Nigerian Reform Drive Falters, Threatening Africa's Biggest Economy

Economic

Summary:

Public anger is swelling as inflation spirals higher, however, and Nigeria's two biggest workers' unions are planning an indefinite strike next week to protest over a cost-of-living crisis.

Nigerian President Bola Tinubu's lightning-fast reform push after taking office in May sparked hope that his administration would be a business-friendly antidote to mounting economic troubles facing Africa's biggest economy.

Fast forward to more than 100 days in office, and the key planks of his economic overhaul - unshackling the naira from its rigid regime, and allowing fuel prices to rise - are coming loose.

The naira hit a record low of 1,000 to the dollar on the black market this week, widening the gap with the official rate, which stood at 785 on Thursday.

Petrol pump prices, meanwhile, have not budged since July - despite a more than 30% rise in oil prices.

Some now fear Tinubu will not be able to wean Nigeria off the costly policies that have stymied investment and throttled economic growth.

"Momentum just seems...almost in reverse," said David Omojomolo, Africa economist at research firm Capital Economics.

Public anger is swelling as inflation spirals higher, however, and Nigeria's two biggest workers' unions are planning an indefinite strike next week to protest over a cost-of-living crisis.

"Sentiment towards Nigeria has been continuing to sour as the initial reform momentum under President Tinubu's administration has faded," said Tellimer analyst Patrick Curran.

Dollar Delay

For years, Nigeria has tightly controlled the official naira rate, even amid declines in the price of oil, sales of which bring in 90% of the country's foreign currency supply.

But providing dollars at an artificially low rate has led to a yawning gap between official and black market rates, leaving businesses and investors unable to access dollars. The central bank has also created import restrictions aimed at reducing dollar demand.

Tinubu's decision to let the official naira rate weaken saw it briefly converge with the black market. Last week, he assured investors they could take money out, touting a "reliable, one figure exchange rate of the naira."

But the gap has widened to nearly 30% this week, and four sources told Reuters it was virtually impossible to get dollars from the central bank on an ad hoc basis.

The incoming central bank chief said on Tuesday that policymakers faced a nearly $7 billion backlog in foreign exchange demand; foreign airlines alone had $783 million in ticket sales trapped, the International Air Transport Association said.

This is one major factor keeping investors from putting money to work in Nigeria.

Another is negative real bond yields and the slow central bank response: 10-year local government bonds yield less than 15% while inflation is running above 25%.

"What they have done so far is not enough to attract domestic debt holders or foreign investors into their domestic debt market," said Carlos de Sousa, portfolio manager at Vontobel Asset Management.

The tattered finances left by the previous administration have also been no help.

In August, the central bank published audited accounts for the first time since 2018, revealing that its $33 billion in FX reserves included a $19 billion commitment in derivatives - slashing the liquid amount of reserves.

JPMorgan calculated net FX reserves stood at $3.7 billion as of the end of 2022, "significantly lower" than prior estimates.

That news sent Nigeria's international bond tumbling.

"Lower net FX reserves reduce the willingness to introduce a flexible exchange rate regime in the near term," said JPMorgan's Gbolahan S Taiwo.

The central bank has also kept other restrictions that businesses say make life tough, including a ban on using central bank foreign exchange to import 43 items.

"The government may have intended to make it a free market, but the CBN isn't allowing it to be one," said a Nigerian private equity investor who did not want to be named.

The delay in scrapping fuel subsidies is exacerbating the dollar crunch. Last year, subsidies cost 2% of gross domestic product, according to Fitch.

Despite being Africa's largest oil exporter, Nigeria imports nearly all its fuel as it does not refine nearly enough to meet the demand of its 200 million citizens. In recent years, it has swapped crude for fuel, depriving it again of a source of U.S. dollars.

It is still using oil cargoes now to pay for fuel it imported previously, and a de-facto pump price limit set by state oil company NNPC LTD's sale price means it is again the sole petrol importer.

Tellimer said Nigeria's gasoline prices would need to rise 73% to align with global prices.

