2023 Market Forecast by SolidECN

[SOLIDECN]

EURGBP is Forced to Decline​

The EURGBP price suffered strong negative pressures, which forces it to delay the bullish attack by reaching the extra support at 0.8875 to notice forming some of the negative waves by reaching 0.8825.

in spite of the main stability within the bullish channel’s levels but the continuation of providing negative closes below the broken support confirms its surrender to the bearish correctional bias domination, to expect reaching 0.8805 and surpassing this obstacle might extend the losses towards 0.8730, to face the moving average 55.

The expected trading range for today is between 0.8865 and 0.8805.​

 

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EURJPY Prefers the Positivity​

The EURJPY pair provided new bullish trading by its rally above the moving average 55 recording some extra gains by reaching 142.40, generally, we will keep our main bullish expectation depending on the stability of the extra support at 142.25, besides stochastic attempt to provide extra positive momentum, to increase the chances for resuming the rise and recording extra gains that might begin from 143.15 reaching the next main target at 144.05.

note that the attempt of the price decline below 140.25 level and holding below it will cancel the positive overview, to expect begin forming strong negative trading that might push it to suffer several losses by reaching 139.60 and 138.20.

The expected trading range for today is between 141.10 and 142.40.​

 

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USDCAD - Growth is possible.​

If the assumption is correct, the USDCAD pair will grow to the area of 1.3691–1.3978. In this scenario, critical stop loss level is 1.3265.

 

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USDCHF - Growth is possible.​

If the assumption is correct, the USDCHF pair will grow to the area of 0.9455 – 0.9600. In this scenario, critical stop loss level is 0.9140.

 

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NZDUSD - US inflation slows the decline

According to the January report, food prices in New Zealand rose again: thus, against January 2022, the cost of food increased by 11.0%, and vegetables and fruits rose most of all – by 16.0%. The price of meat, poultry, and fish grew by 9.2%, while restaurant meals and soft drinks increased by 8.3% and 7.1%, respectively. Compared to December last year, the indicator increased by 1.7%.

The US dollar is trading at 103.300 in the USD Index, having hardly reacted to yesterday's disappointing CPI report: the index rose by 0.5% in January, exceeding the 0.1% growth rate of the previous month, which led to a slowdown in annual inflation to 6.4% from 6.5% before. The rate of decline has reduced to a minimum, and soon inflation may continue the positive dynamics observed in autumn.

The trading instrument has reversed and is actively declining, approaching the December low of 0.6240, and the technical indicators reinforce the sell signal.

Resistance levels: 0.6360, 0.6500 | Support levels: 0.6240, 0.6100.​

 

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AUDCAD Leans above the Additional Support​

The AUDCAD pair lost the positive momentum, which forces it to form some of the bearish correctional rebound, to face the extra support at 0.9225 and settles above it, the continuation of the stability above this support besides providing positive momentum by stochastic exit from the oversold level, which will increase the chances for gathering positive momentum, to begin activating the bullish track by targeting 0.9345 level initially, then breaching the barrier near 0.9420.

while the price reach below the current support will force it to suffer extra losses by resuming the bearish correctional attempts, to expect reaching the critical support at 0.9130.​

 

[SOLIDECN]

AUDUSD consolidates below the resistance​

The AUDUSD pair attempted to return to the main bullish channel but it consolidated below the resistance line formed at 0.7000 barrier, to start today with bearish bias and approach the key support 0.6925, waiting to break this level to confirm the continuation of the correctional bearish wave and head towards our negative targets that start at 0.6855 and extend to 0.6780.

The EMA50 forms negative pressure against the price to support the expectations to decline, besides stochastic that provides negative signals on the four hours’ time frame. Therefore, we are waiting for more expected decline in the upcoming sessions conditioned by the price stability below 0.7000. The expected trading range for today is between 0.6870 support and 0.7000 resistance​

 

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USDCHF Technical Analysis​

The USDCHF pair provided new positive trades to test the key resistance 0.9250, showing bearish bias now to press on the EMA50, waiting to surpass this barrier to confirm the continuation of the expected bearish trend on the intraday basis, which its next targets located at 0.9120 followed by 0.9060.

