company's stock price.
S&P500 Intraday Technical Levels
Support Resistance
3927 3966
3902 3981
3887 4006
Pivot Point: 3942
S&P500 – Technical Outlook
The S&P 500 (SPX) has been steadily rising, surpassing the $3,970 mark and heading towards the next resistance level of $4,085. On the lower end, the immediate support level for SPX is at $3,850, and breaking below this level may result in further selling towards the $3,765 mark.
Despite this, leading technical indicators such as RSI and MACD are in a buying zone, indicating a bullish bias among investors.
A bullish breakout above the $4,085 level could create additional buying opportunities towards $4,160 or even higher, signaling positive market sentiment.
Related:
* GOLD Price Analysis – March 22, 2023
EUR/USD Price Analysis – March 22, 2023
Daily Price Outlook
The EUR/USD currency pair is currently trading at around 1.0770. Following a four-day increase, the pair has stabilized as buyers take a breather at the highest levels seen in five weeks on the day of the Federal Reserve (Fed) decision.
German ZEW Economic Sentiment
The March 2023 ZEW Index of Economic Sentiment poll for Germany in the Eurozone shows a significant decline. The Economic Sentiment Index dropped in March to 13.0 from 28.1 in January, falling short of the 14.9 market estimate. Meanwhile, the ZEW Economic Sentiment Index for the Eurozone also fell from 29.7 to 10.0, below the forecast of 23.2.
Despite the negative reports, market sentiment remains positive, with traders more focused on the banking industry's improvements. As a result, the bulls on the EUR/USD pair remain unaffected by the weak ZEW polls.
Eyes on FOMC Today
The US Existing House Sales for February surged by 14.5%, exceeding the predicted 0.0%. However, the positive effect on the US Dollar was dampened by the Philadelphia Fed Non-Manufacturing Business Outlook survey indicator, which fell to -12.8 in March.
Nevertheless, the focus was on the anticipated rate hike by the Fed and the ongoing banking issue, overshadowing the economic data. International markets experienced a risk-off sentiment in recent days but were relieved on Tuesday as US authorities' efforts to contain the financial crisis received market support.
US Treasury Secretary Janet Yellen's statement reduced worries about additional banking instability by stating that the Federal Reserve's new Bank Term Funding facility and discount window loans are supplying liquidity to the banking sector.
The FOMC meeting started its two-day discussion on Tuesday, with a 25 bps rate hike expected, along with demands for no change or even a rate cut. As a result, US 10-year yields traded lower before the meeting at 3.581%, and the DXY stood at 103.20. Despite the flat dollar, the EUR/USD is moving upwards.
The FOMC meeting will be the main focus on Wednesday, and traders must prepare for significant price fluctuations throughout the American session.
EUR/USD Intraday Technical Levels
Support Resistance
1.0717 1.0802
1.0668 1.0838
1.0632 1.0888
Pivot Point: 1.0753
EUR/USD – Technical Outlook
The EUR/USD pair has confirmed a break of the 1.0745 level by finishing the daily candlestick above it, providing further evidence of the intraday and short-term positive trend. Our next positive targets range from 1.0800 to 1.0900.
The price is being supported from below by the EMA50, however temporary sideways movements owing to stochastic negativity may occur before the projected bullish wave resumes. However, breaking the 1.0745 level will put an end to the positive scenario and send the price into a bearish correction, with targets starting at 1.0680 before any new attempt to advance.
Today's trading range is predicted to be between the support level of 1.0710 and the resistance level of 1.0870.
Related:
* GOLD Price Analysis – March 22, 2023
GOLD Price Analysis – March 22, 2023
Daily Price Outlook
The price of gold, XAU/USD, is currently trading around 1,938.83. On Wednesday, gold prices traded within a narrow range after a sharp decline as the market awaited the Federal Reserve's interest rate decision. Additionally, the demand for gold as a safe haven decreased as concerns over a financial crisis faded.
Easing Banking Fears
Comments from US Treasury Secretary Janet Yellen helped alleviate concerns about banking instability, as she highlighted the Federal Reserve's efforts to provide liquidity to the banking sector through measures such as the Bank Term Funding facility and discount window loans.
As a result of government assistance and easing concerns about a potential banking crisis in the US and Europe, gold prices experienced significant losses. While demand for safe-haven assets played a role in the recent surge of gold, the easing of banking concerns led to a sell-off in the metal.
With concerns about a banking crisis subsiding, markets have begun to anticipate a higher likelihood that the Fed will take a firm stance against inflation, potentially leading to an increase in interest rates. However, this could decrease risk appetite and have a negative impact on XAU/USD.
Fed Interest Rate Decision Ahead
The Federal Reserve's two-day meeting has come into focus, and it may increase rates later in the day to temper hotter-than-usual inflation.
The Fed could vote in favor of an additional 25 basis point increase at its March 22 meeting, bringing US interest rates to a high of 5%. The Fed is also expected to call for more increases to help the US economy keep up with inflation, which rose at a yearly rate of 6% in February.
