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2023 Market Forecast by Solid ECN in Technical_6825f0acc9f09

2023 Market Forecast by Solid ECN

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GBPUSD

The GBPUSD pair provided new positive trades to test 1.2200 barrier, waiting to get positive motive that assists to push the price to continue the price and achieve our positive targets that start at 1.2260 and extend to 1.2440 after surpassing the previous level.

2023 Market Forecast by Solid ECN in Technical_gbpusd_12

The EMA50 continues to support the expected bullish wave, which depends on the price stability above 1.2060, as breaking it will put the price under negative pressure that targets testing 1.1940 before any new attempt to rise.
#241 - March 20, 2023, 07:18:22 AM

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Gold

Precious metals gain amid increase in risk-aversion and pullback in US yields

Strong upward move launched on the gold market on March 8, 2023 is continuing at the beginning of a new week. Risk-off moods can be spotted on the financial markets at the beginning of a new week and it is providing support for safe haven assets, like for example gold. UBS will buy troubled Swiss lender, Credit Suisse, in a government-brokered deal. However, this failed to ease market concerns as the deal will include write down of Credit Suisse's AT1 bonds and this may turn out to be a hit to banks and other institutions with exposure to Credit Suisse. Apart from that, Fed and 5 other central banks (ECB, BoJ, BoE, BoC and SNB) will switch from weekly to daily USD swap auctions in order to boost USD liquidity. US yields pulled back providing even more support for precious metals.

2023 Market Forecast by Solid ECN in Technical_gold_18

As a result of those market moves, gold is trading over 1% higher on the day. Gold price climbed above $2,000 per ounce this morning, reaching the highest level since March 2022.
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#242 - March 20, 2023, 09:57:34 AM

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Oil

Oil launched a new week's trading lower amid an overall increase in risk aversion. WTI drops below $65 per barrel and trades at the lowest level since November 2021! Declines accelerated after price dropped below a key $70-72 price zone last week. The $60-65 area is a demand zone marked with local lows from 2021 and local highs from 2019 and 2020.

There are few reasons behind a drop in oil prices:

  • Concerns over conditions of banking and financial systems in the United States and Europe. UBS will acquire Credit Suisse but it failed to ease market concerns
  • Demand in China remains weak - imports stay low, run rates in refineries drop but at the same time Chinese exports of oil derivatives are increasing, what may hint at oversupply in the country
  • Lack of interest from speculators - end-February data shows oil being extremely net oversold by speculators
  • Goldman Sachs - one of the world's largest institutional bulls when it comes to oil - slashed Brent price 12-month ahead forecast from $100 to $94 per barrel
2023 Market Forecast by Solid ECN in Technical_oil_10

WTI (OIL.WTI) drops below $65 per barrel. Price dropped to a key zone, marked with local highs and lows from previous years, as well as with the range of two largest downward impulses in recent year (2014 and 2020).
#243 - March 20, 2023, 12:07:10 PM

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2023 Market Forecast by Solid ECN in Technical_6803a6c52eb12
#244 - Today at 09:40:02 AM

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EURUSD

Euro continues to recover against the dollar at the beginning of this week, after a sharp crash in the last week - that was motivated by the worries around Credit Suisse that put the European banking sector under pressure and heavily penalized the euro.

Daily Time Frame EUR/USD

  • On the daily chart, we can see that the price is once again testing the upper limit of the range, close to 1.0695.
  • This will be a decisive zone for the price to understand the next momentum in the currency pair.
2023 Market Forecast by Solid ECN in Technical_eurusd-n-1_3

Dollar Index Daily Time Frame

  • On the dollar index chart, we can see that the bullish movement slowed down after the price tested the 50 period exponential moving average (EMA).
  • As long as the price remains below this zone, we should expect the bearish movement to continue over the next few sessions.

2023 Market Forecast by Solid ECN in Technical_eurusd-n-2_3

  • USD index, Daily time frame chart.
  • JPY leads the gains this trading session.

2023 Market Forecast by Solid ECN in Technical_eurusd-n-3_1
#244 - March 20, 2023, 02:41:59 PM

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DE30

European indices had a poor start to a new week with major indices from the Old Continent launching today's cash trading session with significant bearish price gaps. This came after a government-brokered deal for UBS to acquire Credit Suisse failed to shore up market sentiment. Issue of Credit Suisse's AT1 bonds being written down to zero sparked concerns that it may be a problem for banks and financial institutions with exposure to those bonds. However, indices began to regain ground as the session progressed and all of the earlier losses have been erased already. Indices from Western Europe trade 0.5-1.0% higher on the day with German DAX adding 0.7% and French CAC40 jumping 0.9%.

