2023 Market Forecast by SolidECN

[SOLIDECN]

EURUSD is Recovering​

The EURUSD pair’s decline stopped at 1.0966 level, to rebound bullishly and settle above the EMA50, to head towards recovering and resume the main bullish wave again, on its way to test 1.1075 level as a first station, noting that breaching this level will extend the bullish wave to reach 1.1150 areas as a next target.

Therefore, we expect to witness more bullish bias in the upcoming sessions, and the price needs to consolidate above 1.1010 to continue the suggested rise, as breaking it will put the price under new negative pressure to head towards visiting 1.0945 level initially.​

 

[SOLIDECN]

NZDUSD​

The NZDUSD pair shows more bullish bias to move away from 0.6290, which supports the continuation of the bullish wave for the rest of the day, and the way is open to achieve our next target at 0.6380, supported by the EMA50 that carries the price from below, noting that holding above 0.6290 is important to achieve these targets.

The expected trading range for today is between 0.6260 support and 0.6370 resistance​

 

[SOLIDECN]

EURJPY holds below the barrier​

EURJPY pair approached 149.35 barrier yesterday, while the lack of the positive momentum forced it to provide new negative close to confirm its affection by the bearish bias for now, noticing its crawl towards 148.35.

We expect to renew the negative attempts to target the first station at 147.50, reminding you that breaking this level might force it to suffer additional losses that might extend towards 146.60 followed by reaching 145.65 support line.​

 

[SOLIDECN]

GBPUSD presses on the channel’s support line​

GBPUSD pair ended yesterday negatively, to test the intraday bullish channel’s support line, noticing that the price begins today with slight decline to move below this support, while stochastic reaches the oversold areas now, to form positive motive that we are waiting to assist to push the price to resume the main bullish wave and head to achieve gains that reach 1.2850.

Therefore, the overall bullish trend will remain valid for the upcoming period, supported by the EMA50, and the price needs to breach 1.2625 to confirm resuming the bullish track, noting that failing to achieve the required breach will push the price to achieve additional decline that its next target reaches 1.2550.​

 

[SOLIDECN]

USDCAD approaches the extended target​

USDCAD pair continued to decline yesterday to approach 1.3300 level, but it bounced bullishly to settle above 1.3350, noticing that stochastic lost its positive momentum to reach the overbought areas now, which forms negative motive that we expect to push the price to resume the negative trades and head to achieve additional negative targets that reach 1.3265.

Therefore, we will continue to suggest the bearish trend for the upcoming period, noting that breaching 1.3385 will stop the negative scenario and lead the price to start correctional bullish wave on the intraday basis.​

 

[SOLIDECN]

Gold​

Gold price continues its bullish trend trajectory on Tuesday. The price of gold is currently trading around $2,030 per ounce, which is a +0.41% daily change. The upward trend channel has provided continuous positive support to gold prices - marked with dark blue parallel lines.

The stochastic indicator is beginning to gather positive momentum, indicating a potential upward movement in the price of gold. The resistance level near the range of $2,060-2,070, marked with a green line, has been tested multiple times, suggesting a strong price action and weakening resistance.

Based on these factors, it is probable that the Gold price continues to rise in the upcoming days. The first positive target is expected to be around $2,049. A break of this level could push the price above $2,068 as the next target. However, a break below the support level of $2,000 would be considered as a negative factor and could initiate a bearish correction wave. In such a scenario, the next support line is in the range of $1,960-1,970. The overall structure is bullish for gold.

Traders and investors should monitor the price action around these key levels and wait for confirmation of a breakout or reversal before making trading decisions. Technical indicators and additional market analysis could provide further insights into the potential direction of gold prices.​

 

[SOLIDECN]

GBPJPY repeats the positive closes

The GBPJPY pair repeated providing positive closes above the extra support at 169.25 level, confirming its readiness to resume the bullish attack, to notice its fluctuation near 170.70.

note that stochastic begins providing positive momentum by its rally above 50 level will ease the mission of reaching the initial extra target at 172.13, then wait for attacking the extra barrier at 172.50 level, which represents the key for detecting the expected trend in the upcoming period. The expected trading range for today is between 169.70 and 171.40.​

 

[SOLIDECN]

GBPUSD​

GBPUSD pair kept its stability above the beached resistance of the bullish flag, to keep the bullish trend scenario valid for the upcoming period, supported by the EMA50, waiting to visit 1.2700 followed by 1.2850 levels mainly.