Over the past year, the Fed has already raised interest rates by 450 basis points and claims it will continue to rely heavily on rate hikes to bring inflation back to its long-term goal of 2% per year.
As the Fed meeting approaches, the US Dollar Index remains steady at 103.19, while the yield on US 10-Year Bonds has fallen to 3.598%.
Despite the DXY's lackluster performance, XAU/USD is struggling to hold steady. The Fed's commitment to continuing the fight against inflation is the reason behind this.
Gold (XAU/USD) Intraday Technical Levels
Support Resistance
1922 1972
1904 2004
1872 2022
Pivot Point: 1954
Gold (XAU/USD) – Technical Outlook
Yesterday, the price of gold went below $1960.00, signaling negative pressure that might lead to a bearish correction with a target of $1909.60.
Nonetheless, technical signs are indicating that a rebound is possible in the near future. The stochastic oscillator is clearly oversold, and the EMA50 is currently giving support from below.
As a result of the conflicting technical variables, it is better to stay out of the market until a clearer signal for the next trend arises. It is worth mentioning that a break of the $1933.20 support level will send the price farther lower, possibly to $1909.60 or even $1885.90. In contrast, breaking above the $1962.50 resistance level is critical to restarting the major bullish trend, with targets at $2000.00 and $2040.00.
Related:
* EUR/USD Price Analysis – March 22, 2023
NASDAQ Price Analysis – March 21, 2023
Daily Price Outlook
The NASDAQ 100 Index is currently trading at 12,562.61, marking a 0.34% increase in the past 24 hours. Traders have gained confidence in the potential resolution of the banking industry crisis, resulting in higher stock prices.
Credit Suisse Takeover
Financial authorities formulated a strategy for UBS to acquire Credit Suisse, aiming to restore trust in the banking system. UBS agreed to acquire Credit Suisse for $3.23 billion, and reports suggest that Switzerland is ready to lend the troubled banks up to $280 billion.
On Sunday, the Federal Reserve, the BoE, and the ECB, along with other major central banks, announced coordinated measures to increase liquidity in their existing US dollar swap deals. The objective was to make obtaining US dollar liquidity easier during times of crisis.
As fears of a global financial catastrophe due to a bank failure subsided, stock prices rose, improving risk appetite following UBS's deal to acquire Credit Suisse. However, the recent rally caused traders to continue taking profits, causing the NASDAQ index to fluctuate between gains and losses.
Fed Considers Interest Rate Hike
With earnings periods between the two quarters, this week does not have much economic data to offer. The main event this week is the Federal Reserve's decision on Wednesday, and the recent financial sector turbulence has increased the odds for interest rate hikes.
Traders and analysts are divided on whether the Federal Reserve will increase its benchmark policy rate. As of Tuesday, CME Group's FedWatch tool indicated a 75.3% chance of a 25 bps hike, while 24.7% believe Chairman Jerome Powell will have to halt his aggressive tightening campaign due to the growing bank failure.
As investors anticipate the FOMC meeting, the US 10-Year Treasury Yield and the Dollar index have slightly increased, with US10YT at 3.496% and DXY trading at 103.39.
Increasing market interest rates burden public and private firms, making business more challenging. Thus, the NASDAQ Index may decline. However, if the Fed halts its aggressive stance, stocks may rise further.
NASDAQ Intraday Technical Levels
Support Resistance
12418 12647
12317 12775
12189 12876
Pivot Point: 12546
NASDAQ – Technical Outlook
The NASDAQ is currently trading with a slightly bullish bias, but it faces immediate resistance at the $12,700 level while the support level remains firm around $12,450. The next significant support for the NASDAQ is at $11,850, and a breach below this level may expose the index to the next support area of $11,600.
The MACD and RSI indicators are both in the selling zone, indicating a strong bearish sentiment in the market. However, if the NASDAQ manages to surpass the $12,700 level, it could potentially target the $13,000 or $13,200 levels on the upside.
Related:
* BTC/USD Price Analysis – March 21, 2023
BTC/USD Price Analysis – March 21, 2023
Daily Price Outlook
The BTC/USD pair is currently trading at $27,908, reflecting a 2.37% increase over the last 24 hours. The weekend witnessed a surge in Bitcoin prices, with the cryptocurrency briefly touching $28,000, a level is last seen nine months ago. However, the prices fell back before the US Federal Reserve made its decision on interest rates.
Global Banks are in Chaos
The global banking sector faced additional pressure on Sunday when it was announced that Swiss banking giant UBS would acquire its financially troubled rival Credit Suisse in a $3.2 billion deal.
The Swiss government arranged the acquisition as part of ongoing efforts to control a crisis that threatens the banking industry worldwide.
Meanwhile, major central banks, including the Federal Reserve, the Bank of England, and the European Central Bank, announced coordinated action on Sunday to boost liquidity in their existing US dollar swap deals.
