2023 Market Forecast by Solidecn

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Market Trends: Navigating Equity Dips and Economic Signals

Last week, European and US stock markets kept falling, marking six weeks of losses. The main worries were about companies' earnings not being as good as hoped and their future outlooks seeming less positive as we move into the year's last quarter. In the US, the markets also dipped, hitting their lowest point since May, showing they're not as strong as they were earlier in the year.

On Friday, the prices of oil and gold jumped suddenly. This happened when the news came out about Israeli forces moving into Gaza, which made gold prices go over $2,000 an ounce for the first time since May. Even though Brent crude oil's price went up past $90 a barrel, it ended the week lower.

The hope is that the careful steps taken in Gaza will increase pressure on Hamas without causing more trouble along Israel's northern border. European markets, which had closed by the time of the Gaza events on Friday, are expected to start a bit stronger, considering the military actions have been limited so far.

It's easy to think the drop in stock markets last week was just because of the uncertain situation in the Middle East. But it was also because of companies not doing as well as expected and lowering their future earnings outlooks, which led to some big drops in their stock prices. This pattern might keep up this week, with all eyes on updates from big companies like HSBC, BP, Shell, and Apple.

Meanwhile, economic reports from Europe and the UK didn't show much good news, but the US did better, with people waiting to see if central banks will change their plans based on recent data. The US Federal Reserve probably won't ease up on its policies soon, and another interest rate increase by the end of the year is still possible. But the Bank of England seems done raising rates for now, with people guessing when the next rate cut might happen in 2024.

In the UK, the number of approved mortgages and other spending data for September might show that people are still careful about spending. And in Germany, after the European Central Bank decided not to change interest rates, inflation is expected to go down in October, and the economy might shrink a bit in the third quarter.​

 

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Gold prices hit $2000 as Middle East tension escalates

As tensions rise in the Middle East, gold prices have shot up over $2000 due to increased fighting on the ground.

While all eyes are on the shifting situation, gold has jumped over the crucial $2000 level because of the growing battles. At the same time, oil prices have stabilized above $83, as people investing in the market are on alert for any interruptions in supply from this key oil-producing area. This week is also important because big banks like the Federal Reserve, the Bank of England, and the Bank of Japan will make decisions on interest rates, which could shake up the markets even more. Investors and market experts around the world are paying close attention to these developments as they influence the economy.

 

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EURJPY Technical Analysis

EURJPY is testing the Ichimoku cloud, a key resistance. Our analysis suggests a bullish market, with a strategy to go long. Currently, it's trading in a bearish channel below the 158.6 pivot. A close above the pivot will confirm bullishness.

If it remains below the pivot, the short-term target is S1 support.​

 

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EURGBP

The EURGBP pair has broken the bearish trendline on the daily chart, indicating a bullish bias. The 4H chart shows it trading above the Ichimoku cloud and weekly pivot, suggesting potential gains.

However, a close below S1 support (0.869) would negate this bullish scenario.​

 

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EURAUD​

The EURAUD pair is currently navigating within a daily bullish channel and is testing the monthly pivot point at 1.6555. If the bulls maintain their position above this pivot point and within the bullish channel, it’s plausible that the EURAUD could ascend to the mid-line of the bullish channel, which is near the R2 support level at 1.712.

However, if the bears manage to close below the pivot point, it would invalidate the bullish scenario. It’s important to note that a closure below the pivot point does not necessarily signal a trend reversal. The support level is at 1.621, and a breach of this level would be required to indicate a trend reversal.​

 

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USDJPY​

Tuesday's trading session saw the USD/JPY currency pair surge, reclaiming territory above the pivotal 150.00 mark. This upswing effectively diminishes the losses witnessed in the preceding two days. The yen displayed a broad weakening, a direct response to the Bank of Japan's reaffirmation of its ultra-easy monetary policy aimed at bolstering the domestic economy. In a notable policy adjustment, the BoJ subtly altered its stance on yield curve control, now referencing the 1% cap on the 10-year Japanese government bond yield as a guiding figure rather than a strict limit.
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Inflation Projections and Economic Data Weigh on Yen​

The BoJ's upward revision of inflation forecasts for the fiscal years 2024 and 2025 hints at a gradual setup for exiting its loose monetary policy. However, this adjustment has not been enough to rally support for the yen, especially against a backdrop of disappointing Japanese industrial and retail data for September.
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US Dollar Demand and Fed Expectations Fuel Rally​