Stochastic current negativity might cause some temporary sideways fluctuation before resuming the expected rise, which will remain valid conditioned by the price stability above 1.2565.​

 

[Solid ECN]

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.



The expected trading range for today is between 25.30 support and 26.10 resistance.​

 

[Solid ECN]

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.

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.​

 

[SOLIDECN]

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.

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).​

 

[SOLIDECN]

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.

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.​

 

[SOLIDECN]

EURTRY​

• Indices from Asia-Pacific are trading mostly higher today. Nikkei gains 0.7%, S&P/ASX 200 adds 0.1%, Nifty 50 jumps 0.4% and Kospi trades flat. Indices from China trade up to 1.2% higher​
• European and US index futures trade slightly above Friday's cash closing prices​
• NBC reports that meeting to discuss debt ceiling between US President Biden and congressional leaders was scheduled for Tuesday​
• With almost all votes counted, no single candidate managed to score an over-50% result in Turkish presidential elections, meaning that a run-off between incumbent president Erdogan and opposition candidate Kilicdaroglu is likely to take place in 2 weeks (May 28, 2023)​
• According to preliminary results, Erdogan's party AKP managed to win parliamentary elections with 35.6% votes and secure 268 seats in 600-seat parliament​
• Turkish lira has been rather calm so far today as investors wait for an official confirmation that run-off in presidential elections will be needed​
• According to Financial Times, G7 countries and European Union consider banning restarting of the Russian gas pipelines if Moscow has previously halted supplies via them​
• According to Reuters, G7 also aims to more strictly target sanctions evasion involving third countries​
• Iraqi oil minister said he does not expect OPEC+ to announce more oil output cuts at June meeting​
• ECB's De Guindos said that rate hike cycle in EMU is on the final stretch and that's why ECB decide to return to 25 basis point moves​
• According to Reuters report, it was advised during BoJ-government meeting that Bank of Japan considers changing its policy approach should CPI and wages keep rising​
• Energy commodities trade mixed - oil drops 0.3% while natural gas jumps 0.7%​
• Precious metals advance - gold gains 0.2% while silver and platinum trade 0.3% higher​
• AUD and NZD are the best performing major currencies while JPY and USD lag the most​

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.​

 

[SOLIDECN]

EURUSD​

Raphael Bostic, head of Atlanta Fed, delivered a speech today. He pointed out that there is still a lot to do on inflation and the economy will have negative impact on price growth (as he expects a slowdown). Bostic sees risk of a recession although it will rather be a short and shallow one.

Bostic stresses that rate cuts this year are not a base case scenario for him and that Fed will not cut rates until well into 2024. However, one should remember that the FOMC dot-plot assumes rate cuts next year. Simultaneously, Fed should maintain an outlook on possible continuation of rate hikes. Overall, Bostic wants to see what impact previous rate hikes will have on the economy.

EURUSD is trading slightly higher on the day after two final days of the previous week were marked with significant strengthening of USD. EURUSD is currently trading below 2 important resistance levels - 1.09 area and 50% retracement of the last major upward impulse.​

 

[SOLIDECN]

NZDUSD​

NZDUSD pair provides clear additional negative trades to approach our first waited target at 0.6200, waiting for more decline to head towards 0.6140 as a next negative station.

Therefore, we will continue to suggest the bearish trend for today unless the price rallied to breach 0.6290 and hold above it.​

 

[SOLIDECN]

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.

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.

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.​

 

[SOLIDECN]

EURUSD​

The weakness of the dollar accelerated during the European session, although the EURUSD pair remained in a fairly strong downtrend sequence following the Fed's decision to raise interest rates on 3th May. A strong reading could prompt the Fed to consider another rate hike or at least maintain interest rates unchanged for a longer period. However, if the data were to show that consumers are increasingly struggling with less available cash for purchases (due to high prices), it would be a negative sign for the dollar, potentially breaking the downtrend line and approaching the 50.0% retracement level of the major downtrend. Only a break above 1.0940 would indicate an exit from the downtrend sequence.

