Solid ECN - Fundamental Analysis

Bearish Trend in AUD/USD: Key Indicators and Price Targets​


Solid ECN – The momentum of the Australian dollar against the U.S. Dollar has paused in today's trading session. As of this writing, the AUD/USD pair is testing the EMA 50 at about 0.651, which coincides with the Ichimoku Cloud.

The 4-hour chart has formed a Doji candlestick pattern, which could be interpreted as a sign of a trend reversal or a halt to the current uptick in momentum.

From a technical standpoint, as long as the AUD/USD pair trades below the cloud, the primary trend remains bearish. In this scenario, the next target will likely be March's lowest price, the 0.647 mark. Please note that if the Standard Deviation indicator rises above the 0.002 level, the pace of the downtrend will escalate.

On the flip side, the bear market should be invalidated if the price of the Australian dollar closes and stabilizes above the 0.6538 resistance mark. In this case, the rise will likely extend and aim for the upper band of the flag.​

AUDUSD Climbs Higher: A Look into the Bullish Trend​


Solid ECN – Yesterday, the Australian dollar saw a significant rise against the U.S. dollar. This increase in value started when it surpassed the EMA 50 and reached 0.6524, marked by a large bullish candle. Following this, there were four more strong bullish candles, pushing the price beyond the Envelopes band, suggesting the market was in an overbought state. This was further supported by the RSI indicator moving above 70.

Today, the market is correcting itself slightly after reaching a high of 0.661 on Thursday. Currently, the AUD/USD pair is trading around 0.657, still above the 50% Fibonacci support level, and maintaining its position over the Ichimoku Cloud. Despite technical indicators showing a bearish trend, the overall outlook remains bullish as long as the price stays above the cloud and the EMA 50.

The AUD/USD price might climb further to challenge the 78.6% Fibonacci resistance level at 0.6626, moving towards the top of the bullish channel shown in red on the 4-hour chart for AUD/USD.

However, if the price falls below the EMA 50 or the 38.2% Fibonacci support level at 0.5548, this would signal an end to the bullish trend.​

Pound Sterling's High Against Dollar & Future Trends​


Solid ECN – Yesterday, the pound sterling reached its highest level against the U.S. Dollar for April, climbing to 1.268. When looking at the GBPUSD 4-hour chart, we see a candlestick with a long wick, peaking at 1.268. This peak is near the top edge of a falling flag pattern and is backed by the Ichimoku cloud and the 38.2% Fibonacci retracement level.

This area of strong resistance halted the pound's upward movement, leading to a rebound by the U.S. Dollar. Currently, the GBPUSD is trading around the 50-day Exponential Moving Average (EMA), at approximately 1.263.

From a technical perspective, the currency pair is in a downtrend. If the price remains below the 50 EMA, we might see this downward trend continue. In such a case, the next target for the bears might be April's lowest point, at 1.2539.

However, if the GBPUSD price can rise above the 38.2% Fibonacci level or the 1.268 mark, it would signal a potential shift away from the downtrend. This possibility seems less likely, as the technical indicators lean towards a continuation of the bear market.​

NZDUSD Pair Sees Bullish Break and Pullback​


Solid ECN – In the latest update for the NZDUSD pair, buyers successfully breached the falling trend line, as observed in the 4-hour chart. Currently, the pair is undergoing a slight pullback, trading around 0.602. It is approaching the EMA 50 and retesting the trend line it crossed.

The signals from technical indicators are not consistent. While the RSI remains above 50, suggesting a bullish trend, the AO bars are red, and the currency pair has yet to position itself over the Ichimoku cloud firmly. This indicates that the recent price increase from 0.5938 is not very strong. Thus, investing in this pair warrants a careful approach.

From a technical analysis standpoint, the NZDUSD price is currently within a bullish trend, staying above both the EMA 50 and the 61.8% Fibonacci support level. If buyers can keep the price above these critical points, we might see continued growth, potentially aiming for the 50% Fibonacci resistance level at 0.6070.

Conversely, a drop below the 0.6 threshold, aligning with the 61.2% Fibonacci level, could signal the end of the current bullish trend.

EURUSD Market Update​


Solid ECN – In Monday's trading session, the Euro trades at about 1.083 against the U.S. Dollar, which is slightly above the EMA 50 and the 38.2% Fibonacci support level. It seems the pair is trying to stabilize itself above the aforementioned level after pulling back from the 23.6% Fibonacci level in Friday's late trading session.

The technical indicators give mixed signals, but the Standard Deviation indicates low activity and sideways momentum in the EURUSD market. That said, with the RSI (Relative Strength Index) hovering above 50, the price of the EURUSD might grow higher to test the 50% Fibonacci level followed by the 1.088 strong resistance area.

