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Finance Magnates CY Limited

Tech stocks brushed aside the uptrend in yields, leading the US equity markets into positive territory. On Tuesday, the Nasdaq Composite Index rallied 1.54%. The S&P 500 and the Dow gained 1.12% and 0.61%, respectively.

The US equity markets set the tone for the Wednesday session, with the ASX 200 and Nikkei opening in positive territory.

However, updates on wage negotiations from Japan pressured the Nikkei. Toyota Motor Corp. (7203), a leading indicator of wage negotiations, reportedly agreed to union demands for wage increases. On Wednesday, Toyota Motor Corp. gave factory workers the most marked increase in pay in 25 years.

News of rising mortgage defaults in China impacted Hang Seng-listed real estate stocks. Tech stocks gave up early gains. In contrast, the ASX 200 tracked the overnight gains from the US. Bank and retail stocks were among the front-runners.

US Equity Market Moves and the Bank of Japan in Focus

On Thursday, the US equity market session from Wednesday will set the tone for the session. There were no US economic indicators for investors to consider on Thursday.

10-year US Treasury yields gained 0.94%, ending the session at 4.192%. Caution ahead of US retail sales and producer price numbers, out on Thursday, impacted market risk sentiment mid-week.

On the technicals, ANZ note the recent high around $2,195 as resistance:

• a break of this resistance targets above $2,200

ANZ are wary of a correction first through, “a healthy price correction looks in the offing:”, citing:

• RSI suggests an overbought level

• If a correction starts, the price could fall back to the key support level of $2,100

Further ahead, and more leaning fundamental than technical.

Bullish factors include:

• “While speculators have increased their bullish bets recently, positions are not matching the intensity of the latest price rally,”
• “Moreover, disinvestment in gold-backed Exchange-Traded Funds (ETFs) has been continuing. A lean level of investment in gold should be seen as a potential driver. This not only limits scope for a heavy liquidation but also leaves ample room for fresh buying.”
• rising uncertainties on the economic outlook and geopolitics
• central banks continue to buy

ANZ cautions that higher prices could weigh on physical demand

The Federal Open Market Committee (FOMC) meet on March 19 and 20. Market expectations heading into the meeting are, at present, slightly above 50% for a June 25bp rate cut.

Analysts at Wolfe Research in the US are flagging a concern:

• “We think the risk leans a bit hawkish next week”
• “After two strong CPI prints, we’re not convinced the Fed will be ready to cut rates by the June meeting with only 2.5 additional CPI readings from here (May CPI comes out on the 2nd day of the June FOMC).”

• “This would be reflected in the Fed potentially moving its median 2024 dot to two cuts instead of three, although this is not yet our base case”

I can’t help but agree. After hot inflation reports for January and February we have all been bombarded with excuses reminiscent of the ‘transitory’ days, but this time from analysts, not from the Fed. Fed officials have been more cautious on inflation readings than the median economists.

The BOJ statement is on the 19th.

The FOMC will be on the 20th.

Buckle up!

Demand Stays Strong

Since demand has stayed strong following last week’s peak, there remains a chance that gold will continue its ascent before a more significant retracement. A rally above today’s high of 2,180 will provide the next sign of strength. However, that should be followed by a breakout above yesterday’s high of 2,184 as it will further confirm the bullish signal. A continuation of the bull trend above 2,185 then becomes more likely.

Long-Term Breakout Confirmed

Since gold has broken out to a new record high and it was confirmed by a weekly close above the prior high of 2,135, there is a good chance that the next higher target zone could be reached. In addition, bullish signals were triggered on the monthly chart for gold. The breakout is from a multi-year basing pattern and the breakout has only just begun. The next higher target zone is from 2,235 to 2,247 and is derived from Fibonacci ratio analysis. Two 161.8% extended targets make up that range. The next higher target range beyond 2,447 is from 2,277 to 2,298.

Drop Below 2,156 Likely Leads to Deeper Retracement

Nevertheless, a deeper retracement becomes more likely on a drop below today’s low of 2,156 and confirmed on a drop below yesterday’s low of 2,151. The 8-Day MA is currently at 2,155. Previous resistance at the prior high of 2,135 may then be tested as support. Further down is the 38.2% Fibonacci retracement at 2,115. However, the more significant support area looks to be around 2,088. That level includes the 50% retracement, and it was a resistance peak in late-December.

For a look at all of today’s economic events, check out our economic calendar.

Inpay, a rapidly growing European fintech company, has enhanced the expansion of Tranglo, a global payment service provider (PSP), into Europe.

This has been done through the implementation of Instant SEPA, which made it possible to enable instant payout services across the continent. 

The partnership, which commenced with 12 key SEPA countries, is set to extend Tranglo’s reach to an additional 24 European nations. 

This collaboration marks a significant stride in Inpay’s broader expansion strategy, particularly into the Asian market.  

The right partner to support scalability

Inpay’s regulatory compliance, overseen by the Danish FSA, and its expertise in risk management are crucial to Tranglo’s scaling efforts. 

The partnership enables Tranglo to offer cost-effective, multi-currency, cross-border payments in SEPA regions. This would significantly reduce transaction times and costs compared to traditional methods. 

Customers benefit from transparent fees and reliable transfer times, thanks to Inpay’s efficient processing and broad network. 

Jacky Lee, Tranglo Group CEO, stressed the importance of shared goals and robust risk management in selecting Inpay as a partner, praising their ability to manage complex payment flows and regulatory demands effectively.

A strategic alliance with Ripple

Since 2022, Tranglo has been a key player in Ripple’s on-demand liquidity (ODL) service, enabling instant, cost-efficient cross-border payments across 25 payment corridors without the need for pre-funding. 

This followed the successful pilot of the ODL service, which processed transactions worth USD 48 million in its initial stages. Ripple’s acquisition of a 40% stake in Tranglo in 2021 aimed to enhance the reach and efficiency of RippleNet and its ODL service, which utilizes the digital asset XRP. 

The partnership with Ripple has allowed Tranglo to offer improved payout services and expand its global footprint, providing remittance and payment solutions across a vast network.

The NZDUSD started the day with a move below the low of a swing area at 0.6148. However, the price started to find buyers later in the Asian session, and in the process moved through the high of a swing area at 0.6159.

That break took the price up to test its 100 hour moving average near 0.6167. Sellers leaned against that level and forced the price back down to the low of the swing area at 0.6148, where buyers store the fall again.

Once again the price moved back to the 100-day moving average and found sellers against the level.

So overall, there is a lot of “ping-ponging” going on between the 100-hour moving average above at 0.6167, and the low of the swing area near 0.6148.

That is not a huge range which suggests that at some point the price is going to break either to the upside or downside. Traders will be looking for momentum on the break in the direction of the break.

Find out all about it in the above video.