Analyst say Tinubu, elected with the narrowest margin since Nigeria returned to democracy in 1999 and facing inflation at nearly two-decade highs, lacks the social capital and mandate to push any harder.

"There is the concern that when the going gets tough...they will walk back on the reforms," Omojomolo said.

Source: ZAWYA

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Devin

Political

Every British child loves the traditional fireworks on November 5. Across the UK, we celebrate what was a historic failure.

The conspirator Guy "Guido" Fawkes was part of a Spanish-inspired plot supported by English Catholic rebels to blow up the parliament at Westminster and assassinate the Protestant King, James I.

If the conspirators had managed to blow up parliament in 1605, in the ensuing chaos, it is possible that the closer union between Scotland and England in the "Union of the Crowns" would have failed. The modern British state might never have happened.

Of course, the penalty for failure in 1605 was severe. Guy Fawkes and his comrades were tortured and executed. Yet what is striking is that the real destruction of the British parliament came 200 years later, and this significant setback for the British state came not as a result of a gunpowder plot but through complacency, carelessness and incompetence.

In 1834, the British parliamentary authorities finally decided it was time to get rid of a load of wood that had been stored in Westminster for decades. The wood was burned in the ancient furnaces in the parliament buildings, but the blaze set alight the chimneys and the whole thing got out of hand. The resulting fire burned down much of parliament in the worst blaze since the Great Fire of London two centuries earlier.

The Victorians – intent on conquering half the world – were shocked by their own complacency. They hadn't taken simple precautions. But then they leapt into action. They brought in the young architects who built the magnificent Palace of Westminster we know today.

The reason this piece of history is relevant – perhaps even urgent – is that the Westminster parliament, the most memorable building at the heart of British democracy, is threatened again.

The threat has been predicted and debated, yet little has been done to fix it. Worse, it's a double threat – from fire, but also water.

Dr Hannah White, of the British Institute for Government, is one who has raised the fire-alarm. She suggests that the kind of blaze that destroyed Notre Dame cathedral in Paris could destroy the home of British democracy too. Those I've talked to who work at Westminster agree about the dangers.

But what is now also being discussed is the water risk. It is a real threat, at least in the minds of those in the Bank of England who consider risk to London as a great financial capital.

Sam Woods runs the bank's Prudential Regulation Authority. Mr Woods is reported to be planning a resilience test for "a very large climate event in the UK" and in other major financial centres. His concern goes beyond the predicted gradual changes in climate to something more like the extreme weather patterns that appear to have become more common around the world – flash floods as well as rising sea levels.

He explained the threat that should give members of Parliament nightmares: "Imagine Westminster under water – a really extreme thing that made policy shift in a very dramatic way."

If "terrible climate events" are happening around the world all the time, then the foreseeable danger is that something similar happens on the banks of the tidal River Thames. It could flood Westminster and have a "very sudden effect in financial markets".

Mr Woods should be congratulated. He's at least thinking ahead. Future planning for possibly predictable yet disastrous events has been done before in Britain, but often the lessons have not been properly learned.

There was planning of a sort for a pandemic but – as the long-running inquiry into coronavirus will undoubtedly reveal – discussing possible future scenarios did not lead to significant or effective preparations for Covid-19.

Yet making Westminster more resilient raises two separate questions.

Climate change is a humanitarian but also a financial and political risk. Were parliament to be flooded, MPs could be homeless for weeks or months, leading to all kinds of dislocation for the UK government.

Second, leaving aside the likelihood of a "terrible climate event", the challenge of simply fixing what is wrong with the buildings in the Palace of Westminster has a timescale ranging upwards from 12 years and a cost put anywhere from £7 billion to £22 billion ($8.5-27 billion), according to New Civil Engineer research.

You might understand, therefore, why delay and adopting an ostrich strategy is often the human response to intractable and costly problems. But as the Victorians found out in 1834, pretending that there isn't a problem doesn't make that problem go away. It makes it more dangerous.

Climate change and even mundane building maintenance both demand long-term thinking. Unfortunately, it's not just the attention span of politicians worldwide that can be short. Their political lifespan is often short too.

