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2023 Market Forecast by Solid ECN

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2023 Market Forecast by Solid ECN in Technical_xx
Silver

Silver price didn?t show any strong move since morning, thus, no change to the expected bullish trend scenario on the intraday basis, which targets 26.07 followed by 26.90 levels as next main stations, supported by the EMA50 that continues to carry the price from below, reminding you that the continuation of the bullish wave depends on the price stability above 25.50 and 25.30 levels.

2023 Market Forecast by Solid ECN in Technical_silver

The expected trading range for today is between 25.30 support and 26.10 resistance.
#361 - May 10, 2023, 03:59:01 PM

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2023 Market Forecast by Solid ECN in Technical_xx
GBPUSD

Should the Bank of England deliver onto those expectations and hike rates by 25 basis points, the main rate would climb to 4.50% - the highest level since October 2008. However, as such an outcome is well expected and priced in, investors will look for hints on what comes next.

Should we see an increase in the number of MPC members who favor keeping rates unchanged, GBP may find itself under pressure. Last time, 7 MPC members opted for increasing rates while 2 preferred keeping them unchanged. Also, a new set of economic projections will be released and it will be closely watched, especially inflation forecasts. UK CPI inflation slowed in March but stayed above 10% YoY mark and should new forecasts show higher inflation expectations, it could be a bullish signal for GBP as it would hint at a need for more rate hikes. Markets currently see a rate peak at around 5.00% in September-November 2023.

2023 Market Forecast by Solid ECN in Technical_gbpusd

Taking a look at GBPUSD chart at H1 interval, one can see that the pair has been pulling back this morning. Pair dropped below the support zone marked with 38.2% retracement of the upward impulse launched on May 2, 2023 (1.2585 area). Downward move did not stop there with pair continuing to move lower and dropping below 200-hour moving average (purple line). An attempt to climb back above this moving average can be spotted at press time but should bulls fail to do so, the pair may look towards a test of the support zone marked with 50% retracement in the 1.2557 area.
#362 - May 11, 2023, 12:20:00 PM

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2023 Market Forecast by Solid ECN in Technical_xx
Bitcoin Weaker Ahead of Options Expiring Friday

Bearish pressure on Bitcoin is increasing as Friday's option expiration approaches. The bears could cause the price to settle below $27,000 allowing options market speculators betting on declines to cash in on record profits. Bitcoin has been pushed below $30,000 several times in April and today the cryptocurrencies are recording another weak day:

  • In addition to the uncertainty surrounding the BTC network's technical problems (soaring fees and tens of thousands of outstanding transactions), sentiment also weakened after still unconfirmed reports of a BTC sale by the US, which holds significant reserves of seized BTC from SilkRoad;
  • Investors are assessing the impact of a potential economic slowdown and Fed policy on cryptocurrencies. Today's claims came in stronger than expected, showing a strong U.S. labor market. This one may cause the Federal Reserve to stay on a hawkish track longer which does not seem positive for risky assets;
  • The call to put ratio (the ratio between call and put options) at 1.65 shows a lack of balance between bulls and bears. There is $560 million in call options and $340 million in put options. Bullish options have been by far the more popular in recent weeks, but in the end it is the supply side that gets the upper hand
  • It is now in the sellers' interest to get the lowest possible price before the options expire tomorrow. A drop below $27,000 could bring the bears as much as $230 million in profits, if the bulls manage to maintain the current level sellers will earn about $120 million according to Coinglass estimates.

2023 Market Forecast by Solid ECN in Technical_btc
 
Bitcoin chart, H1 interval. The price has fallen below the SMA100, SMA200 and the 23.6 Fibonacci retracement of the March 10 upward wave, making it likely that demand will only be more active at the 38.2 Fibo level, near $26,650.
#363 - May 11, 2023, 05:03:16 PM

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2023 Market Forecast by Solid ECN in Technical_xx
EURNZD

EURNZD is one of the G10 FX crosses that experienced large moves so far today. The pair is trading higher as EUR got supported by hawkish comments from Joachim Nagel, Bundesbank President and ECB member. Meanwhile, NZD is the worst performing G10 currency after RBNZ lowered 1- and 2-year inflation expectations.

