2023 Market Forecast by Solid ECN

Gold

During today's session gold price bounced off recent lows above the $1,800 an ounce mark, a level not seen since December 2022. Upward move gained steam after publication of latest Conference Board consumer confidence figures.  Price is currently approaching crucial support at $1830, which is marked with previous price reactions, upper limit of local 1:1 structure and 38.2% Fibonacci retracement of the upward wave started in March 2020.  Should break lower occur, upward move may accelerate towards the key resistance zone between $1868 - 1875 an ounce. On the  other hand, if sellers manage to halt declines around $1830 level, another downward impulse may be launched towards psychological support at $1800.

USDCAD - Growth is possible

If the assumption is correct, the USDCAD pair will grow to the area of 1.3850 ? 1.3977. In this scenario, critical stop loss level is 1.3440.

CHN Comp

• US indices finished the final trading session of February lower. S&P 500 dropped 0.30%, Dow Jones moved 0.71% and Nasdaq moved 0.10% lower. Small-cap Russell 2000 bucked the trend and finished 0.04% higher
• Indices from Asia-Pacific traded mostly higher today. Nikkei added 0.3%, Nifty 50 gained 0.6%, S&P/ASX 200 dropped 0.1%
• Indices from China traded higher on the back of strong PMIs with Hang Seng trading 4% higher on the day
• DAX futures point to a higher opening of the European cash session today
• Bloomberg reports that amount of Russian diesel-type fuel stored in floating storage reached 1.9 million barrels and is the highest since October 2022 as the country struggles to find buyers for its oil derivative products after Western sanctions
• Official Chinese manufacturing PMI jumped from 50.1 to 52.6 in February (exp. 50.5) and reached the highest level since April 2012. Services gauge moved from 54.4 to 56.3 (exp. 55.0)
• Australian GDP grew by 0.5% QoQ in Q4 2022 (exp. 0.7% QoQ)
• Australian CPI inflation dropped from 8.4 to 7.4% YoY in January (exp. 8.1% YoY)
• Australian final manufacturing PMI for February came in at 50.5 and was revised higher from 50.1 signaled in flash reading
• Japanese final manufacturing PMI for February came in at 47.7 and was revised slightly higher from 47.4 in flash reading
• API report pointed to a 6.2 million barrel build in US oil inventories (exp. +0.8 mb)
• Cryptocurrencies trade higher amid overall improvement in risk moods. Bitcoin gains 2.5%, Ethereum jumps 2.6% and Dogecoin trades 1.7% higher
• Oil is trading 1% higher while US natural gas prices pull back 1%
• Precious metals trade higher as USD underperforms - gold adds 0.5% while silver and platinum trade 1.3% higher
• AUD and NZD are the best performing major currencies while JPY and USD lag the most

Chinese CHNComp is rallying today following the release of strong official PMIs for February. Index bounced off the support zone ranging between 6,600 pts and 200-session moving average is now trading over 4% higher on the day.

XRPUSD - Pending decision on SEC lawsuit

This week, the XRPUSD pair resumed growth after the negative dynamics last Friday, which developed against the backdrop of the release of January data on the price index of personal consumption expenditures in the United States: the figure rose from 5.3% to 5.4% YoY. The increase in value reinforced the fears of experts in the continuation of the tightening cycle of the regulator's monetary policy, which supported the dollar and put pressure on alternative assets. On the background of these data, the price dropped to the area of 0.3655 but now it has returned to the middle line of Bollinger bands around 0.3800.

The situation on the market remains uncertain as investors await the final decision on the suit of the US Securities and Exchange Commission (SEC) against Ripple, which should follow soon. The agency insists that the XRP coin, like other cryptocurrencies, except for BTC, is an unregistered security. Corporation lawyers reject the accusations, stating the imperfection of the current definition of the concept of "security" and referring to the statements of the former head of the SEC, William Hinman, who claimed that the ETH token, similar to XRP, is not one. Experts believe that Ripple has a high chance of winning the process. They note that the SEC had previously initiated a similar lawsuit against blockchain platform LBRY, accusing it offering its own LBC tokens but the court ruled that LBC could only be considered a security if there was an initial coin offering (ICO). If Ripple convinces the court that there was no official initial offering, the decision could be favorable for the company, and then leading exchanges such as Coinbase and Binance will re-list XRP, and its price will rise, leveling the negative effect of American monetary policy.



Now, the trading instrument is close to the middle line of Bollinger bands 0.3800, consolidation above which will give the prospect of resuming growth to 0.4150 (Murrey level [+1/8]) and 0.4330 (Fibonacci correction 23.6%). The key ?bearish? level is 0.3662 (Murrey level [7/8]), a breakdown of which will provide a decline to 0.3418, 0.3662 (Murrey level [6/8]).

Resistance levels: 0.38, 0.415, 0.433 | Support levels: 0.3662, 0.3418

EURGBP

Euro kicked off March on a strong note as fresh preliminary inflation data from France and Spain showed price pressures accelerated last month. Also inflation in North-Rhine Westphalia, the most densely populated part of Germany, also increased. Markets price in ECB to lift rates by another 50bps in March, while the peak rate for the deposit facility is projected to reach 4% in February of 2024, above the 3.9% seen in late February.

On the other hand, the British pound is one of the worst performing G10 currencies today as fresh comments from BoE Governor Bailey overshadowed optimism over Britain's agreement with the EU on post-Brexit trade regarding Northern Ireland. Bailey said further rate hikes may be appropriate but nothing is decided as inflation has been slightly weaker, and activity and wages slightly stronger. It seems that his indecisiveness was perceived well by the markets.



EUR and NZD are the best performing major currencies while GBP and USD lag the most.



EURGBP rose sharply at the beginning of today's session, however buyers struggle to reach major resistance at 0.8875, which is marked with previous price reactions and 23.6% Fibonacci retracement of the upward wave launched in December 2022. As long as price sits below, pullback towards  local support at 0.8815. cannot be ruled out.

EURGBP

EUR could be on the move later today when the CPI report for February from the euro area and ECB minutes are released at 10:00 am GMT and 12:30 pm GMT, respectively. CPI reading may draw more attention as it will be more timely - keep in mind that ECB minutes will be a recap of discussions from around 3 weeks ago and therefore views included may be outdated. In fact, many ECB members have struck a hawkish tone since the latest meeting with ECB President Lagarde saying this morning that a 50 bp rate hike at the March meeting is still on the table. This has provided some support for EUR this morning and put some pressure on European equities. Lagarde also said that she does not expect recession in the euro area and that inflation should start to slow from march due to base effects.



Taking a look at EURGBP chart at D1 interval, we can see that the pair has climbed to the 0.8900 resistance zone yesterday. An attempt to break above was made today on the back of Lagarde's comments but those gains were already erased. Nevertheless, another attempt cannot be ruled out given two potential EUR-volatility events later in the day (CPI and ECB minutes). Also the pair may see some action during speeches from ECB Schnabel (12:30 pm GMT), BoE Tenreyro (1:00 pm GMT) and BoE Pill (3:00 pm GMT).