2023 Market Forecast by SolidECN

SOLIDECN

Master Trader
Nov 16, 2021
3,116
22
54
39

GBPUSD​

Andrew Bailey, governor of the Bank of England, as well as two other BoE members (Sam Woods and Dave Ramsden) appeared before the Treasury Select Committee today for a hearing on Silicon Valley Bank collapse. Bailey noted that collapse of SVB was the fastest banking failure since Barings Bank failure, which collapsed in 1995 following massive 827 million GBP loss incurred by trader Nick Leeson. However, those two cases cannot be compared as Barings failed due to rogue trader actions while SVB collapsed due to bank run and poor interest rate risk management. Speaking on Credit Suisse, Bailey said that problems of Swiss bank were company-specific and should not be seen as a risk for domestic banks. Overall, Bailey said that does not think that any of the features of recent banking failings (SVB and CS) are causing stress in the UK financial system. He said, however, that we are in a period of heightened tensions in the markets and higher levels of alertness are needed.

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Bailey's comments today were in-line with his remarks yesterday, when he noted that UK rate setters are unlikely to be distracted from fighting inflation by troubles of the global banking system. GBP saw some weakness following Bailey's comments today but the move immediately after remarks was barely noticeable. Taking a look at GBPUSD chart at D1 interval, we can see that the pair has reached the resistance zone marked with 50% retracement of the downward move launched in June 2021. Pair attempted to break above it last week but failed and today's attempt also looks to be under question. GBPUSD erased gains from earlier today, painting a long upper wick on D1 interval. However, should we see a break above this zone, the 1.2440 area, marked with local highs from previous months, could be the next target for buyers. On the other hand, failure to break above could see the price pull back towards the support zone marked with 38.2% retracement and 200-session moving average (purple line).​
 

SOLIDECN

Master Trader
Nov 16, 2021
3,116
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USD unimpressed by Consumer Confidence data​

US Consumer Confidence Index rose to 104.2 from 102.9 in March (revised to 103.4). Today’s reading came in above analysts’ estimates of 101.​
  • Present situation index 151.1 vs 153 prior​
  • Expectations index 73.0 vs 69.7 prior​
  • 1 year inflation 6.3% vs 6.3% prior​
  • Jobs hard-to-get 10.3 vs 10.5 prior​
  • 14.9% expect their incomes to increase, up from 14.4% last month​
9iXRB.jpg


Conference Board Confidence index moved higher in March, however inflation expectations still remain high, which is not what FED would like to see.

Simultaneously, Richmond manufacturing index for March was released. The index unexpectedly fell less than expected to -5 from-16 in February, while analysts’ expected -10.0 pointing to a modest improvement in business conditions. Of its three component indexes, shipments saw the largest change (up to 2 in March from -15 in February) and both the employment (-5 vs -7) and new orders (-11 vs -24) indexes improved but remained in negative territory. Firms continued to report easing of supply chain constraints as the indexes for backlogs and lead times remained negative. The average growth rate of prices paid decreased moderately, while the average growth rate of prices received changed little in March. Firms remained pessimistic about local business conditions and the index for future local business conditions edged down slightly.

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EURUSD saw relatively small reaction to today’s data releases. The most popular currency pair continued to trade around 1.0820 level.​
 

SOLIDECN

Master Trader
Nov 16, 2021
3,116
22
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USDCAD​

USDCAD finally managed to break below the key short-term support at 1.3655. According to the Overbalance methodology, this may point to a change of the main sentiment to bearish. The level of 1.3655 should be treated as the first line of resistance. In turn, nearest support to watch can be found around 1.3535 and 1.3475 levels.