2023 Market Forecast by Solid ECN in Technical_de30_4

Taking a look at the DE30 chart at H4 interval, we can see that another attempt at breaking below the 14,750 pts support zone was made today and once again it turned out to be a failure. Index caught a bid later on and rallied towards the psychological 15,000 pts mark. While the index managed to break above this hurdle, bulls failed to break above the 15,050 pts swing area. However, the index remains close to this resistance and another attempt to break above it later into the day cannot be ruled out.
#245 - March 20, 2023, 04:37:27 PM

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BTC

  • Weaker sentiment on stock exchanges did not prevent cryptocurrencies from rising
  • The correlation of the price of BTC with the major indices has dropped noticeably recently
  • Bitcoin price is approaching overbought levels and 61.8 Fibonacci retracement

The recent weakness of banks has caused capital to flow into cryptocurrencies for two reasons. The main beneficiary of the rally - decentralized Bitcoin - is not directly dependent on the centralized financial sector. Second, in the face of escalating bank problems, the chances of a Federal Reserve pivot have increased. Since the collapse of SVB, the Fed has already hinted twice at supporting market liquidity, which investors have taken as a positive prognosticator. It's still unpredictable which way the crisis will unfold but its hold on UBS's takeover of Credit Suisse coupled with a potentially dovish Fed could provide a catalyst for upside for risk assets.

On Wednesday at 8 pm GMT, markets will see if indeed Jerome Powell will be willing to go easy on Wall Street and change to a more dovish stance. If investors sense that the Fed is softening under the pressure of systemic concerns, the rally in cryptocurrencies is likely to be prolonged. At the same time, it is difficult to imagine the price of BTC continuing to rise if the scale of the current crisis were to increase significantly.

2023 Market Forecast by Solid ECN in Technical_btc-1_4

The price drop following the collapse of the SVB bank did not last long. Bitcoin surprised the markets and has since risen nearly 30%.

2023 Market Forecast by Solid ECN in Technical_btc-2_4

The largest of the cryptocurrencies has had one of its best weeks in the past few years, with the price rising more than 20%

2023 Market Forecast by Solid ECN in Technical_btc-3_2

The inverted head-and-shoulders formation pattern may herald bullish attempt to btrak the main psychological resistance level of $30,000.

2023 Market Forecast by Solid ECN in Technical_btc-4_1

Markets see more than 43% chance that the Federal Reserve will not raise interest rates on Wednesday. Just two weeks ago, the markets saw a 50bp hike as a chance. That's a drastic change.

2023 Market Forecast by Solid ECN in Technical_btc-5

The amount of stored BTC in the so-called 'cold wallets' of the largest BTC holders of so-called whales (above 1,000 BTC) is at levels last seen in mid-2020. This may indicate that if the BTC price maintains momentum, the amount of BTC in whale portfolios will increase again. For the moment, however, the amount of cryptocurrency in the whales' wallets continues to fall, which could indicate their sending BTC to exchanges and continued risk aversion among the largest holders. A change in this trend would be a sign of the growing strength of the largest of cryptocurrencies.

2023 Market Forecast by Solid ECN in Technical_btc-6[

Bitcoin, D1 interval. The price has approached $28,700, which coincides with the 61.8 Fibonacci abolition of the upward wave initiated in the spring of 2020. The RSI indicator indicates an overbought level signaling a possible correction.
#246 - March 21, 2023, 06:10:56 AM

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S & P

Also news that JPMorgan CEO Jamie Dimon is leading discussions with other CEOs of other large US banks in an effort to provide further support, including potentially converting their $30 billion in deposits into a capital injection, only slightly calmed investors' nerves. According to Wall Street Journal, preliminary discussions have been focused on ways that the banks can boost the beleaguered banks capital. Also in play is a potential investment by the banks themselves.

Also according to CNBC, JPMorgan Chase is advising  First Republic Bank on strategic alternatives,  one of which is capital raise which could dilute current shareholders. A sale of the bank is also taken into consideration.

2023 Market Forecast by Solid ECN in Technical_sp_3

First Republic (FRC.US) stock has been in free fall recently.  Last week alone, a troubled San Francisco-based lender lost nearly 70.0% of its market value. Sell-off accelerated in pre-market, however sellers failed to retest all-time low at $9.00 and buyers managed to erase some of the losses in the evening. Nevertheless, the main sentiment remains bearish and only a break above the local resistance zone around $42.25 could let to a bigger upward correction.
#247 - March 21, 2023, 07:05:02 AM

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AUDUSD

Yesterday's trading on Wall Street and in Europe ended higher, making up for losses from earlier in the day initiated by the uncertainty surrounding the takeover of Credit Suisse by UBS. Better sentiment fueled Asian markets today. Stock exchanges in Japan are closed due to a national holiday.

