Market Update by Solidecn.com

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Bitcoin

Recently, we observed a notable event in the BTCUSD market trends. The BTCUSD broke out of the bearish channel, surpassing the $27,237 pivot with a strong bullish candle in the 4-hour chart. As of now, it’s testing the $27,952 resistance, indicating a potential shift in market dynamics.

Our BTCUSD Analysis wouldn’t be complete without examining the technical indicators. Upon scrutinizing the BTCUSD 4-hour chart, we noticed a divergence in the Relative Strength Index (RSI) indicator. Both the RSI and the stochastic oscillator are hovering in the over-bought zone. This observation is crucial as it often signals a potential reversal in market trends.



Given the current state of overbought conditions, our BTCUSD Analysis suggests a cool down in the bullish momentum. It’s likely that the bears will step in to correct the recent rise of BTCUSD. This correction phase is a common occurrence in financial markets after a significant price increase and is often seen as a healthy sign for long-term market stability.

We anticipate that BTCUSD might test the Ichimoku cloud before further rise. The Ichimoku cloud is a collection of technical indicators that show levels of support and resistance, as well as momentum and trend direction. It’s an essential tool in our BTCUSD Analysis toolkit.

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USDSEK Analysis: The Ultimate Guide to October 2023

The pair recently broke above the 10.84 resistance level, a significant milestone in its upward trajectory. This break was tested when the Stochastic oscillator signaled that the USDSEK might be overbought. However, with the RSI indicator remaining above the 50 level and far from the overbought area, it suggests a decent bid for buyers at the 10.84 support level.



To further confirm this scenario, we’ve zoomed into the USDSEK 4H chart. Despite attempts by the bulls to break out of the bearish channel, the USDSEK price has returned inside the channel. In this USDSEK analysis, we recommend traders to exercise patience at this level. Although the currency pair’s main trend is bullish in the weekly chart, it’s currently in a declining channel in the 4H chart.



If the bears manage to close below the blue bullish channel, we anticipate that the USDSEK price will decline to the middle line of the 4H bearish channel (shown in black), followed by reaching the 10.77 support level. On the other hand, if the bulls on the USDSEK manage to break out of the blue bullish channel in the 4H chart, we predict that the price of the pair would surge towards a target of 11.123.

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USDINDEX

In the wake of the escalating conflict in the Middle East, secure assets like gold and the US Dollar have seen a significant rise.

The intensifying conflict in the Middle East has led to a notable increase in the value of secure assets such as gold and the US Dollar. The situation on the Israel-Lebanon border has worsened, resulting in over 2,000 civilian casualties in the Gaza Strip. In an attempt to alleviate the situation, the US has initiated covert negotiations with Iran. However, the possibility of a direct clash between Israel and Iran, a major backer of Hamas, is causing alarm. In tandem with these US-Iran discussions, oil prices have skyrocketed due to fears of impending oil sanctions. According to Bloomberg Economists, this situation could drive oil prices up to $150, potentially pushing the global economy into a recession.



The US Dollar is maintaining its upward trajectory, driven by strong inflation figures from the US. The rising geopolitical unrest in the Middle East has also strengthened the appeal of the greenback as a preferred safe-haven asset. Although the Dollar’s overall trend is subject to potential swings, the forthcoming speech by Fed Chairman Jerome Powell is a significant event to watch.

Currently, the Dollar Index is experiencing an uptrend while it tests the resistance level. However, the MACD indicates a decrease in bullish momentum, and with the RSI at 59, it suggests that the index may undergo a technical correction as the RSI has sharply withdrawn from overbought conditions.

Resistance levels: 106.60, 107.15.
Support levels: 105.65, 104.80.

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USDJPY: Temporary Pause, but Uptrend Persists

The USDJPY rally has recently hit a pause as it lingers near the firm resistance at the psychological level of 150, not too distant from the 2022 peak of 152. Nonetheless, there is no clear indication of a reversal in the ongoing uptrend. The price action for this month, thus far, can best be described as moving sideways, with the lower boundary finding support around the 200-period moving average, near the early-October low of 147.35.




Considering that USDJPY is currently within the intervention zone observed last year, breaking through the 150.00-152.00 range could be a challenging endeavor. This challenge is further accentuated by the views of some Federal Reserve officials who have suggested that interest rates may have peaked. For a more comprehensive understanding of the fundamental outlook, refer to the article "Japanese Yen Aided by Fed Pause View, Geopolitics; USDJPY, GBPJPY, AUDJPY," which was published on October 11. On the flip side, a drop below the 147.00-147.50 range would confirm a fading of the broader upward pressure. Such a decline could potentially pave the way towards the early-September low of 144.50.

