Market Update by Solidecn.com

[Solid ECN]

EURJPY Keeps the Bearish Bias

EURJPY pair provided negative close below the additional barrier 142 yesterday, to increase the chances of activating the negative attack again, while the current weak trades are caused by stochastic contradiction against the moving average 55 that provides negative signals by settling below the mentioned barrier.



These factors allow us to expect forming temporary sideways fluctuation until gathering the additional negative momentum to ease the mission of starting the negative attack and press on 140.25 level soon, while breaking it will confirm the continuation of the negativity by targeting 139.4 and 138.2 levels.

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GBPUSD - Growth is possible.

On the daily chart, the downward fifth wave of the higher level 5 of (V) ended, within which the wave (5) of 5 formed, and the development of the upward first wave (1) started. Now, the third wave of the lower level 3 of (1) is forming, within which the wave iii of 3 has ended, a correction has formed as the wave iv of 3, and the wave v of 3 is developing.

If the assumption is correct, the GBPUSD pair will grow to the area of 1.2900–1.3500. In this scenario, critical stop loss level is 1.1835.

[Solid ECN]

EURUSD - Growth is possible.

On the daily chart, the downward wave of the higher level А ended, within which the fifth wave (5) of А formed, and the development of the upward wave B started. Now, the entry first wave 1 of (А) of B is developing, within which the third wave of the lower level iii of 1 has formed, a local correction has ended as the fourth wave iv of 1, and the fifth wave v of 1 is developing.

If the assumption is correct, the EURUSD pair will grow to the area of 1.1100 – 1.1300. In this scenario, critical stop loss level is 1.0755.

[Solid ECN]

BTCUSD - The pair's upside potential remains

Positive sentiment associated with monetary factors still prevails. Investors are confident that against the backdrop of declining inflationary pressures, the US regulator will start raising interest rates less rapidly, reducing the increment to 25 basis points from 50 basis points. These actions should lead to a decrease in support for the US currency and at the same time reduce the likelihood of the US economy going into recession, which increases the risk appetite of investors.



The price corrected to the level of 22500 (Murrey level [6/8]), a breakdown of which will give the prospect of developing a decline to the levels of 21250 (Murrey level [5/8], Fibonacci retracement 61.8%) and 20000 (Murrey level [4/8], Fibonacci retracement 38.2%). The key level for the "bulls" remains the level of 23400, consolidation above which will ensure growth to the levels of 25000 (Murrey level [8/8]) and 26250 (Murrey level [+1/8]).

Resistance levels: 23400, 25000, 26250 | Support levels: 22500, 21250, 20000

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EURGBP Takes Advantage of the Additional Support Line Stability

The EURGBP pair faced additional negative pressures to form strong negative waves and suffer some losses by crawling towards 0.8722, to face additional support and settle above it, noting that the main stability within the bullish channel that appears on the chart allows us to wait to gather the additional positive momentum to manage to form bullish waves and target 0.8820 followed by pressing on 0.8880 barrier in order to find a way to resume the bullish rally in the upcoming period.



The expected trading range for today is between 0.8740 and 0.8820.

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USDCAD - macroeconomic statistics did not support the position of the Canadian currency

The industrial goods price index lost 1.1% in December, exceeding the previous month's –0.5% decline, with annual growth slowing to 7.6% from 9.4% earlier. The value for commodities declined 3.1% after the –0.8% correction in November and from 7.9% to 7.5% YoY. The main reason for the negative dynamics is the fall in oil prices on world exchanges, where quotes of the benchmark Brent Crude Oil fell to 86.00.The US dollar fell below the key support level of 102.000 in the USD Index against the negative statistics from the housing market: the volume of construction of new houses in December amounted to 1.382M, which was lower than 1.401M earlier, and the number of building permits issued amounted to 1.330M compared to 1.351M in November. Investors ignored data on initial jobless claims, which fell to 190.0K from 205.0K in a week.



On the daily chart, the trading instrument is growing within the global Triangle pattern with dynamic boundaries 1.3620–1.3300 towards the resistance line, and the technical indicators maintain a sell signal and hint at a correction.