Starting with EUR news, Joachim Nagel said that inflation still remains too high and too strong. He continued saying that central bankers need to be sure that the inflation wave ends before they decide to pause policy tightening. He stressed it loud and clear that the latest rate hike delivered by the ECB won't be the last. While Nagel sounding hawkish is nothing new as he is one of the biggest ECB hawks, comments suggesting that more rate hikes are coming have been delivered throughout the week by various ECB members throughout this week.

2023 Market Forecast by Solid ECN in Technical_nzfusd

Moving onto NZD news, the Reserve Bank of New Zealand lowered its 1- and 2-year ahead inflation expectations. 1-year expectations dropped from 5.11 to 4.28% while 2-year expectations were lowered from 3.30 to 2.79%. This can be seen as a dovish move as lower inflation expectations suggest that RBNZ is progressing in its fight against inflation and may not need to raise rates too much. Money markets currently see just 25 basis points of additional tightening through July.

Taking a look at EURNZD chart at D1 interval, we can see that the pair has halted recent sell-off at 50% retracement of the upward impulse launched in mid-December 2022. Recovery move was launched yesterday and gains accelerated today. The pair climb above resistance zone in the 1.7420 area, marked with 38.2% retracement and is looking towards a test of the 50-session moving average (green line).
#364 - May 12, 2023, 09:15:17 AM

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2023 Market Forecast by Solid ECN in Technical_xx
EURUSD

The EURUSD pair ended yesterday below 1.0945 level, to fall under expected negative pressure in the upcoming sessions, targeting 1.0865 level as a next correctional target.

2023 Market Forecast by Solid ECN in Technical_eurusd

Therefore, we are waiting for more expected decline on the intraday basis, supported by the negative pressure formed by the EMA50, noting that breaking the targeted level will push the price to achieve additional bearish correction that its next target reaches 1.0795, while the expected decline will remain valid unless breaching 1.0945 and getting daily close above it.
#365 - May 12, 2023, 12:02:11 PM

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2023 Market Forecast by Solid ECN in Technical_xx
EURTRY

Turkish lira is trading a touch higher against USD and EUR today, as a run-off will be needed to decide the next Turkish president. It looks like there are expectations for a tight race with TRY seeing rather muted moves.

2023 Market Forecast by Solid ECN in Technical_eurtry
#366 - May 15, 2023, 07:16:43 AM

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2023 Market Forecast by Solid ECN in Technical_xx
US100

Stock traders launched a new week in upbeat moods with indices from Asia-Pacific finishing today's trading higher and European benchmarks advancing as well. US index futures also trade higher with Russell 2000 (US2000) leading with 0.7% gain and Nasdaq-100 (US100) lagging behind others with 0.3% gain. The week ahead is slightly lighter in terms of data and macro events than previous ones but traders will be nevertheless offered some interesting reports. US retail sales data for April tomorrow at 1:30 pm BST as well as Powell's speech on monetary policy on Friday, 4:00 pm BST are top events to watch in US macro calendar for the week. US tech shares may see some moves later into the week when Alibaba Group reports earnings on Thursday.

2023 Market Forecast by Solid ECN in Technical_us100

Taking a look at US100 chart at H1 interval, we can see that the index managed to halt recent declines at 13,330 pts support zone, marked with 23.6% retracement of the upward move launched in late-April, lower limit of the market geometry as well as the upward trendline. Bouncing off this area confirmed the bullish sentiment and index started to recover recent losses. A break above 50-hour moving average (green line) was delivered today and now the way for a test of recent highs just shy of 13,500 pts mark is open.
#367 - May 15, 2023, 10:17:25 AM

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2023 Market Forecast by Solid ECN in Technical_xx
GBPUSD: Pound ticks lower after concerning UK macro figures

The British pound lost ground early in the European session following the publication of weak macro data from the UK, reducing the chance of a hawkish turn from the Bank of England. The reading for March showed that the unemployment rate in the UK rose to 3.9% against an expected 3.8% and an earlier reading of 3.8%. What's more, the negative overtones of the publication were provided by a big jump in unemployment claims, which came in at 46.7 thousand against an earlier reading of 26.5 thousand (today's reading beat analysts' expectations by more than 49%. Wage growth excluding bonuses is also down and came in at 6.7% y/y vs. the expected 6.8% y/y. At the moment, the money market is pricing in a 30% chance of a halt to the hike cycle at the upcoming BoE meeting in June.

