Daily Market Analysis by Solid ECN | *Video*

GBPUSD market insight by Solid ECN Securities

The pound is consolidating near 1.36
The pair is trading ambiguously against the US dollar during today's morning session, consolidating near 1.36. Despite the fact that the British currency has been trying to renew local highs since the end of January, the further growth of the instrument was limited by the aggravation of the geopolitical situation around Ukraine.

The day before, the President of Russia signed a decree recognizing the independence of the Donetsk People's Republic (DPR) and the Lugansk People's Republic (LPR), and also instructed the Ministry of Defense to ensure the safety of citizens in these territories. The vast majority of Western countries have already spoken out condemning these actions, and the head of the White House, Joe Biden, signed a decree imposing new sanctions against Russia.

At the same time, the UK macroeconomic report released the day before provided significant support to the pound. Markit Manufacturing PMI in February remained at the same level, while analysts expected it to decline. Markit Services PMI in February strengthened ahead of its forecasts.

Support and resistance
In the D1 chart, Bollinger Bands are reversing horizontally. The price range is changing slightly, but remains rather spacious for the current level of activity in the market. MACD indicator is trying to reverse into the descending plane, keeping the previous buy signal. Stochastic, having approached the level of "80" is also inclined to reverse downwards, indicating the possibility of a corrective downtrend in the ultra-short term.

Resistance levels: 1.36, 1.365, 1.37, 1.375.
Support levels: 1.355, 1.3500, 1.3460, 1.3435.

Market update by SolidECN

Crude Oil, the uptrend is possible
Prices for "black gold" continue to grow rapidly against the backdrop of the geopolitical situation in Eastern Europe. The day before, Brent Crude Oil quotes rose above 96.50, but by the end of the session corrected to 93.75.

In general, the situation on the market remains tense.
Investors fear interruptions in the supply of Russian oil and gas to the market in the event of active hostilities on the borders with Ukraine, which is intensified due to the actions of the German authorities, who suspended the certification of the Nord Stream 2 gas pipeline the day before.

Experts believe that Russia will continue to fulfill its obligations under gas contracts, but will not increase the volume of supplies if necessary, not wanting to increase transportation through Ukrainian territory.

The prerequisites for further growth in energy prices on the market remain, although the increase in quotations is somewhat restrained by the possibility of concluding an American-Iranian "nuclear deal". In this case, Iran will be able to bring additional volumes of cheaper oil to the market, but in the current situation, even they are unlikely to be able to fully meet the growing demand.

Support and resistance
The price continues to be in an uptrend, the target of which may be at 100. The key level for the "bears" seems to be at 91 (the center line of Bollinger Bands), the breakdown of which will give the prospect of a corrective decline to 87.5.

However, this variant of the movement seems less likely, since the technical indicators indicate continued uptrend:
Bollinger Bands and Stochastic reverse upwards, and MACD is stable in the positive zone.

Resistance levels: 95, 100, 106.25.
Support levels: 91, 87.5, 81.25.

Market update by Solid ECN

USDCHF, the US dollar is losing ground gained yesterday
During the Asian session, the USDCHF pair is actively declining, correcting after yesterday's sharp growth, which led to a renewal of local highs of February 10.

The reason for the sharp rise in the US currency was the escalation of the conflict in Ukraine, as investors try to avoid risk and invest their capital in shelter assets. Russian President Vladimir Putin authorized a special military operation in the Donbas, which immediately resonated in the markets ? investors began to abandon risky assets in favor of shelter assets massively.

Strong macroeconomic statistics from the US provided additional support for the US currency on Thursday. Thus, annual data on GDP dynamics for the fourth quarter of 2021 reflected the expected economic growth of 7.0%. At the same time, the GDP price index accelerated from 7.0% to 7.2% over the same period, ahead of forecasts of 6.9%.

On Friday, traders focus on a block of macroeconomic statistics from the US on the dynamics of orders for durable goods and personal income and expenses of American households for January.

Support and resistance
On the daily chart, Bollinger bands reverse into a horizontal plane. The price range consolidated within a fairly wide range, fully consistent with the observed trading dynamics. MACD reversed upwards, forming a new buy signal (the histogram is above the signal line). Stochastic demonstrates similar dynamics, signaling further development of the upward dynamics in the nearest time intervals.

Resistance levels: 0.9250, 0.9276, 0.9300, 0.9341.
Support levels: 0.9220, 0.9200, 0.9175, 0.9157.

