Forex Updates by Solid ECN

[Solid ECN]

USDCAD: the pair is down 2.3% from July highs

On July 13, the regulator raised the interest rate by 100 basis points to 2.5%. However, the markets expected conflicting inflation figures. According to macroeconomic statistics, CPI was recorded at 6.2% YoY, higher than the analysts' forecast of 5.9% and the previous value of 6.1%, but standard inflation slowed down in June. The indicator was lower than the forecast of 0.9% MoM and the May value of 1.4%, probably due to the seasonal factor and the adaptation of enterprises to the new conditions of monetary policy.

The long-term trend in the USDCAD pair remains upward. The key support for the trend is at 1.2835, and market participants tested it last Friday, which resulted in quotes rising to the 1.2938 area. Accordingly, for the upward dynamics to continue, buyers need to break through it. Otherwise, the USDCAD pair is expected to decline and renew the July low of 1.2835.

The mid-term trend changed to a downtrend last week. Traders broke through the key trend support 1.2996–1.2974. The sell target zone is 1.2777–1.2756. The key trend resistance is shifting to 1.3064–1.3042. If the participants overcome it within the correction, it will be possible to consider short positions with the first target at the last week's low.

Resistance levels: 1.2938, 1.3065, 1.3157 | Support levels: 1.2835, 1.2525

 

[Solid ECN]

AUDUSD - Inflation in Australia may accelerate

The AUDUSD pair started the week with an upward movement and is currently testing the level of 0.6958. However, consolidation above it seems less likely, as investors refrain from opening new trading positions, waiting for two key releases on Wednesday – the publication of inflation data in Australia and the decision of the US Federal Reserve on the interest rate.

Thus, Q2 CPI is likely to be poor: the indicator will consolidate around 6.1–6.3% YoY, which is twice the target of the Reserve Bank of Australia (2.0–3.0%) and thus will reach the high since 1990. Implementation of the forecast or its exceeding will confirm the fears of the head of the regulator, Philip Lowe, who recently stated that “psychological inflation” is forming in the country when consumers rush to spend available capital, expecting further price increases, which only exacerbates the negative dynamics, which, in turn, could push agency officials to accelerate the pace of interest rate adjustments to 75 basis percentage points, increasing the risks of the national economy going into recession.

The trading instrument is within the long-term downward channel, and now the price is testing 0.6958, consolidation above which will allow quotes to strengthen to the area of 0.708. Otherwise, the price decline will resume to 0.6835, 0.6713. Technical indicators do not give a single signal: Bollinger bands are horizontal, Stochastic is leaving the overbought zone, forming a sell signal, and the MACD histogram is preparing to move into the positive zone.

Resistance levels: 0.6958, 0.708 | Support levels: 0.6835, 0.6713, 0.6591

 

[Solid ECN]

AUDUSD, H4

On the four-hour chart, at 0.6860, there is the formation of the Three advancing white soldiers pattern, meaning buyers have seized the initiative and intend to restore positions. In turn, the appearance of the Three “bullish” steps pattern also signals the continuation of the upward dynamics, and the “bullish” Marubozu pattern indicates the predominance of “bullish” sentiment. In the current situation, the asset will most likely continue to recover to the resistance level of 0.7037, which will allow the quotes to head to the zone of 0.7191−0.7397. An alternative scenario is possible after the consolidation below the support level of 0.6860, and then the downward movement may intensify to 0.6437.

AUDUSD, D1

On the daily chart, a Falling wedge price pattern is being formed, from which the asset managed to break up, but its implementation has not yet been completed. The “bullish” mood for the instrument is also confirmed by a series of formed Three “bullish” steps figures, which serve as signals for the continuation of the uptrend. Most likely, the trading instrument will strengthen the upward dynamics to 0.7037, consolidation above which will become a catalyst for the movement of quotations to the area of 0.7191−0.7397.