The goal was to make it easier to obtain US dollar liquidity during times of crisis. However, several banking stocks plummeted in response.
In stark contrast, Bitcoin has continued to perform well, with its price increasing significantly following the collapse of several major banks earlier this month.
As a result of the banking turmoil, Bitcoin has been touted by enthusiasts as a safe-haven and digital gold. The BTC/USD has reached a nine-month high as investors consider concerns over the banking industry.
Investors Eye Fed Interest Rate Decision
Ahead of the US Federal Reserve's interest rate decision, investors were cautious, causing a loss of momentum for Bitcoin. Now that the Fed has announced a rate hike on Wednesday, investors are refocusing on inflation.
According to CME Group experts, there is a 73.8% probability that the Fed will increase interest rates by 25 basis points, while the probability of the Fed keeping rates steady due to concerns about bank viability is 26.2%.
The speculation of a rate hike by the Fed has also led to a rise in the US dollar. The US Dollar Index increased by 0.14% to 103.40, which has limited BTC/USD's growth.
Bitcoin Price Chart - Source: Tradingview
BTC/USD Intraday Technical Levels
Support Resistance
27082 28390
26452 29068
25774 29698
Pivot Point: 27760
BTC/USD – Technical Outlook
Bitcoin's support remained above the $26,000 zone as the cryptocurrency attempted to break over the $28,000 and $28,400 barriers. The bears, though, didn't give up near $28,500, and the day's high was about $28,590. There has been a modest drop below the $28,000 barrier as the cryptocurrency consolidates its recent gains.
Bitcoin could have a correction to the downside if the $28,500 resistance level isn't breached, with first support in the $27,700 area and the trend line. The 100 hourly simple moving average and the trend line at $27,200 are the next key support levels.
The 50% Fibonacci retracement level of the up wave, from the $23,912 swing low to the $28,590 high, is at $26,250, which could be reached if losses continue. The $25,700 level represents the next major support level.
Related:
* BTC/USD Price Analysis – March 17, 2023
AUD/USD Price Analysis – March 21, 2023
Daily Price Outlook
The AUD/USD is currently trading at 0.6685, having fallen by 0.49% in the last 24 hours. The currency pair experienced a drop following the release of the Reserve Bank's March meeting minutes, which revealed that officials were considering pausing interest rate increases in light of decreasing inflation and economic pressures.
RBA Minutes and AUD/USD
The Reserve Bank of Australia (RBA) released the minutes of its March monetary policy meeting early on Tuesday morning. During the meeting, the board discussed the need to potentially pause the cycle of rate increases, but also noted that Australia's inflation remained high, the labor market was tight, and wage growth had picked up.
However, RBA officials only considered the possibility of a 25 basis point (bps) increase in rates, despite recent inflation in the Australian economy.
The minutes also revealed that policymakers were concerned about the potential for fluctuations in the monthly Consumer Price Index (CPI), which slowed from its peak of 8.4% in December.
Despite this, the RBA has not yet reached its target range for inflation and may continue to hike rates soon. However, the RBA minutes were less hawkish than expected, which led to a drop in the AUD/USD currency pair.
FOMC meeting in focus
On Tuesday, the US Dollar Index (DXY) is up by 0.12% at 103.40, following the state-backed purchase of Credit Suisse by UBS, which eased concerns about a global banking crisis. As traders cautiously move back into riskier assets, the dollar has regained some ground.
The decision of the Federal Reserve on Wednesday is the most significant market event this week. The market expects that the Fed will not raise interest rates by more than 25 basis points (bps), as their priority is to restore investors' confidence. Therefore, the dollar is struggling to maintain its upward trend in recovery.
CME Group's FedWatch tool shows that as of Tuesday, there is a roughly 75.3% chance of a 25 bps hike by the Fed. However, the remaining 24.7% are against rate hikes and believe that Chairman Jerome Powell should halt his hawkish tightening campaign in light of the rising bank failure.
If the Fed decides to keep interest rates steady to prevent the effects of rising banking stress, it could benefit the AUD/USD.
AUD/USD Intraday Technical Levels
Support Resistance
0.6678 0.6742
0.6640 0.6768
0.6614 0.6806
Pivot Point: 0.6704
AUD/USD – Technical Outlook
The AUD/USD pair is currently trading bearishly below the 0.6665 level and is approaching its second target at 0.6550. It is moving within a bearish channel, increasing the chances of further bearish corrections, with a possible decline towards 0.6400.
The bearish trend is being supported by the EMA50, and negative momentum may be required to break through and reach the expected target.
However, if the pair manages to surpass the 0.6665 level, it could prevent the anticipated decline and initiate recovery attempts, targeting 0.6780 initially. The expected trading range for the day is between the support level of 0.6500 and the resistance level of 0.6620.
Related:
* BTC/USD Price Analysis – March 21, 2023