2023 Market Forecast by Solid ECN in Technical_gbpusd-1

Preliminary data from the UK's tax office showed the first drop in total headcount in more than two years in April, down 136,000 from March.

2023 Market Forecast by Solid ECN in Technical_gbpusd-2

The GBPUSD pair reacted with declines to today's UK data reading, however, the scale of the sell-off has already been largely negated. The downward impulse stopped at the support defined by the 200-period exponential moving average (golden curve), which is currently the main support on the H4 interval.
#368 - May 16, 2023, 07:52:58 AM

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AUDJPY

Australian jobs market data for April was released during the Asian trading session today and turned out to be a big disappointment. Employment declined by 4.3k in the previous month while the median estimate among economists was for a 24.5k jobs gain. This has led to a jump in unemployment rate from 3.5 to 3.7% (exp. 3.5%). Moreover, the composition of the employment drop is worrying as it was driven by full-time jobs, which fell 27.1k, while part-time jobs increased by 22.8k.

Report was clearly AUD-negative as it showed weakening of the labor market and could be an important factor for the Reserve Bank of Australia when deciding on rates. Major financial institutions are split in their expectations - some, like for example Goldman Sachs, expect one more 25 bp rate hike from RBA in this cycle while others, like for example Commonwealth Bank of Australia, say that RBA is done with hiking already. Money markets are currently pricing in RBA staying on hold at its next meeting on June 6, 2023.

2023 Market Forecast by Solid ECN in Technical_audjpy_6

Australian jobs data released trigger a pullback on AUD market. Taking a look at AUDJPY chart at D1 interval, we can see that the pair managed to climb above 200-session moving average (purple line) and attempted to move above the resistance zone ranging below 91.50 mark. However, today's pullback puts this breakout under question. If we see a daily close below the 200-session moving average, the pair may be set for a correction. However, one should remember that the overall trend is upward with the pair trading in a bullish price channel.
#369 - May 18, 2023, 07:53:41 AM

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2023 Market Forecast by Solid ECN in Technical_xx
DE 30

German DAX rallied over the past two days, adding almost 2% over Wednesday and Thursday combined. The upward move was being continued on the futures market during the Asian session today as optimism over possible agreement on US debt ceiling drove equities higher.  As a result, DAX futures (DE30) briefly traded above 16,300 pts mark at fresh all-time highs.

2023 Market Forecast by Solid ECN in Technical_de30-1[

Taking a look at DE30 chart at H1 interval, we can see that the upward move on the German index accelerated after breaking above the 15,810-16,085 pts range. While the index pulled back a bit after reaching a fresh ATH, there is still some room for gains from a technical point of view. A textbook range of the upside breakout from the aforementioned 15,810-16,085 pts trading range suggests a possibility of the upward move to as high as 16,355 pts - or around 0.6% higher from current market price.

2023 Market Forecast by Solid ECN in Technical_de30-2
#370 - May 19, 2023, 08:36:04 AM

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2023 Market Forecast by Solid ECN in Technical_xx
Oil

WTI (OIL.WTI) launched a new week's trade lower as failure to make progress on the US debt ceiling over the weekend brings us closer to the US default. On top of that, the Chinese decision to ban Micron chips is also risking reigniting tensions between the US and China.

2023 Market Forecast by Solid ECN in Technical_oil_12
#371 - May 22, 2023, 08:27:42 AM

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EURUSD

The EURUSD pair has been under pressure over the past few weeks; however, last Friday, bulls showed signs of strength once again.