Many of the current crop of British MPs will no longer be in parliament after the election next year. They must be wondering why they should take inconvenient, unpopular and costly action now for a problem that, perhaps, only the next generation of their successors will actually face.

But they should act anyway, because it's the right thing to do.

Source: The National News

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Commodity

Gold stable, despite 'bad news'

Gold continues to trade with impressive resilience. Even though conditions in financial markets have turned against the precious metal in recent months, gold prices have not absorbed much damage, defying the negative pressure exerted by soaring interest rates and an appreciating US dollar.

In normal times, gold and interest rates have a negative relationship. When rates rise and yields on government bonds race higher, gold becomes less attractive, as it pays no interest to hold. If investors can buy a US government bond that pays them a yield of 4.5% per year, like they can today, they are less likely to buy the non-yielding precious metal. That's what theory suggests, at least.

Similarly, a stronger US dollar is bad news for gold because the metal is mostly priced in US dollars. This means that when the dollar appreciates, it becomes more expensive for investors outside of the United States to buy gold, which inevitably dampens demand.

Gold Decouples from Interest Rates, What's Next?_1

But these classic correlations have broken down lately. Yields on inflation-protected bonds went through the roof in September to reach their highest levels in almost 15 years and the dollar has staged a phenomenal recovery. Going purely by the historical relationships, this combination should have smashed gold down.

Yet, the yellow metal has remained relatively flat, and continues to trade 8% away from record highs. Therefore, some new element has come into play to change gold's trading dynamics.

Central bank demand

This new element has been the direct buying of gold by central banks in an effort to raise their reserves. Central bank gold purchases reached a new record in the first half of this year, a pattern that likely persisted in the third quarter, spearheaded by China.

Geopolitics lie behind this boom in central bank demand. The invasion of Ukraine resulted in the immediate freezing of Russia's reserves held abroad in dollars and euros - around half of the assets held by the Bank of Russia were frozen under Americans and European sanctions. That was the beginning of a paradigm shift for how central banks manage their reserves.

The People's Bank of China started loading up on gold to diversify the nation's reserves away from dollars and euros, concerned about suffering the same fate in case diplomatic relations with the West turn colder in the future. This diversification strategy has seen China consistently buy gold for ten consecutive months through August, in what could be a multi-year trend.

Gold Decouples from Interest Rates, What's Next?_2

Sovereign purchases have fueled underlying demand for gold, almost establishing a floor under prices. When there are such massive buyer whales active in the market, which are not sensitive to prices because their motives are mostly political, it helps to prevent any massive selloffs. Hence the resilience of gold prices in the face of sky-high rates.

The central bank buying spree has also suppressed volatility. Gold options contracts have seen their implied volatility fall to pre-pandemic levels over the summer, which essentially means investors are not hedging as much for any massive movements in gold, expecting the boost in demand to translate into smoother trading conditions moving forward.

New record highs possible, but not imminent

In the near term, downside risks for gold will probably continue to dominate. The negative forces of rising real yields and a roaring US dollar could continue to dampen the appeal of the precious metal, keeping a lid on any rallies.

It is difficult to say exactly how much further the rally in the dollar and yields can go. The US economy is superior to its competitors at this stage from a growth perspective, the Fed has shifted to a stance of higher-for-longer interest rates, and the Treasury will continue to flood the markets with newly issued debt next quarter, maintaining the upward pressure on yields.

Therefore, it seems premature to call for a trend reversal in gold. Most likely, these factors will keep the precious metal under selling interest in the coming weeks. That said, any losses could also be relatively limited considering the purchases from central banks, so gold prices might only bleed lower in a slow manner.

Gold Decouples from Interest Rates, What's Next?_3

Looking at the charts, the most crucial regions to watch on the downside are $1,900, and beyond that the August low near $1,885. If that zone is violated too, the spotlight would turn to $1,860, a level marked by the inside swing high in March.

In the bigger picture, though, it seems quite plausible that gold can eventually rally to new records. If the highest bond yields in a generation could only knock gold 8% down from record highs, the precious metal can likely take out those highs once yields cool off again.