On the other side of the pair, the US dollar is finding robust support, spurred by the market's belief in the Federal Reserve's commitment to its tight monetary policy, including the possibility of further rate hikes in 2023. Remarks from Fed Chair Jerome Powell about persistently high inflation and the potential for additional rate increases have kept US bond yields near the 5.0% mark, underpinning the dollar's strength.
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Caution Ahead of FOMC Meeting​

Despite the bullish momentum, there's caution in the air as speculation about potential Japanese intervention to curb yen depreciation persists. Traders are also adopting a wait-and-see approach in anticipation of the Federal Open Market Committee's (FOMC) meeting. The Fed's decision, due on Wednesday, is expected to hold steady, but any signals on future rate adjustments will be pivotal for the currency pair.
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Bullish Indicators and Resistance Challenges​

From a technical standpoint, the USD/JPY's resilience below the 200-period Simple Moving Average on the 4-hour chart has set a bullish tone. Daily chart oscillators are gaining positive momentum, suggesting room for further upside. However, traders should watch for resistance near the daily highs around 150.35-150.40, with the year-to-date peak and the 151.00 mark as key levels to breach for continued ascent.
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Support Levels to Monitor on Pullbacks​

Conversely, a retreat below 150.00 could find solid ground near the 100-period SMA on the 4-hour chart at approximately 149.60-149.55. A decisive drop below this could open the path to 149.00 and potentially challenge the bullish outlook. Should selling pressure intensify, the pair may test the monthly low around 147.30-147.25, recorded on October 3, which would tilt the market sentiment towards the bears.

 

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GBPUSD​

GBPUSD shows a bullish signal, breaking above the 1.216 level. With the RSI above 50, it may rise towards the 1.225 resistance, hinting at a possible trend reversal.

 

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GBPJPY​

The GBPJPY pair has broken through the bearish channel on the daily chart and is currently trading above the pivot point of 182.9. The Relative Strength Index (RSI) indicator is hovering above the 50 level, suggesting that the bulls have regained control.

Looking closer at the GBPJPY 4-hour chart, we can see that the bulls are facing a barrier at 183.7. If the GBPJPY price can break this level, it will clear the path towards R2.

However, if the price fails to breach this resistance, it could result in the GBPJPY price returning to the bearish channel depicted on the daily chart.​

 

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GBPAUD​

The GBPAUD currency pair has demonstrated a robust breakout from its previous bearish trendline during today's trading session. This pivotal movement has not only captured the attention of traders but has also signaled a potential shift in the underlying market dynamics. The currency pair's ability to sustain a close above the critical pivot point of 1.917 further boosts the case for a bullish outlook.

The Relative Strength Index (RSI) confrims this bullish sentiment. Currently, the RSI is indicating upward momentum, suggesting that the buying pressure is outpacing selling pressure. This technical alignment could very well pave the way for the GBPAUD price to ascend towards the next notable resistance level at 1.931.​

 

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Gold​

Gold is currently undergoing a test of its support level at $1,970. Interestingly, it's trading below the pivot point in the market. The Relative Strength Index (RSI) is showing signs of divergence, indicating a potential correction in the price of gold. This correction could possibly extend to a level of $1,934.

 

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Crude Oil​

Crude oil is currently showing a bearish trend, consistently trading within a bearish channel. The Relative Strength Index (RSI) is attempting to cross the crucial 50 mark, a movement that could indicate potential market shifts. However, it's not a guaranteed sign of a bullish reversal.

The oil price is testing a significant resistance at $83.2. The result of this test could offer insights into future price trends. A break above this resistance might suggest a shift in market sentiment, while failure to do so could reinforce the bearish trend.

The oil market remains bearish as long as the price stays within this channel, indicating that sellers currently have the upper hand. If the bearish momentum persists, the oil price might drop to $80. However, this is a prediction and actual market movements can vary.​

 

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Market Update: Anticipation Before Fed Announcement​

As the financial community awaits the Federal Reserve's upcoming decision on interest rates, a sense of anticipation builds. The general consensus is that there won't be a change to the current rates. Investors are keenly waiting to hear from Fed Chair Jerome Powell for hints about future monetary policies. Meanwhile, there's buzz around Advanced Micro Devices (AMD) as it reveals long-term sales goals for its AI-focused processors.
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Federal Reserve's Decision in Focus​

The Federal Reserve in Washington is poised to announce its latest stance on interest rates. It's predicted that the rates will remain between 5.25% and 5.50%. The market's attention will pivot to the Fed's statement and Powell's press conference for any forward-looking statements. The Fed is balancing efforts to manage inflation without stalling the economy. There's curiosity about how long the heightened rates will persist, especially with recent surges in Treasury yields affecting the stock market. Analysts are suggesting the Fed might pause to evaluate the effectiveness of its current policies in curbing inflation.
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Market Movements Before the Fed's Update​

