2023 Market Forecast by Solidecn

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USDJPY​

• Wall Street indices had a volatile session yesterday but have ultimately finished trading with decent gains. S&P 500 gained 0.53%, Dow Jones added 0.33%, Nasdaq moved 0.72% higher and Russell 2000 jumped 0.71%​
• Indices from Asia-Pacific traded mixed today. Nikkei gained 1.3%, S&P/ASX 200 moved 0.3% higher, Kospi dropped 0.6% and Nifty 50 traded flat. Indices from China traded 0.5-1.4% lower​
• DAX futures point to a slightly higher opening of the European cash session​
• Ueda, nominee to succeed Kuroda as BoJ chief, said that he sees inflation as peaking but warned that inflation trends do not improve, yield curve control will need to be maintained.​
• Speaking of tweaking BoJ yield curve control tool, Ueda said that targeting shorter-dated yields is one of the options on the table (BoJ currently targets 10-year yield)​
• Ueda did not make any specific comments on FX rates apart from saying that discussion on a specific JPY levels should be avoided​
• According to a Reuters poll, almost half of Japanese companies want the Bank of Japan to exit the negative rate policy. 47% of respondents think that new BoJ governor should change policy​
• China made a cease-fire proposal to Russia and Ukraine. However, it is said that proposal gives too much concessions to Russia and is unlikely to win backing in Kyiv​
• According to Der Spiegel report, Russia is holding talks with China over supply of Chinese combat drones as well as know-how needed to manufacture them in Russia​
• French finance minister Le Maire said that a new sanctions package on Russia is being prepared​
• Japanese CPI accelerated from 4.0 to 4.3% YoY in January (exp. 4.5% YoY). Core CPI accelerated from 4.0 to 4.2% YoY (exp. 4.2% YoY)​
• Cryptocurrencies trade mixed but scale of moves is really small. Bitcoin drops 0.1%, Ethereum gains 0.1% and Dogecoin adds 0.2%​
• Brent and WTI trade around 0.6% higher each while US natural gas prices drop 0.7%​
• Gold gains 0.2%, platinum adds 0.1% and silver trades flat. Palladium rallies over 1%​
• NZD and JPY are the best performing major currencies while CHF and USD lag the most​

USDJPY experienced some volatility during Ueda confirmation hearings, but is ultimately trading little changed compared to pre-hearing levels. The pair is trading in a short-term 134-135 range.​

 

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NZDCAD​

The NZDCAD pair continued to provide correctional bearish tracs due to facing strong negative pressures caused by stochastic crawl below 50 level, to suffer additional losses and settle near 0.8360 level.

We notice the price consolidation within the bullish track that depends on 0.8390 level forming strong support line that allows us to wait to gather the additional positive momentum to manage to start activating the bullish track and expect to rally towards 0.8430, followed by attempting to breach 0.8485 obstacle in order to ease the mission of reaching additional stations in the upcoming period.​

 

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Economic calendar: Second-tier US data, central bankers' speeches​

• European indices set for slightly higher opening​
• Second-tier data from the United States​
• UK PM Sunak meets EC President von der Leyen to discuss Northern Ireland protocol​

European index futures point to a slightly higher opening of the cash session on the Old Continent today. This comes after a rather downbeat Asian session during which most of the regional indices traded lower.

Economic calendar for the day ahead is light. Traders will be offered some second-tier data from the United States, like durable goods orders or pending home sales. UK Prime Minister Sunak is set for a meeting with EC President von der Leyen to discuss Northern Ireland protocol. UK Deputy PM Raab said that great progress has been made and that the deal is close so GBP may see some moves today if some kind of statement is released after the meeting.

While today's calendar is light, things get more interesting later into the week with the release of February CPI data from Europe, ECB minutes or US ISM indices for February.

