Solid ECN - Fundamental Analysis

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AUDUSD: Bearish Trend Continuation or Bullish Breakout?​

Solid ECN - The AUDUSD price currently ranges inside the bearish wedge pattern below the Ichimoku cloud. As of this writing, the pair trades at 0.651. The technical indicators suggest a continuation of the downtrend, which aligns with the primary AUD/USD direction. The Relative Strength Index is crossing below the 50 level, and the Awesome Oscillator bars are in red and about to flip below the signal line.

From a technical standpoint, as long as the currency pair remains below the Ichimoku cloud, the downtrend is valid, and the price will likely test the last lower lows, 0.64678.

Conversely, the bearish trend line (in blue) and the 0.6542 level are pivotal in the bearish and bullish bias. Therefore, if the bulls stabilize the price above the said level, the uptick momentum that began in early February could extend to the January high, 0.6623.

This is a technical analysis perspective, and actual market conditions may vary. Always consider multiple factors when making trading decisions.​

 

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US Stocks Fall as Inflation Surprises Market​

Solid ECN - On a recent Tuesday, the three extensive US stock indexes - the S&P 500, Dow Jones, and Nasdaq - all fell. The S&P 500 dropped more than 1%, the Dow Jones went down over 300 points, and the Nasdaq decreased almost 2%. This happened because the inflation rate in the US was higher than what people thought it would be. This made investors think twice about whether the Federal Reserve would lower interest rates in March and May. The yearly inflation rate dropped to 3.1%, but people thought it would drop even more to 2.9%.

Also, the yearly core inflation was 3.9%, higher than the expected 3.7%. Consumer prices increased by 0.3% compared to the month before, and the core rate went up to 0.4%, both more than expected. The real estate and tech sectors both went down about 2%. Stocks of big tech companies like Microsoft, Amazon, NVIDIA, and Alphabet also dropped nearly 2%. But, Coca-Cola did well and went up about 2% after they reported earnings that met expectations and revenue that was higher than expected.​

 

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BTCUSD Enters Consolidation Phase​

Solid ECN - Bitcoin's price has declined after reaching as high as $50,374 in today's trading session. As of writing, the digital gold trades around the $48,700 mark, near the 25 simple moving average. According to the technical indicators, the relative strength index has exited the overbought area, while the awesome oscillator shows a minor divergence. This could signal that Bitcoin might be entering a consolidation phase.

From a technical standpoint, if the BTCUSD price falls below the 25 simple moving average, the phase mentioned above might extend to the $23.6 Fibonacci support level, followed by the $46,877 resistance.

We suggest waiting for the bitcoin price to stabilize above the $46,000 level before adding new or more bids to the bullish market.​

 

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Oil Prices Dip Amid US Stockpile Surge​

Solid ECN - WTI crude oil prices dropped to around $77.5 per barrel by Wednesday, halting a week-long rise due to a report indicating a significant increase in US oil stockpiles by 8.52 million barrels the previous week. This most considerable increase since mid-November exceeded the anticipated rise of 2.6 million barrels. The US Energy Information Administration official report is expected later the same day.

Additionally, oil prices were affected by the latest US inflation data, which was higher than expected. This development reduced expectations for the Federal Reserve to lower interest rates soon, which could impact global economic growth and oil demand. The inflation news also drove the dollar to its highest value in three months, making oil, priced in dollars, more costly for those with different currencies.​

 

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NZ Dollar Hits Week Low Amid Policy​

The New Zealand dollar fell below $0.61, its weakest in a week, as the market weighed the US Federal Reserve's delayed interest rate cuts against New Zealand's lower inflation forecasts and the Reserve Bank of New Zealand's (RBNZ) firm approach. US data showed a less significant drop in inflation than expected for January, leading investors to delay their expectations for the Fed's policy easing.

