2023 Market Forecast by Solidecn

[SOLIDECN]

AUDJPY​

AUDJPY has been trading sideways in recent days but the pair may be heading for a breakout from this short-term lull today. Release of much better than expected official PMIs from China supported market sentiment during the Asian trading session and is also providing support for indices from the Old Continent at the beginning of the European cash session today. However, AUDJPY has already given back some gains following the initial rally as investors are having second thoughts.

There are 2 factors at play for AUDJPY today. The first one is the aforementioned release of official Chinese PMIs. The second one, is a release of not so encouraging data from the Australian economy. The Australian GDP report for Q4 2022 showed growth of 0.5% QoQ, which was weaker than the 0.7% QoQ median estimate from economists. Moreover, Australian CPI data for January showed a quite significant slowdown from 8.4 to 7.4% YoY while markets expected a deceleration to 8.1% YoY. Weaker than expected GDP growth and bigger than expected slowdown in CPI inflation gives Reserve Bank of Australia some room to justify slowing or pausing the rate hike cycle.

Taking a look at AUDJPY chart at D1 interval, we can see that the pair has been trading in a short-term upward channel since mid-December 2022. The pair made two attempts at breaking above the 93.00 resistance zone recently but have later pulled back following a failure. After around a week of trading sideways in the 91.70 area, we are seeing some action from AUDJPY bulls today. However, it should be noted that both - upper and lower - wicks of recent daily candlesticks have been quite large. This means that it cannot be ruled out that we will see reversal of today's gains later into the day and painting of another doji-like candlestick, signaling persisting indecisiveness.​

 

[SOLIDECN]

XRPUSD - Pending decision on SEC lawsuit​

This week, the XRPUSD pair resumed growth after the negative dynamics last Friday, which developed against the backdrop of the release of January data on the price index of personal consumption expenditures in the United States: the figure rose from 5.3% to 5.4% YoY. The increase in value reinforced the fears of experts in the continuation of the tightening cycle of the regulator's monetary policy, which supported the dollar and put pressure on alternative assets. On the background of these data, the price dropped to the area of 0.3655 but now it has returned to the middle line of Bollinger bands around 0.3800.

The situation on the market remains uncertain as investors await the final decision on the suit of the US Securities and Exchange Commission (SEC) against Ripple, which should follow soon. The agency insists that the XRP coin, like other cryptocurrencies, except for BTC, is an unregistered security. Corporation lawyers reject the accusations, stating the imperfection of the current definition of the concept of "security" and referring to the statements of the former head of the SEC, William Hinman, who claimed that the ETH token, similar to XRP, is not one. Experts believe that Ripple has a high chance of winning the process. They note that the SEC had previously initiated a similar lawsuit against blockchain platform LBRY, accusing it offering its own LBC tokens but the court ruled that LBC could only be considered a security if there was an initial coin offering (ICO). If Ripple convinces the court that there was no official initial offering, the decision could be favorable for the company, and then leading exchanges such as Coinbase and Binance will re-list XRP, and its price will rise, leveling the negative effect of American monetary policy.

Now, the trading instrument is close to the middle line of Bollinger bands 0.3800, consolidation above which will give the prospect of resuming growth to 0.4150 (Murrey level [+1/8]) and 0.4330 (Fibonacci correction 23.6%). The key “bearish” level is 0.3662 (Murrey level [7/8]), a breakdown of which will provide a decline to 0.3418, 0.3662 (Murrey level [6/8]).

Resistance levels: 0.38, 0.415, 0.433 | Support levels: 0.3662, 0.3418​

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[SOLIDECN]

EURGBP​

Euro kicked off March on a strong note as fresh preliminary inflation data from France and Spain showed price pressures accelerated last month. Also inflation in North-Rhine Westphalia, the most densely populated part of Germany, also increased. Markets price in ECB to lift rates by another 50bps in March, while the peak rate for the deposit facility is projected to reach 4% in February of 2024, above the 3.9% seen in late February.

On the other hand, the British pound is one of the worst performing G10 currencies today as fresh comments from BoE Governor Bailey overshadowed optimism over Britain's agreement with the EU on post-Brexit trade regarding Northern Ireland. Bailey said further rate hikes may be appropriate but nothing is decided as inflation has been slightly weaker, and activity and wages slightly stronger. It seems that his indecisiveness was perceived well by the markets.

EUR and NZD are the best performing major currencies while GBP and USD lag the most.