1:30 pm GMT - US, durable goods orders for January.​

• Headline. Expected: -3.9% MoM. Previous: 5.6% MoM​
• Ex-transport. Expected: 0.1% MoM. Previous: -0.2% MoM​

3:00 pm GMT - US, pending home sales for January. Expected: 0.9% MoM. Previous: 2.5% MoM
​

Central bankers' speeches​

• 9:00 am GMT - BoE Broadbent​
• 11:00 am GMT - BoE Saporta​
• 3:30 pm GMT - Fed Jefferson​
• 3:45 pm GMT - ECB De Cos​
• 5:00 pm GMT - ECB Lane​

Key reports in the later part of the week
​

Tuesday​

• China PMIs for February​
• French CPI for February​
• Canadian GDP report for Q4​
• US Conference Board consumer confidence index for February​

Wednesday​

• Final manufacturing PMIs for February from Europe and the United States​
• German CPI for February​
• US ISM manufacturing index for February​

Thursday​

• Euro area CPI for February​
• ECB minutes​

Friday​

• Final services PMIs for February from Europe and the United States
• US non-manufacturing ISM index for February​

 

[SOLIDECN]

US100​

• Indices from Asia-Pacific traded lower at the beginning of a new week. Nikkei dropped 0.1%, S&P/ASX 200 traded 1.1% lower, Kospi slumped 0.9% and Nifty 50 moved 0.8% lower. Indices from China traded 0.2-0.8% lower​
• DAX futures point to a slightly higher opening of the European cash session​
• US index futures little changed compared to Friday closing prices​
• UK prime minister Sunak is set to meet with EC President von der Leyen today to discuss the Brexit deal (Northern Ireland protocol). UK deputy PM Raab said that great progress has been made and that long-standing issue is close to be solved​
• ECB President Lagarde said that a 50 bp rate hike at the March meeting is not certain and remains data-dependent. ECB Visco said that peak rate could be 3.75% but it remains data-dependant​
• BoJ Governor nominee Ueda said that CPI growth will slow below 2% in fiscal-2023 but it will take time for the 2% target to be met sustainably and stably. He also said that current monetary easing conducted by Bank of Japan is appropriate​
• Conway, RBNZ chief economist, expects New Zealand official cash rate to peak around 5.5% around the middle of the year (4.75% currently)​
• Russia halted pipeline oil deliveries to Polish refiner PKN Orlen over the weekend​
• New Zealand retail sales dropped 0.6% QoQ in Q4 2022​
• Australian business inventories dropped 0.2% QoQ in Q4 2022 (exp. 0.0% QoQ)​
• Cryptocurrencies trade lower - Bitcoin drops 0.3%, Dogecoin trades 0.7% lower while Litecoin pulls back 0.4%. Ethereum gains 0.1%​
• Energy commodities trade mixed at the beginning of a new week - oil drops 0.9% while US natural gas prices jump 1.4%​
• Precious metals pull back slightly amid USD strengthening - gold trades 0.1% lower, silver drops 0.2% and platinum pulls back 0.5%​
• USD and EUR are the best performing major currencies while NZD and AUD lag the most​

Nasdaq-100 futures (US100) climbed back above the 12,000 pts mark but some selling pressure appeared as the European trading drew close and another pull back cannot be ruled out.​

 

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Crude Oil - The price is in a correction and may grow.​

If the assumption is correct, the asset will grow to the area of 85.00–93.60. In this scenario, critical stop loss level is 73.50.

 

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Silver - Growth is possible.​

If the assumption is correct, the XAGUSD pair will grow within the wave v of 1 to the area of 24.58 – 26. In this scenario, critical stop loss level is 20.36.

 

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EURUSD - Real estate sales skyrocket in the US​

On Friday, Q4 2022 data on the gross domestic product (GDP) was released: the indicator slowed down by 0.4% compared to the previous period, which was worse than analysts expected –0.2%, while the annual value fell to 0.3% from 0.5% YoY, confirming the negative trend in the economy, which is likely to enter into a recession soon. Today at 12:00 (GMT+2) the data on indexes of business expectations and sentiments in the manufacturing sector will be published, and the indicator of consumer confidence may reach –19.0 points, as well as a month earlier.

