On the daily chart below for WTI crude
oil, we can see that after the surprise OPEC+ cut and a mini rally to the top
of the range at $83, the market saw an incredibly fast selloff. The bullish
case is the tight supply and underinvestment, but the demand side of the
equation is definitely leading, and it’s connected to a deteriorating global
economy.

The global central banks
tightening amid high inflation is dampening demand and it’s aimed precisely at
that. The recent weaker US labour market data has also played a big role and
the regional banking crisis is not helping either. It looks like the bearish
trend will continue until the central banks start easing but until then we may
see even lower prices.

WTI
Crude Oil technical analysis

On the 4 hour chart below, we can
see how the upper bound of the range acted as the top and then the third
rejection from the downward trendline was the last attempt by the
bulls to rally. After that we saw a big selloff with almost no pullbacks.
Tonight, we also saw a flash crash that was erased soon after once the price
bounced from the $64 low. The price is now overstretched, and we should see a
bigger pullback probably towards the $72 zone before the next big move.

On the 1 hour chart below, we can
see that a good level for the sellers would be the 61.8% Fibonacci
retracement level which is just beneath the bottom of the
broken range. Further downside is unlikely from here unless more regional banks
fail and the US labour market data miss expectations. Today we have the Jobless Claims
report and tomorrow the NFP. Watch out for these data points as they will cause
big moves in the markets.

This article was written by ForexLive at www.forexlive.com.

Doesn’t
matter what your choice is – McDonald’s breakfast menu or lactose-free porridge
with granola and peanut butter. Anyway, you can’t ignore the fact that
McDonald’s is a phenomenon in the fast-food universe as well as in the stock
market. And despite the crisis and general situation in the world, the company
has presented financial reports with more impressive numbers than analysts had
expected. So, what’s next? Let’s try to investigate if McDonald’s still has
room for growth.

Since
the beginning of the year, McDonald’s stock has increased by almost 10%. As you
can see in the chart below, the shares have outperformed the S&P 500 and
Dow Jones indices.

You
could argue that there is not a large gap after a third of a year. That’s why
we prepared one more chart – it shows what has been going on with the same
symbols in the last five years. The picture below looks like a comparison
between a McFlurry and cheap supermarket ice cream. Also, you should know that
there are various factors which might influence the stock price. Some of them
are pretty unpredictable but lots of future market movements can be forecast
using a variety of trading tools. One of them is economic
calendar – it warns you about all upcoming major economic
events.

McDonald’s
has dropped its Q1 report suggesting that the company might continue its
positive movement. Earnings per share and revenue results beat analyst
expectations – $2.63 against $2.33 and $5.9 bln against $5.59 bln. Moreover,
net income and sales have grown as well.

However,
McDonald’s raised prices on the menu in the past year and crises around the world are influencing the
amount of spare cash people have. But the last thing might be even positive in
this case. The reason is – doesn’t matter if there’s a crisis or not – people
love cheap eats, and McDonald’s is the place to go for that.

Also,
the company reduced various costs recently – a large number of employees were
dismissed, and some offices were closed. This is one more positive factor for
McDonald’s balance between income and expenses. Such optimization gives an
opportunity to spend more money on business development and enlargement of
delivery capabilities.

And we
shouldn’t forget about the Chinese market. After the county eased off the Covid
restrictions, McDonald’s can count on increased profits in the region.

Though,
you shouldn’t look at the perspectives of McDonald’s shares only through
rose-colored glasses. Current market conditions present challenges for
businesses. Layoffs and shutting down the offices show that the situation in
the company is far from cloudless. Moreover, you should remember that if the
stock market goes down, MCD will probably do the same.

But
analysts continue to believe in McDonald’s shares. The consensus forecast is
+9% in the next 12 months. It might not be too impressive, but the forecast
says that the shares may be a good addition to the portfolio. But it’s just a
prediction, and it can be changed in a week or even tomorrow. That’s why before
buying (or selling) these stocks, you need to do your own analysis – only after
that, can you make an informed decision.

This article was written by ForexLive at www.forexlive.com.