However, entering the market with a bullish outlook is risky since the primary trend is bearish. Therefore, it is recommended to wait and monitor the price action closely near the key levels mentioned above and seek opportunities to join the bear market.

From a technical standpoint, if the price rises to the 1.088 resistance, it would offer a decent price to go short on the EURUSD pair if the 4-hour chart forms a bearish candlestick pattern.

On the other hand, if the Euro dips below the EMA 50, this could signal a continuation in the downtrend, and retail traders can adjust their strategies accordingly and join the primary trend, which is bearish.​

EURUSD Steady at $1.08 as ECB Meeting Nears, Rate Cut Hints Awaited​


Solid ECN – The euro remained steady at about $1.08, with investors taking a careful stance as they awaited Thursday's European Central Bank (ECB) announcement.

It's widely anticipated that ECB officials will keep interest rates at their current record highs for the sixth time in a row. The focus is now on how the statement is worded and what ECB President Lagarde might say in her press conference to hint at when the first interest rate decrease of the year could happen.

Recent documents from the ECB show that the officials are more confident about inflation moving towards their goal of 2%, which makes a strong argument for a reduction in interest rates. On the other hand, the US dollar kept getting support because the latest data showed the American job market is still doing well, indicating that the Federal Reserve might not hurry to lower interest rates soon.​

EURUSD Trends: A Shift Below Key Levels This Week​


Solid ECN – In the 4-hour chart, the EURUSD currency pair trades under the descending trendline, shown in black. This position came about after the pair developed a bearish engulfing pattern right around the 61.8% Fibonacci support level, suggesting the possibility of a trend change. At the same time, the awesome oscillator gives off a divergence signal, matching what the candlestick pattern indicates.

The pair must end below the 50 EMA for the downtrend to press on. If this happens, we could see the price heading towards the 23.6% Fibonacci support level, marking it as the initial goal for this week.

However, should the EURUSD pair's price climb above the 61.8% Fibonacci resistance level, the current bearish market analysis might no longer be applicable.​

USDJPY Breakthrough: Bullish Uptrend Resumes, Ichimoku Cloud Watch​


Solid ECN – In the current trading session, the bulls of USDJPY have finally broken through the 159.9 barrier. This suggests that the uptrend is likely to continue. However, the next bullish target remains uncertain as there are no significant obstacles for the bulls.

It’s important to note that the Ichimoku cloud is the dividing line between bull and bear markets. We should consider pausing the bullish scenario if the price falls below this level.​

USDCAD Breaks April High: What's Next?​


Solid ECN — In this evening's trading session, The U.S. Dollar surpassed April's highest price point, the 1.3647 mark against the Canadian dollar. This uptick in momentum has led the RSI indicator to step into the overbought zone, indicating that the USDCAD pair might enter a short-term consolidation.

From a technical standpoint, this breakout paved the road to the 78.6% Fibonacci resistance. However, entering the bull market is not recommended when the market is saturated from buying pressure. That said, if the price returns to the 1.364 area followed by the 61.8%, it provides a decent entry point to join the buyers.

GBPUSD's Pullback: An Opportunity?​


Solid ECN – The GBPUSD pair dipped below 1.2593, April's lowest point against the U.S. dollar, in yesterday's trading session. As of writing, the pair is experiencing a pullback toward the broken support at 1.2575. This pullback was expected because the price went below the Envelopes lines, which is interpreted as an oversold market.

From a technical perspective, the market is bearish as long as the GBPUSD price hovers below the Ichimoku Cloud and the EMA 50. The pullback can provide opportunities to join the bear market if it stops at the 1.2575 resistance, followed by 1.2613. Therefore, monitoring these levels and looking for bearish candlestick patterns such as a doji or a bearish engulfing pattern can signal investors to join the sellers.

If this scenario comes into play, the next target for the bears will likely be the 50% Fibonacci level, the 1.247 mark, followed by the lower band of the bearish flag.

Conversely, if the GBPUSD closes and stabilizes itself above the cloud and the upper band of the flag, the bear market should be considered invalid.​

Frankfurt's DAX 40 Dips as ECB Holds Rates, US Inflation Data Surprises​


Solid ECN – On Thursday, the DAX 40 index of Frankfurt saw a slight decrease of 0.2%, closing at 18,090 points. This happened right after the European Central Bank decided to keep its primary interest rates the same. The bank also mentioned it might lower rates if it looks like inflation is going to drop based on future projections. However, President Lagarde was clear that the ECB hasn't promised to follow a set path for interest rates, stating that any decisions will be based on upcoming data.