For the first time since the beginning of December, the American currency exceeded 105.000 in the USD Index, having started trading this week around 105.2. One of the main factors of positive dynamics was Friday's data on new home sales, which reflected a correction in January by 670.0K after 625.0K earlier against the forecast of a decline to 620.0K.

On the daily chart, the trading instrument continues its corrective movement, having returned to the recent ascending corridor with dynamic boundaries 1.0380–1.0810, and the technical indicators have given a sell signal.

Resistance levels: 1.06, 1.074 | Support levels: 1.048, 1.032​

 

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NATGAS​

US natural gas prices once again launch a new week with an upward move. NATGAS continues upward movement launched on Friday. This move was triggered by forecasts for colder weather in key US heating regions over the next two weeks and therefore higher demand for natural gas.

US natural gas prices dropped around 70% between mid-December 2022 and mid-February 2023. While there were some upward corrections during this downward impulse, the one we are observing currently deserves a note. Taking a look at NATGAS chart at H4 interval, we can see that price broke above the 50-period Exponential Moving Average at the end of the previous week and it was the first such breakout since mid-December. This may hint that a large upward correction may be on the cards. A break above the upper limit of a market geometry at 2.816 would confirm bullish momentum.​

 

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BTCUSD - The pair remains under pressure​

Regulatory pressure on the digital sector is growing: consistent claims against Kraken, Binance, and Paxos, the issuer of USDP and Binance USD BUSD stablecoins, as well as information about the possibility of banning staking and access of individuals to the digital dollar make experts fear worsening business conditions and additional outflow of investments from the sector. The most pessimistic representatives of the crypto community believe that the current situation may lead to the withdrawal of digital companies from the United States to countries more loyal to the industry. Recently, the head of the Securities and Exchange Commission (SEC), Gary Gensler, reaffirmed that almost all cryptocurrencies, except for BTC, can be recognized as securities since they offer investors a profit using the efforts of intermediaries. The official also questioned the ability of digital assets to act as a store of value or payment mechanism and hinted at a further increase in the activity of the regulator.

The trading instrument regained some of its lost positions and is now near the middle line of Bollinger Bands 23400, but the resumption of growth to 25000 (Murrey level [8/8]), 26562.5 (Murrey level [+1/8]) will become possible if it consolidates above the level 24000. The key “bearish” level is 23000, and its breakdown will give the prospect of further decline to 21875 (Murrey level [6/8]), 20312.5 (Murrey level [5/8]).

Technical indicators do not give a single signal: Bollinger bands are horizontal, the MACD histogram is decreasing in the positive zone, but Stochastic is reversing upwards.

Resistance levels: 24000, 25000, 26562.5 | Support levels: 23000, 21875, 20312.5​

 

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GBPUSD​

UK Prime Minister Rishi Sunak met at Windsor with European Commission President Ursula von der Leyen today to discuss Brexit. more precisely, to discuss the so-called Northern Ireland protocol. This is one of the final outstanding issues preventing the Brexit chapter from closing. Rishi Sunak is set to deliver a statement on discussions to the UK Chamber of Commons at 6:30 pm GMT. However, there is a lot of confusion around the outcome of talks.

Steve Baker, British Minister of State for Northern Ireland and a Brexit hardliner, asked by reporters as he left Downing Street 10 said that Prime Minister Sunak was at a cusp of securing a fantastic deal. Later, the media reported that Democratic Unionist Party (DUP) of Northern Ireland liked the deal and is ready to accept it soon. However, this optimism was put under question later on when DUP leader Donaldson told reporters that he is neither positive, nor negative on the outcome of talks and that his party will need to take time to analyze the proposal and how it answers DUP's concerns.