Silver may grow
On the daily chart, the first wave of the higher level (1) of 3 formed, and a downward correction developed as the wave (2) of 3, within which the wave C of (2) formed. Now, the development of the third wave (3) of 3 has started, within which the first wave of the lower level i of 1 of (3) formed, a local correction has started to develop as the wave ii of 1 of (3).

If the assumption is correct, after the end of the correction, the price will grow to the levels of 27.00?28.40. In this scenario, critical stop loss level is 23.2.

USDCAD, the pair may grow!

On the daily chart, the first wave of the higher level (1) of 5 forms, within which the wave 3 of (1) develops. Now, the third wave of the lower level iii of 3 is developing, within which the wave (i) of iii has formed, a local correction has ended as the wave (ii) of iii, and the development of the wave (iii) of iii has started.

If the assumption is correct, the pair will grow to the levels of 1.32 - 1.341. In this scenario, critical stop loss level is 1.2585.

Silver prices show a weak increase during the Asian session, retesting the level of 25.5. The instrument has been developing a fairly active uptrend since April 6, retreating from local lows since the end of last month and receiving support from statistics on record inflation in the world. Given the high Consumer Price Index in the US, which reached 8.5% in March, as well as the growing geopolitical uncertainty against the backdrop of the development of the Russian-Ukrainian conflict and severe anti-COVID restrictions in China, the demand for defensive assets remains elevated.

Macroeconomic statistics released the day before showed an increase in annual consumer inflation in the US to 8.5%, which was a new record high for 41 years. At the same time, a sharp tightening of the US Federal Reserve's monetary policy is expected in May: in addition to the expected rate hike by 50 basis points at once, a quantitative tightening program may also be launched to correct its balance.

Additional support for the metal comes from the prospect of a gradual lifting of COVID restrictions in China, while the restoration of industrial activity. The Chinese authorities announced the easing of a number of quarantine measures in parts of Shanghai, which will affect almost 5 million people, since there were no new cases of coronavirus infection over the past two weeks. Silver, unlike gold, is more actively used in industry, and therefore reacts sharply to such factors.



Bollinger Bands in D1 chart demonstrate flat dynamics. The price range remains practically unchanged, limiting the development of "bullish" dynamics in the short term. MACD grows, preserving a stable buy signal (located above the signal line). Stochastic is showing similar dynamics; however, the indicator line is already approaching its highs, indicating the risks of overbought instrument in the ultra-short term.

Resistance levels: 25.58, 26, 26.27, 26.57 | Support levels: 25.35, 25, 24.67, 24.42

On the daily chart, the third wave of the higher level 3 of (1) develops, within which the fifth wave v of 3 develops. Now, the third wave of the lower level (iii) of v has formed.

If the assumption is correct, after the end of the local correction as the fourth wave (iv) v, the pair will grow to the levels of 128.5 - 130. In this scenario, critical stop loss level is 122.63.

Silver prices show a moderate decline during the Asian session, developing a strong "bearish" momentum formed the day before. The instrument is testing the level of 25 for a breakdown, updating local lows from April 12.

High US bond yields approaching multi-year highs (10-year bonds are trading around 2.95%), as well as the growth of the USD Index to the peaks of April 2020, are probably the main reasons why the "bulls" decided to take their profits. In addition, traders expect an early tightening of monetary policy by the US Federal Reserve. The rate hike by 50 basis points, as well as the launch of the quantitative tightening program are expected already during the May meeting of the regulator. What is more, St. Louis Fed Chair James Bullard said on Monday that he is open to the theoretical possibility of a rate hike of up to 75 basis points at once, although this will not be considered a "main scenario".

Pressure on silver quotes is also exerted by not the most confident macroeconomic statistics from China. Data published earlier in the week showed a slowdown in Industrial Production in China in March from 7.5% to 5%, which, however, turned out to be better than market expectations at the level of 4.5%. Analysts attribute the slowdown in manufacturing activity in China to a new outbreak of coronavirus, as a result of which the Chinese authorities announced the introduction of quarantine in a number of provinces, following the policy of "zero tolerance".



In the D1 chart, Bollinger Bands are reversing horizontally. The price range is almost unchanged, but it remains rather spacious for the current level of activity in the market. MACD is going down, keeping a fairly stable sell signal (located below the signal line). Stochastic shows a more confident decline, but is quickly approaching its lows, indicating the growing risks of the oversold pound in the ultra-short term.

Resistance levels: 25.35, 25.58, 26, 26.19 | Support levels: 25, 24.67, 24.42, 24