  • AUDUSD pair breaks back below the 0.6700 level. The case for a pause in the rate hike cycle by the RBA at its 4 April meeting has strengthened. According to the RBA minutes released today, the Board agreed to reconsider the case for pausing rate hikes and to closely examine incoming data from the economy.
  • The ECB's Holzmann is softening his previous calls for three consecutive 50 basis point rate hikes.
  • From the US, there was some news affecting the stock market. The US Treasury is looking at unlimited deposit guarantees (via the FDIC) if the banking crisis worsens.
  • On the political front, investors are looking at the Putin-Xi meeting in Moscow, which may bring new threads in the realm of the Ukraine conflict and other geopolitical-economic relations.
  • PIMCO lost $340 million on the redemption of Credit Suisse Bank's AT1 bond. Lawyers from Switzerland, the United States and the United Kingdom are talking to Credit Suisse's AT1 bondholders about possible legal action after up to $17 billion in losses related to the redemption.
  • Goldman Sachs commented on the current state of the equity market this way - "valuations don't look particularly attractive".
  • Bill Ackman, founder and hedge fund manager of Pershing Square Capital commented that the FOMC should consider holding off on rate hikes for tomorrow's Committee decision. Today marks the start of the Fed's two-day meeting in Washington. 
  • Citi predicts a 25bp rate hike on Wednesday, and notes that the tone of the press conference will now be particularly important.
  • Citadel and Trafigura traders believe that the turmoil in the banking market is temporary and unlikely to cause far-reaching perturbations in the global economy. Demand for oil should strengthen.

Quotations:
Futures in Europe point to a bullish opening to the session on the Old Continent. US contracts are also gaining, however the scale of the increases is minimal. On the FX market, the USD is currently performing best. NZD and AUD are the worst performers. Energy commodities are down, extending the wave of uncertainty in the economy. Gold and silver are correcting recent gains and recording slight declines. Bitcoin is currently losing 0.4 per cent and slipping towards $27,800.

2023 Market Forecast by Solid ECN in Technical_audusd_10

The AUDUSD pair is currently trading in a structure bounded by important support and resistance levels. The upcoming FOMC decision and ongoing banking uncertainty could create additional volatility on the pair.
#248 - March 21, 2023, 09:27:29 AM

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US500

The key event of the month, the FOMC interest rate decision, is ahead of us. Although the Fed's decision is always referred to as the event of the month, tomorrow's decision will be even more closely scrutinized by the market due to the lingering spectre of the banking crisis in the background. The mood on Wall Street is a veritable rollercoaster at the moment, but let us try to take a look at where the US500 benchmark has been moving and what might happen in the coming days.

As we can see on the chart of the US500 contracts on the D1 interval attached below, the instrument's quotations have been moving in a very interesting technical structure for almost 2 years. The US500 broke out above the long-term downtrend line and successfully defended its outer extension, which encouraged the bulls to rise. However, we are inexorably approaching the next limitation, namely the resistance set by the uptrend initiated in the last quarter of 2022.

2023 Market Forecast by Solid ECN in Technical_qcxNm

What will happen next? To answer this question, we need to consider the factors that are shaping current market sentiment, namely tomorrow's FED decision and the spectre of a banking crisis. At the moment, the money market is pricing in an 83.4% chance of a 25 basis point hike, which seems market neutral at the moment. However, the key factor will be Powell's comments after the meeting regarding the hike cycle in the context of banking uncertainty. The risk of worsening problems in the sector will go a long way to curbing the hawkish enthusiasm of the Fed, which, remember, is in an advanced stage of tightening and seeing positive developments in the economy, such as last week's good PPI inflation reading.  Today, equity market sentiment was bolstered by further comments from the US Treasury, which was reported to be looking at providing unlimited deposit guarantees (via the FDIC) if the banking crisis worsens. In the event of a dovish FED, stock markets could eagerly extend the current upward momentum and break out above resistance near 4080 points. On the other hand, if the FED maintains a firm monetary stance, a downward impulse could be initiated towards support near 3870 points.
#249 - March 21, 2023, 11:13:20 AM

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ZEW Sentiment Index Below Expectations

  • 10:00 am GMT - Germany, ZEW sentiment index for March. Actual: 13.0. Forecast: 15.0. Previously: 28,1
  • Current conditions: Actual: -46.5. Forecast: -44.3. Previously: -45.1
  • ZEW says the international financial markets are under strong pressure. Assessment of the earnings development of banks and insurance sector have deteriorated considerably.

2023 Market Forecast by Solid ECN in Technical_quA3D

DE30 did not react to the below expectation reading of the ZEW index.
#250 - March 21, 2023, 01:06:57 PM

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#251 - Today at 09:40:02 AM

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EURUSD

US home sales data for February was released at 2:00 pm GMT today and it turned out to be a massive beat. Data came in at 4.58 million, up from 4.00 million in January and significantly above 4.20 million expected by the market. The release trigger an uptick on equity markets with S&P 500 (US500) reaching a fresh daily high near 4,030 pts. USD, on the other hand, was muted with EURUSD barely moving in the first minutes following the release.