Having said that, there is a lot of uncertainty and the statement from Sunak at 8:30 pm GMT today may be simply an update rather than an announcement. Nevertheless, GBP has traded higher throughout the day and is the best performing G10 currency at press time. Taking a look at GBPUSD chart at D1 interval, we can see that the pair bounced off the support zone marked with 38.2% retracement of the downward move launched in mid-2021. However, it should be said that a bulk of this move was driven by USD weakening following disappointing durable orders data for January at 1:30 pm GMT.​

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Bitcoin​

Cryptocurrencies at the start of the week are trying to make up for declines from the weekend, when Bitcoin retreated below $23,000 on a wave of disappointing for bulls PCE US inflation data. But today Wall Street indices rise again.

Despite media reports of a possible global ban on cryptocurrencies being analyzed by the International Monetary Fund and the Financial Stability Board, former World Bank president and IMF chief Georgieva indicated that rather than resorting to a global ban, regulators will work to create an appropriate regulatory framework, taking into account the popularity of cryptocurrencies in emerging economies. In the wake of a softening extreme regulatory spectrum and a rebound on exchange floors, with Bitcoin trading near $23,800, other cryptocurrencies are also trying to rebound.

List of the most gaining cryptocurrencies. Leading the way are the intensely oversold NEO, DYDX and Maker on Friday.

Cryptocurrency-based investment products saw outflows last week, after investors moved funds into funds betting on Bitcoin declines.​

• Positive U.S. economic data and the prospect of more Fed rate hikes dampened risk demand, weighing on cryptocurrencies. Funds betting on BTC declines saw inflows totaling $10 million in the week ended February 24, according to CoinShares, compared to an outflow of $12 million from funds betting on a rise in the BTC price (the third weekly decline in a row). Positive fund inflows were registered by CoinShares for Polygon, Solana and Cardano with slightly negative ones for Ethereum.​

The CoinShares report highlighted the most important short-term risks for the industry are the controversy over regulations planned for implementation in 2023, the position of the SEC - whose head Gary Gensler says that of all cryptocurrencies, only Bitcoin is a 'digital commodity' and may not fall under its jurisdiction, and investor sensitivity to macroeconomic data. , which have recently disappointed bulls by casting doubt on the disinflationary trend.

itcoin, M30 interval. The major cryptocurrency has broken above the SMA200 average and is struggling for a sustained breakout above the 38.2 Fibonacci retracement at $23,800, which could reopen the way to $25,000.
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USDCHF Rebounds from the Resistance​

USDCHF pair bounced downwards clearly after testing the bullish channel’s resistance that appears on the chart, to approach the key support 0.9316, noticing that stochastic got rid of its negative momentum to show oversold signals now, while the EMA50 provides positive support to the price.

Therefore, we believe that the chances valid to resume the correctional bullish trend, which targets 0.9475 as a next station, reminding you that the continuation of the bullish wave requires holding above 0.9316.​

 

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GBPUSD - A fall is possible.​

If the assumption is correct, 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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EURUSD - The price is in a correction and a fall is possible.​

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 1.0809.

 

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EURUSD​

Flash CPI reports for February from France and Spain were released today at 7:45 am GMT and 8:00 am GMT, respectively. Expectations were for a slight acceleration in French headline price growth and a slight slowdown in Spanish price growth. French data turned out to be higher-than-expected and provided some support for EUR while pushing European indices, like DE30, slightly lower. Spanish reading further magnified those moves as it showed price growth accelerating in spite of an expected slowdown.

France​

• Annual: 6.2% YoY vs 6.1% YoY expected (6.0% YoY previously)​
• Monthly: +0.9% MoM vs +0.7% MoM expected (+0.4% MoM previously)​

Spain​

• Annual: 6.1% YoY vs 5.7% YoY expected (5.9% YoY previously)​
• Monthly: +1.0% MoM vs +0.9% MoM expected (-0.4% MoM previously)​

Those releases offer an important insight but, as far as market reaction is concerned, the best is yet to come. German CPI reading for February, the most closely watched one in Europe, will be released tomorrow at 1:00 pm GMT and is expected to show a slowdown from 8.7 to 8.5% YoY. Release of ECB minutes scheduled for Thursday, 12:30 pm GMT also has a scope to move EUR.