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SOLIDECN

Master Trader
Nov 16, 2021
3,116
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39

AUDUSD​

  • US indices finished yesterday's trading slightly lower. S&P 500 dropped 0.16%, Dow Jones moved 0.12% lower and Nasdaq plunged 0.45%. Small-cap Russell 2000 index dropped 0.06%​
  • Indices from Asia-Pacific are trading higher today. Nikkei gained 1.1%, S&P/ASX 200 traded 0.2% higher, Kospi traded flat and Nifty 50 gained 0.1%. Indices from China traded 0.1-0.2% higher while Hong Kong's Hang Seng gains over 2%​
  • DAX futures point to a slightly higher opening of the European cash session today​
  • US Energy Secretary Granholm said that refilling of strategic petroleum reserve may start this year​
  • Shinichi Uchida, deputy governor of Bank of Japan, said that if 10-year Japanese yield climbs to 2%, BoJ will experience an unrealized loss of 50 trillion JPY on its bond portfolio (currently 10-year yield sits at 0.3%)​
  • United States said that China shouldn't overreact to Taiwan president's visit to the United States. This comes after China warned that meeting between US officials and Taiwan president would be seen as provocation​
  • Lee Bokhyun, head of South Korean financial regulator, said that South Korean authorities will consider lifting the short-selling ban this year. Ban was imposed early in the Covid pandemic​
  • Australian CPI inflation decelerated from 7.4 to 6.8% YoY in February (exp. 7.4% YoY). Core inflation dropped from 7.6% in January to 6.9% YoY in February​
  • API report pointed to a 6.08 million barrel draw in US oil inventories (exp. +0.2 mb)​
  • Cryptocurrencies trade higher - Bitcoin gains 1.3%, Ethereum adds 1.1% and Dogecoin jumps 2.4%​
  • Energy commodities trade mixed - oil gains slightly while US natural gas prices drop​
  • Precious metals pull back amid USD strengthening - gold drops 0.5%, silver trades 0.7% down and platinum dips 0.6%​
  • NZD and USD are the best performing major currencies while JPY and AUD lag the most​
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AUD is pulling back after a lower-than-expected CPI reading for February. AUDUSD failed to break above the 0.6710 resistance zone and is now pulling back towards the 200-hour moving average (purple line).​
 

SOLIDECN

Master Trader
Nov 16, 2021
3,116
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EURUSD ticks lower after Kazimir remarks​

Peter Kazimir, member of the European Central Bank governing council, said that the ECB is closely monitoring the situation in the banking sector and that it is ready to step in to ensure price and financial stability in the euro area. However, his remarks relating to the monetary policy show that ECB is somewhat concerned by the uncertainty caused by recent banking failures in the US and Europe - Kazimir revealed that ECB members agreed not to provide guidance for the May meeting. On the other hand, Kazimir said in the very same speech that he thinks that inflation is too high for too long and that further rate hikes are needed, although possibly at a slower pace, which is a kind of guidance on its own. Speaking about future decisions he said that core inflation developments and trends will be key in determining the next move.

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EUR ticked lower during Kazimir's speech but the move was very small and has been completely erased by now. The pair is trying to recover from an overnight drop that was launched after repeated failures to break above the 1.0850 swing area.​
 

SOLIDECN

Master Trader
Nov 16, 2021
3,116
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US100 gains over 1%


China's tech sector rebound fuels gains on Nasdaq

US100 futures are gaining, as a higher opening in Asia and euphoria on Alibaba shares have improved sentiment around the technology sector. Analysts have been very wary of Chinese tech stocks in recent years, fearing direct government intervention in their business and margins. So far, however, China is positioning itself as a free-market economy, allowing it to compete with the United States. A few months ago, representatives of Chinese authorities at the Davos Economic Forum asserted that, contrary to Western fears, the country does not intend to centralize power and completely subordinate the financial market party. In addition, reports from the Washington Post indicated that President Joe Biden is expected to present new banking regulations. The White House was prompted to create them by the SVB bankruptcy. The Nasdaq is attempting to close the quarter with its best performance since 2020, and after several weeks of turmoil in the banking sector, investors appear 'jaded' by news of the prospect of a crisis. US bank valuations are still far from a meaningful upward correction and Joe Biden has warned that the banking crisis is far from over, against which buyers have shifted from the 'risky' financial sector to the technology market.

