Market Update by Solidecn.com

[Solid ECN]

Economic Calendar: Holidays in US and Canada Thin out Liquidity

Diplomats was far from encouraging and it should deteriorate sentiment rather than improve it.

Economic calendar for today is light with only some second-tier data being scheduled for release during the European trading hours. A point to note is that US traders will be off today to observe Presidents Day. On top of that, traders from Canada will also be off to observe Family Day holiday. As a result, liquidity conditions in the afternoon are expected to be much thinner (changes to trading hours listed below). AUD may see some action this evening and the coming Asian session, thanks to scheduled releases of flash PMI for February and RBA minutes.


9:00 am GMT - Poland, data pack for January.

• Industrial production. Expected: 4.2% YoY. Previous: 1.0% YoY
• Wage growth. Expected: 12.6% YoY. Previous: 10.3% YoY
• Employment. Expected: 1.8% YoY. Previous: 2.2% YoY

Overnight/Asian session

• Monday, 10:00 pm GMT - Australia, flash PMIs for February.
• Tuesday, 0:30 am GMT - RBA minutes
• Tuesday, 0:30 am GMT - Japan, flash manufacturing PMI for February

US holiday - trading hours changes

• No trading - BRAComp, CORN, SOYBEAN, WHEAT, SOYOIL, LEANHOGS, CATTLE, SUGAR, COCOA, COFFEE, COTTON
• Trading until 4:30 pm GMT - VIX
• Trading until 6:00 pm GMT - US30, US100, US500, US2000, USDIDX, TNOTE
• Trading until 7:15 pm GMT - PLATINUM, PALLADIUM
• Trading until 7:30 pm GMT - GOLD, SILVER, GASOLINE, OIL.WTI, NATGAS

[Solid ECN]

NZDUSD

• Indices from Asia-Pacific traded mostly higher at the beginning of a new week. Nikkei and S&P/ASX 200 traded 0.1% higher, Kospi added 0.2% and Nifty 50 dropped 0.1%. Indices from China traded up to 2% higher.
• DAX futures point to a higher opening of the European cash session today.
• US index futures trade little change compared to Friday's cash closing prices.
• US and Canadian traders are off for holidays today so liquidity conditions in the afternoon may be thinner.
• US Secretary of State Blinken said that US has information suggesting that China is considering providing Russia with ammunition and lethal weapons for war in Ukraine.
• Bloomberg reports that meeting between Blinken and his Chinese counterpart Wang Yi over the weekend was rocky and far from encouraging.
• People's Bank of China left 1- and 5-year prime lending rates unchanged at 3.65 and 4.30%, respectively. Decision was in-line with expectations.
• According to Reuters report, People's Bank of China has reportedly asked domestic bank to slow issuance of loans this month.
• North Korea fired two ballistic missiles today. UN Security Council will convene at 8:00 pm GMT today to discuss the situation.
• Cryptocurrencies are trading mixed today with major coins experiencing rather small moves. Bitcoin drops 0.2%, Ethereum trades 0.3% higher and Dogecoin adds 0.4%.
• Energy commodities trade mixed - oil gains 0.8-0.9% while natural gas pulls back around 2%.
• Precious metals benefit from USD weakening at the beginning of a new week - gold and silver gain around 0.1% each while platinum adds almost 0.5%.
• AUD and JPY are the best performing major currencies while CHF, EUR and USD lag the most.

NZDUSD bounced off the 0.62 support zone last week but failed to launch a major recovery move. There is a lot of uncertainty around NZD as RBNZ is set to announce rate decision this week (Wednesday, 1:00 am GMT) and some see a chance for rate hike cycle pause amid recent floods and cyclone hit.

[Solid ECN]

Tesla's 2023 Recall of Full Self-Driving Targets a 'Fundamental' Flaw

More than 360,000 vehicles will receive an over-the-air update after the US government said that Autopilot can be dangerous in some driving situations.

[Solid ECN]

NATGAS

US natural gas prices have been trading sideways since the beginning of February. Bulls attempted to break above the upper limit of the trading range in the 2.60 area on Tuesday but failed and a pullback was triggered. Price found support in the 2.43 area and an over-4% rally has taken place in the past few hours. The EIA report on natural gas inventories is released to watch for NATGAS traders today. It is expected to show much smaller inventory draw (-97 bcf) than in the previous week (-217 bcf). Such low expectations can be reasoned with the fact that the United States enjoyed relatively high temperatures. Moreover, the report will not yet capture the impact of Freeport LNG terminal resuming operations. Nevertheless, some short-term volatility is to be expected around release time.



Taking a look at NATGAS chart we can see that the price is currently trading near the midpoint of the trading range. Weather conditions are expected to deteriorate in the next 8-14 days with temperatures in key heating regions dropping. This combined with resumption of exports at Freeport LNG terminal may provide some upward pressure on NATGAS prices going forward.

[Solid ECN]

Crude Oil Technical Analysis

Crude oil price bounced upwards clearly after the negative attempts that it witnessed yesterday, as it kept its stability above 78.00, to surpass 78.90 level and settles above it now, which leads the price to resume the bullish bias, affected by the inverted head and shoulders’ pattern, which has positive targets that start at 81.60 and extend to 84.25.



