Solid ECN | Professional Market Analysis | *Video*

[SOLIDECN]

NZDUSD Breaks the Support

The NZDUSD pair faced negative pressure to break 0.6240 and settles below it, which pushes the price to achieve more expected decline in the upcoming sessions, targeting visiting 0.6100 areas mainly.

Therefore, the bearish bias will be suggested for today, noting that breaching 0.6240 and holding above it again will reactivate the positive scenario that its first target located at 0.6315.

The expected trading range for today is between 0.6150 support and 0.6260 resistance, and the expected trend for today is Bearish.​

 

[SOLIDECN]

USDCAD - the pair is preparing for the strengthening of the downward dynamics

According to the latest survey, the situation of small and medium-sized enterprises in the third quarter improved markedly: 23.5% of enterprises expect difficulties in acquiring resources, and not 26.8%, as it was before, against the backdrop of a decline in inflation to 6.9% from a peak of 8.1%, only 32.4% of organizations expect a new price increase, which is lower than 34.0% in the previous period; and 34.4% predict a decline in profitability, up from the previous 35.9%. Overall, 29.8% of businesses said they still have problems maintaining inventory levels or purchasing, which is lower than the previous estimate but still quite a lot.

On the daily chart, the asset again approached the Neckline of the previously implemented Head and shoulders pattern to test it. The EMA fluctuation range on the Alligator indicator remains downwards, increasing the likelihood of the trend continuing, and the AO oscillator histogram forms bars in the sell zone.

Resistance levels: 1.35, 1.363 | Support levels: 1.3335, 1.3223​

 

[SOLIDECN]

ASX 200 - Australian stock market continues its uptrend

Thus, the largest Australian financial conglomerate Commonwealth Bank of Australia today will present financial results for the third quarter, from which analysts expect a significant increase in revenue in the area of 12.02 billion Australian dollars, and the diversified company Wesfarmers Ltd., according to preliminary estimates, will record revenue at the level of 6.97 billion Australian dollars, up from 7.05 billion Australian dollars a quarter earlier. Earnings per share are projected in the region of 1.0 dollar, in line with the previous quarter.

On the daily chart of the asset, the price is trading within the global side channel, having reached the resistance line the day before, and the technical indicators keep a stable buy signal.

Support levels: 7170, 7000 | Resistance levels: 7280, 7440​

 

[SOLIDECN]

BTCUSD - decline may continue

Like the rest of the cryptocurrency market, the BTC coin is experiencing the consequences of the bankruptcy of the FTX exchange, which risks causing a “domino effect” and leading to significant losses for other large companies in the digital sector. Currently, a direct consequence of this event is the loss of funds by millions of creditors and the financial problems of more than a dozen cryptocurrency platforms, including Galaxy Digital, Sequoia Capital, BlockFi, Crypto.com, and others. Investors are most wary of the current situation with a subsidiary of the Digital Currency Group: Genesis Global Capital offered investors to issue loans in cryptocurrencies at a high interest rate. This service was also used by the FTX exchange, secured by its own FTT token, and after its closure, the Digital Currency Group experienced a liquidity deficit of 1.0B dollars, which has not yet been closed. According to experts, the bankruptcy of the Digital Currency Group could have even more significant consequences for the cryptocurrency industry than the fall of FTX, as many digital enterprises will be deprived of the opportunity to raise additional capital. Community members understand this danger and are creating a fund under the auspices of the Binance exchange to support companies affected by the crisis. The total amount of funds allocated for this may reach several billion dollars, but whether they will help stabilize the market is still unknown.

Resistance levels: 17500, 19100, 20000 | Support levels: 15700, 15000, 13750​

 

[SOLIDECN]

GBPJPY tends to postpone the rise

The GBPJPY pair surrendered to stochastic negativity by forming new negative wave and press on the additional support 166.80 after failing to surpass 168.20 barrier. We will start suggesting the correctional bearish attempts that might target 165.90 followed by reaching the moving average 55 at 164.50, while surpassing the mentioned barrier will cancel the negative overview and allows us to wait to record many gains by moving towards 169.40 and 170.20.

The expected trading range for today is between 167.35 and 165.9, and the expected trend for today is Bearish.​

 

[SOLIDECN]

USDCHF Technical Analysis

The USDCHF pair fluctuates with calm positivity to approach 0.9500 barrier, noticing that the EMA50 forms continuous negative pressure against the price, to support he continuation of the expected bearish trend for the upcoming period, which its next targets located at 0.9355 followed by 0.93. Therefore, we will continue to suggest the bearish trend on the intraday basis unless breaching 0.9540 and holding with a daily close above it.

