Market Update by Solidecn.com

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S & P

Also news that JPMorgan CEO Jamie Dimon is leading discussions with other CEOs of other large US banks in an effort to provide further support, including potentially converting their $30 billion in deposits into a capital injection, only slightly calmed investors' nerves. According to Wall Street Journal, preliminary discussions have been focused on ways that the banks can boost the beleaguered banks capital. Also in play is a potential investment by the banks themselves.

Also according to CNBC, JPMorgan Chase is advising First Republic Bank on strategic alternatives, one of which is capital raise which could dilute current shareholders. A sale of the bank is also taken into consideration.



First Republic (FRC.US) stock has been in free fall recently. Last week alone, a troubled San Francisco-based lender lost nearly 70.0% of its market value. Sell-off accelerated in pre-market, however sellers failed to retest all-time low at $9.00 and buyers managed to erase some of the losses in the evening. Nevertheless, the main sentiment remains bearish and only a break above the local resistance zone around $42.25 could let to a bigger upward correction.

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BTC

• Weaker sentiment on stock exchanges did not prevent cryptocurrencies from rising
• The correlation of the price of BTC with the major indices has dropped noticeably recently
• Bitcoin price is approaching overbought levels and 61.8 Fibonacci retracement

The recent weakness of banks has caused capital to flow into cryptocurrencies for two reasons. The main beneficiary of the rally - decentralized Bitcoin - is not directly dependent on the centralized financial sector. Second, in the face of escalating bank problems, the chances of a Federal Reserve pivot have increased. Since the collapse of SVB, the Fed has already hinted twice at supporting market liquidity, which investors have taken as a positive prognosticator. It's still unpredictable which way the crisis will unfold but its hold on UBS's takeover of Credit Suisse coupled with a potentially dovish Fed could provide a catalyst for upside for risk assets.

On Wednesday at 8 pm GMT, markets will see if indeed Jerome Powell will be willing to go easy on Wall Street and change to a more dovish stance. If investors sense that the Fed is softening under the pressure of systemic concerns, the rally in cryptocurrencies is likely to be prolonged. At the same time, it is difficult to imagine the price of BTC continuing to rise if the scale of the current crisis were to increase significantly.



The price drop following the collapse of the SVB bank did not last long. Bitcoin surprised the markets and has since risen nearly 30%.



The largest of the cryptocurrencies has had one of its best weeks in the past few years, with the price rising more than 20%



The inverted head-and-shoulders formation pattern may herald bullish attempt to btrak the main psychological resistance level of $30,000.

Markets see more than 43% chance that the Federal Reserve will not raise interest rates on Wednesday. Just two weeks ago, the markets saw a 50bp hike as a chance. That's a drastic change.



The amount of stored BTC in the so-called 'cold wallets' of the largest BTC holders of so-called whales (above 1,000 BTC) is at levels last seen in mid-2020. This may indicate that if the BTC price maintains momentum, the amount of BTC in whale portfolios will increase again. For the moment, however, the amount of cryptocurrency in the whales' wallets continues to fall, which could indicate their sending BTC to exchanges and continued risk aversion among the largest holders. A change in this trend would be a sign of the growing strength of the largest of cryptocurrencies.

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Bitcoin, D1 interval. The price has approached $28,700, which coincides with the 61.8 Fibonacci abolition of the upward wave initiated in the spring of 2020. The RSI indicator indicates an overbought level signaling a possible correction.

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DE30

European indices had a poor start to a new week with major indices from the Old Continent launching today's cash trading session with significant bearish price gaps. This came after a government-brokered deal for UBS to acquire Credit Suisse failed to shore up market sentiment. Issue of Credit Suisse's AT1 bonds being written down to zero sparked concerns that it may be a problem for banks and financial institutions with exposure to those bonds. However, indices began to regain ground as the session progressed and all of the earlier losses have been erased already. Indices from Western Europe trade 0.5-1.0% higher on the day with German DAX adding 0.7% and French CAC40 jumping 0.9%.



Taking a look at the DE30 chart at H4 interval, we can see that another attempt at breaking below the 14,750 pts support zone was made today and once again it turned out to be a failure. Index caught a bid later on and rallied towards the psychological 15,000 pts mark. While the index managed to break above this hurdle, bulls failed to break above the 15,050 pts swing area. However, the index remains close to this resistance and another attempt to break above it later into the day cannot be ruled out.

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Oil

Oil launched a new week's trading lower amid an overall increase in risk aversion. WTI drops below $65 per barrel and trades at the lowest level since November 2021! Declines accelerated after price dropped below a key $70-72 price zone last week. The $60-65 area is a demand zone marked with local lows from 2021 and local highs from 2019 and 2020.

