Market Update by Solidecn.com

[Solid ECN]

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.

[Solid ECN]

XAGUSD - The price is in a correction, a fall is possible.


On the daily chart, a downward correction of the higher level ended as the second wave (2), within which the wave C of (2) formed, and the development of the third wave (3) started. Now, the first entry wave of the lower level i of 1 of (3) has formed, and the correctional wave ii of 1 of (3) is developing, within which the wave (a) of ii has ended, the wave (b) of ii has formed, and the wave (c) of ii is developing.





If the assumption is correct, the XAGUSD pair will fall to the area of 19.88 – 19.32. In this scenario, critical stop loss level is 21.70.

[Solid ECN]

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

On the daily chart, the third wave of the higher level 3 ended, and a downward correction started to develop as the fourth wave 4. Now, the wave of the lower level a of 4 has formed, and a local correction has started to develop as the wave b of 4.



If the assumption is correct, the USDJPY pair will fall to the area of 133.2 – 127.36. In this scenario, critical stop loss level is 146.42.

[Solid ECN]

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.

[Solid ECN]

Crude Oil Price Suffers Strong Losses

Crude oil price ended last Friday with strong negativity to settle at 76.05 level, starting today with additional strong decline to break the mentioned level and reach 74 areas now, which pushes the price to suffer more expected losses in the upcoming period, opening the way to head towards 72.60 areas as a next main station.



Therefore, the bearish bias will be expected for today, supported by the negative pressure formed by the EMA50, taking into consideration that breaching 76.05 will stop the suggested decline and lead the price to attempt to recover again.



The expected trading range for today is between 72 support and 75.7 resistance, and the expected trend for today is Bearish.

[Solid ECN]

Dollar on track for weekly losses on Fed rates

Dollar fell in European trade on Friday against a basket of major rivals, extending the gains for the fourth day in a row, and almost hitting three-month lows, and on track for the second weekly loss in three weeks following weak US data and the release of Fed's minutes. Such Fed minutes clearly bolstered the case for a 0.5% rate hike in December and a slower pace of policy tightening.



The Index

The dollar index fell 0.25% to 105.68, with a session-high at 106.16, after closing down 0.2% yesterday, the third loss in a row, edging near three-month lows at 105.34. Dollar is now down 1.2% so far this week on track for the second weekly loss in three weeks.




Weak Data

Recent US data showed manufacturing and services activities tumbled heavily in November, hinting at potential economic recession in the fourth quarter of the year.


The Fed

Fed's minutes released for the November 1-2 meeting showed most policymakers agreed it's important to slow down the pace of policy tightening.


Fed Minutes

Chances for a 0.5% rate hike in December by the Fed rose from 75% to 85% after Fed's minutes, while chances for a 0.75% rate hike fell from 25% to 15%.

[Solid ECN]

Gold Technical Analysis

Gold price tests the key support 1746.4 and keeps its stability above it until now, which keeps the bullish trend scenario valid for the upcoming period, supported by the EMA50, waiting to resume the bullish bias to visit 1765 initially. On the other hand, we should note that breaking 1746.4 and holding below it will stop the positive scenario and push the price back to the correctional bearish track again, to head towards testing 1721.65 areas initially.



The expected trading range for today is between 1735 support and 1775 resistance, and the expected trend for today is Bullish.

[Solid ECN]

GBPUSD Technical Analysis


The GBPUSD pair fluctuates within tight track since morning, which keeps the bullish trend scenario valid as it is without any change, depending on the price stability above 1.1990, supported by stochastic approach to the oversold areas, reminding you that we are waiting to rally towards our next positive target that reaches 1.2260.





The expected trading range for today is between 1.2030 support and 1.2210 resistance, and the expected trend for today is Bullish.

[Solid ECN]

XAUUSD - The possibility of growth remains.


On the daily chart, the downward correction has ended as the fourth wave of the higher level (4), within which wave C of (4) has formed as an impulse and the development of the fifth wave (5) has begun. At the moment, the first wave of the lower level 1 of (5) is being built, in which wave iii of 1 formed and corrective wave iv of 1 ended.


It is predicted that the quotes of the XAUUSD pair will continue their upward dynamics in the area of 1808.08 - 1881.56. The level of 1720.15 is critical and stop-loss for this scenario.

[Solid ECN]

USDJPY - The asset is in correction, the probability of the fall is maintained.

On the daily chart, the third wave of the higher level 3 has completed and a downward correction is being formed as the fourth wave 4. At the moment, a wave of the lower level a of 4 has already appeared and a local correction is developing as a wave b of 4.

It is predicted that the quotes of the USDJPY pair will fall to the area of 133.2 – 127.36. The level of 146.42 is critical and stop-loss for this scenario.