Market Update by Solidecn.com

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Euro Strengthens Against Dollar: A 5-Month Analysis


The Euro has risen to $1.1, a five-month high. This is due to the weakening of the dollar. The latest PCE inflation data from the US suggests that the Fed may reduce interest rates next year. The first cut could be in March. Traders expect the ECB to also cut borrowing costs next year. They may follow the Fed’s pace. However, most policymakers are against this idea. Over the year, the Euro has gained about 3%.

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Decoding Divergence: A Deep Dive into Gold Chart Patterns

Solid ECN – Upon first glance at the Gold chart, we notice the awesome oscillator bars signaling divergence. However, it appears that the divergence signal led to the consolidation phase. As a result, the XAUUSD price is currently ranging above $2,045. The ADX’s style line in black is retreating below the 40 level, indicating that the market’s momentum may slow down. Consequently, the gold price might remain within a narrow range until the holidays end.



The lower line of the bullish flag serves as support. If the bottom line is breached, the gold price could dip to the resistance area of the Ichimoku cloud. However, as long as the price continues to range inside the channel, the market maintains its bullish stance. In this scenario, the next target could be the 61.8% Fibonacci resistance, followed by the $2,090 mark.

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Understanding EURJPY’s Movement in the Ichimoku Cloud

Solid ECN – The EURJPY currency pair is presently undergoing a test of the Ichimoku cloud. Last week, the pair managed to cross above the cloud successfully. The subsequent decline post-breakout could potentially be viewed as a consolidation phase.

However, should the pair’s decline persist below the cloud, the bullish bias would be rendered invalid, indicating a false Ichimoku signal.

From a technical perspective, as long as the pair remains within the channel and above the 50% Fibonacci support level, the short-term trend is bullish. In this scenario, the target could be the upper band of the flag channel.




This analysis is subject to market conditions and should be used in conjunction with other indicators.

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Aussie Dollar Strong Amid US Data

Solid ECN – The Australian dollar stays near $0.68, its highest in five months. This is due to US data hinting at Federal Reserve rate cuts next year. Analysts think the Reserve Bank of Australia will cut rates later than others. It hasn't raised rates as much as other banks. Australian inflation is sticking around longer. RBA Governor Michele Bullock said last month that lowering inflation from around 5.5% to below 3% will take time. It's mostly due to local demand. Markets expect the RBA to cut rates only by late 2024.

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Euro Hits 5-Month High Amid Dollar Weakness

Solid ECN – The euro recently climbed to $1.1, marking its highest point in five months. This rise is largely due to the weakening U.S. dollar. The latest PCE inflation data from the U.S. has fueled expectations that the Federal Reserve might begin lowering interest rates as early as next year, potentially starting in March.

At the same time, market players are predicting that the European Central Bank (ECB) might also reduce borrowing costs next year, potentially in line with the Fed's actions. However, it's worth noting that many ECB policymakers are not in favor of this prediction. Over the course of the year, the euro has seen an approximate 3% increase in value.

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Dollar Index: A Holiday Trading Tale

On Tuesday, amidst holiday trading, the dollar index lingered around 101.6. This was near its five-month low, due to signs of slowing US inflation. This has led to predictions that the Federal Reserve will begin to lower interest rates next year. Data from Friday revealed that the core PCE index, the Federal Reserve’s favored inflation measure, dropped to 3.2% in November from 3.4% in October.

This was lower than the projected 3.3%. Furthermore, figures from Thursday showed a weaker than expected US economic growth in Q3 and a minor rise in unemployment benefit claims recently. The dollar was trading near multi-month lows against other major currencies. It is at risk of further depreciation against the yen, as BOJ Governor Kazuo Ueda stated on Monday that the chances of reaching the 2% inflation target were “gradually rising.”

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A Simple Guide to the Nikkei 225’s Recent Rise


Solid ECN – On Monday, the Nikkei 225 index rose by 85.05 points or 0.26%, ending at 33,254.03. This continued the gains from the previous session. Investors were encouraged by Wall Street’s year-end rally on Friday, especially after the US Federal Reserve’s preferred inflation measure for November was lower than expected and closer to the central bank’s 2% target.


Meanwhile, both overall and core inflation in Japan dropped to a 16-month low last month. On a quiet Christmas day, investors paid attention to a speech by Kazuo Ueda, the governor of the Bank of Japan. He suggested that the central bank might change its monetary policy if wages and prices start moving in the right direction. He also repeated that the board was keeping its very supportive monetary policy to protect the delicate economic recovery.


The healthcare sector led the increase, followed by property, tech, and consumer sectors. The top performers of the day included Nexon Co. (5.4%), NTT Data Group (4.5%), Lasertec Co. (2.8%), NH Foods (2.5%), and Takashimaya Co. (2.4%).

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Japan's Economic Index: A Fragile Uptick in 2023


Solid ECN – In October 2023, Japan's main economic forecast tool (the Leading Economic Index), saw a slight increase to 108.9 from an initial 108.7. However, this was still not as high as the previous month's 109.3, showing that Japan's economic recovery is still weak.


The country is dealing with rising prices and lots of outside uncertainties. During the third quarter of 2023, Japan's economy went down by 0.7%, marking its first drop in a year. This downturn was caused by reduced spending by both people and businesses, and trade issues also played a part in lowering the country's overall economic performance. Additionally, people's confidence in the economy in October was almost at its lowest in six months.

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USDJPY's Sharp Decline

Solid ECN – The USDJPY pair saw a sharp drop after hitting the Ichimoku cloud. It's now trading below a resistance level formed by the cloud. A closer look at the USDJPY 4-hour chart shows the price falling within a channel. The pair is currently at the 78.6% Fibonacci support level.

Given the technical indicators, it seems this support might break, continuing the bearish trend.