The expected trading range for today is between 0.9390 support and 0.9520 resistance, and the expected trend for today is Bearish.​

 

[SOLIDECN]

Crude Oil - EU countries again did not agree on the maximum price level for oil from Russia

Representatives of the EU countries could not agree on the limitation of prices for Russian oil. According to one of the diplomats, the reason was the position of the representatives of the Polish delegation, which again refused to agree, demanding a significant reduction in the price ceiling from the current offer of 65.0–70.0 dollars per barrel since now this limit does not hinder exports in any way and will not significantly pressure on the Russian budget. Also, according to yesterday's data, the cost of a barrel of Urals oil was 51.96 dollars. As for the deal itself, the market has less and less confidence that all participating countries will finally accept it in the EU before December 5, when the restrictions provided for by the eighth package of sanctions, including the embargo on the supply of "black gold" from the Russian Federation by sea, will come into force.

On the daily chart of the asset, the trading instrument is moving within the downward corridor, approaching the resistance line, and the technical indicators maintain a stable sell signal, which does not rule out a local correction.

Resistance levels: 88.20, 95 | Support levels: 82.80, 77.5​

 

[SOLIDECN]

NZDUSD -Quotes remain within the downward channel

Thus, according to the report of Statistics New Zealand (Stats.nz), employment in the main sectors of the economy in October adjusted to 2.32M jobs, but the decrease in the indicator in the primary sectors was 1.7%, in the commodity-producing sector, growth reached 0.6%, while the service sector showed no change. Regarding age groups, the largest increase in the value was observed in the category of 15–19 years old, which added 18.5%, and the maximum outflow of workers was in the category of 25–29 years old, which amounted to –3.3%. Considering that the first category includes mainly part-time jobs, the increase in this category had little effect on economic activity. The situation in the asset may change tomorrow when the data on building permits is published, the positive dynamics of which reached 3.8% last month.

The trading instrument moves within the downward channel on the daily chart, steadily near the resistance line. Technical indicators maintain a stable buy signal, working out a slight correction.

Resistance levels: 0.6265, 0.6467 | Support levels: 0.61, 0.5878​

 

[SOLIDECN]

Euro resumes gains on European interest rate prospects

Euro rose in European trade today, resuming the gains against dollar after a two-day hiatus on profit-taking from five-month highs back then, with current gains coming amid estimates of a 0.75% rate hike by the ECB next month. The greenback fell amid improving risk appetite in the market while demand on safe havens slow down, with investors expecting China to control the ongoing protest in China quickly.

EURUSD rose over 0.5% to 1.0394, after falling 0.55% yesterday, the second loss in a row on profit-taking, after hitting five-month highs earlier at 1.0496.

European Rates

Now markets almost fully expect the ECB to increase interest rates by 75 basis points in December instead of 50 basis points, following bullish remarks by ECB President Christine Lagarde. Investors await important European inflation data tomorrow for November to gauge final chances for a 0.75% rate hike by the ECB.


The Dollar

The dollar index fell 0.5% on Tuesday, resuming losses after a two-day advance from three-month lows back then at 105.22 against a basket of major rivals. The greenback recouped recently following some bullish remarks by a few Fed officials that showed the Fed might still be aggressive in its policy tightening efforts. Fed Saint Louis President James Bullard said the ECB needs to raise interest rates by a bit more, while New York Fed President John Williams said the Fed needs to carry on its path of rate hikes.

The dollar fell today as risk appetite improved in the markets, while Asian stocks advanced, led by Chinese stocks, hurting demand on safe haven. Investors now mostly expect Chinese authorities to control ongoing protests and alleviate some of the strict Covid 19 restrictions.​

 

[SOLIDECN]

EURUSD - Downside surprise in German inflation data Coming?​

German CPI inflation data for November is a key European macro reading of the day. Data for the whole of Germany will be released at 1:00 pm GMT and median consensus point to headline price growth remaining unchanged at 10.4% YoY. However, those expectations may be outdated following the release of state-level CPI data from Europe's largest economy. All 6 state-level readings that were already released showed a deceleration in consumer price growth in November. This is a strong hint that German reading at 1:00 pm GMT will not show inflation remaining unchanged and will instead surprise to the downside.
​