Another supportive factor for US equities is the sharply losing VIX index, which is seen by investors as a barometer of market fear. Compiled by the CBOE, the index extends a 1.5-week-long downward impulse.

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The US100 index is trying to maintain the bullish momentum initiated 2 weeks ago, and the declining VIX may support the buyers' side even now. However, it is worth watching tomorrow and Friday's session, when we will know many interesting macro readings from the US economy.​
 

SOLIDECN

Master Trader
Nov 16, 2021
3,116
22
54
39

US100​

  • US indices finished yesterday's trading higher with all major Wall Street indices adding 1% or more. S&P 500 gained 1.42%, Dow Jones moved 1.00% higher and Nasdaq jumped 1.79%. Russell 2000 gained 1.08%​
  • Nasdaq gained over 20% off December low and has entered a technical bull market.​
  • Indices from Asia-Pacific trade mostly higher. S&P/ASX 200 gained 1%, Kospi added 0.6%, Nift 50 moved 0.8% higher while Nikkei dropped 0.6%​
  • Indices from China traded 0.2-0.5% higher​
  • DAX futures point to a higher opening of the European cash session today​
  • Fed Chair Powell has reportedly told Republican Representatives that Fed expects 1 more rate hike in 2023​
  • ECB Schnabel said that banking troubles may have a disinflationary effect. On the other hand, she warned that labor costs indicate possibility of second round inflationary effects​
  • Fitch noted that there were 14 sovereign default events since 2020, compared to 19 sovereign default events in whole 2000-2019 period​
  • Chinese premier Li Qiang said that his country will strengthen macro policy adjustments and act to boost consumption and investments​
  • UK car production increased 13.1% YoY in February as supply chain pressures eased. This was the first monthly increase in output in three months. 81% of all cars produced in UK were exported, with EU being main destination​
  • New Zealand's building permits slumped 9% MoM in February. On annual basis drop reached 29.2% YoY​
  • Major cryptocurrencies trade mixed - Bitcoin gains 1.2%, Ethereum adds 0.1%, Dogecoin drops 0.7% and Ripple trades 3.6% lower​
  • Energy commodities trade mixed - oil gains around 0.3% while US natural gas prices drop 1.7%​
  • Precious metals trade mostly higher - silver adds 0.7%, platinum trades 0.8% higher and palladium gains 0.6%. Gold trades flat​
  • AUD and JPY are the best performing major currencies while USD and EUR lag the most​

UUDqX.png


Nasdaq-100 (US100) trades around 20% above the December 2022 low and therefore has entered a bull market, at least from a technical point of view. However, for any larger upward move to be delivered, a break above a psychological, mid-term resistance zone in the 13,000 pts area would be required.​
 

SOLIDECN

Master Trader
Nov 16, 2021
3,116
22
54
39

EURUSD​

EURUSD will be on watch throughout the day today. This is thanks to releases of inflation data from Europe. Flash CPI reading for March from Spain was already released at 8:00 am BST and it came in even below low expectations - 3.3% YoY vs 3.8% YoY expected (6.0% YoY previously). Such a drop can be attributed to base effects, especially in energy, as oil prices skyrocketed a year ago in the aftermath of Russian invasion of Ukraine and now they are over 30% year-over-year lower. German reading at 1:00 pm BST is also expected to show a noticeable drop - from 8.7% YoY to 7.3% YoY.

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Market expectations for ECB rate hikes have dropped and now the market prices in an around-75% chance of a 25 basis point rate hike at a meeting on May 4, 2023. However, a softer CPI readings from Europe may push those expectations even lower and it could serve as a drag for EUR. Nevertheless, it should be noted that CPI data for April will be available when ECB next meets therefore today's reading may have less of an importance for rate setters in Europe at their next meeting.