In the US, the situation looked a bit different. Reports showed that the growth in producer prices wasn't as strong as people thought it would be. However, the core index for the year was a bit higher than what was predicted. The day before, on Wednesday, unexpected high US CPI figures made people question if the Federal Reserve could reduce interest rates over the summer. This uncertainty makes it harder for the world's other big central banks to plan for easing.​

Monitoring Yen's Rally Against Sterling​


Solid ECN – The Japanese yen is making a comeback against the pound sterling from 192.9 and is increasing its pace toward the 23.6% Fibonacci level.

The pair trades in the bullish flag depicted in red, as shown on the daily chart. The current downward momentum occurs while the RSI indicator closes on the 50 levels and the Awesome Oscillator signals divergence. This could be interpreted as a trend reversal or the beginning of a new consolidation phase, which appears stronger.

From a technical standpoint, the primary trend is bullish. Still, due to the divergence signal, the consolidation phase might extend to the 23.6% Fibonacci support, followed by the lower band of the bearish flag in blue.

Therefore, we suggest monitoring the aforementioned levels closely for a hammer stick pattern since these levels provide a decent price point for joining the bull market.

EUR/USD Exchange Rate Forecast: Navigating Through Global Market Signals​


Solid ECN—The EUR/USD exchange rate might see some interesting moves this week, influenced by different factors in Europe and the United States.

The mood in Europe is somewhat positive as the stock markets, particularly the STOXX 50 index, increased by 0.6% on Monday. This increase happened because tensions in the Middle East seemed to calm down after Israel successfully defended itself against a major air attack from Iran. Additionally, the US has reassured everyone that it wants to avoid any more significant conflict in that region. These developments have made investors feel more secure, which is suitable for the markets.

On the business side in Europe, there were some mixed signals. Portugal’s GALP Energia saw its oil and gas production drop by 9% from the previous quarter, which might raise some concerns about energy supplies. However, there were also some big deals, like France's BNP Paribas buying a significant stake in Belgian insurer Ageas and Italy’s Prysmian acquiring Encore Wire for $4.2 billion. These moves could show confidence in European companies and might support the euro.

In the United States, investors are very focused on what the Federal Reserve will do next. Fed officials are planning speeches this week, and everyone wants to know how the central bank will deal with the tight job market and high inflation. If the Fed signals that it might raise interest rates to control inflation, it could strengthen the US dollar.

Overall, the EUR/USD exchange rate will likely react to how these situations develop. If the European economy shows more positive signs and the US Fed suggests strong measures against inflation, we could see some volatility and essential shifts in the exchange rate. It's a week where traders will need to keep a close eye on news from both sides of the Atlantic.​

EURUSD Trading Tips Amid Market Volatility​


Solid ECN – The EURUSD currency pair dipped to as low as 1.062 during Friday's trading session and traded at about 1.066, with an increase in today's trading session.

The RSI indicator signals that the market is oversold, while the Standard Deviation indicator hovers at a peak of around 0.0079 and is declining. This can be interpreted as the market being oversold and market volatility slowing down.

From a technical perspective, joining the bears in an oversold market condition is not recommended. Therefore, waiting patiently for the EURUSD to correct some of its losses is logical and wise. However, we don't see signals from the Awesome Oscillator indicating the start of a consolidation phase. Regardless of the AO, if the price reaches the 23.6% Fibonacci level, this resistance area can provide a decent entry point for retail traders to join the bear market.

Please be aware that the Ichimoku cloud stands between the bear market and the bull market. The market remains bearish as long as the price hovers below the cloud.​

Understanding Bitcoin’s Recent Price Recovery​


Solid ECN—Bitcoin's price has rebounded from the $60,600 resistance, coinciding with the lows of April 5 and 20. This recovery was anticipated as the RSI indicator was previously in oversold territory. As of this writing, the indicator is showing bullish signs, having flipped above the 50 level.

Consequently, the BTCUSD pair remains bullish, although it is currently trading below the Ichimoku cloud. The next bullish target is likely the upper band of the flag around $72,000.

However, the bulls face the EMA 50 as a barrier, suggesting that there might be a consolidation phase or a minor pullback to the 38.2% Fibonacci support level before the uptrend resumes. This is particularly likely, considering the standard deviation indicator is losing momentum.