For that to happen, it might require some panic event in global markets or signs of an imminent US recession that fuel speculation of Fed rate cuts. That's not on the horizon for now, but the economic cycle does seem to be in its final stages, so it might simply be a matter of time.

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Peterson

Commodity

Energy

Bond

Economic

In the past, from historical experience, the inversion of yields of the U.S. Treasury Securities is often an important signal of economic recession, but it seems to have great limitations. For example, this round of interest rate hikes by the Federal Reserve has caused the 10-year and 2-year yields of the U.S. Treasury Securities to remain inverted for 13 months since July last year, but the U.S. economy does not seem to show signs of recession. On the contrary, the market generally expects that the U.S. economy will have a "soft landing".

In the past 43 years, there has been a statistical correlation between the inverted yields of the U.S. Treasury Securities and the economic recession. At present, the phenomenon of inversion has improved, and as long as it is based on the resilience of economic fundamentals, the long-term yield will rise sharply. This inversion improvement is more like the economic crises in 1980 and 1982, but it is different from the subsequent four economic crises, mainly because the short-term yield driven by the Fed's interest rate cut is down, and the interest rate cut generally means the Fed's confirmation of the deterioration of economic prospects, and the inversion improvement is more regarded by the market as a signal that the economy is about to fall into recession. At present, if there is a rate cut and a short-term downtrend, it will be closer to the signs of recession.

At present, another leading indicator "copper-oil ratio" reveals the risk of recession again. As a "global economic barometer", the price of copper has fallen by nearly 10% since the end of July, while the ratio of copper to oil has been falling to around 88.0 since June, the lowest since November last year. According to historical experience, whenever the ratio of copper to oil goes down, it will warn the risk of economic recession like the index of "the yield curve of the U.S. Treasury Securities is inverted". So, has the classic "leading indicator" of the U.S. recession failed? Is it still instructive?

We will not discuss its effectiveness for the time being, but given the current situation, it is foreseeable that with the further reflection of the lag of monetary tightening in Europe and the U.S., the economic prospects in Europe and the U.S. will cause demand-side concerns. At the same time, the "grey rhinos" such as the possible U.S. government shutdown in mid-November, the U.S. auto workers' strike that continues to grow, and the uncertainty over China's economic recovery, as well as the risks that might be masked rather than disappear, so we have to be cautious. Even if there is no so-called recession risk, the U.S. Dollar Index soars and non-US currencies depreciate sharply, and if the oil price climbs to US$100+ again, the impact on the global economy will be far greater than that of last year, which will hit the demand side hard, and it is also doomed that the oil price will not go far further. Perhaps OPEC countries will stop reducing their holdings or even increasing their production earlier.

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Owen Li

Commodity

Energy

Energy - Steady OPEC output

The oil market struggled yesterday. ICE Brent settled a little more than 1.6% lower on the day as rising treasury yields and USD strength proved to be too much of an obstacle for the market. Technically, the Brent December contract still needs to fill the gap left following the November contract expiry on Friday. If that happens, it would take the front-month contract back above US$95/bbl.

Preliminary OPEC production data for September is starting to come through. The Bloomberg survey showed that output increased by 50Mbbls/d MoM to 27.97MMbbls/d. Nigeria showed the largest increase over the month. Their supply grew by 60Mbbls/d, while Iran saw a marginal pullback in output of 50Mbbls/d. Output is likely to remain relatively steady over October. Further out, the market will be focused on any sign that Saudi Arabia is starting to unwind its voluntary additional supply cuts.

There was a bit more noise yesterday around the resumption of Northern Iraqi oil flows through the Ceyhan pipeline. Turkey has said that flows could resume this week. However Iraqi officials have thrown cold water on the idea, saying that there are still some issues that need to be resolved before this can happen. The pipeline can carry almost 500Mbbls/d of crude oil from the Kurdish region to the Ceyhan export terminal. Flows were suspended back in March after the Iraqi government won an international arbitration ruling, stating that these flows were occurring without approval from the Iraqi government.