Taking a look at EURUSD chart at H1 interval, we can see that the pair dropped following Spanish CPI release (orange circle) but has managed to recover all of the losses later on. Pair broke above the 1.0850 resistance zone and is now attempting to take out yesterday's daily highs in the 1.0865 area.​
 

SOLIDECN

Master Trader
Nov 16, 2021
3,116
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39

AUDJPY​

  • US indices finished another trading day higher. S&P 500 gained 0.57%, Dow Jones moved 0.43% higher and Nasdaq jumped 0.73%. Russell 2000 was a laggard and dropped 0.18%​
  • Indices from Asia-Pacific followed into footsteps of US peers and traded higher. Nikkei and S&P/ASX 200 gained around 0.8% each, Kospi added 0.9% and Nifty 50 traded 1.0%. Indices from China traded up to 0.8% higher​
  • DAX futures point to a slightly higher opening of the European cash session today​
  • Reuters reports that Japan will set up a panel to discuss possibility of implementing digital yen backed by Bank of Japan​
  • Turkey has approved Finland's NATO membership bid, clearing the final hurdle for the Nordic country to join the alliance. Sweden is still waiting for approval from Turkey and Hungary​
  • According to Reuters report, OPEC+ JMMC is most likely to recommend leaving output cuts unchanged at a meeting on Monday​
  • The Japanese trade and industry ministry announced that it will impose export controls on semiconductor manufacturing equipment. While it was stated that restrictions do not target any specific country, most take it as a step against China​
  • Official Chinese manufacturing PMI dropped from 52.6 to 51.9 pts in March (exp. 51.6). Services gauge jumped from 56.3 to 58.2 pts (exp. 55.0)​
  • Japanese industrial production increased 4.5% MoM in February (exp. 2.7% MoM)​
  • Japanese retail sales increased 1.4% MoM in February (exp. -0.3% MoM)​
  • Australian private sector credit increased 0.3% MoM in February (exp. 0.4% MoM)​
  • Major cryptocurrencies are trading higher - Bitcoin gains 0.3%, Ethereum and Dogecoin add 0.6% each and Ripple trades 1.4% higher​
  • Energy commodities are trading little changed - oil drops around 0.1% while US natural gas prices climb 0.2%​
  • Precious metals trade mixed - gold and silver drop while platinum gains slightly​
  • NZD and AUD are the best performing major currencies while JPY and CHF lag the most​
UwV7U.png


AUDJPY is trading higher following better than expected readings of official Chinese PMIs for March. A key near-term resistance to watch can be found in the 90.25 area, where the downward trendline and 50-session moving average (green line) can be found.​
 

SOLIDECN

Master Trader
Nov 16, 2021
3,116
22
54
39

EURUSD climbs back above 1.09 mark after French CPI beat​

French flash CPI data for March was released today at 7:45 am BST. Report, just like reports from other European countries, was expected to show a significant deceleration in year-over-year reading. However, actual data showed a smaller than expected slowdown, just as it was the case with German data yesterday. French CPI slowed from 6.3 to 5.6% YoY in March, while the market expected a slowdown to 5.5% YoY. On a monthly basis, CPI reached 0.8% MoM, above 0.6% MoM expected by the market but below 1.0% MoM print from January.

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Market reaction was small - DE30 ticked lower in a knee-jerk move before recovering losses while EURUSD moved higher and climbed back above 1.09 mark.​
 

SOLIDECN

Master Trader
Nov 16, 2021
3,116
22
54
39

US100​

It seems that we may be ending the downward phase on Wall Street, given the more than 20% rebound from the bottom. The US100 is having its best quarter since Q2 2020! In fact, if it weren't for the high inflation problem in February and then the banking crisis in March, then the US100 could even be above 14,000 points. Currently, the goal of investors will be to break through the area of 13450 points, where the range of the previous similar correction is located, and 13700 points, which are the peaks of the previous correction as well.

