Market Update by Solidecn.com

[Solid ECN]

USDJPY Above Ichimoku Cloud, Bulls Eye Gain



The USDJPY currency pair trades above the Ichimoku cloud, signaling a bullish trend. Various technical indicators further support this positive outlook. The ADX line, an indicator of trend strength, is above 40, indicating a solid upward trend. The awesome oscillator bars are green, and the RSI indicator is positioned above its median line, aligning with the bullish sentiment.

Bullish traders in the USDJPY market are likely setting their sights on the 61.8% Fibonacci resistance level—the lower band of the bullish flag and the Ichimoku cloud support this bullish scenario. The bullish trend remains valid and intact as long as the currency pair maintains its position above the cloud.

[Solid ECN]

GBPUSD Tests Ichimoku Cloud, Eyes Rise



The GBPUSD currency pair has tested the Ichimoku cloud in today’s trading session. The pair is currency trading at 1.2721 while the awesome oscillator bars turned green. The RSI indicator stayed above 50, another signal for the bullish trend’s resumption.

If the bulls can maintain the price above the cloud, the price will likely rise. But the first hurdle is 1.2776. Should this level be breached, the following target can be 1.2826.

The bullish scenario is invalid if the bears close below the cloud. In this case, the lower band of the bullish flag would be the next resistance.

[Solid ECN]

New Zealand Dollar Balances as Rate Cut Expectations Grow

Solid ECN – The New Zealand dollar has stabilized at $0.624 after recent ups and downs. This comes as the US dollar weakens, with many expecting the Federal Reserve to cut interest rates several times this year. US consumer inflation expectations for the short term hit a near three-year low in December, hinting at a softer approach to monetary policy.

In New Zealand, markets anticipate four rate cuts from their central bank this year, possibly starting in May. The central bank's head noted the unexpected slowdown in growth, increasing chances of an earlier rate cut. In November, New Zealand's cash rate remained at 5.5%, narrowly avoiding a hike.

[Solid ECN]

Analyzing EURUSD's Current Position


The EURUSD pair couldn't break the 38.2% Fibonacci level and is now in a bearish flag pattern. Its current price is 1.093, meeting the 50% Fibonacci level. Technical indicators aren't showing significant changes. The RSI is under 50, and the Awesome Oscillator bars are small and near the signal line. The ADX line is steady but over 20, indicating a possible upcoming trend.

If the price stays in the channel, it might go down. The first target for this drop could be the 61.8% Fibonacci level. But, if it breaks out of the channel, it might challenge the Ichimoku cloud.

[Solid ECN]

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[Solid ECN]

Pound Steadiness, Consumer Borrowing Spike, and House Price Rise



Solid ECN - The UK's pound currency remained stable at $1.27. This stability came as market players analyzed new economic figures and their effect on global financial policies. A recent report from the US showed an unexpected jump in job creation, suggesting the Federal Reserve might not lower interest rates soon, possibly not even in March. Meanwhile, UK consumer borrowing saw a significant boost, with an increase of £2.0 billion - the most since March 2017 and higher than the £1.4 billion predicted.

Additionally, the number of loans for buying homes in the UK was higher than expected, reaching 50.1K. In other news, Britain's service sector grew stronger in December than initially thought, and the mood among businesses was the most optimistic in seven months. Finally, UK house prices increased by 1.7% compared to last year, the first rise in nine months.

[Solid ECN]

Euro Stabilizes Amid Eurozone Inflation and Strong US Job Market






Solid ECN - The euro maintained a steady value near $1.09. This happened as market players absorbed new information. The Eurozone showed an increase in its inflation rate. At the same time, the US job market was doing well. These developments reduced the need for the European Central Bank and the US Federal Reserve to lower interest rates.

In December, the Euro Area saw its inflation rate go up to 2.9%. This was just below the expected 3%. The main reason for this increase was the cost of energy. The core inflation rate, which excludes energy, also slowed down. It reached 3.4%, the lowest since March 2022.

In the US, the job scene was positive. There were 216,000 new jobs added last month. This was more than the expected 170,000. The unemployment rate stayed the same at 3.7%. However, there was a slight dip in the activity rate. It fell to 62.5%, the lowest since February.

[Solid ECN]

USDCHF Navigates Between Bullish Channel




Solid ECN – The bull's effort to flip the price above the Ichimoku cloud continues. However, the ADX indicator hovers below the 20 level, which can be interpreted as a weak market trend. The USDCHF price should stabilize itself above the %38.2 Fibonacci level for the uptick bias to continue. If this happens, the price would rise to test the %50 level of the Fibonacci resistance as its initial target.

Conversely, the bullish scenario should be invalid if the USDCHF price exceeds the bullish channel. In this case, the downfall would extend to December 2023's low.

[Solid ECN]

Swiss Franc Falls from 12-Year High

Solid ECN – The Swiss franc dropped to 0.85 against the US dollar, down from a 12-year peak of 0.841. The DXY's recovery influenced this change. Last year, the franc gained 8.5% versus the dollar, reflecting differing interest rate policies of the Swiss National Bank and the Federal Reserve. The Fed's latest meeting hinted at a cautious approach, further affected by US inflation slowing down.

Despite this, the Swiss National Bank sees reasons for higher rates due to potential inflation increases. Currently, inflation in Switzerland is at 1.4%, but predictions show it might reach the 2% goal in mid-2024. This has led investors to believe that the Swiss National Bank will cut rates later than the Fed. Additionally, the franc reached a new high against the Euro, reflecting ongoing high rate expectations from the Swiss National Bank.

[Solid ECN]

Canadian Dollar Falls Beyond 1.33 USD Mark

Solid ECN – The value of the Canadian dollar has recently dropped, surpassing 1.33 against the US dollar. This decline comes after it had reached a five-month peak at 1.32 on December 26th. Several factors contribute to this shift, including a strengthening US dollar, lackluster economic reports within Canada, and a decrease in foreign currency coming into the country. A notable point of concern is Canada's manufacturing sector, which has experienced its most significant downturn since the 2020 pandemic crash.

This downturn poses challenges for the central bank's efforts to control inflation through tighter policies. Additionally, the Canadian dollar's strength is further weakened by a global reduction in oil demand, which traditionally supports the currency through foreign exchange. Investors are now focusing on the upcoming labor market report, set to be released on Friday, to gain insights into the potential directions of future monetary policy.