Metals - Gold plunges to seven-month low

Gold plunged to its lowest level since March yesterday - edging closer to US$1,800/oz, as treasury yields continued to move higher and the USD also strengthened. The higher-for-longer narrative has been putting significant pressure on gold, which is leading to a significant reduction in investment appetite reflected by the large declines in gold ETF holdings in recent months. Fed policy will remain key to the outlook for gold prices in the months ahead.

Source: ING

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Alex

Economic

Governor Bullock has made absolutely minimal changes in her first Statement despite evidence of higher inflation in the September quarter. She is likely to make her mark in November when the staff refreshes their forecasts for growth and inflation.

As expected, the Reserve Bank Board decided to leave the cash rate target unchanged at 4.1% at its October meeting.

While the decision was widely anticipated the issue for markets was whether new Governor Bullock would decide to send some different messages than had been signalled in previous Statements under Governor Lowe.

For instance, these messages may have indicated a greater concern around achieving the inflation target in the appropriate time frame; more concern about the underperforming Australia economy; the resilience of the labour market; or, the surprise recovery in house prices.

There were no such changes in the Statement.

The inflation issue was the most likely "candidate" for a revised approach.

However, as with the other key topics the Governor chose to almost exactly stick to the script that had been established by Governor Lowe.

The most contentious issue is around the implications of the August Inflation Indicator for the September quarter Consumer Price Index.

Westpac has lifted its forecast for Trimmed Mean Inflation from 0.8% to 1.1%, mainly due to higher inflation in the services sector for which the August report provides valuable information for the whole quarter.

The Governor's Statement refers to "the prices of many services are continuing to rise briskly" although this is little changed from the September Statement "the prices of many services are rising briskly."

As a result of our increase in our forecast for the Trimmed Mean in September we have lifted our forecast for annual Trimmed Mean inflation in 2023 from 3.8% to 4.1%.

Services plus higher fuel prices have lifted our September quarter forecast for headline inflation from 0.9% to 1.1% and annual inflation in 2023 from 3.9% to 4.3%.

The RBA is currently forecasting inflation by end 2023 at 3.9% (Trimmed Mean) and 4.1% (Headline).

Presumably the RBA forecasters would also be revising their own forecasts on the basis of the August Inflation Indicator but there is no such indication in the Statement.

In the Governor's Statement the sentence "The central forecast is for CPI inflation to continue to decline and to be back within the 2–3% range in late 2025.

Despite our slightly higher profile for inflation in 2023 our forecasts are still in line with the RBA achieving their 2025 target.

The Governor chose not to react to those possible upgrades to the inflation forecasts – better to await the official September quarter CPI report which will be a key input into any forecast revisions.

Governor Bullock has opted to maintain the status quo prior to reviewing her position once the staff's revised forecasts are available for the November meeting.

On the basis of our revised inflation forecast we expect the September Inflation Report will provide grounds for the staff inflation forecasts for the end of 2023 to be revised a little higher but not threaten the key goal of reaching the inflation target by 2025.

We do not see such revisions as providing sufficient evidence for a rate hike at the November meeting.

Source: Westpac Banking Corporation

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IC Markets

Cryptocurrency

Stocks

Forex

Economic

DXY

The DXY chart currently demonstrates a bullish momentum, with the possibility of a short-term drop to the 1st support level before potentially bouncing and rising towards the 1st resistance level.

The 1st support at 106.19 is identified as an overlap support, which may provide a level of price stability. The 2nd support at 105.68 is also considered an overlap support, potentially offering additional support to price declines.

On the resistance side, the 1st resistance at 107.13 is crucial, with the presence of the 127.20% Fibonacci Extension, indicating its significance as a potential barrier to price increases. Beyond this, the 2nd resistance level at 107.91 is recognized as a swing high resistance

EUR/USD

The EUR/USD chart currently exhibits bearish momentum, with the potential scenario of a short-term rise towards the 1st resistance level before reversing and moving towards the 1st support.