There are few reasons behind a drop in oil prices:

• Concerns over conditions of banking and financial systems in the United States and Europe. UBS will acquire Credit Suisse but it failed to ease market concerns
• Demand in China remains weak - imports stay low, run rates in refineries drop but at the same time Chinese exports of oil derivatives are increasing, what may hint at oversupply in the country
• Lack of interest from speculators - end-February data shows oil being extremely net oversold by speculators
• Goldman Sachs - one of the world's largest institutional bulls when it comes to oil - slashed Brent price 12-month ahead forecast from $100 to $94 per barrel

WTI (OIL.WTI) drops below $65 per barrel. Price dropped to a key zone, marked with local highs and lows from previous years, as well as with the range of two largest downward impulses in recent year (2014 and 2020).

[Solid ECN]

Gold

Precious metals gain amid increase in risk-aversion and pullback in US yields

Strong upward move launched on the gold market on March 8, 2023 is continuing at the beginning of a new week. Risk-off moods can be spotted on the financial markets at the beginning of a new week and it is providing support for safe haven assets, like for example gold. UBS will buy troubled Swiss lender, Credit Suisse, in a government-brokered deal. However, this failed to ease market concerns as the deal will include write down of Credit Suisse's AT1 bonds and this may turn out to be a hit to banks and other institutions with exposure to Credit Suisse. Apart from that, Fed and 5 other central banks (ECB, BoJ, BoE, BoC and SNB) will switch from weekly to daily USD swap auctions in order to boost USD liquidity. US yields pulled back providing even more support for precious metals.



As a result of those market moves, gold is trading over 1% higher on the day. Gold price climbed above $2,000 per ounce this morning, reaching the highest level since March 2022.

[Solid ECN]

GBPUSD

The GBPUSD pair provided new positive trades to test 1.2200 barrier, waiting to get positive motive that assists to push the price to continue the price and achieve our positive targets that start at 1.2260 and extend to 1.2440 after surpassing the previous level.



The EMA50 continues to support the expected bullish wave, which depends on the price stability above 1.2060, as breaking it will put the price under negative pressure that targets testing 1.1940 before any new attempt to rise.

[Solid ECN]

EURUSD

EURUSD pair shows calm positive trades to gradually towards our waited target at 1.0745, getting good support by the EMA50, to keep the bullish trend suggested for the upcoming period.



It is important to monitor the price when reaching the targeted level, as breaching it will extend the bullish wave to reach 1.0920 areas as a next main station, while consolidating against the bullish wave will press on the price to rebound bearishly to test the minor support areas around 1.0635 initially. On the other hand, we should note that breaking 1.0635 will stop the expected rise for today and push the price to turn to decline to visit 1.0515 level as a first station.

[Solid ECN]

EURUSD

Industrial production in the US remain unchanged at 0.0% in February, below market consensus of a 0.2% MoM rise.



EURUSD is rather unimpressed by today's data. The pair continues to trade around 1.0620 level.

[Solid ECN]

Bitcoin

Cryptocurrencies are enjoying another day of strong gains with BITCOIN rallying over-7% and looking towards the $27,000 mark. The most popular coin took out a local high from Tuesday today and reached a fresh 9-month high. While cryptocurrencies performed poorly between mid-February and early-March, the digital asset market took a U-turn this week. Actions of US authorities aimed at stemming contagion risk from collapse of tech- and crypto-related banks, triggered a rally on cryptocurrencies market. Bitcoin is currently trading over 35% above a local low reached as recently as a week ago on March 10, 2023. Solid gains have been all across the cryptocurrency market this week.


A number of cryptocurrencies rallied over-20% over the past week! Taking a look at the BITCOIN chart at D1 interval, we can see that the coin has not only fully recovered from the February 21 - March 10 sell-off but has even jumped noticeably above mid-Friday's peak in the $25,000 area. Coin is closing in on a $27,000 mark. Near-term potential resistance levels to watch are marked with lower and upper limits of a short-term trading range from May and June 2022 at $29,000 and $31,500, respectively.

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USDCHF

USDCHF pair provided clear negative trades yesterday, and begins today with new decline to attempt to break 0.9260 level again, reinforcing the expectations of continuing the bearish trend in the upcoming sessions, reminding you that our waited targets begin at 0.9150 and extend to 0.9060.



Stochastic provides negative signals that support the continuation of the expected decline, reminding you that the continuation of the bearish wave depends on the price stability below 0.9316.