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SOLIDECN

Master Trader
Nov 16, 2021
3,116
22
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39

Economic Calendar: Manufacturing ISM, OPEC+ JMMC meeting​

  • European markets set to open slightly lower​
  • Oil surges after surprise OPEC output cut​
  • ISM manufacturing and final PMIs in the calendar​

Futures markets point to a slightly lower opening of today's European cash session. Investors' attention is on the oil market as Brent and WTI trade 5% higher on the day after OPEC countries surprised with voluntary cuts of more than 1 million barrels. OPEC+ Joint Minister Monitoring Committee is set to meet again and will be watched closely. Timing of the post-meeting announcement is unknown, however. Apart from that, investors will be offered US ISM manufacturing print as well as final PMIs from Europe and the United States. Traders should keep in mind that this is a pre-Easter week and liquidity on the markets may be thinner. The week will also be shorter with many stock exchanges being offline on Friday.​
  • 8:00 am BST - Poland, manufacturing PMI for March. Expected: 48.2. Previous: 48.5​
  • 8:15 am BST - Spain, manufacturing PMI for March. Expected: 50.1. Previous: 50.7​
  • 8:45 am BST - Italy, manufacturing PMI for March. Expected: 51.0. Previous: 52.0​
  • 8:50 am BST - France, manufacturing PMI for March (final). First release: 47.7​
  • 8:55 am BST - Germany, manufacturing PMI for March (final). First release: 44.4​
  • 9:00 am BST - Euro area, manufacturing PMI for March (final). First release: 47.1​
  • 9:30 am BST - UK, manufacturing PMI for March (final). First release: 48.0​
  • 2:45 pm BST - US, manufacturing PMI for March (final). First release: 49.3​
  • 3:00 pm BST - US, ISM manufacturing index for March. Expected: 47.5. Previous: 47.7​
  • 3:00 pm BST - US, construction spending for February. Expected: 0.0% MoM. Previous: -0.1% MoM​

Central bankers' speeches​

  • 11:00 am BST - ECB Simkus​
  • 1:00 pm BST - ECB Vujcic​
  • 9:15 pm BST - Fed Cook​
 

SOLIDECN

Master Trader
Nov 16, 2021
3,116
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EURUSD​

Today we are going to analyze the EUR/USD for a longer period of time, in order to get a broader view of the major currency pair. Over the last few months the euro has been recovering against the US dollar, but recently the bullish momentum has slowed down.
But could the current rally be compromised?

On the weekly chart, we can see that the price continues to be supported relatively well by the 50-period EMA, although it continues to struggle to break above the recent highs reached this year.

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Dollar Index - Weekly Time Frame​

On the other hand, when we look at the dollar index chart, we can see that there is room for further declines in the USD. Above all, when we identify the chart pattern - head and shoulders which could support further declines if the price breaks below the neckline of the pattern.
Furthermore, the improvement in market sentiment also supports this bearish USD scenario.

UfSNL.png


AUD leads the gains this morning.​

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SOLIDECN

Master Trader
Nov 16, 2021
3,116
22
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39

Markets ignore European PMI revisions​

Revisions of European manufacturing PMI indices for March were released this morning. Spanish reading showed quite noticeable beat but releases from other countries, like France and Germany, were revisions and came in close to flash estimates. As a result, there was no major reaction to those on the market. EURUSD trades mostly flat on the day while European equity markets trade slightly higher on the day.

Manufacturing PMIs for March​

  • Spain: 51.3 vs 50.1 expected​
  • Italy: 51.1 vs 51.0 expected​
  • France (final): 47.3 vs 47.7 first release​
  • Germany (final): 44.7 vs 44.4 first release​
  • Eurozone (final): 47.3 vs 47.1 first release​
UiV33.png


While EURUSD has seen nearly no reaction to PMI releases, the pair saw some interesting moves earlier in the day and a pin bar pattern near an important price zone can be spotted on the daily chart.​
 

SOLIDECN

Master Trader
Nov 16, 2021
3,116
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Oil​

OPEC+ members announced massive voluntary oil output cuts over the weekend, triggering a spike in oil prices at the beginning of new week's trade. A total cut of 1.157 million barrels was announced by 8 OPEC and non-OPEC countries. Those cuts will take effect from May and will remain in force until the year of the year. On top of that, Russia announced that its 500 thousand barrel output cut, which was set to end by the end of June 2023, will be extended until the end of 2023. This is a massive reduction in supply, amounting to more than 1% of global output, and it should not come as a surprise that oil prices jumped over 5% at the beginning of a new week. However, it should be noted that such massive oil output cuts may also hint that OPEC has some serious concerns about demand outlook. Having said that, this may not be bullish for oil prices in the long-term. OPEC+ Joint Minister Monitoring Committee is meeting today and will provide recommendations on policy. It was widely expected that recommendation will be for no change in the output but weekend announcements created uncertainty.