Stock futures indicate a slight dip as traders anticipate the Fed's announcement. Key stock indices like the Dow, S&P 500, and Nasdaq showed downward movements in early trading. This follows a slight rally that capped off a turbulent October, which saw declines across major stock indices.
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Spotlight on AMD's Revenue Forecast​

AMD's shares saw mixed reactions after-hours due to its revenue forecast for the upcoming quarter and its first sales projection for the MI300 chip. While the forecast was below expectations, there's optimism about its potential in the AI market. This news comes alongside earnings announcements from other major players in the tech and consumer goods sectors.
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China's Manufacturing Downturn​

In China, manufacturing activity has seen a downturn, according to the latest Caixin data. This contraction reflects weaker domestic and international demand, with a continued decrease in export orders due to challenging economic conditions in key markets.
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Oil Prices on the Rise Amidst Fed Expectations​

In the commodities market, oil prices have marginally increased. Traders are exercising caution as they await the Fed's decision. There's also attention on geopolitical tensions that could impact oil supply and prices.​

 

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GBPAUD

The GBPAUD couldn’t hold above the weekly pivot (1.917) in the 4H chart, and the pair slumped to the significant support at 1.9. Moreover, the GBPAUD formed a bullish long wick candlestick pattern in the daily chart, and the RSI indicator shows divergence. These signals can be interpreted as a trend reversal or an imminent correction in the price.

S1 provides support to the bullish scenario. As long as the price holds above 1.899, it is likely for the GBPAUD price to rise and test the weekly pivot again.

On the other hand, if bears close below S1, the bullish scenario is invalidated and the path to S2 will be cleared.​

 

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GBPAUD​

The GBPAUD has broken out of the bearish channel, and the bears are currently testing the 1.895 support level. The market bias remains bearish as the pair is trading below the Ichimoku cloud.

Zooming in on the 4-hour GBPAUD chart provides a detailed insight into the forecast. The decline has approached the lower boundary of the bearish channel on the 4H chart. With the RSI indicator nearing the oversold territory, a pullback to the channel's median line could be anticipated. Additionally, given the current selling pressure, the next target would likely be the 1.884 support level.

Conversely, the 1.917 level acts as the pivot. The bearish scenario would be negated if the price breaks above this pivot or the upper line of the channel.​

 

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EURUSD Technical Analysis

The EURUSD currency pair has been trading in a range from 1.051 to 1.068 since October 23. The pair formed a hammer candlestick pattern on the daily chart and is currently trading above the monthly pivot. Since the pair hovers below the Ichimoku cloud, we will be looking for selling opportunities.

The RSI indicator crossed above the level of 50, indicating that the price of EURUSD might increase to R1 (1.067 resistance). This level offers a decent price to enter short, especially if the market forms a long wick candlestick, a doji, or a bearish engulfing pattern.

Another scenario for short trading in EURUSD is to wait for the pair to break S1 (1.049 support). In this case, the pace of decline in the pair would increase and the next target would be S2 (1.042), followed by S3 (1.032).​

 

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EURJPY Technical Analysis

The EURJPY currency pair is trading within a daily bullish channel and it tested the middle line of the channel in the previous day’s candle. Today, the EURJPY had a pullback to the pivot. With the RSI indicator hovering above the 50 level, it is likely that the bulls will push the EURJPY price to R1 (162.7), followed by the upper line of the channel or R2 (165.0).

The main support for our bullish EURJPY forecast is S1 (156.28). If this level breaks, the uptrend is likely to end and we might see a trend reversal. However, this is unlikely due to the Bank of Japan’s current interest policy.​

 

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EURAUD Forecast​

The EURAUD pair is trading within a weekly bullish channel and above the Ichimoku cloud. This indicates that the trend is bullish, and we should look for buying opportunities in this currency pair.

When we zoom into the EURAUD 4H chart, we see that the bulls added buying pressure when the pair's decline reached the 1.6455 resistance level. Currently, it is testing the 1.6563 resistance level. With the RSI indicator increasing in value and the Awesome Oscillator showing a green bar, if the pair can close above 1.6563, it will pave the way for EURAUD to reach 1.6700. This level aligns with the upper band of the young bearish channel.

The 1.6455 level serves as support for this bullish scenario. If it breaks, the bullish scenario becomes invalid.​

 

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FTX Bitcoin Theft: New Movement Detected​

A new chapter unfolds in the ongoing FTX Bitcoin theft saga. Blockchain analysis group PeckShield has alerted the community with a recent discovery. They've traced another batch of Bitcoin, which was part of the assets stolen from the now-defunct FTX.

