Market Update by Solidecn.com

[Solid ECN]

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.

[Solid ECN]

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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[Solid ECN]

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.

[Solid ECN]

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.

[Solid ECN]

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 was 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.

[Solid ECN]

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."

[Solid ECN]

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.

[Solid ECN]

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.

[Solid ECN]

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.