EURGBP rose sharply at the beginning of today's session, however buyers struggle to reach major resistance at 0.8875, which is marked with previous price reactions and 23.6% Fibonacci retracement of the upward wave launched in December 2022. As long as price sits below, pullback towards local support at 0.8815. cannot be ruled out.​

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[SOLIDECN]

EURCHF​

The EURCHF pair took advantage of the stability of the additional support at 0.9860 to push it above the EMA50, achieving clear gains by reaching 1.0032, these factors confirm surrendering to the domination of the bullish bias, noting that stochastic positive momentum signals will assist to resume the bullish rally, to expect targeting 1.0080 followed by pressing on the additional barrier at 1.0145 as a next target for the bullish bias.

The expected trading range for today is between 0.9975 and 1.0080.​

 

[SOLIDECN]

US500​

• US indices finished the first trading session of a new month mostly lower. While Dow Jones and Russell 2000 finished more or less flat, S&P 500 dropped almost 0.5% and Nasdaq moved over 0.6% lower​
• Poor performance of US equity indices was accompanied by another pick-up in US yields. 10-year Treasury yield climbing above 4% for the first time since November 2022​
• Indices from Asia-Pacific traded mixed today. Nikkei dropped 0.1%, Nifty 50 moved 0.3% lower, S&P/ASX 200 traded flat and Kospi added 0.6%. Indices from China traded 0.1-0.8% lower​
• DAX futures point to a flat opening of the European cash session today​
• Reuters reports that Chinese officials may set a 6% GDP growth target for 2023, what would be higher than 4.5-5.5% proposed back in November. Target is expected to be announced on Sunday, March 5​
• Australian building approvals slumped 27.6% MoM in February (exp. -9.2% MoM)​
• Japanese capital expenditures increased 7.7% YoY in Q4 2022​
• Salesforce (CRM.US) rallied over 15% in the after-hours trading following the release of the earnings report. Company reported sales at $8.38 billion (exp. $7.99 billion) and EPS at $1.68 (exp. $1.36). Salesforce announced expansion of buyback programme from $10 to $20 billion​
• Cryptocurrencies are trading lower on Thursday - Bitcoin drops 0.3%, Dogecoin trades 1% lower and Ethereum pulls back 0.5%​
• Energy commodities trade lower - oil pulls back 0.3% while US natural gas prices drop 0.6%​
• Precious metals pull back amid USD strengthening - gold drops 0.2%, platinum dips 0.4% and silver trades 0.7% lower​
• USD and CAD are the best performing major currencies while NZD and JPY lag the most​

Continued drop in US bonds (TNOTE - light blue overlay) is putting pressure on Wall Street indices. 10-year US yields climbed above 4% yesterday and S&P 500 futures (US500) are making a break below 200-session moving average today.​

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[SOLIDECN]

EURGBP​

EUR could be on the move later today when the CPI report for February from the euro area and ECB minutes are released at 10:00 am GMT and 12:30 pm GMT, respectively. CPI reading may draw more attention as it will be more timely - keep in mind that ECB minutes will be a recap of discussions from around 3 weeks ago and therefore views included may be outdated. In fact, many ECB members have struck a hawkish tone since the latest meeting with ECB President Lagarde saying this morning that a 50 bp rate hike at the March meeting is still on the table. This has provided some support for EUR this morning and put some pressure on European equities. Lagarde also said that she does not expect recession in the euro area and that inflation should start to slow from march due to base effects.

Taking a look at EURGBP chart at D1 interval, we can see that the pair has climbed to the 0.8900 resistance zone yesterday. An attempt to break above was made today on the back of Lagarde's comments but those gains were already erased. Nevertheless, another attempt cannot be ruled out given two potential EUR-volatility events later in the day (CPI and ECB minutes). Also the pair may see some action during speeches from ECB Schnabel (12:30 pm GMT), BoE Tenreyro (1:00 pm GMT) and BoE Pill (3:00 pm GMT).​

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[SOLIDECN]

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

If the assumption is correct, the AUDUSD pair will fall to the area of 0.6645 – 0.6524. In this scenario, critical stop loss level is 0.6917.

 

[SOLIDECN]

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

If the assumption is correct, the NZDUSD pair will fall to the area of 0.6008 – 0.5890. In this scenario, critical stop loss level is 0.6388.

 

[SOLIDECN]

Oil​

Crude oil price breached 77.40 level clearly to trade at 78.00 barrier now, reinforcing the expectations of continuing the bullish trend for the rest of the day, and the way is open to achieve our first target at 78.90, reminding you that breaching it will push the price to 80.40 as a next main target, while holding above 77.40 represents key condition to continue the expected rise, which gets good positive support by the EMA50.

The expected trading range for today is between 76.20 support and 79.40 resistance.​

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[SOLIDECN]

GBPCHF​

The GBPCHF pair ended the correctional bullish rebound by providing new negative close below 1.1415 resistance, to notice crawling below the moving average 55 and consolidate near 1.1255, also, stochastic begins to provide the negative momentum to increase the efficiency of the bearish track, to keep waiting to touch the negative stations near 1.1180 followed by reaching the additional support at 1.1100.