In New Zealand, figures showed inflation expectations hitting their lowest in more than two years for the first quarter, indicating that past rate increases effectively controlled rising costs. Yet, RBNZ's Governor Adrian Orr remarked that the battle against inflation isn't over, pointing out widespread financial pressures as the reason for continuing a "restrictive monetary policy."​

 

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Yen Hits 3-Month Low, Japan Eyes Market Action.​

Solid ECN - The Japanese yen dropped beyond 150 against the dollar, reaching a three-month low due to unexpected high inflation in the US, which makes it less likely for the Federal Reserve to lower interest rates soon. This significant fall in the yen's value led Japan's Finance Minister, Shunichi Suzuki, to warn that the government is watching the market. However, he did not say if they would step in again.

The Vice Finance Minister for International Affairs, Masato Kanda, mentioned that Japan might take necessary measures in the foreign exchange market to prevent economic harm from the yen's rapid decline. In 2022, Japan intervened in the currency market three times when the yen hit a 32-year low of 152 against the dollar and has not intervened since. Meanwhile, investors are looking into the Bank of Japan's future monetary policy, especially after hints that it may not increase rates sharply, even if it moves away from negative interest rates.​

 

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Swiss Franc Hits 2-Month Low Amid Low Inflation​

Solid ECN - The Swiss franc fell below 0.88 against the US dollar in February, hitting its lowest point in over two months, following an unexpectedly low inflation report. This report supported those in the Swiss National Bank who favor less aggressive monetary policy. In January, Switzerland's consumer price index increased by 1.3% compared to the previous year, missing the expected increase of 1.7% and marking the lowest rise over two years.

This was also the seventh month in a row that inflation stayed under the SNB's preferred maximum of 2%. The drop in inflation came even as there were expectations for higher figures amidst the country's gradual removal of electricity subsidies and adjustments to the value-added tax system. This led to increased speculation that the SNB might reduce its key interest rate sometime in the year's first half, possibly as early as March. Additionally, the franc's value was further lowered as the SNB grew its foreign exchange reserves in January for the second consecutive month, signaling a recovery from a continuous decrease over the last two years, bringing the reserves to their lowest in seven years.​

 

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GBPJPY Breaks January Record: Trading Above 188.8 Support​

Solid ECN - The GBPJPY currency pair trades above the 188.8 support after it broke the January all-time high on Tuesday. As seen in the GBPJPY 4-hour chart, the primary trend is bullish, but the pair bounced from 190.0, perhaps to test the blue trendline, which acts as double support to the price.

Interestingly, the technical indicators show signs of divergence, which can be interpreted as the beginning of a consolidation phase or a trend reversal. Therefore, the uptrend would continue if the GBPJPY price can maintain its position above the 23.6% of the Fibonacci retracement level.

On the other hand, if the price falls below the Fibo level mentioned above, the consolidation phase might extend to the 50% Fibonacci level, which is backed up by the Ichimoku cloud.​

 

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Yen Drops to 3-Month Low Amid US Inflation Surge.​

Solid ECN - The Japanese yen fell below 150 against the dollar, reaching its lowest point in three months due to unexpectedly high US inflation rates, which reduced the likelihood of the Federal Reserve cutting interest rates soon. This significant drop in the value of the yen led Japan's finance minister, Shunichi Suzuki, to warn that the government is closely monitoring market movements. However, he did not confirm any plans for intervention.

Masato Kanda, the Vice Finance Minister for International Affairs, also mentioned that Japan might take necessary measures in the forex market if the yen continues to drop, as it negatively affects the economy. Economically, Japan faced a setback with a 0.1% decrease in its GDP for the last quarter, contrary to the anticipated 0.3% growth, and after a 0.8% decline in the previous quarter. The economy saw a 0.4% reduction yearly, marking two consecutive quarters of decline.​

 

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Canadian Dollar Dips Amid US Inflation Concerns​

The Canadian dollar dropped below 1.35 against the USD, getting close to the almost two-month low of 1.345 it hit on February 9th. This happened because persistent inflation in the US made people think the Federal Reserve might not lower interest rates soon, which made the US dollar stronger.