German state-level CPI readings for November​

• North Rhine Westphalia: 10.4% YoY vs 11.0% YoY previously​
• Hesse: 9.7% YoY vs 9.9% YoY previously​
• Baden Wuerttemberg: 9.6% YoY vs 9.8% YoY previously​
• Bavaria: 10.9% YoY vs 11.0% YoY previously​
• Brandenburg: 10.5% YoY vs 10.8% YoY previously​
• Saxony: 9.9% YoY vs 10.1% YoY previously​

It should be also noted that Spain CPI reading for November, released today at 8:00 am GMT, also surprised to the downside and decelerated from 7.3% to 6.6% YoY (exp. 7.5% YoY). If inflation in Germany slows as well, ECB could have more reasons to slow the pace of tightening to 50 bp rate hike in December, down from 75 bp rate hikes delivered at two previous meetings.

EURUSD is rather unimpressed by deceleration in German state-level inflation data. The pair continues to trade in between 50- and 200-hour moving averages, awaiting a catalyst for a break.​

 

[SOLIDECN]

USDCAD Begins Bearish Wave

The USDCAD pair touched the key resistance 1.3500 and consolidated below it, to start providing negative trades by today’s open, which encourages us to suggest building bearish wave on the intraday basis, targeting testing 1.3350 initially.

Therefore, the bearish bias will be suggested for today unless breaching 1.3500 and holding above it, noting that breaking the targeted level will extend the bearish wave to reach 1.3205 areas as a next main station.

The expected trading range for today is between 1.3360 support and 1.3500 resistance, and the expected trend for today is Bearish.​

 

[SOLIDECN]

EURUSD needs strong positive motive

The EURUSD pair shows some slight bearish bias to test the EMA50, while stochastic continues to move within the oversold areas, waiting to motivate the price to resume the expected bullish trend for the upcoming period, which targets testing 1.0515 as a next main station. On the other hand, we should note that breaking 1.0285 and holding below it will stop the expected rise and press on the price to turn to decline and achieve negative targets that start at 1.02 and extend to 1.0.

The expected trading range for today is between 1.0285 support and 1.0450 resistance, and the expected trend for today is Bullish.​

 

[SOLIDECN]

GBPUSD awaits the breach

The GBPUSD pair trades within minor bearish channel that appears on the chart, and we believe it forms bullish flag pattern, as the price needs to breach 1.1995 to activate the positive effect of this pattern followed by rallying to resume the main bullish trend, which targets 1.2080 followed by 1.2200 levels as next main stations. Therefore, we will continue to suggest the bullish trend for the upcoming period unless breaking 1.1950 and holding below it.

The expected trading range for today is between 1.1920 support and 1.2090 resistance, and the expected trend for today is Bullish.​

 

[SOLIDECN]

Crude Oil - Trades near the year’s low

The key factor determining the direction of dynamics in the oil market remains the discussion of the maximum price level for Russian oil, which has not yet been agreed upon. Despite additional negotiations and consultations, the Baltic countries and Poland strongly oppose the introduction of a limit of 65.0–70.0 dollars per barrel, insisting on a range of 30.0–40.0 dollars per barrel. The desire of the leading European countries to set a limit is natural since, despite public statements about the refusal to purchase Russian energy resources, it is virtually impossible to do without them, and the high cost will allow them to hope that official Moscow will continue to supply energy resources further. However, yesterday, Deputy Prime Minister of the Russian Federation Alexander Novak denied this assumption, saying that the government would stop cooperating with countries that supported the new pricing mechanism and intended to work only on market conditions while not ruling out a possible reduction in oil production if the offer exceeded demand. The head of the International Energy Agency, Fatih Birol, also pointed to the fall in oil production in Russia and suggested that in the first quarter of 2023 it could reach –2.0M barrels per day.



On the daily chart of the asset, the instrument is moving around the year’s low of 76.00, slightly correcting upwards, and the technical indicators confirm the likelihood of a local correction, weakening the sell signal.

Resistance levels: 81, 86.6 | Support levels: 77.35, 73.65​

 

[SOLIDECN]

Nasdaq 100 - The US stock market is correcting down again

At the beginning of the week, the US market traded with low volatility, but the situation began to change after a number of officials from the regional Federal Reserve Banks (FRB) spoke about the current monetary policy. Thus, the Chair of the St. Louis Fed, James Bullard, noted that the US Federal Reserve needs to keep the interest rate above 5.0% throughout the next year, and possibly even several quarters of 2024, in order to have a significant impact on inflation. This opinion was shared by the Chair of the Fed of New York, John Williams, who noted that the regulator will continue the policy of aggressively increasing the indicator and will keep it at a high level throughout the next year.