Support levels: 0.686, 0.6686, 0.6437 | Resistance levels: 0.7037, 0.7191, 0.7397

 

[Solid ECN]

Gold - Investors turn to gold in anticipation of a US recession

Investors continue to monitor the economic situation in the US. Today, data on Q2 GDP will be presented, and preliminary estimates of experts have recorded a resumption of positive dynamics, reaching a value of 0.5% after falling by 1.6% in the previous period. However, since the publication of statistics for the first quarter, US Federal Reserve officials raised the interest rate by 1.50%, and inflation accelerated from 7.0% to 9.1%, which is completely contrary to positive forecasts. Traders are focused on the comments of US Treasury Secretary Janet Yellen, who will make a speech immediately after the release. Earlier, the official stated the need to reduce inflation, considering preserving a strong economy. While a recession is becoming inevitable, she says there are no signs of a downturn.

On the daily chart, the formation of a wide downwards channel with dynamic boundaries 1800.0–1650.0 continues, and now the price is growing towards the resistance line. Technical indicators weaken the sell signal: fast EMAs on the Alligator indicator are actively approaching the signal line, and the AO oscillator histogram, being in the sell zone, is forming new rising bars.

Support levels: 1717, 1681 | Resistance levels: 1752, 1808

 

[Solid ECN]

Crude Oil - A fall is possible

On the daily chart, the first wave of the higher level 1 of (1) of C formed, and a downward correction forms as the second wave 2 of (1) of C, within which the wave a of 2 develops. Now, the third wave of the lower level (iii) of a is developing, within which the wave iv of (iii) and the wave v of (iii) are forming.

If the assumption is correct, Crude Oil price will fall to the levels of 82.3 – 67. In this scenario, critical stop loss level is 103.55.

 

[Solid ECN]

ETHUSD - The decline may continue

This week, the ETHUSD pair is correcting downwards, losing the positions won last week, against the background of a possible slowdown in the pace of monetary policy tightening in the USA and the expectation of an early transition of the Ethereum network to the PoS proof algorithm.

Experts note that there is "fatigue" in the market from the constant news about the approaching merger of the Ethereum 1.0 and Ethereum 2.0 networks. Most investors have already put money in the purchase of ETH and are now waiting for an immediate update, which is scheduled for mid-September. Up to this point, observers do not rule out the continuation of the pair's decline or its consolidation.

In addition, the overall pressure on the market is exerted by monetary factors. Despite the possibility of reducing the pace of interest rate hikes, which was mentioned last week by the head of the US Fed Jerome Powell, the regulator will not give up tightening monetary policy to combat inflation and will spend it for a considerable time, strengthening the position of the US currency in relation to competitors.

The price has corrected to the area of 1570, but for further serious decline it will need to consolidate below the strong support level of 1500 (the middle line of the Bollinger Bands, Fibo retracement 23.6%). In this case, the reduction targets will be 1375 and 1250. The key for the "bulls" remains the level of 1750, the breakout of which will give the prospect of resuming growth to the levels of 1875 (, Fibo retracement 38.2%), 2000, and 2125.

Resistance levels: 1750, 1875, 2000, 2125 | Support levels: 1500, 1375, 1250

 

[Solid ECN]

USDJPY - The medium-term trend reversed downwards

The USDJPY pair moved to growth as a result of escalating geopolitical tensions between the US and China against the background of the visit of the Speaker of the House of Representatives, Nancy Pelosi, to Taiwan. Now the trading instrument is around 133.16.

Despite serious threats from the PRC, no one interfered with the landing of the official’s plane, but her arrival in the country caused sharp condemnation from the Chinese authorities, who announced the start of large-scale military exercises around the island in response. Pelosi visited Parliament and expressed hope for increased political and economic cooperation with Taipei. In turn, official Beijing reacted by imposing trade sanctions against Taiwan, which is especially dangerous given the current crisis: in particular, the import of citrus fruits and two types of fish products, as well as the supply of sand, will be stopped. In the face of political tension, investors traditionally avoid risky assets and prefer to buy the US dollar and gold.

The USDJPY pair rebounded from the key long-term uptrend support at 131.40, and the likely upward target is now the 50% Fibonacci retracement level (134.87) superimposed on July downside momentum. If it is held, the negative dynamics will continue in August, but in case of the breakout, buyers will target 137.18.