 

[SOLIDECN]

Gold​

Hawkish comments from a number of Fed members as well as better-than-expected macro data from the United States is providing support for the US dollar today. Fed members speaking today have been reluctant to speak about any immediate rate cuts and instead hinted that rates may rise further if no sufficient progress on inflation is made. On top of that, retail sales and industrial production data for April, which was released today in the evening, turned out to be better-than-expected with retail sales ex-autos and gas jumping 0.6% MoM higher (exp. 0.2% MoM) and industrial production increasing 0.5% MoM (exp. 0.0% MoM). As a result, USD is the best performing G10 currency today. This in turn is putting pressure on precious metals, which are also benefitting from an increase in uncertainty amid lack of agreement on US debt ceiling.

Taking a look at GOLD at D1 interval, we can see that the price of this precious metal is dropping more than 1% today and has broken below the psychological $2,000 per ounce mark. A near-term support zone to watch can be found in the $1,980 area, where the 50-session moving average (green line) and 38.2% retracement of the upward move launched at the turn of February and March 2023 can be found. A break below this hurdle would pave the way for a test of the 50% retracement in the $1,940 area. However, a key support zone to watch can be found around 1% lower in the $1,922 area, where the lower limit of the Overbalance structure can be found.​

 

[SOLIDECN]

JAP225​

• Indices from Asia-Pacific struggles for direction today, with mixed performance from leading markets. This is a potential response to mixed closing of Wall Street session on Monday when US500 closed with +0.11% gains​
• S&P/ASX 200 gains 0.1%, Kospi trades 0.6% higher and Nifty 50 declines 0.1%. Indices from China trade fell 0.3% - HKComp performed slightly better.​
• The Japanese index adds 0.35% and is trading at 30,100 points. The NIKKEI 225 index is one of the best performing indices from the last couple of days and now is trading near an all time high after strong economic data and positive comments from country leaders.​
• DAX futures point to a slightly higher opening of the European cash session today, with DE30 trading 0.3% higher at 15.964 points.​
• Energy commodities are trading sideway - Brent and WTI trade 0.2% higher while US natural gas prices falls 0.6%​
• Precious metals continue weaker performance with gold trading once again below $2,000 per ounce and silver at $23,6 per ounce - over 10% lower than last month highs​
• The dollar held steady in trading, supported by positive US data, particularly in retail sales. USDJPY maintained its upward push above 136.00. Dollar pairs trade with limited volatility, which may persist during the European trading session.​
• Fed's Bostic highlights that if unemployment rises and inflation remains sticky, the Fed will face enormous pressure. The Fed must maintain a strong commitment to inflation, although it is unclear what actions they would take in the event of a debt default.​
• Japanese shares extended their gains due to stronger-than-expected economic growth, boosting market optimism. Goldman Sachs suggests that Japan's markets may be on the verge of a rare bull market. Wall Street strategists attribute the gains to corporate reforms and easy monetary policy, predicting another 10% increase in shares.​
• Japan's economy grew at its quickest rate in three quarters, according to the reading, which showed an annualized rate of GDP growth for Q1 at 1.6% versus 0.7% expected.​
• Economy Minister Goto emphasizes the need to carefully watch the impact of price rises on consumers. Future economic growth is expected to be moderate, supported by rising salaries, better attitudes, and company investment. The Japanese government approved an electricity bill rise, expected to keep inflation above 2% for longer than expected.​
• The BoJ may consider to revise its Yield Curve Control (YCC) policy at the upcoming June meeting. The stronger-than-expected GDP outcome supports the view that the BoJ could take a step toward normalization soon.​

NIKKEI 225 index is one of the best performing indices. Price is near the all time high level at 30,500 points.​

 

[SOLIDECN]

Wheat​

Turkish media reports that Russian and Ukrainian negotiators with help from Turkey and the United Nations are closing in on an extension to Black Sea grain deal. This has triggered a drop on the WHEAT market with grain price erasing all of today's gains. Nevertheless, the news has not been confirmed yet and Russian media reported over the weekend that any extensions are likely to be just for 60 days (similarly to previous extensions).