The 1st support at 1.0459 is considered significant due to the presence of the 61.80% Fibonacci Projection and the 127.20% Fibonacci Extension, suggesting Fibonacci confluence and making it a noteworthy level for potential price reversals. Additionally, the 2nd support at 1.0395 is identified as a swing low support, further reinforcing its importance as a potential support level.

On the resistance side, the 1st resistance at 1.0500 is characterized as an overlap resistance, indicating its potential role as a barrier to price increases. Furthermore, the 2nd resistance at 1.0395 is recognized as a swing high resistance, emphasizing its significance in potential price reversals.

EUR/JPY

The instrument being analyzed is EUR/JPY, and the current overall momentum of its chart is bullish.

There is a potential scenario where the price could make a bullish bounce off the 1st support level, which is at 156.75, and head towards the 1st resistance level at 158.50.

The 1st support at 156.75 is considered significant because it acts as a multi-swing low support.

Additionally, there is a 2nd support level at 155.82, which is also valuable due to its status as a multi-swing low support. It aligns with a 161.80% Fibonacci Extension level, adding to its importance.

On the resistance side, the 1st resistance level at 158.50 is considered important because it represents a multi-swing high resistance.

Moreover, there is a 2nd resistance level at 159.42, which holds importance as a pullback resistance in the chart analysis.

EUR/GBP

The instrument being analyzed is EUR/GBP, and the current overall momentum of its chart is bearish.

There is a potential scenario where the price could make a bearish reaction off the 1st resistance level, which is at 0.8671, and subsequently drop to the 1st support level at 0.8635.

The 1st support at 0.8635 is considered significant because it acts as an overlap support and corresponds to a 61.80% Fibonacci Projection.

Additionally, there is a 2nd support level at 0.8614, which is also valuable due to its status as an overlap support.

On the resistance side, the 1st resistance level at 0.8671 is considered important because it represents an overlap resistance. Furthermore, this level aligns with a 61.80% Fibonacci Retracement, adding to its significance.

Moreover, there is a 2nd resistance level at 0.8701, which holds importance as a multi-swing high resistance in the chart analysis.

GBP/USD

The GBP/USD chart currently maintains a bearish momentum, with factors contributing to this momentum being its position below the bearish Ichimoku cloud.

There is a potential scenario of a bullish bounce off the 1st support level at 1.2067, which is supported by the presence of the 127.20% Fibonacci Extension, indicating a possible reversal point. Additionally, the 2nd support at 1.2011 is identified as a swing low support and aligns with the 161.80% Fibonacci Extension, further emphasizing its significance.

On the resistance side, the 1st resistance level at 1.2124 is recognized as an overlap resistance, suggesting it may act as a barrier to bullish movements. Beyond this, the 2nd resistance at 1.2265 is also categorized as an overlap resistance.

GBP/JPY

The instrument being analyzed is GBP/JPY, and the current overall momentum of its chart is bullish.

There is a potential scenario where the price could drop further to the 1st support level, which is at 180.59, in the short term before bouncing from there and rising to the 1st resistance level at 181.87.

The 1st support at 180.59 is considered significant because it acts as a multi-swing low support and corresponds to a -27% Fibonacci Expansion.

Additionally, there is a 2nd support level at 179.73, which is also valuable as it functions as a pullback support and aligns with a 161.80% Fibonacci Extension.

On the resistance side, the 1st resistance level at 181.87 is considered important because it represents a pullback resistance.

Moreover, there is a 2nd resistance level at 182.90, which holds significance as a swing high resistance in the chart analysis.

USD/CHF

The USD/CHF chart currently exhibits a bullish momentum.

There's a potential scenario of a bullish continuation towards the 1st resistance level at 0.9211. The 1st support at 0.9095 is identified as a swing low support, indicating a potential level where the price might find support. Additionally, the 2nd support at 0.9016 is categorized as a pullback support, further strengthening its significance.

On the resistance side, the 1st resistance level at 0.9211 is recognized as a swing high resistance and marks a potential point where the price could face resistance initially. Beyond this, the 2nd resistance at 0.9263 is notable for the convergence of the 161.80% Fibonacci Extension and the 61.80% Fibonacci Retracement, indicating a Fibonacci confluence and underscoring its importance as a potential resistance zone.