The medium-term trend reversed downwards last week, and as a result of the fall, the target zone 2 (131.33–130.95) was reached, from where an upward correction is now developing, the target of which is to test the key trend resistance 134.64–134.24, after which new short positions can be considered with the target at the low of the current week.

Resistance levels: 134.87, 137.18 | Support levels: 131.40, 126.49

 

[Solid ECN]

USDJPY - The pair is in a correction, a fall is possible.

On the daily chart, the first wave of the higher level (1) develops, within which the wave 3 of (1) forms. Now, the third wave of the lower level iii of 3 has ended, and a downward correction is forming as the fourth wave iv of 3, within which the wave (a) of iv has formed.

If the assumption is correct, after the correction (b) of iv the USDJPY pair will fall to the levels of 127.06–123.5. In this scenario, critical stop loss level is 139.39.

 

[Jotase]

ETHUSD - The decline may continue

This week, the ETHUSD pair is correcting downwards, losing the positions won last week, against the background of a possible slowdown in the pace of monetary policy tightening in the USA and the expectation of an early transition of the Ethereum network to the PoS proof algorithm.

Experts note that there is "fatigue" in the market from the constant news about the approaching merger of the Ethereum 1.0 and Ethereum 2.0 networks. Most investors have already put money in the purchase of ETH and are now waiting for an immediate update, which is scheduled for mid-September. Up to this point, observers do not rule out the continuation of the pair's decline or its consolidation.

In addition, the overall pressure on the market is exerted by monetary factors. Despite the possibility of reducing the pace of interest rate hikes, which was mentioned last week by the head of the US Fed Jerome Powell, the regulator will not give up tightening monetary policy to combat inflation and will spend it for a considerable time, strengthening the position of the US currency in relation to competitors.

The price has corrected to the area of 1570, but for further serious decline it will need to consolidate below the strong support level of 1500 (the middle line of the Bollinger Bands, Fibo retracement 23.6%). In this case, the reduction targets will be 1375 and 1250. The key for the "bulls" remains the level of 1750, the breakout of which will give the prospect of resuming growth to the levels of 1875 (, Fibo retracement 38.2%), 2000, and 2125.

Resistance levels: 1750, 1875, 2000, 2125 | Support levels: 1500, 1375, 1250

You guys post analysis after the market is moved to the required numbers. You should give updates at least 2 days in advance and not when the market is already in the movement. Its just you guys are copy and paste somebody else updates.

 

[Solid ECN]

EURUSD - Growth is possible.

On the daily chart, a downward correction of the higher level developed as the wave (B), within which the wave C of (B) formed, and the upward wave (C) started. Now, the entry first wave of the lower level (i) of i of 1 of (C) is forming, within which the wave iii of (i) is forming.

If the assumption is correct, the EURUSD pair will grow to the levels of 1.0612 – 1.0787. In this scenario, critical stop loss level is 1.0082.

 

[Solid ECN]

USDCHF - Technical analysis

H4
On the four-hour chart, there is the formation of a Three Black Crows candlestick analysis pattern, which means a continuation of the downtrend and emphasizes the unstable position of the "bulls". At the moment, above the support level of 0.9396, a Bearish Engulfing Pattern has formed, which signals about increasing sales volumes. If the "bulls" fail to hold it, one should expect an increased downtrend up to the level of 0.9227. An alternative scenario is possible if buyers overcome the resistance level of 0.9496 with further recovery of positions in the zone of 0.9619–0.9728.

D1
The daily chart shows the formation of a Bear Flag price pattern, from which the price broke down. In addition, the negative trend is accompanied by the formation of a long red candle, the "bearish" Marubozu, which emphasizes the strength of sellers. In the current situation, the "bearish" trend is expected to continue and the price pattern to end at the level of 0.9227. The turning point for the "bulls" may be an impulse breakdown of the level of 0.9496.