EURUSD

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EURUSD caught a bid following French and Spanish CPI data and retested the 1.06 mark. However, no decisive break higher was made yet.

DE30

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Equities, including German DE30, took after today's CPI data. DE30 is making a test of the lower limit of the ongoing short-term trading range in the 15,300 pts area.​

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Gold​

During today's session gold price bounced off recent lows above the $1,800 an ounce mark, a level not seen since December 2022. Upward move gained steam after publication of latest Conference Board consumer confidence figures. Price is currently approaching crucial support at $1830, which is marked with previous price reactions, upper limit of local 1:1 structure and 38.2% Fibonacci retracement of the upward wave started in March 2020. Should break lower occur, upward move may accelerate towards the key resistance zone between $1868 - 1875 an ounce. On the other hand, if sellers manage to halt declines around $1830 level, another downward impulse may be launched towards psychological support at $1800.

 

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AUDCAD​

The AUDCAD pair ended the correctional bearish rebound by testing the key support 0.9105, to form solid obstacle against the negative trades, noticing the activation of the bullish track by reaching 0.9200.

Note that the frequent consolidation above the EMA50 and stochastic attempt to provide the positive momentum allow us to keep the bullish overview, to expect targeting 0.9240 followed by attempting to press on the initial barrier at 0.9310 in order to find a way to resume the bullish trades.​

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USDCAD - Growth is possible​

If the assumption is correct, the USDCAD pair will grow to the area of 1.3850 – 1.3977. In this scenario, critical stop loss level is 1.3440.

 

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USDCHF - Growth is possible.​

If the assumption is correct, the USDCHF pair will grow to the area of 0.9600 – 0.9819. In this scenario, critical stop loss level is 0.9332.

 

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CHN Comp​

• US indices finished the final trading session of February lower. S&P 500 dropped 0.30%, Dow Jones moved 0.71% and Nasdaq moved 0.10% lower. Small-cap Russell 2000 bucked the trend and finished 0.04% higher​
• Indices from Asia-Pacific traded mostly higher today. Nikkei added 0.3%, Nifty 50 gained 0.6%, S&P/ASX 200 dropped 0.1%​
• Indices from China traded higher on the back of strong PMIs with Hang Seng trading 4% higher on the day​
• DAX futures point to a higher opening of the European cash session today​
• Bloomberg reports that amount of Russian diesel-type fuel stored in floating storage reached 1.9 million barrels and is the highest since October 2022 as the country struggles to find buyers for its oil derivative products after Western sanctions​
• Official Chinese manufacturing PMI jumped from 50.1 to 52.6 in February (exp. 50.5) and reached the highest level since April 2012. Services gauge moved from 54.4 to 56.3 (exp. 55.0)​
• Australian GDP grew by 0.5% QoQ in Q4 2022 (exp. 0.7% QoQ)​
• Australian CPI inflation dropped from 8.4 to 7.4% YoY in January (exp. 8.1% YoY)​
• Australian final manufacturing PMI for February came in at 50.5 and was revised higher from 50.1 signaled in flash reading​
• Japanese final manufacturing PMI for February came in at 47.7 and was revised slightly higher from 47.4 in flash reading​
• API report pointed to a 6.2 million barrel build in US oil inventories (exp. +0.8 mb)​
• Cryptocurrencies trade higher amid overall improvement in risk moods. Bitcoin gains 2.5%, Ethereum jumps 2.6% and Dogecoin trades 1.7% higher​
• Oil is trading 1% higher while US natural gas prices pull back 1%​
• Precious metals trade higher as USD underperforms - gold adds 0.5% while silver and platinum trade 1.3% higher​
• AUD and NZD are the best performing major currencies while JPY and USD lag the most​

Chinese CHNComp is rallying today following the release of strong official PMIs for February. Index bounced off the support zone ranging between 6,600 pts and 200-session moving average is now trading over 4% higher on the day.​

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