The FTX Bitcoin theft has seen the hacker orchestrate a move of about 288.8 Bitcoin, currently valued at nearly $10 million.
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Evaluating the Extent of the FTX Bitcoin Theft​

Looking back, the once-prominent cryptocurrency exchange FTX crumbled in November last year. Amidst the chaos, an anonymous hacker seized the moment, orchestrating a heist that resulted in the loss of roughly $500 million in cryptocurrencies. This individual didn’t waste time, quickly converting the stolen assets into 180,000 Ethereum, which were then scattered to 12 separate wallets. At the time of this distribution, the Ethereum amassed was worth about $200 million.

The aftermath of the FTX Bitcoin theft turned the hacker into a significant Ethereum stakeholder. In a strategic move later that November, the hacker converted 50,000 ETH to Ren Bitcoin (RenBTC), a variant of Bitcoin on the Ethereum network.
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Recent Attempts to Liquidate Stolen Ethereum​

U.Today has reported on attempts made this year to launder the stolen Ethereum. The FTX Bitcoin theft perpetrator tried to exchange the Ethereum for tBTC on the ThorSwap DeFi platform in early October. The platform promptly shut down to prevent this, highlighting the vulnerability of DeFi systems to such exploitation.

Undeterred, the hacker pivoted to the Threshold Network, successfully transferring the Ethereum into the Bitcoin network. At that point, the FTX Bitcoin theft culprit had approximately 110,000 ETH in their possession, worth about $180 million.

Following the suspension of ThorSwap, Bitcoin advocate Max Keiser took the opportunity to critique DeFi for being "heavily centralized," in contrast to his views on the decentralization of Bitcoin.
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Substantial Ethereum Shifts to US Exchanges​

In a related development, cryptocurrency tracking firm Whale Alert has noted large Ethereum movements. In recent activity linked to the FTX Bitcoin theft, substantial sums of Ethereum were transferred to major US exchanges such as Coinbase and Kraken.

Despite the tumultuous market, Ethereum showed impressive growth of 18.14% from October 20 to October 26, reaching a high of $1,848. This increase paralleled Bitcoin's climb above $34,000. Post-surge, Ethereum recorded a modest 2.84% decrease but continues to maintain its strength around the $1,800 threshold, still feeling the ripples of the FTX Bitcoin theft.a​

 

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LUNA Coin Analysis Amidst Market Turbulence​

Despite the unpredictable nature of Bitcoin, which has sent shockwaves through the cryptocurrency market, there remains a resilient sense of optimism among crypto investors. LUNA coin, in particular, has come under the spotlight as it faces the brunt of Bitcoin's price swings. The analysis reveals that LUNA coin has tested the critical support level of $0.437 on multiple occasions, leading to a complete reversal of its previously secured gains. This has raised pertinent questions about the coin's durability in the face of short-term market speculation.

The trading volume for LUNA coin has seen a downturn, a factor that could compel crypto exchanges to undertake significant strategic decisions regarding the coin's listing and trading mechanisms. This shift is noticeable as the market progresses towards a post-2024 era, anticipated to be free from the burden of insolvent tokens—a stark contrast to the volume-centric bear markets and their accompanying regulations.

Should LUNA coin's valuation slide below the crucial threshold of $0.437, the analysis suggests that it could enter a precarious phase, potentially leading to further devaluation towards the $0.387 level, having to first breach intermediary resistances at $0.412 and $0.405. Such a downturn would mark unprecedented low points for the coin, challenging the fortitude of investors.

This article underscores the inherent hope that continues to fuel crypto investors' enthusiasm, even as they weather the storm of Bitcoin volatility and its cascading effects on altcoins, including LUNA coin. The analysis serves to equip investors with insights into the coin's performance and prospects within the volatile crypto market.​

 

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EURNZD Outlook: Downward Momentum Gains Traction

The EURNZD currency pair is currently facing a challenge at the 1.798 pivot point, having already descended below the Kernel line on the daily chart. The RSI's crossing of the middle line signals an intensifying bearish outlook for the EURNZD.

Detailed Analysis on the 4-hour Chart

For a more detailed view, we shift our focus to the 4-hour chart. Here, the market trend is clearly bearish, with EURNZD trading under the Ichimoku cloud. The pair is currently challenging the 0.382 Fibonacci retracement level. If it falls below this level, we might witness the fall extend to the 50% and subsequently the 61% Fibonacci retracement levels.

The Ichimoku cloud poses a resistance. To counter the bearish forecast, EURNZD bulls would have to achieve a close above the cloud.​