Daily Market Outlook, April 21, 2023
A mixed bag of earnings Stateside left investors somewhat subdued coupled with soft US data and another round of hawkish Fed rhetoric there was little to inspire risk appetite, Asian equity markets followed suit with most regional bourses trading in the red, the Shanghai Comp is the stand out under performer shedding just over 1% as US China relations came into focus with Treasury Secretary Yellen suggesting that the countries relations may be jeopardised by national security interests, this souring of mood was compounded as US President Biden threatened to announce further China investment restrictions, China countered the reports with Chinese Foreign Minister Gang commenting that the entire Taiwan Strait belongs to China and that those who play with fire eventually get burnt!
Today’s data docket is dominated by PMI releases for the UK, Europe and the US, recent reports have hinted towards an uptick in economic activity especially in the UK and Europe, the majority of this improvement has been driven by services sector productivity, however, in the UK manufacturing and services retreated in March, whilst services remained in the expansionary zone above the pivotal 50 level, manufacturing failed to retain expansionary territory printing 47.9. Markets anticipate incremental improvement in the April data with manufacturing nudging above 49 with services tipping the 53 handle, net net this would suggest the UK economy is growing.
In the Eurozone markets look for services index to have slipped towards 54.0 in April marginally down from 55.0 while manufacturing is expected to tick up towards 48.0 similar to the UK this would suggest that the Eurozone economy continues to expand in the second quarter.
In the US, the manufacturing PMI is set to advance to 49.5 while services are set to pull back from nine month highs to 51.5. Fed speakers on deck today include voters Cook and Harket set to speak after the close of trade in New York.
FX Options Expiries For 10am New York Cut
(In bold represent larger expiries, more magnetic when trading within daily ATR)
EUR/USD: 1.0970-80 (1.2BLN), 1.1000 (456M), 1.1025 (360M), 1.1050 (2.3BLN)
A massive 40-billion between 1.09-1.11 expire through month end
GBP/USD: 1.2350 (545M), 1.2400 (270M), 1.2450 (207M), 1.2500 (375M)
EUR/CHF: 0.9750 (461M). AUD/JPY: 88.00 (375M)
AUD/USD: 0.6705 (771M), 0.6800 (476M), 0.6845 (1.8BLN)
USD/JPY: 133.75 (239M), 134.00-20 (900M), 135.00 (420M)
Overnight News of Note
US Futures Are Flat As Wall Street Processes Earnings Results
Gold Eases As Dollar Steadies; Fed Interest Rate Trajectory In Focus
Fed Officials Back Another Hike While Watching Banking Fallout
Fed's Harker: See More Bank Action To Quash Inflation Pressure
Fed Emergency Loans To Banks Record First Rise In Five Weeks
Biden Eyes A Re-Election Announcement As Soon As Next Week
Biden Set To Unveil Chinese Investment Curbs With G7 Backing
Top China Diplomat Defends Growth Model, Draws Taiwan Line
Japan Broadening Inflationary Pressures Test BoJ Dovish Stance
G7 Considering Near-Total Ban On Exports To Russia, Kyodo Say
Japan Broadening Inflationary Pressures Test BoJ Dovish Stance
North Korea Tell G7 That It Will Never Give Up Nuclear Weapons
BoE Official To Hawks: Rates Too High For Economy To Withstand
UK Confidence Rises To Highest Since War Triggered Price Surge
Meta’s Zuckerberg: To Slow Hiring, Won’t Rule Out Future Layoffs
(Sourced from Bloomberg, Reuters and other reliable financial news outlets)
Technical & Trade Views
SP500 Bias: Intraday Bullish Above Bearish Below 4110
Primary support is 4000
Primary objective is 4207
Below 3985 opens 3950
20 Day VWAP bullish, 5 Day VWAP bullish
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EURUSD Bias: Intraday Bullish Above Bearish below 1.09
Primary support is 1.07
Primary objective is 1.1128
Below 1.0700 opens 1.0660
20 Day VWAP bullish, 5 Day VWAP bearish
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GBPUSD Bias: Intraday Bullish Above Bearish below 1.2330
Primary support is 1.2250
Primary objective 1.2659
Below 1.22 opens 1.2010
20 Day VWAP bullish, 5 Day VWAP bearish
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USDJPY Bias: Intraday Bullish above Bearish Below 133.00
Primary resistance is 135.15
Primary objective is 129.15
Above 136 opens 137.90
20 Day VWAP bearish, 5 Day VWAP bullish
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AUDUSD Bias: Intraday Bullish Above Bearish below .6640
Primary support is .6620
Primary objective is .6814
Below .6560 opens .6450
20 Day VWAP bearish, 5 Day VWAP bearish
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BTCUSD Intraday Bias: Bullish Above Bearish below 28900
Primary support 26500
Primary objective is 30500
Below 26300 opens 25800
20 Day VWAP bullish, 5 Day VWAP bearish
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!