USD/JPY

The USD/JPY chart currently has a bullish momentum, but there's a potential scenario of a short-term drop to the 1st support level at 148.44 before bouncing and rising towards the 1st resistance.

The 1st support at 148.44 is identified as an overlap support, making it a significant level for potential price support. Additionally, the 2nd support at 147.80 is categorized as a pullback support, further reinforcing its importance as a potential level where the price might find support.

On the resistance side, the 1st resistance level at 149.90 is crucial, with the presence of the 127.20% Fibonacci Extension, indicating its significance as a potential resistance zone. Beyond this, the 2nd resistance at 150.42 is marked by the 161.80% Fibonacci Extension, further underlining its importance as a potential barrier to upward movements in the price.

USD/CAD

The USD/CAD chart currently has a bearish momentum, and there is a potential scenario of a bearish reaction off the 1st resistance level, leading to a drop towards the 1st support.

The 1st support at 1.3633 is considered a good support level, characterized as a pullback support. Additionally, the 2nd support at 1.3575 is identified as an overlap support, which offers another potential zone where the price might find necessary support.

On the resistance side, the 1st resistance level at 1.3693 is crucial, being a swing high resistance. Beyond this, the 2nd resistance level at 1.3745 also serves as a swing high resistance, representing a barrier for potential upward movements in the price.

AUD/USD

The AUD/USD chart currently has a bearish momentum, but there is a potential scenario of a bullish bounce off the 1st support level, heading towards the 1st resistance.

The 1st support at 0.6334 is considered significant as it is a swing low support level. Additionally, the 2nd support at 0.6291 is identified as a level where the price aligns with the 127.20% Fibonacci Retracement, which enhances its role as a key support level.

On the resistance side, the 1st resistance level at 0.6387 is categorized as a pullback resistance, which might initially limit upward movements. Beyond this, the 2nd resistance at 0.6456 also serves as a pullback resistance

NZD/USD

The NZD/USD chart is currently exhibiting a bearish momentum, and there's a potential scenario of a bearish continuation towards the 1st support level.

The 1st support at 0.5902 is considered significant as it is a multi-swing low support level. Additionally, the 2nd support at 0.5860 is identified as a multi-swing low support and is further reinforced by the presence of the 127.20% Fibonacci Extension, making it an important level for potential price support.

On the resistance side, the 1st resistance level at 0.5983 is marked as a pullback resistance, which might initially limit upward movements. Beyond this, the 2nd resistance at 0.6035 is identified as a swing high resistance, representing another potential barrier to bullish advancements in the price.

DJ30

The instrument being analyzed is DJ30, and the current overall momentum of its chart is bullish.

There is a potential scenario where the price could make a bullish bounce off the 1st support level, which is at 33280.79, and head towards the 1st resistance level at 33713.99.

The 1st support at 33280.79 is considered significant because it acts as an overlap support.

Additionally, there is a 2nd support level at 32722.19, which is also valuable as it functions as a swing low support.

On the resistance side, the 1st resistance level at 33713.99 is considered important because it represents a swing high resistance. Furthermore, this level aligns with both a 61.80% Fibonacci Retracement and a 78.60% Fibonacci Projection, indicating Fibonacci confluence and adding to its significance.

Moreover, there is a 2nd resistance level at 34055.99, which is deemed important as it represents an overlap resistance and corresponds to a 50% Fibonacci Retracement, contributing to its significance in the analysis.

GER40

The instrument being analyzed is GER40, and the current overall momentum of its chart is bullish.

There is a potential scenario where the price could make a bullish bounce off the 1st support level, which is at 15137.90, and head towards the 1st resistance level at 15295.20.

The 1st support at 15137.90 is considered significant because it acts as a multi-swing low support.

In addition, there is a 2nd support level at 15029.70, which is also notable due to its status as a 127.20% Fibonacci Extension.

On the resistance side, the 1st resistance level at 15295.20 is considered important because it represents a pullback resistance. Furthermore, this level corresponds to a 38.20% Fibonacci Retracement, adding to its significance.