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Frax's New Product sFRAX: A Game Changer in Decentralized Finance

Frax, a decentralized finance protocol, has introduced a new product called sFRAX. This product allows holders of Frax's stablecoin, FRAX, to earn interest at a rate similar to the U.S. Federal Reserve's interest rate on reserve balances, which is currently around 5.4%. The product started with an annual percentage yield (APY) of 10%, but it will eventually match the Federal Reserve's rate.

Since its launch, over 150 users have invested more than $35 million in sFRAX. This has caused the price of Frax's governance token, FXS, to increase by 7% to $5.66, although it has since dropped slightly to $5.49.

Meanwhile, lending protocol MakerDAO has been successful in attracting interest in the U.S., investing over $2 billion in short-term bonds since February 2022 and offering a 5% savings rate on its own stablecoin, DAI. This has led to a significant increase in the value of its token, MKR, which has risen by over 168% this year.

In comparison, FXS has only increased by 32% this year. However, some people in the crypto community believe that FXS will soon catch up with MKR.

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In-Depth Analysis of XAGUSD

Silver prices, much like their golden counterpart, are experiencing a similar trend. The XAGUSD pair has seen an impressive surge this week, with an increase of nearly 2 percent. This level of aggressive push in the value of this precious metal hasn't been witnessed since mid-September.

Looking ahead, the immediate resistance that the XAGUSD pair might face is twofold. Firstly, it's the previous rising range of support that was observed in September. Secondly, it's the 38.2% Fibonacci retracement level which stands at 22.85. These resistance levels could potentially hold their ground, thereby reinstating the broader bearish bias that has been prevalent since early May.




However, in the event of a downward turn, the immediate support seems to be situated at the midpoint of the Fibonacci retracement, which is at 21.84. If losses extend beyond this point, the focus then shifts to the 61.8% level at 20.83.

A clearance below this latter level could potentially open up the possibility for a resumption of the downtrend. This would be a significant development as it would indicate a continuation of the bearish bias in the market.

In conclusion, while silver prices have shown a promising increase this week, there are several key resistance and support levels to watch out for. These levels will play a crucial role in determining whether the current uptrend can sustain itself or if a return to the bearish bias is on the horizon.

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XAUUSD

Gold prices are looking to increase as we move into early European trading hours. With a rise of over 2.4 percent, the gold to US dollar rate (XAUUSD) is on track for its best week since mid-March. This comes as recent comments from the Federal Reserve have been increasingly cautious.


If we look at the daily chart, the first level of resistance seems to be at 1884.89, a key point from August. Resistance levels are prices at which sellers are expected to enter the market in sufficient numbers to take control from buyers.Just above that, gold will encounter the 50- and 200-day moving averages.

A moving average is a commonly used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random short-term price fluctuations.There was a bearish crossover in September, which suggested a general downward trend. A bearish crossover occurs when a short-term moving average crosses below a long-term moving average, signaling potential downward price movement.

So, XAUUSD is facing important resistance levels as we approach the weekend. If prices start to fall, the midpoint of the Fibonacci retracement level is at 1848.37, followed by the 1804.78 – 1815.30 point. Fibonacci retracement levels are horizontal lines that indicate where support and resistance are likely to occur. They are based on Fibonacci numbers, each level is associated with a percentage, showing how much of a prior move the price has retraced.

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Crude Oil Market Analysis

Crude Oil rose from $80, which is in the Ichimoku cloud, and is currently testing the broken support around $84. Bears successfully broke out of the channel and the outlook of the current market is bearish, with the RSI hovering below the 50 line in the Crude Oil daily chart.



The bearish bias of Crude oil is more vivid in the 4H chart, as the black gold is trading below the pivot and within the bearish channel.




With the price holding below the 84.36 pivot, we expect the decline in Crude oil to continue and target the 80 support followed by 77.86.

On the flip side, if the oil price closes above the bearish channel in the 4H chart, the short-term bearish scenario will be over, and bulls are likely to drive up the price to test the daily resistance around $88 in upcoming sessions.

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CPI: Not the most welcome outcome

Recent inflation reports have exceeded expectations, potentially offsetting the cautious tone from Federal Reserve officials. However, the focus seems to be on the duration of current interest rates rather than their height. Thus, a slightly higher inflation rate may not significantly disrupt the market.

The "Fed rhetoric shift" is becoming evident, with Christopher Waller's comments suggesting that the rise in yields could substitute for a rate hike. This indicates a possible shift towards a more dovish monetary policy.

The future hinges on economic indicators. Unless inflation rises unexpectedly or labor market imbalances lead to a wage-price spiral, the Fed may maintain a less hawkish stance. This could boost demand for longer-duration assets and foster a "Santa rally".

The market's reaction to today's CPI print is uncertain, but it may not be what investors were hoping for.