Resistance levels: 1.3523, 1.3697 | Support levels: 1.3409, 1.3224

[Solid ECN]

USD Sees Little Reaction to Upbeat Claims and Philly Fed Data

> The number of Americans filling for unemployment benefits was 0.190 million in the week ended January 14, compared to 0.205 million reported in the previous week. Today’s reading came in well below market expectations of 0.214 million.

> Continuing claims reading, which lags initial jobless claims data by one week, rose to 1.647 million from 1,634 million, while analysts expected an increase to 1.660 million.

> The Philadelphia Fed Manufacturing Index increased to -8.9 in January from -13.8 in December and below market expectations of -11.0.

> Housing starts for December came in at 1382k, compared to market estimates of 1.359 million. Building permits at 1.33million, much lower than expected 1.37 million



EURUSD is rather unimpressed by today's data. The pair continues to trade around 1.8000 level.

[Solid ECN]

ADAUSD - Murray Analysis

The ADA/USD pair has been growing since the beginning of this year within the framework of a general market trend: last week the price rose to the three-month highs to the level of 0.3662 (Murray level [7/8], Fibo retracement 38.2%), after which it corrected to the area of 0.3300, where it is now trading.

A breakdown of the level of 0.3173 (Murray level [5/8], Fibo retracement 23.6%) may lead to the development of a decline to the level of 0.2929 (Murray level [4/8]), supported by the middle line of the Bollinger Bands. If the level of 0.3418 (Murray level [6/8]) is broken out, a correction to the area of 0.3662 (Murray level [7/8]), 0.3906 (Murray level [8/8]), 0.4150 (Murray level [+1/8]) is possible.



In general, the resumption of the growth of quotations in the near future seems to be a more likely scenario, since the upward trend in the pair persists, which is confirmed by the upward reversal of the Bollinger Bands. At the same time, the development of a downward correction to the area of 0.2929 is also not excluded, but the price is unlikely to go lower, since the Stochastic is close to the oversold zone, which indicates a possible upward reversal.

Resistance levels: 0.3418, 0.3662, 0.3906, 0.415 | Support levels: 0.3173, 0.2929, 0.2685

[Solid ECN]

Chart of the Day - EURTRY

Norges Bank decided to leave rates unchanged at a meeting today but there is one more rate decision to be announced today. Central Bank of the Republic of Turkey will announce its rate decision at 11:00 am GMT. Market expects no change from CBRT with one-week repo rate staying unchanged at 9:00 am GMT. The Bank said that it has ended the rate cut cycle after a 150 bp rate cut in November and indeed rates stayed unchanged at the December meeting later on. While Turkey is facing massive inflation, there is a view that rates may stay unchanged until mid-2023 when elections in Turkey take place. However, should the Bank make a move at one of the coming meetings, it is more likely to be another cut rather than hike.




Apart from CBRT rate decisions, traders will also get a chance to take a look at ECB minutes. ECB hiked interest rates by 50 basis points at the latest meeting, slowing the pace of hikes from previous 75 bps. Bank noted that rates will have to rise further significantly and a balance sheet reduction schedule was also announced. While there were some rather dovish comments from ECB members in recent days, minutes may not reflect it as they relate to the December 15, 2022 meeting.

Taking a look at EURTRY chart at the H1 interval, we can see that the pair has bounced off the 200-hour moving average (purple line) and climbed above the 20.28 swing area later on. The nearest resistance zone to watch can be found in the 20.42 area and is marked with recent local highs. Should CBRT surprised with a rather unlikely rate cut, the pair may quickly jump above the aforementioned 20.42 zone and look towards all-time highs from late-2021 in the 20.68 area.

[Solid ECN]

USDCAD Achieves Clear Gains

The USDCAD pair rallied upwards yesterday to breach 1.2420 and touch the key resistance 1.3500, noticing that the price finds difficulty to surpass this level, accompanied by witnessing negative signals through stochastic, which supports the chances of bouncing bearishly to resume the bearish trend, which targets 1.3415 followed by 1.3350 levels as next negative stations.



Therefore, we expect to witness bearish bias in the upcoming sessions unless the price managed to breach 1.3500 and hold with a daily close above it. The expected trading range for today is between 1.3415 support and 1.3560 resistance.