Stochastic provides negative signals that we are waiting to support the continuation of the bearish bias in the upcoming sessions, reminding you that breaching 0.9250 will push the price to achieve additional gains and visit 0.9315 before detecting the next destination clearly.​

 

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NZDUSD Technical Analysis​

The NZDUSD pair confirmed breaking 0.6290 level after closing the daily candlestick below it, which supports the expectations of achieving more bearish correction on the intraday and short term basis, opening the way to head towards 0.6210 followed by 0.6140 levels as next main targets.

The EMA50 forms negative pressure that supports the continuation of the expected bearish trend, while stochastic begins to loses the positive momentum gradually. Therefore, we are waiting for more expected decline in the upcoming sessions, noting that the continuation of the bearish wave requires holding below 0.6290 and 0.6320 levels.​

 

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Gold Technical Analysis​

Gold price continued to decline to reach few pips away from the waited target at 1828.70, which represents 38.2% Fibonacci correction level for the rise measured from 1616.65 to 1959.77, which means that breaking it will push the price to visit the next correctional level at 1788.20.

Therefore, we suggest witnessing more bearish bias in the upcoming sessions, and the price needs negative motive that assists to achieve the required break and rally towards the suggested target. Taking into consideration that breaching 1878.80 will stop the negative scenario and push the price to rise again.​

 

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USDJPY Technical Analysis​

The USDJPY pair breached 133.30 level clearly and closed the daily candlestick above it, to open the way to continue the rise on the intraday and short term basis, to head towards achieving positive targets that start at 134.70 and extend to 135.70.

Therefore, we are waiting for more rise in the upcoming sessions, supported by the EMA50 that carries the price from below, noting that stochastic current negativity might cause some sideways fluctuation before resuming the expected bullish bias. On the other hand, we should note that breaking 133.30 will stop the positive scenario and press on the price to turn to decline.​

 

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NATGAS​

US natural gas prices have been trading sideways since the beginning of February. Bulls attempted to break above the upper limit of the trading range in the 2.60 area on Tuesday but failed and a pullback was triggered. Price found support in the 2.43 area and an over-4% rally has taken place in the past few hours. The EIA report on natural gas inventories is released to watch for NATGAS traders today. It is expected to show much smaller inventory draw (-97 bcf) than in the previous week (-217 bcf). Such low expectations can be reasoned with the fact that the United States enjoyed relatively high temperatures. Moreover, the report will not yet capture the impact of Freeport LNG terminal resuming operations. Nevertheless, some short-term volatility is to be expected around release time.

Taking a look at NATGAS chart we can see that the price is currently trading near the midpoint of the trading range. Weather conditions are expected to deteriorate in the next 8-14 days with temperatures in key heating regions dropping. This combined with resumption of exports at Freeport LNG terminal may provide some upward pressure on NATGAS prices going forward.​

 

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EURUSD Economic Calendar: Quiet end to a busy week​

• European indices trade 0.3-0.5% lower ahead of the opening​
• Speeches from Fed and ECB members​
• Earnings from Deere & Co, AMC Networks​

European indices trade lower on Friday, following a downbeat US and Asian sessions. Moods on the global markets deteriorated further yesterday as higher-than-expected PPI reading added to concerns over inflation and scale of still needed tightening. USD is the best performing G10 currency but has pared some gains ahead of the European cash session open. Commodities find themselves under pressure amid stronger USD with gold trading 0.6% lower and oil dropping 0.5%.

Economic calendar for today is very light. There are no macro releases scheduled for release that tend to move the markets. The UK retail sales report was released at 7:00 am GMT and showed an unexpected increase (+0.3% MoM vs -0.5% MoM expected). GBP has had a fairly muted reaction to the release. Speeches from Fed and ECB members may offer some FX volatility

1:30 pm GMT - US, export prices for January. Expected: -0.2% MoM. Previous: 0.4% MoM
​

Central bankers' speeches​

• 11:30 am GMT - ECB Villeroy​
• 1:30 pm GMT - Fed Barkin​
• 1:45 pm GMT - Fed Bowman​

​

Top US earnings​

• Deere & Company (DE.US) - before market open​
• AMC Networks (AMCX.US) - before market open​
• AutoNation (AN.US) - before market open​

 

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GBPJPY Keeps the Positivity​

The GBPJPY pair kept its positive stability above the additional support 159.90, to confirm surrendering to the domination of the suggested bullish bias by touching 161 level, reminding you that it is important to gather the additional positive momentum to manage to breach the moving average that forms an obstacle at 162.10, to ease the mission of reaching the additional positive stations near 163 followed by 164.45.