OPEC: 1,079k bpd​

  • Saudi Arabia: 500k bpd​
  • Iraq: 211k bpd​
  • United Arab Emirates: 144k bpd​
  • Kuwait: 128k bpd​
  • Algeria: 48k bpd​
  • Oman: 40k bpd​
  • Gabon: 8k bpd​

OPEC+: 578k bpd​

  • Kazakhstan: 78k bpd​
  • Russia: extension of 500k bpd cut until end of the year (was set to end in June)​

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Brent (OIL) launched this week's trading with a big bullish price gap but those gains started to be erased later on. Nevertheless, oil continues to trade around 5% higher on the day. A point to note, however, is that price did not manage to reach a key resistance zone in the $87 area, marked with previous price reactions and the upper limit of the Overbalance structure. This means that the outlook remains bearish and an attempt to fill the bullish price gap cannot be ruled out. The $80 area is the first support to watch in such a scenario.​
 

SOLIDECN

Master Trader
Nov 16, 2021
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Gold​

  • OPEC+'s surprising decision to cut production has lifted oil prices. OIL.WTI quotations jumped above the $81 level.​
  • Germany's DAX tested Friday's highs, but ultimately closed the day 0.3% lower. In turn, we saw slight increases in France, where the CAC40 added 0.32%, or the UK, the FTSE100 gained 0.54%.​
  • Gold is doing quite well on Monday, with the precious metal's quotations rising less than 1% and approaching once again the $2,000 barrier, which should be seen as short-term resistance.​
  • Treasury bonds are gaining on a wave of manufacturing ISM data, which eased concerns about lingering inflationary pressures in the U.S. and overshadowed the potential impact of OPEC+ oil production cuts on another jump in the economy's goods and services prices. U.S. TNOTE's and German BUND's are both gaining more than 0.3% in today's session.​
  • US industrial activity indicators published today came in below expectations. Both the PMI and ISM readings showed that actuality in the sector is declining.​
  • Looking at the forex market, we can observe weakness in the US currency. The EURUSD pair even managed to go above 1.0900, but we are seeing a slight pullback in the evening hours. Nevertheless, the main sentiment on the pair remains upward in the medium term.​
  • The crypto market did not show any decisive direction today. The major digital currencies are trading mixed. In the evening hours, bitcoin remains in the regions of the reference level.​
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GOLD quotes are currently testing resistance stemming from the line drawn after the recent tops. If pierced above, resistance at the $2,000 level may be tested. In turn, its crossing may lead to the generation of another upward wave.​
 

SOLIDECN

Master Trader
Nov 16, 2021
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AUDNZD after RBA and before RBNZ​

Australian dollar is one of the worst performing G10 currencies after Reserve Bank of Australia announced its latest monetary policy decision earlier today. The RBA decided to pause the rate hike cycle and keep the main interest rate unchanged at 3.60%. While such a decision was expected, wording of the RBA statement was changed so that it no longer suggests that future rate hikes are certain. Having said that, today's weakening of AUD should not come as a surprise.

Traders will be offered rate decisions from another Antipodean central bank tomorrow at 3:00 am BST - Reserve Bank of New Zealand. In this case, the market expects rates to be increased by 25 basis points with the Official Cash Rate (OCR) jumping to 5.00%. A 25 basis point rate move is fully priced in by money markets. Economists also seem to be convinced that a 25 bp rate hike is the next move - out of 21 economists surveyed by Bloomberg, 19 expect a 25 bp rate hike, 1 expects a 50 bp rate hike and 1 expects no change. This would mark another slowdown in the pace of tightening after the Bank slowed from 75 bp rate hike to 50 bp rate hikes in February. Moreover, it may also hint that the 5.5% peak OCR rate in latest RBNZ forecasts may no longer be a base case scenario with expectations swinging towards a lower terminal rate. This will be the focus of RBNZ announcement tomorrow - how much higher will the rates go. Money markets currently see a rate peak near 5.25% in December 2023.