The $60,600 mark is critical to keeping the market bullish. Should the Bitcoin price dip below this level, the bullish scenario would need to be reevaluated.​

Analyzing USDCAD's Recent Overbought Status​


Solid ECN – As of this writing, the USDCAD currency pair is trading at about 1.3737, slightly below the 78.6% Fibonacci level. The rise that began on April 4 from 1.3477 has led to the pair becoming overbought. Notably, the RSI indicator highlighted yesterday's saturated market when it hovered above 70.

Subsequently, the USDCAD formed a doji candlestick pattern with a long wick on the 4-hour chart, and interestingly, the Awesome Oscillator is showing signs of a bearish wave.

Therefore, from a technical perspective, the USDCAD price might dip. However, for this to occur, the bears must close and stabilize the price below the 1.3725 minor support. If this scenario unfolds, the correction phase could extend to the 1.3682 broken resistance, which offers a decent entry point to join the bull market.

It is worth noting that the market remains bullish as long as the USDCAD price trades above the EMA 50.​

GBPJPY Eyes Resistance at 192.9: Bullish Outlook​


Solid ECN – The GBPJPY price bounced significantly from the 23.6% Fibonacci support and is testing the April high, which is in conjunction with the upper band of the flag, at the 192.9 mark.

As of this writing, the GBPJPY price trades at about 192.2 and is trying to stabilize itself above the Ichimoku cloud. Interestingly, the technical indicators are bullish, with the RSI hovering above 50 and the Awesome Oscillator bars turning green and closing in on the signal line from below.

From a technical standpoint, the GBPJPY is in a bull market if it remains within the bullish flag, marked in red. The price of this trading instrument will likely resume its rise. However, it is noteworthy that for the bullish scenario to play out, the buyers must close above the flag, specifically at the 192.9 resistance.

On the other hand, the 23.6% Fibonacci support stands between the bullish and bearish markets. The bull market is invalidated only if the GBPJPY price dips below this level.​

Bullish Gold: Navigating the Upswing with Fibonacci and Technical Indicators​


Solid ECN – The gold price returned upward after it touched the 38.2% Fibonacci level, which coincides with the EMA 50 and the Ichimoku cloud at the $2,324 mark. Interestingly, the XAU/USD 4-hour chart formed a bullish long-wick candlestick pattern, which signals the continuation of the bull market.

As of this writing, the yellow metal is trading at about $2,370, slightly above the 23.6% Fibonacci support. The technical indicators are also bullish. The RSI indicator hovers above the 50 level and the Awesome Oscillator bars are green and above the signal line.

From a technical perspective, as long as the price remains above the EMA 50 and inside the flag, the market trend remains bullish. The next target will likely be April’s high at the $2,432 mark.

Conversely, the bull market is invalidated if the XAU/USD price dips below the 38.2% Fibonacci support.​

ETHUSD: Bearish Trends Below Ichimoku Cloud​


Solid ECN – The ETHUSD price stabilizes below the Ichimoku cloud after pulling back from the 38.2% Fibonacci support level at $2,801. The technical indicators are bearish, with the Relative Strength Index hovering below 50 and the Awesome Oscillator below the signal line, its bars in red.

The ETHUSD chart above shows that the pair trades within a bearish flag. Therefore, from a technical standpoint, the trend remains bearish, and the decline will likely extend to the lower band of the flag, followed by the $2,717 support level.

Conversely, the bull market would be invalidated if the price crosses and stabilizes above the flag.​

Canadian Bonds and Inflation Trends Amid US Fed Expectations​


Solid ECN – The Canadian 10-year government bond yield has stabilized at 3.78%, a peak not seen since November. This rate holds steady as investors carefully balance their expectations between the US Federal Reserve maintaining a strong stance and anticipating a potential rate cut from the Bank of Canada (BoC).

Amid this backdrop, new economic data revealed that Canada's annual inflation rate in March was recorded at 2.9%, which was below the expected figures. This decline in inflation is noteworthy as it indicates a possible easing in price pressures within the economy. Core inflation measures, closely monitored by the Canadian central bank, also dipped more than anticipated. This decline further bolsters the belief that underlying inflation in Canada might be settling down.

These inflation trends come as Canada has observed an uptick in its national unemployment rate and contractionary Purchasing Managers' Index (PMI) readings earlier in the month. These indicators typically suggest a slowdown in economic activity.

The combination of these factors has led to significant market speculation. Nearly two-thirds of investors now foresee a rate cut by the BoC in the upcoming June meeting. This expectation has provided substantial support to Canadian government bonds, helping them withstand the pressures that have led to a more pronounced selloff in US Treasury bonds.

As the market anticipates the BoC's next moves, these developments are critical for investors and policymakers alike, offering a glimpse into the potential directions of Canada's financial and economic landscape.​