Support levels: 0.9396, 0.9307, 0.9227 | Resistance levels: 0.9496, 0.9619, 0.9728

 

[Solid ECN]

DAX 30 - German stock market continues its local growth

The day before, financial data were presented by the chemical-industrial group Henkel AG & Co. KGaA, having posted quarterly revenue of 5.64 billion euros, which exceeded the 5.36 billion euros expected by analysts. The EPS was 0.9126 euros, while the forecast was at the level of 0.8813 euros. In turn, one of the largest German food delivery services HelloFresh SE reported income of 1.96 billion euros, which was better than the projected 1.9 billion euros. The EPS figure also beat expectations, amounting to 0.35 euros per share. Finally, HelloFresh SE's main competitor, Delivery Hero SE, reaffirmed its financial targets for 2022, saying it expects turnover growth of around 7% in the third quarter.

On the weekly chart of the asset, the price continues to attempt to consolidate in the uptrend, approaching the resistance line of the downward channel. Technical indicators have already reversed towards growth and issued a buy signal: the fast EMAs of the Alligator indicator are way above the signal line, and the histogram of the AO oscillator, having moved to the buy zone, is forming ascending bars.

Support levels: 13533, 12530 | Resistance levels: 14260, 15070​

 

[Solid ECN]

Chart of the Day - EURUSD​

EURUSD is pulling back this morning. The move lower is driven mostly by strengthening of the US dollar. The main currency pair tried to recover some losses after the release of mixed PMIs for France and Germany that showed major improvement in the services sector and significant deterioration in manufacturing. While flash PMIs failed to trigger a strong recovery move, they seem to have been enough to halt declines.

Taking a look at EURUSD at the H1 interval, we can see that the pair dropped to the 1.0940 area, where the short-term upward trendline can be found. Bulls managed to defend this price zone and now we can see the pair trying to climb back above 1.0950. From a technical point of view, this is a bullish development but whether this translates into a large upward impulse will depend on whether bulls manage to break above the 1.0980 resistance zone that has been limiting upward moves this week. Should such a break occur, EUR bulls may target recent highs in the 1.1070 area next.

The pair may see some volatility around 2:45 pm BST when flash PMIs from the United States for April are released. Market expects a small deterioration in both manufacturing and services.​

 

[Solid ECN]

JPY Recovers losses ahead of upcoming BOJ meeting​

Japanese central bankers will meet this week to decide on monetary policy (Friday). This will be the first meeting under new Bank of Japan governor Ueda. There was some hope in the markets that change at BoJ helm will result in change in BoJ policy. However, Ueda so far has been hinting at continuation of the ultra-loose policy of his predecessor, at least for now. On the other hand, Sankei reports that the central bank may review and assess the past 10 years of monetary policy. One cannot rule out that even in spite of lack of change in policy or statement, assessment alone may offer some guidance. JPY is recovering some of its recent losses as the meeting draws closer.

USDJPY is trading higher today, due to USD strength, but has lost some ground after the Sankei news report. USDJPY continues to trade in an uptrend started at the end of March but has run into resistance in the 135.00 area.​

 

[Solid ECN]

BTC​

Recently, many events have overlapped and influenced the prevailing sentiment on the cryptocurrency market.

On the one hand, we observe weakening bulls on the broader financial market after high index results in the first quarter of this year. Investors are trying to price in new quarterly reports published by the largest technology companies in the US and deteriorating macroeconomic data, which are starting to forecast the upcoming recession on the financial markets.

On the other hand, a lot has happened in the crypto market space. The recent hearing of SEC chairman Gary Gancler did not bring any new news. The SEC chairman continued his narrative without any explanation that all cryptocurrencies except BTC should be considered security - despite many questions from Congress Representatives.

Another wave of declines came today after the news about Coinbase suing the SEC. According to the information provided, Coinbase has taken legal action in a US federal court to force the country's securities regulator to give a definitive response to a petition it submitted in July. The petition sought clearer regulatory guidelines for the cryptocurrency industry in the US.