This drop comes after the Canadian dollar had improved last week, thanks to positive job reports in Canada. In January, Canada added almost 40,000 jobs, and nearly 20,000 fewer people were unemployed, bringing the unemployment rate down for the first time since December 2022. This was a sign of hope amid growing concerns that high-interest rates set by the Bank of Canada (BoC) are slowing down the economy, even as the threat of rising inflation continues.​

 

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Gold Hits $2000 Amid Economic Concerns.​

Solid ECN - The price of gold climbed to $2,000 per ounce last Thursday, boosted by a weaker dollar and lower bond yields. This increase came as investors welcomed the latest U.S. economic figures and looked forward to insights from Federal Reserve officials regarding when they might start reducing interest
rates. U.S. retail sales fell significantly more than expected in January, and the number of people filing for unemployment benefits unexpectedly hit a four-week low, hinting that the economy could be weaker than previously believed.

Austan Goolsbee, the President of the Chicago Federal Reserve, expressed concern on Wednesday about the risk of delaying interest rate cuts too long. At the same time, Michael Barr, the Federal Reserve's Vice Chair for Supervision, mentioned that recent inflation numbers suggest achieving the 2% inflation goal could be challenging.​

 

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UK Retail Sales Surge in January 2024​

Solid ECN - In January 2024, the UK saw a significant jump in retail sales, increasing by 3.4% from the previous month after a sharp decline of 3.3% in December. This increase surpassed the expected 1.5% rise and marked the most significant monthly growth in retail since April 2021. This growth spanned across most sectors except for clothing stores. Food store sales, particularly in supermarkets, increased by 3.4%, recovering from a 3.1% drop in December. Sales in non-food stores also saw a rebound, improving by 3.0% after a 3.9% fall in December.

Specifically, department stores and other specialized stores, like those selling sports equipment, enjoyed increases of 5.4% and 6.2%, respectively. This was partly attributed to the beneficial effects of January sales events. Sales in stores selling household goods, especially hardware stores, rose by 1.8%, whereas clothing stores experienced a 1.4% decrease. Furthermore, sales of automotive fuel saw a significant rise of 5.4%, aided by lower fuel prices.​

 

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USDCAD Analysis: Bullish Trendline Supports Above 50% Fibonacci Level​

Solid ECN - The USDCAD currency pair dipped to 1.3447 in today's trading session. The current USDCAD price is 1.348, which is above the 50% Fibonacci retracement level. This deck is further supported by the Ichimoku cloud and the bullish trendline, both visible in red on the USDCAD 4-Hour chart. From a technical perspective, if the bulls maintain the market above the 61.8% Fibonacci support, the bullish trend will likely persist. In this scenario, the following targets could be the 23.6% retracement level, followed by the recent peak of 1.3585.

Conversely, if the bears manage to lower the price below the 1.3447 support and stabilize it there, the downward momentum could extend to the 1.3357 support level.​

 

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USDCHF Analysis: Bearish Flag Test and Fibonacci Support​

Solid ECN - Sellers of the USDCHF have tested the lower band of the bearish flag at the 0.8782 mark. Interestingly, the price rebounded from 0.8782 and is attempting to stabilize within the channel and above the 78.2% Fibonacci level. The technical indicators remain neutral, with the RSI hovering around the median line and the bars of the Awesome Oscillator striving to stay above the signal line.

From a technical standpoint, the bullish outlook will remain valid if the USDCHF price stays above 0.8782. In this scenario, the bulls will likely aim for the high of February 13th, the 0.8885 mark.

On the other hand, if the value of the Canadian dollar surpasses 0.878, the bullish scenario should be invalidated. The next bearish target could be the 50% Fibonacci support level, further reinforced by the Ichimoku cloud.​

 

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Silver Prices Rise Amid U.S. Economic Shifts​

Solid ECN - The price of silver climbed to almost $23 for each ounce as market participants weighed the possibility of the Federal Reserve reducing interest rates in May, following the latest economic indicators from the United States. The drop in U.S. retail sales was unexpectedly sharp at 0.8% for January, representing the most significant fall since March of the previous year.