Therefore, the bullish trend will be expected for the upcoming sessions, supported by the EMA50 that carries the price from below, being aware that breaking 78.00 will cancel the mentioned positive formation and press on the price to turn to decline, to head towards visiting 75.65 areas mainly.

[Solid ECN]

USDCHF Technical Analysis

The USDCHF pair provided new positive trades to test the key resistance 0.9250, showing bearish bias now to press on the EMA50, waiting to surpass this barrier to confirm the continuation of the expected bearish trend on the intraday basis, which its next targets located at 0.9120 followed by 0.9060.



Stochastic provides negative signals that we are waiting to support the continuation of the bearish bias in the upcoming sessions, reminding you that breaching 0.9250 will push the price to achieve additional gains and visit 0.9315 before detecting the next destination clearly.

[Solid ECN]

Gold Drops to Six-week Low Amid Stronger USD

Gold price dropped over 1.0% during today's session and is trading at levels not seen since early January as fresh US inflation figures bolstered bets that Fed will stick to its tightening path in order to bring down inflation. Also latest Fed commentary also showed that policymakers largely backed more rate increases, though Fed's Harker said the Fed was nearing the point where rates were restrictive enough. Markets now expect the Fed funds rate to peak around 5.26% in July from the current range of 4.5% to 4.75%. This puts pressure on precious metals, while the dollar strengthens across the board, with the most pronounced buying activity against the antipodean currencies. The yield on the US 10-year Treasury note, seen as a proxy for global borrowing costs, is moving towards 3.8%, a level not seen in more than a month. Traders now look ahead to US retail sales data on 1:30 pm GMT for more clues about the economy. Higher than expected reading would give Fed more reasons to continue on a hawkish path and put further pressure on bullion.

From a technical point of view, gold prices pull back sharply after buyers failed to break above major resistance at $1875. Price is currently approaching crucial support at $1830, which is marked with previous price reactions and 38.2% Fibonacci retracement of the upward wave started in March 2020. Should break lower occur, sell-off may accelerate towards psychological support at $1800.



Gold price dropped over 1.0% during today's session and is trading at levels not seen since early January as fresh US inflation figures bolstered bets that Fed will stick to its tightening path in order to bring down inflation. Also latest Fed commentary also showed that policymakers largely backed more rate increases, though Fed's Harker said the Fed was nearing the point where rates were restrictive enough. Markets now expect the Fed funds rate to peak around 5.26% in July from the current range of 4.5% to 4.75%. This puts pressure on precious metals, while the dollar strengthens across the board, with the most pronounced buying activity against the antipodean currencies. The yield on the US 10-year Treasury note, seen as a proxy for global borrowing costs, is moving towards 3.8%, a level not seen in more than a month. Traders now look ahead to US retail sales data on 1:30 pm GMT for more clues about the economy. Higher than expected reading would give Fed more reasons to continue on a hawkish path and put further pressure on bullion.

From a technical point of view, gold prices pull back sharply after buyers failed to break above major resistance at $1875. Price is currently approaching crucial support at $1830, which is marked with previous price reactions and 38.2% Fibonacci retracement of the upward wave started in March 2020. Should break lower occur, sell-off may accelerate towards psychological support at $1800.



US dollar strengthens across the board during today's session.

[Solid ECN]

AUDUSD consolidates below the resistance

The AUDUSD pair attempted to return to the main bullish channel but it consolidated below the resistance line formed at 0.7000 barrier, to start today with bearish bias and approach the key support 0.6925, waiting to break this level to confirm the continuation of the correctional bearish wave and head towards our negative targets that start at 0.6855 and extend to 0.6780.



The EMA50 forms negative pressure against the price to support the expectations to decline, besides stochastic that provides negative signals on the four hours’ time frame. Therefore, we are waiting for more expected decline in the upcoming sessions conditioned by the price stability below 0.7000. The expected trading range for today is between 0.6870 support and 0.7000 resistance

[Solid ECN]

AUDCAD Leans above the Additional Support

The AUDCAD pair lost the positive momentum, which forces it to form some of the bearish correctional rebound, to face the extra support at 0.9225 and settles above it, the continuation of the stability above this support besides providing positive momentum by stochastic exit from the oversold level, which will increase the chances for gathering positive momentum, to begin activating the bullish track by targeting 0.9345 level initially, then breaching the barrier near 0.9420.



while the price reach below the current support will force it to suffer extra losses by resuming the bearish correctional attempts, to expect reaching the critical support at 0.9130.

[Solid ECN]

GBPUSD Technical Analysis

The GBPUSD pair trades with clear positivity to start attacking 1.2190 level, to hint the attempt to return to rise and stop the bearish correction that dominated the recent trades, and we prefer to stay neutral until the price confirms its situation according to the mentioned level followed by detecting its next destination clearly.



Note that confirming the beach will push the price to achieve gains that start at 1.2300 and extend to 1.2440, while consolidating below it will press on the price to decline again and test 1.1940 level as a first main station. The expected trading range for today is between 1.2100 support and 1.2250 resistance.