On the 4-hour timeframe, the BTC price continued to consolidate below $28,000, with the largest cryptocurrency by market capitalization trading at around $27,240, down 0.55% in the past 24 hours. BTC has already dropped by 13% from its recent highs of $31000. The price broke through the key support level around $28,600, indicating a bearish trend in the short term. Currently, the price is at the equilibrium level of the last consolidation range, indicating that the market is in a state of indecision. However, further price action downwards is expected, with the next resistance level likely to be at $26,650. This level acted as a support in the past. Overall, the short-term trend for Bitcoin appears bearish and traders should exercise caution when taking long positions. It is essential to keep an eye on any major news events or developments in the cryptocurrency space that may impact the price of Bitcoin.​

 

[Solid ECN]

Oil​

Oil continues to trade near but has not yet managed to close a bullish price gap, triggered by an unexpected OPEC+ output cut announcement. A bearish sentiment can be spotted on the crude market since mid-April and is trading less than $1 per barrel away from closing a bullish gap. Taking a look at OIL.WTI at the D1 interval from a technical point of view, we can see that downward move accelerated after the price failed to break above $82 resistance. According to the Overbalance methodology, this hints that the long-term trend remains bearish. Moreover, price dropped back below 100-period EMA, what further supports the bearish outlook.

Taking a look at WTI at a lower interval (H1), we can see that price tested a recently-broken support as a resistance and, after a failure to break above it, downward move was resumed. Currently, we are observing OIL.WTI testing recent local lows in the $76.85 per barrel area and should we see a break below this zone, the way towards $75.50 - lower limit of bullish price gap - will be left open.

 

[Solid ECN]

Bitcoin​

Bitcoin chart, D1 interval and US500 (yellow chart). Bitcoin again showed a negative correlation with the S&P500 and started an upward movement when US500 contracts weakened, influenced by weakness in the banking sector. The RSI indicator is still at relatively neutral levels indicating that the bulls still have plenty of room to possibly continue their attack. The first significant resistance level appears to be around $30,000 - $31,000, last seen in early summer 2022. The bulls has defended the bullish momentum at 23,6 Fibonacci retracement.

 

[Solid ECN]

EURUSD​

EURUSD saw a fairly dramatic reversal late in 2022 when it turned out that the energy crisis in Europe was softer than feared. The pair was trading close to 0.95 at the end of September but has rallied all the way to 1.10 since then. Could it be primed for a larger correction?

When looking at the D1 interval one can spot a nearly completed 5- wave structure. The current wave runs along the upwards corridor and while we saw 2023 highs last week, the pair currently tests the lower limit of the channel. A breakout lower could therefore result not just in profit taking but possibly in a larger ABC corrective structure. One should be vigilant for a larger move amid reduced volatility during the Labour Day.

A breakout lower – should it occur – could be a warning signal for other markets as well as the EURUSD rally accompanied gains on other risk-on markets, especially European equities. With DE30 at the highest since January 2022 and not too far off ATH the stakes are high. Should the pair break lower out of the channel, a larger corrective structure could be initiated.​

 

[Solid ECN]

EURUSD in Breakout Mode​

• The EUR/USD continues to go sideways in a tight trading range holding above the moving average (blue line).​
• The market is still Always In Long. However, the past five trading days have had a lot of overlapping bars. This increases the risk of more trading range price action.​
• The bulls want the tight bull channel to continue up, and the bears want a downside breakout and test of prior lower highs, such as April 17th.​
• The bears need to get a close below the moving average. Without it, traders will continue to buy at the moving average, betting it will act as support.​
• At the moment, the odds are that the bull channel that began in March will convert into a trading range and test prior lower highs. However, without a downside breakout, the market will probably have to go sideways and develop more selling pressure.​

 

[Solid ECN]

Gold confirms the breach​

Gold prices confirmed breaching the symmetrical triangle’s resistance line and settled with a daily close above it, to resume the main bullish track and head towards achieving positive targets that start by testing the recently recorded high at 2048.70, supported by moving above the EMA50.

Therefore, we are waiting for more expected rise in the upcoming sessions, and the price needs to hold above 1992.20 to guarantee the continuation of the bullish wave, as breaking this level will press on the price to return to the correctional bearish trend again and open the way to visit 1957.30 areas on the near term basis.​