2023 Market Forecast by Solid ECN in Technical_qfsX3

US home sales data for February was released at 2:00 pm GMT today and it turned out to be a massive beat. Data came in at 4.58 million, up from 4.00 million in January and significantly above 4.20 million expected by the market. The release trigger an uptick on equity markets with S&P 500 (US500) reaching a fresh daily high near 4,030 pts. USD, on the other hand, was muted with EURUSD barely moving in the first minutes following the release.
#251 - March 21, 2023, 02:42:28 PM

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Oil

Alexander Novak, Russian deputy prime minister for fuel energy complex, said that the 500k barrels per day oil output cut that was ordered for March will remain in force through June. Novak said that production has not been slashed by the announced half a million barrels yet but Russia is close to achieving this target cut.

2023 Market Forecast by Solid ECN in Technical_qfEx0

Brent (OIL) and WTI (OIL.WTI) ticked higher on the news. Oil prices jumped around 1% after Novak's comments hit headlines.
#252 - March 21, 2023, 03:31:48 PM

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GBPUSD

Inflation Rate in the United Kingdom increased to 10.40% YoYin February from 10.10% in January, above market estimates of 9.9% YoY.

The largest upward contributions came from restaurants and cafes, food, and clothing, partially offset by downward contributions from recreational and cultural goods and services (particularly recording media), and motor fuels. Core CPI rose 6.20% in February over the same month in the previous year, well above analysts' estimates of 5.7%. Fresh data may suggest that the BoE may not necessarily be approaching the end of the tightening cycle. Tomorrow a 25 bp rate hike is expected.

2023 Market Forecast by Solid ECN in Technical_qzDTm

GBPUSD is trading higher today and fresh CPI data provided more fuel for bulls. The currency pair is moving further away from support zone in the 1.2215 area.
#253 - March 22, 2023, 08:28:35 AM

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JAP225

  • US indices finished yesterday's session higher amid expectations that the Fed will tighten policy less aggressively in the evening. S&P 500 added 1.30%, Dow Jones moved 0.98% higher and Nasdaq rose 1.58%. Russell  outperformed and managed to finish 1.88% higher
  • Indices from Asia-Pacific traded higher today - Nikkei jumped 1.94%, S&P/ASX 200 moved 0.87% higher while Kospi and Nifty 50 rose 1.12% and 0.20% respectively
  • Indices from China traded 0.2-0.45% higher
  • DAX futures point to a lower opening of today's European cash session
  • ECB's Nagel said that policymakers have to be "even more stubborn" in inflation fight. In his opinion Eurozone banking system is resilient, not facing repeat of 2008
  • First Republic Bank could potentially receive government backing, according to Bloomberg
  • API report pointed to a 3.262 million barrel build in US oil inventories (exp. -1.448 mb)
  • RBC analysts believe that OPEC would intervene if oil prices dropped substantially.
  • Russia's Deputy Prime Minister Novak said that the country's current curtailed level of crude oil output would be in place through June 2023.
  • Commerzbank lowered its 2023 midyear Brent crude oil forecast to US$80 a barrel (from $95)
  • Cryptocurrencies are trading slightly higher today - Bitcoin gains 0.5%, Ethereum adds 0.4%
  • Energy commodities are lower - oil drops 1.0% while US natural gas prices fell over 2.6%
  • Precious metals little changed - silver rose 0.16%, gold trades 0.8% higher
  • AUD and NZD are the best performing major currencies while USD and CHF lag the most
2023 Market Forecast by Solid ECN in Technical_qzZAR

Nikkei (JAP225) was one of the best performing Asian indices today. Index returned to crucial resistance at 27200 pts, which is marked with previous price reactions and 23.6% Fibonacci retracement of the upward wave launched in March 2020.
#254 - March 22, 2023, 11:20:03 AM

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EURUSD

The most popular currency moved higher on Wednesday morning following a set of hawkish comments from ECB President Lagarde. In her opinion policymakers are neither committed to raise further nor are yet finished with hiking rates. ECB does not see clear evidence that underlying inflation is trending downwards. The underlying inflation dynamics remain strong. Lagarde emphasized that the ECB is ready to act and provide liquidity support.

2023 Market Forecast by Solid ECN in Technical_qHIDU

EURUSD jumped above major resistance at 1.0765 following Lagarde comments, which paves the way towards net key resistance at 1.0900. This level coincides with 50.0% Fibonacci retracement of the downward wave started in June 2021.
#255 - March 22, 2023, 01:17:15 PM

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