• All eyes on the Fed as regional banks come under fire
• Dollar loses some ground to start European morning trade
• Oil tumbles further, $70 within reach
• RBA’s Kohler says have some confidence that goods inflation will moderate this year
• US MBA mortgage applications w.e. 28 April -1.2% vs +3.7% prior
• Eurozone March unemployment rate 6.5% vs 6.6% expected

Markets:

• JPY leads, USD lags on the day
• European equities slightly higher; S&P 500 futures up 0.2%
• US 10-year yields down 3.4 bps to 3.405%
• Gold flat at $2,015.63
• WTI crude down 2.9% to $69.59
• Bitcoin down 0.4% to $28,574

The tension is building as we gear towards the Fed policy decision later today, after US regional banks were hammered in trading yesterday. While there is a calmer mood in equities, let’s not forget that was also the case yesterday all before it turned sour when Wall Street entered the fray.

The bond market continues to hint at caution as Treasury yields remain heavy and that is weighing further on USD/JPY, as the pair is down from 136.00 to 135.50 during European morning trade.

The dollar was rather subdued as it was offered across the board during the session. EUR/USD moved up from 1.1010 to 1.1040 while GBP/USD moved up from 1.2480 to 1.2530 before settling closer to 1.2500 now.

There is a bit of a mixed mood in markets, as oil is also seen slumping hard as global growth worries continue to weigh. WTI crude is down by nearly 3% in a fall back under $70 – the first time in over five weeks.

And despite that, USD/CAD is seen keeping closer to flat levels around 1.3620 as the dollar is struggling to capitalise on the day.

It’s now over to the Fed to see what comes next on the week.

This article was written by Justin Low at www.forexlive.com.

The Kremlin itself has responded by saying that „we consider it an attempt on Putin’s life“ and that „we reserve the right to respond when and however we see fit“. Adding that there were two drones used in the attempted attack and that Putin had not been injured.

There are vides circulating around social media showing smoke from the Kremlin at night. But make what you will of it and we shall see how Ukraine responds to this later today.

JUST IN – Russia says Ukraine tried to hit Kremlin with drones overnight in an assassination attempt on Putin.pic.twitter.com/xAS0BtTDzs

— Disclose.tv (@disclosetv) May 3, 2023

This article was written by Justin Low at www.forexlive.com.

• Prior +3.7%
• Market index 214.4 vs 216.9 prior
• Purchase index 165.8 vs 169.1 prior
• Refinance index 461.2 vs 457.6 prior
• 30-year mortgage rate 6.50% vs 6.55% prior

Despite a drop in rates in the past week, mortgage activity declined mainly due to a slump in purchases – which were offset slightly by a rise in refinancing activity. Overall, it still points to weaker conditions in the mortgage market as it has been over the past year already since the Fed began aggressively hiking rates.

This article was written by Justin Low at www.forexlive.com.

It feels like a bit of déjà vu for the Fed as US regional banks come under pressure once again before they announce their next policy decision.

It will be a case once again where markets will look to the Fed decision and see if Powell will offer up any relief after the jitters from yesterday. The first thing traders and investors will be watching is the interest rate decision and whether the Fed will hike by 25 bps or not.

If the Fed does hike by 25 bps, the initial kneejerk reaction could see another heavy selloff in regional banks. At this point, markets can argue that policymakers will have to draw a line somewhere after yet another bank (First Republic) failed and there are increasing worries involving other banks like PacWest and Western Alliance.

Adding to that argument is the fact that the Fed tends to pacify markets and go with „what is expected“, so as to not upset the balance and order of things. This has been the mantra ever since Yellen took over and Powell has continued with that all through his tenure so far. That should be no different this time.

And if you take a peek through the looking glass, perhaps the decision to hike by 25 bps is the lesser of two evils.

Let’s say that the Fed chooses not to hike at all today. Firstly, that creates a serious credibility issue as it means that their resolve to combat inflation has wavered. That is not something markets would like to see at any point, I would say.

Then, what happens if regional banks still end up getting clobbered once we get to the Wall Street close? There is no fallback for the Fed in this instance. They will end up losing both credibility on the inflation front and also failing to appease markets as regional bank fears linger.

Whereas if they do hike by 25 bps, there is still that and Powell can then try his best to soothe markets by implicitly hinting at a pause in the tightening cycle.

It’s sort of a damned if you do, damned if you don’t kind of situation. I shared some other thoughts on the Fed decision here. What do you think the Fed should do and would do later today?

This article was written by Justin Low at www.forexlive.com.

On the daily chart below, we can
see that the price bounced near the key support at 0.6563 and eventually spiked
up as the RBA surprised with an interest rate hike. The price action remains
choppy as central banks are near the end of their tightening cycles and the
market is uncertain on what’s next.