Moreover, there is a 2nd resistance level at 15505.60, which holds importance as a swing high resistance. This level aligns with a 78.60% Fibonacci Projection, contributing to its significance in the analysis.

US500

The instrument being analyzed is US500, and the current overall momentum of its chart is bearish. Several factors contribute to this bearish momentum.

There is a potential scenario where the price could make a bearish reaction off the 1st resistance level, which is at 4292.4, and subsequently drop to the 1st support level at 4259.7.

The 1st support at 4259.7 is considered significant because it acts as a swing low support and corresponds to a 78.60% Fibonacci Retracement level.

Additionally, there is a 2nd support level at 4234.1, which is also notable because it functions as an overlap support.

On the resistance side, the 1st resistance level at 4292.4 is considered important because it represents an overlap resistance. Furthermore, this level aligns with a 38.20% Fibonacci Retracement, adding to its significance.

Moreover, there is a 2nd resistance level at 4333.6, which holds importance as a swing high resistance. This level coincides with both a 78.60% Fibonacci Projection and a 38.20% Fibonacci Retracement, indicating Fibonacci confluence and further enhancing its significance in the analysis.

BTC/USD

The instrument being analyzed is BTC/USD, and the current overall momentum of its chart is bullish. Several factors contribute to this bullish momentum.

There is a potential scenario where the price could make a bullish bounce off the 1st support level, which is at 27412, and head towards the 1st resistance level at 28586.

The 1st support at 27412 is considered significant because it acts as an overlap support and coincides with a 61.80% Fibonacci Retracement level, adding to its importance in the analysis.

Additionally, there is a 2nd support level at 26774, which is also valuable as it functions as an overlap support.

On the resistance side, the 1st resistance level at 28586 is considered important because it represents an overlap resistance. Furthermore, this level aligns with a 61.80% Fibonacci Projection, contributing to its significance in the analysis.

ETH/USD

The instrument being analyzed is ETH/USD, and the current overall momentum of its chart is bullish.

There is a potential scenario where the price could make a bullish bounce off the 1st support level, which is at 1649.76, and head towards the 1st resistance level at 1689.42.

The 1st support at 1649.76 is considered significant because it acts as an overlap support and corresponds to a 50% Fibonacci Retracement level.

Additionally, there is a 2nd support level at 1633.77, which is also valuable as it functions as a pullback support and aligns with a 61.80% Fibonacci Retracement level.

On the resistance side, the 1st resistance level at 1689.42 is considered important because it represents a pullback resistance. Furthermore, this level coincides with both a 50% Fibonacci Retracement and a 61.80% Fibonacci Projection, indicating Fibonacci confluence and adding to its significance.

Moreover, there is a 2nd resistance level at 1735.23, which holds importance as a multi-swing high resistance in the chart analysis.

WTI/USD

The WTI chart currently has a bearish momentum, and there's a potential scenario of a bearish continuation towards the 1st support level.

The 1st support at 85.57 is considered significant as it's identified as an overlap support, making it an important level where the price might find some support. Additionally, the 2nd support at 84.03 is categorized as a pullback support, further underpinning its role as a key level for potential price support.

On the resistance side, the 1st resistance level at 87.53 is marked as a pullback resistance, potentially limiting upward movements. Beyond this, the 2nd resistance at 90.75 is identified as an overlap resistance, representing another potential barrier to bullish advancements in the price.

XAU/USD (GOLD)

The XAUUSD chart currently exhibits a bearish momentum, with a potential scenario of a bearish continuation towards the 1st support level.

The 1st support at 1806.00 is considered significant as it's identified as an overlap support, making it a crucial level for potential price support. Furthermore, the 2nd support at 1777.59 is also categorized as an overlap support, reinforcing its importance as a potential zone where the price may find support.

On the resistance side, the 1st resistance level at 1856.47 is marked as a pullback resistance, potentially limiting upward movements. Beyond this, the 2nd resistance at 1887.35 is identified as a swing high resistance.

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