Surprisingly, new unemployment claims fell to the lowest point in four weeks, mitigating the impact of the previously non-farm solid payroll figures. Additionally, Austan Goolsbee of the Chicago Federal Reserve advised caution against delaying interest rate cuts. In parallel, Michael Barr, the Federal Reserve's Vice Chair for Supervision, remarked that the recent inflation figures suggest a challenging journey to achieving the 2% inflation goal.​

 

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EURUSD Correction Phase and Fibonacci Retracement​

Solid ECN - The EURUSD currency pair entered a correction phase after the bears hit the 1.06946 bottom. Currently, the price of the most traded currency pair is 1.0758, and it is about to test the 23.6% Fibonacci retracement level, which also aligns with the Ichimoku cloud. The main barrier for further rise is the 1.0805 resistance. Should this level be breached, the consolidation phase would extend to the 38.2% Fibonacci resistance, the upper band of the bearish flag.

On the flip side, if the EURUSD price falls below 1.07316, the downtrend is likely to continue, and the first target would be the February 14th low, the 1.0694 mark.​

 

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GBPUSD Tests Ichimoku Resistance: Bullish Trend Insight​

Solid ECN - The GBPUSD pair is currently testing the Ichimoku cloud resistance. Interestingly, this level is backed up by the descending trendline, depicted in red. The price of the GBPUSD stands at 1.261, and the technical indicators show signs of the bullish trend that began last week.

From a technical standpoint, the uptick momentum will likely continue if the bulls stabilize the price above the descending trendline. If this scenario comes into play, the next bullish target would be the 61.8% Fibonacci resistance level.

Conversely, the 1.2590 level supports the bullish scenario mentioned above. However, should the bears breach this level, the price would likely experience a further decline to 1.255, followed by 1.251.​

 

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AUDUSD Price Analysis: Testing Fibonacci and Trendline Resistance​

Solid ECN - The AUDUSD price stands at 0.653 at the time of writing. Currently, the pair is testing the 0.654 high, which aligns with the 23.6% Fibonacci level. Interestingly, the bulls have managed to cross above the descending trendline, depicted in blue, and are now attempting to stabilize above this level. Regarding technical indicators, they promise a continuation of the uptick momentum that began on February 13th, starting from the 0.6442 lower low.

From a technical standpoint, if the price holds above the ascending trendline, depicted in red, the bulls will likely rise and test the 0.6623 resistance, backed up by the 38.2% Fibonacci level.

Conversely, the bullish scenario would be invalidated if the AUDUSD price falls below the ascending trendline, precisely the 0.6497 mark.​

 

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Aluminum Prices Dip Amid Global Demand Concerns​

Solid ECN - Aluminum prices dropped to around $2,200 per ton in February, the lowest in a month, due to growing negativity around the demand for metals worldwide. Recent reports from China, the leading buyer, show a weakening economy and lower consumer interest, affecting the expected purchases by major producers. The situation worsened as the UAE stepped in to help with the export of bauxite from Guinea following an explosion at a fuel tank, which posed risks to aluminum production logistics.

Meanwhile, the market is also looking at how new EU sanctions on Russian aluminum could affect its availability. These sanctions could expand the existing prohibitions on various aluminum products. However, the European Aluminium association mentioned that the current sanctions cover only 12% of the EU's aluminum imports, leading to calls for a wider ban.​

 

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Bitcoin’s Uptrend Momentum: A Market Analysis​

Solid ECN - The momentum of Bitcoin’s uptrend eased after it surged as high as $52,866. This digital gold has risen since January 20, while the RSI indicator has been hovering in the overbought area for a week now. Interestingly, sellers in the market have created a bearish, long-wick candlestick on the daily chart, which could signal an end or a pause in the bullish market.

Based on the data we’ve received for the candlestick patterns and the technical indicators, waiting for the BTCUSD price to end its consolidation phase before placing new bets on the bullish trend is recommended. The 23.6% Fibonacci retracement level, which aligns with the $49,000 support, could be a decent offering price.​