The economic data keeps sending
conflicting messages and the volatility is high around the regional banking
woes in the US. AUD is sensitive to risk sentiment, so traders will need to
ride the ups and downs in the market’s mood.

AUDUSD
technical analysis

On the 4 hour chart below, we can
see more closely the ugly choppiness in the pair in the last 2 months. This may
be a big double
top pattern
within a correction which could be a stronger signal of a continuation to the
downside, but the risk sentiment should turn sour to make the price to break
below the support and increase the bearish momentum. Today we have the ISM Services PMI and
the FOMC policy announcement, so watch out.

On the 1 hour chart below, we can
see that the price is now consolidating in a little box testing the trendline and the 61.8% Fibonacci
retracement level. This is where the buyers should step in to
try another push to the upside. The sellers, on the other hand, will want to
see the price to break below the trendline to start piling in and target the
support at 0.6563 or even a new lower low.

This article was written by ForexLive at www.forexlive.com.

On the daily chart below for the
Nasdaq, we can see that after a brief fall below the range created just beneath
the key 12274 resistance, the price rallied back strongly
and it’s now back again at the resistance. The latest rally was helped by
better than expected data in the US
GDP report
and the beat in Jobless
Claims after several weeks of misses.

The bad news though is that the ISM
Manufacturing PMI yesterday beat forecasts and the inflation and
employment sub-indexes returned back into expansion. As long as employment
remains strong with a falling inflation the stock market can rise, but it’s
harder to do so when inflation remains persistently high as well as that may
force the Fed to keep hiking rates.

On the 4 hour chart below, we can
see that the buyers may still be targeting new higher highs with the big bullish
flag pointing to a 13000 extension. The latest bounce from the 50% Fibonacci
retracement level had no pullbacks and given that the price is
back at the key resistance and the ISM data yesterday is not that bullish, we
may see a pullback here and probably again some consolidation.

On the 1 hour chart below, we can
see the recent fakeout highlighted by the orange circle and then the rally back
towards the top of the range. This week is packed with top tier economic
events like the ISM PMIs, the FOMC and the NFP, so we may see another breakout
but the direction will be given by the data. More inflationary pressures should
be negative for the market, while strong labour market data with easing
inflationary pressures should be positive.

This article was written by ForexLive at www.forexlive.com.

• Some further tightening may be required to meet that objective
• We will do what is necessary to bring inflation back to target
• We are not on a pre-set course
• Paying attention to consumption, inflation, jobs, global economic developments
• Australian dollar had responded to change in rates outlook since April pause

That last point is subtle but perhaps it warrants more attention.

If the RBA had paused today and the Fed hikes tomorrow, it would result in the widest spread between Australia and US interest rates ever in favour of the latter. The prospect of that could lead to an even weaker aussie, which would not help with the inflation battle, and make that a tougher job for the RBA.

AUD/USD remains little changed amid the above remarks, still holding at 1% gains around 0.6695 currently.

This article was written by Justin Low at www.forexlive.com.

Bitcoin fell
all day yesterday, losing around 6% to $27.6K, raising the question of whether
we are seeing the start of a prolonged decline.

Bitcoin
closed below its 50-day moving average on Monday. The price stays below that
curve and is stuck at $28.0K after rising 1.3% to today. If it
can’t quickly surpass it again, Bitcoin’s fall below $27K will pave the way for
a move to $22K, where the 200-day passes, which became a turning point in
March.

Twitter
analyst Bluntz, who predicted a bear market bottom for BTC in 2018, expects Bitcoin
to fall to $25K. In his view, the first cryptocurrency is unlikely to break
$30,000 soon. BTC has completed a 5-wave and is now in a corrective A-B-C
formation.

News background

Cryptocurrencies
will outperform other asset classes amid the continued devaluation of fiat
currencies and the ongoing banking crisis, Real Vision CEO Raul Pal said
following the bankruptcy of First Republic Bank (FRB).

Peter
Brandt, tech analyst and head of Factor LLC, believes Bitcoin will soon
overtake all other cryptocurrencies and „bury all the imposters“. He
pointed to the chart of the BTC dominance index, which he believes is poised for
a breakout after two years of consolidation.

According to
Santiment’s research, crypto asset prices in April were „very broadly
dispersed“ and barely correlated with each other.

This article was written by FxPro’s Senior Market Analyst Alex
Kuptsikevich.

This article was written by FxPro FXPro at www.forexlive.com.