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Taking a look a AUDNZD chart at H1 interval, we can see that the pair has been recently trading sideways. Dovish RBA decision today led to quite a steep drop on the pair. AUDNZD broke below the 1.0755 support zone and continued to move lower until it reached 1.0720 support zone (orange circle). This is an important support zone, marked with previous price reactions as well as 200-hour moving average (purple line). A break below it could pave the way for a test of recent lows in the 1.0680 area. However, a hawkish RBNZ may be needed for this scenario to materialize.​
 

SOLIDECN

Master Trader
Nov 16, 2021
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USDCHF rebounds to the 38.2% retracement of the week's trading range​

The USDCHF fell sharply in the early NY session and in the process moved below the swing low going back to early August 2021 at 0.90178 (see red numbered circles on the daily chart above). The low price today reached to the nice round number of 0.9000 where some traders put a toe in the bearish water. Those buyers are breathing a sigh of relief as the price has indeed rebounded. The price has rebounded to a high of 0.90756.

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That has taken the price above the February 2 low at 0.9058, and tested the swing low from March at 0.90706. The high correct price has extended to 0.90756 just above the March low.

Looking at the hourly chart, the move up off the low tested the 38.2% retracement of the week's trading range at 0.9075. Getting above the 38.2% retracement is the minimum retracement target of a trend like move i.e. the move down from Monday's high.

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A move above the 38.2% retracement would next target the 50% retracement at 0.9098. Move above that and focus will turn toward the falling 100 hour moving average and swing area near 0.9120. Getting above all those levels would ultimately be needed if the buyers are to be taken more seriously.

Nevertheless, they could still get short-term satisfaction on a move above the 38.2% retracement.​
 

SOLIDECN

Master Trader
Nov 16, 2021
3,116
22
54
39

May ECB rate hike unsure after Lane comments​

Lane, the ECB's chief economist gives a question mark on the May decision, pointing out that it will depend on inflation perpsectives, including the underlying ones. In view of this, Lane stresses that this is why the ECB does not give guidance for the next meeting and everything depends on the data and its outlook. On the other hand, he says that if the data performs as in the projections, May should bring a hike. However, it is unclear what kind. The market, on the other hand, is currently pricing that it should be a smaller hike, or 25 bps.

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The EUR is not reacting to these reports, although we have seen slight increases on the pair in recent minutes. Further strong declines in US and European yields are progressing. U.S. yields are down 2.8 basis points today, and European yields are down 2.7 basis points.​
 

SOLIDECN

Master Trader
Nov 16, 2021
3,116
22
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39

USCAD drops after Candian jobs data beat​

The Canadian jobs report for March was released today at 1:30 pm BST. Report release was brought a day forward as Canada will be observing Good Friday tomorrow. Data turned out to be a huge positive surprise. Employment change turned out ot be much higher-than-expected with both full-time and part-time jobs showing decent increases. As a result, the unemployment rate avoided an expected uptick to 5.1% and stayed unchanged at 5.0% instead.

Canada, jobs report for March
  • Employment change: +34.7k vs +12.9k expected (+21.8k previously)​
  • Unemployment rate: 5.0% vs 5.1% expected (5.0% previously)​
  • Full-time employment: +18.8k vs +31.1k previously​
  • Part-time employment: +15.9k vs -9.3k previously​
k5jjn.png


USDCAD climbed to the short-term resistance zone near 1.3490 prior to the release. However, the pair pulled back following better-than-expected data. A support zone near 1.3460 handle, marked with previous price reactions as well as the lower limit of the upward channel. However, bulls managed to defend the area and erased the majority of the drop in the first minutes following the release.​