On the daily chart, the index quotes continue to trade within the local rising channel, and the technical indicators are about to reverse and give a sell signal.

Support levels: 11330, 10665 | Resistance levels: 11900, 12553​

 

[SOLIDECN]

Gold price surpasses the first target

Gold price succeeded to surpass our first positive target at 1765.00 to confirm the continuation of the bullish wave on the intraday and short term basis, and the way is open to achieve our next target at 1786.50, and we suggest the continuation of the bullish bias to breach this level and achieve additional gains that reach 1812.00 areas.

Therefore, the bullish trend will remain valid for the upcoming period, supported by the EMA50 that carries the price from below, noting that the continuation of the bullish wave requires holding above 1765.00 and the most important above 1746.40.

The expected trading range for today is between 1760.00 support and 1795.00 resistance, and the expected trend for today is Bullish.​

 

[SOLIDECN]

NZDUSD Surpasses the Target

The NZDUSD pair rallied upwards strongly to succeed breaching 0.6240 and achieve our waited positive target at 0.6300, waiting for more expected rise in the upcoming period, and the way is open to head towards 0.6400 barrier as a next positive station. Therefore, the bullish wave will remain dominant in the upcoming sessions unless breaking 0.6240 and holding below it.

The expected trading range for today is between 0.6280 support and 0.6400 resistance, and the expected trend for today is Bullish.​

 

[SOLIDECN]

Chart of the Day - US30 - 01.12.2022

Fed Chair Jerome Powell said yesterday that it would make sense to moderate the pace of policy tightening in the light of recent macroeconomic data. He said that economic momentum has decelerated below trend but such a situation would need to last for inflation to come down. As price growth in the US economy remains elevated, Powell sees need for further rate hikes but his comment on moderation of the pace made markets believe that 50 bp rate hike is now the base case scenario for December meeting (December 14, 2022). Money markets now price in less around 2% chance of a rate hike bigger than 50 bp rate hike, down from 15% prior to Powell's speech.

Stock markets rallied as Powell hit the dovish note, pushing Nasdaq-100 (US100) over 4% higher yesterday. While the tech index saw the biggest reaction to Powell's speech, it should be noted that it is Dow Jones that has been the top performing Wall Street index as of late. Dow Jones (US30) jumped 20% off the October low, compared to an around-15% rebound for other three major indices (Nasdaq, S&P 500 and Russell 2000).

Taking a look at US30 chart at D1 interval, we can see that the index jumped above recent local high and reached the highest level since late-April 2022, a 7-month high! A small pullback can be observed today. Should bulls regain control and push the index higher again, the first major resistance zone to watch can be found in the ranging around 78.6% retracement of the downward move started in January 2022 (35,100 pts area).​

 

[SOLIDECN]

DAX 40 - Correction in the bond market supports the index

After the release of extremely weak statistics on the labor market, corporate news receded into the background. The number of unemployed in Germany in November increased by 17.0 thousand after an increase of 9.0 thousand in the previous month, while analysts expected an increase of 13.0 thousand. In turn, the overall Unemployment Rate in the country corrected to 5.6% from 5.5% a month earlier. The constant increase in the number of unemployed citizens has been going on since May, which is an extremely negative signal for the country's economy.

On the daily chart of the asset, the price is trading well above the descending channel resistance line, reaching highs in the late spring of this year, and the technical indicators maintain a steady buy signal.

Support levels: 14260, 13430 | Resistance levels: 14830, 15540​

 

[SOLIDECN]

USDJPY - the US dollar continues to lose ground

Japan's industrial output lost 2.6% in October after falling 1.7% a month earlier, but the Economy Ministry forecasted an upward correction of 3.3% in November and a slowdown to 2.4% in December. Against this background, Manufacturing PMI also showed a negative trend to 49.0 points from 49.4 points earlier. Tomorrow, the national currency may receive the necessary support, as the speech of the Bank of Japan Governor Haruhiko Kuroda is expected, within the framework of which the next plans to support the yen exchange rate may be announced.

On the daily chart of the asset, the trading instrument is moving below the global ascending corridor, dropping to the lows of July, and the technical indicators maintain a stable sell signal.

Resistance levels: 138.7, 142.1 | Support levels: 135.5, 130.8​