2023 Market Forecast by Solid ECN in Technical_eurusd-1_5

EURUSD - 4 hours time frame chart

However, on the 4-hour chart, we can see that buyers regained control of the price near an important support zone marked by 1.0757. Currently, the price is approaching a significant obstacle - the downtrend line. If buyers manage to break above this zone, the upward movement may resume.

2023 Market Forecast by Solid ECN in Technical_eurusd-2_3

On the 4 hours time chart of the US Dollar Index, we can also see signs that the bearish scenario for the USD may indeed manifest. From a technical standpoint, we observe that sellers managed to break below the lower boundary of the rising wedge pattern, which could bring new selling pressures to the price.
#372 - May 22, 2023, 04:02:55 PM

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2023 Market Forecast by Solid ECN in Technical_xx
EURUSD

Flash PMI indices for May from France and Germany were released at 8:15 am BST and 8:30 am BST, respectively. Data was expected to show a small improvement in the manufacturing sector as well as deterioration in the services sector.

Indeed, it was the case with French data with manufacturing index climbing in-line with expectations and services index dropping more than expected. However, things looked different in case of German data as manufacturing index there disappointed and dropped instead of improving while services gauge unexpectedly jumped. In both countries manufacturing sector remained below 50 points threshold, indicating a recession, while services sector remain above 50 points threshold, indicating an expansion.

2023 Market Forecast by Solid ECN in Technical_eurusd_23

EUR and European indices dropped in a knee-jerk move after the French release, with EURUSD dropping deeper below 1.08 mark. While equity indices managed to recover from those losses later on, they faced another wave of selling following German data. Meanwhile, EUR attempted to recover after German data and moved back towards the 1.08 mark.
#373 - May 23, 2023, 09:13:11 AM

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2023 Market Forecast by Solid ECN in Technical_xx
Bitcoin

  • US debt deal was reached during a weekend
  • Beijing ?Web3 Innovation and Development White Paper? introduction

Bitcoin experienced a price increase over the week, reaching above $28,000, attributed to various factors. One significant development was the announcement of a debt ceiling deal by the White House, which boosted market sentiment and led to a 4.9% increase in Bitcoin and a 4.9% increase in Ether. Additionally, a Chinese governmental agency released a white paper outlining suggestions for China's Web3 policy, signaling progress in a country that has been reevaluating its approach to cryptocurrencies.

2023 Market Forecast by Solid ECN in Technical_btc_2

The release of the white paper in Beijing coincided with new digital asset regulations in Hong Kong, sparking further interest in China's stance toward the crypto industry. The document, titled "Web3 Innovation and Development White Paper," recognizes Web3 technology as an essential aspect of future Internet industry development. Beijing's municipal government aims to establish the city as a prominent global innovation hub for the digital economy, allocating a minimum of 100 million yuan annually until 2025 for this purpose. As a reminder, retail investors in Hong Kong are allowed to trade cryptocurrencies starting from the 1st of June.
#374 - May 29, 2023, 11:53:31 AM

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2023 Market Forecast by Solid ECN in Technical_xx
USDJPY

USDJPY quotes started the new week with a correction. Looking technically at the D1 interval, before the weekend the price reached the upper limit of the wide upward channel, where sellers appeared. For now it is far too early to think about a change in sentiment, nevertheless the last upward wave was made in one go, so there is a risk of a deeper downward correction. Should the discount actually gain momentum, the 137.30 - 137.90 zone should be regarded as key support. Resistance remains around the 141.00 level, which is the area of the upper limit of the aforementioned upward channel.

2023 Market Forecast by Solid ECN in Technical_usdjpy-1

Looking at the lower time frame - H1, we can see the very strong uptrend. The key short-term support is the level of 139.60, which is derived from the lower limit of the 1:1 structure and the EMA100 average. According to the overbalance methodology, only a break of this support could lead to a deeper discount. 

2023 Market Forecast by Solid ECN in Technical_usdjpy-2
#375 - May 30, 2023, 06:35:55 AM

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