The expected trading range for today is between 160.4 and 162.​

 

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EURUSD - The price is in a correction and a fall is possible.​

On the daily chart, the downward wave of the higher level А ended, and the development of the upward wave B started, within which the entry first wave of the lower level 1 of (А) of B formed. Now, a downward correction is developing as the second wave 2 of (А) of B, within which the wave a of 2 has formed, and the wave b of 2 is developing.

If the assumption is correct, the EURUSD pair will fall to the area of 1.0325 – 1.0163. In this scenario, critical stop loss level is 1.1040.

 

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GBPUSD - The price is in a correction and a fall is possible.​

On the daily chart, the upward first wave of the higher level (1) formed, within which the wave 5 of (1) ended. Now, a downward correction is developing as the second wave (2), within which the wave of the lower level A of (2) has formed.

If the assumption is correct, after the end of the wave B of (2), the GBPUSD pair will fall to the area of 1.1400 – 1.1155. In this scenario, critical stop loss level is 1.2437.

 

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NZDJPY​

NZDJPY may be entering a volatile week. The Reserve Bank of New Zealand is scheduled to announce the next monetary policy decision on Wednesday at 1:00 am GMT. There is a lot of uncertainty around this announcement. Money markets price in around 40 basis points of tightening and majority of economists polled by Bloomberg see 50 bp rate hike as the base case scenario. However, calls for a lower hike or even a pause have been mounting recently as New Zealand is facing floods and damage from a cyclone. A decision to pause rate hikes to wait and see what damage to the economy weather has done, would be surprising and would likely trigger a pullback on NZD market.

When it comes to the JPY-side, an event to watch this week is the confirmation hearing of Kazuo Ueda in the lower house of the Japanese parliament scheduled for Friday, February 24. Ueda has been nominated to succeed Kuroda as Bank of Japan head and this week's confirmation hearing will be his first appearance since nomination. Any suggestions that the Bank of Japan may exit or roll down highly expansionary policy under his watch could trigger moves on the JPY market.

Taking a look at NZDJPY chart at D1 interval, we can see that the pair has been largely trading sideways as of late. The pair failed to break above the midpoint of the trading range in the 84.50 zone. Apart from previous price reactions, this zone is also marked with a 200-session moving average. Moves on the pair has been recently confined to the inner 82.50-84.50 range and high-volatility events scheduled for this week, especially RBNZ decision, could lead to a breakout, direction of which may determine the direction of the next big move.​

 

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AUDUSD Approaches Major Resistance​

The Australian dollar is the best performing G10 currency today as rising copper prices seem to support the resources-linked currencies amid subdued USD demand. AUDUSD bounced off the lowest level since January 6 touched on Friday and returned above 0.6900 level, however hawkish FED and simmering tensions between US and China may limit the upside movement. Currently the pair is approaching local resistance at 0.6925, which is marked with previous price reactions, 50% Fibonacci retracement of the last upward wave and 50 SMA (green line). Break higher would pave a way towards the next resistance at 0.6980, however if sellers manage to regain control and halt advances, then another downward impulse towards support at 0.6870 may be launched. Aussie may experience increased volatility in the evening and the coming Asian session, during the releases of flash PMI for February and RBA minutes.

One can observe a significant weakness of the US dollar, despite heightened geopolitical tensions.

 

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EURUSD​

The bullish momentum of recent months eased in February. The last sessions have been marked by some indecision in the price that ended up consolidating.

On the dollar index chart, we can see that there may be room for further declines in the dollar. Friday's daily candle rejected the 200-period EMA and if the price moves back below the 200- and 50-period EMAs, then the EUR could gain against US Dollar weakness.

AUD leads the gains this trading session.

 

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Silver​

Major European indices finished today's session mostly lower, with Dax closing slightly below the flatline as traders brace themselves for the release of critical PMI data for the eurozone and the US due tomorrow before the publication of FOMC minutes later on Wednesday. ECB's Rehn said rates should be raised after March and the terminal rate could be reached this summer.

Silver bounced off the key support zone around $21.35-21.45 on Friday, which is marked with the lower limit of 1: 1 structure and 50% Fibonacci retracement of the last bullish wave. Moreover, a hammer formation has appeared on the D1 interval, which may be a sign that recent downward correction may have come to an end.​