The expected trading range for today is between 1.1310 and 1.1180.​

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[SOLIDECN]

EURJPY​

The EURJPY pair postponed the bullish rally, affected by 145.25 level forming an obstacle against the bullish attempts, to notice providing weak sideways fluctuation by consolidating near 144.80.

We remind you that the bullish scenario will remain valid as long as 144.00 forms additional support line, and stochastic attempt to crawl towards the overbought areas, allowing us to wait to surpass the current obstacle and manage to reach the next main target at 146.50.​

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[SOLIDECN]

USDCAD​

The USDCAD pair continues to decline to break 1.3600 level and settles below it, to head towards providing more negative trades on the intraday basis, targeting visiting 1.3500 level mainly.

Therefore, the bearish bias will be suggested for today, noting that the expected decline is temporary, waiting to resume the bullish wave that its targets begin by testing 1.3680 level. On the other hand, we should note that breaching 1.3630 will stop the suggested negative scenario for today and lead the price to recover again.​

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[SOLIDECN]

Bitcoin​

Cryptocurrencies are on watch as potentially another collapse is brewing on the markets. Concerns are mounting over the financial condition of Silvergate Bank, a bank that specializes in cryptocurrency transactions. Silvergate warned in a filing on Wednesday that recent losses that the bank has experienced may leave it with less capital than it needs. Company also said that it failed to meet the deadline to submit its annual report to the US Securities and Exchange Commission.

Reaction was quick with hedge funds, partners and investors pulling out from the Bank, leading to a collapse in its share price. Cryptocurrency companies, like for example Coinbase, stop accepting and initiating payments to or from Silvergate. However, some companies, like for example BitStamp, warned that they cannot be held responsible for any funds deposited at Silvergate accounts, signaling to clients that they decide to use Silvergate accounts at their own risk.

Whole situation is putting pressure on cryptocurrencies with major coins dropping 3-7% today. Taking a look at the BITCOIN chart at the D1 interval, we can see that the coin is testing a major support zone today. The $22,450 area is marked with previous price reactions as well as the lower limit of a local market geometry. A break below would, at least in theory, hint at a short-term trend reversal. In such a scenario, declines could deepen with sellers targeting the next support zone in-line - $21,200 area marked with previous price reactions and 100-period Exponential Moving Average (green line).​

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[SOLIDECN]

XAUUSD - Growth is possible.​

If the assumption is correct, the XAUUSD pair will grow to the area of 1889.75 – 1960.25. In this scenario, critical stop loss level is 1802.05.

 

[SOLIDECN]

USDJPY - Growth is possible.​

If the assumption is correct, the USDJPY pair will grow to the area of 138.50 – 142.17. In this scenario, critical stop loss level is 134.02.

 

[SOLIDECN]

ETHEREUM​

ETHEREUM price fell over 6.0% on Friday and broke below psychological support at $1600, which coincides with 38.2% Fibonacci retracement of the upward wave started in June 2022. Currently buyers attempt to halt declines around local support at $1550, which is marked with previous price reactions. However, should break lower occur. sell-off may deepen towards recent lows at $1460.

 

[SOLIDECN]

US100​

The Fed released its semi-annual monetary policy report today, and next week Powell will testify before Congress. His statement may provide some hints regarding future rate hike path and measures which may be taken during the March meeting. Highlights of the report:

Further hikes are needed​

• Financial conditions have tightened significantly since June​
• Service inflation excluding the housing sector remains elevated, further dynamics will depend on the labor market​
• Bringing inflation back to 2% likely requires period of below-trend growth, some softening of labor market conditions​
• Inflation abroad remains high, which has an impact on domestic prices​
• The labor market will remain strong for now​

Today's report did not cause any major market moves, as next week's Powell semiannual testimonies is much more important. EURUSD rebounded slightly and the US100 remains at session highs.​

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[SOLIDECN]

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 1.0500 – 1.0325. In this scenario, critical stop loss level is 1.0695.

 

[SOLIDECN]

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

If the assumption is correct, the GBPUSD pair will fall to the area of 1.1650 – 1.1420. In this scenario, critical stop loss level is 1.2285.

 

[SOLIDECN]

AUDUSD​

The AUDUSD pair continues to crawl positively to trade near the key resistance 0.6780, noticing that stochastic lost its positive momentum to start providing negative signals now, waiting to motivate the price to rebound bearishly and resume the correctional bearish track, which targets 0.6665 as a next station.

The EMA50 continues to press negatively on the price to support the continuation of the expected bearish trend, being aware that breaching 0.6780 will complete forming positive pattern that has the ability to push the price to turn to rise and head to visit 0.6925 areas initially.
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