Market Update by Solidecn.com

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GBPUSD Technical Analysis

News Solid ECN- The GBPUSD currency pair is declining after encountering resistance at the upper band of the channel, as anticipated. Currently, the pair is showing downward momentum, trading below the 1.228 pivot point. Notably, the RSI indicator has risen above the 50 level, indicating that bulls are attempting to retest the pivot.




As long as the pair stays below the pivot, the outlook remains bearish, with 1.213 (S1) as the target.

Conversely, if bulls manage to close above the pivot and stabilize the price, the GBPUSD could potentially rise, retesting the R1 level again. However, please note that the trend is still bearish; even if the pair rises to test R1, going long is not recommended. The R1 level or the upper band of the bullish flag may provide a strong resistance zone, offering bears an opportunity to exert additional pressure.

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EURGBP

FxNews - The EURGBP trend is bullish, with trading in the upward flag. However, the uptick momentum eased this week after the EURGBP price hit the middle line of the bullish flag in the daily chart.





To have a better insight into the price action, we shall zoom into the EURGBP 4H chart. The pair broke the bullish trend line in the 4H chart (shown in red), and currently, it is testing the 0.872 pivot. If the price closes below the pivot, the correction would likely continue to the lower levels, starting with the 0.868 support (S1).





Please note, the market is bullish. Therefore, going short on the currency pair is not suggested. The 0.868 deck provides a decent supply zone to increase bullish bids on the pair.

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EURJPY

The EURJPY currency pair has recently experienced a bounce from the upper line of the bullish flag, as observed in the 4-hour chart. This significant movement has caused the Relative Strength Index (RSI) to flip below the overbought zone. Despite the bullish trend, there's a possibility that the pair might correct the recent gains to the 160.7 support level, also known as S1.

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A Closer Look at the Positive Turnaround for Spanish Stocks


FxNews- The Spanish stock market has recently experienced a significant upswing, with the IBEX 35 index climbing to 9,440. This rise brings the index near its two-month peak, outpacing the majority of its European counterparts. The banking sector appears to be the driving force behind this surge, as it has seen substantial gains.
The Banking Sector Spearheads the Rally


Among the banks, Banco Sabadell emerged as the top performer with a 3% increase, followed closely by Bankinter with a 2.6% rise. CaixaBank and BBVA also contributed to the rally with gains of 1.9% and 1.4% respectively. This upward trend in the banking sector has played a pivotal role in the overall performance of the Spanish stock market.



Other Sectors Join the Upward Trend


The telecommunications and real estate sectors have also seen considerable advances, following the lead of the banking sector. However, not all sectors shared in the prosperity. Acciona and Acciona Energia, for instance, experienced a slight downturn, with their stocks falling by 0.8% and 0.7% respectively.
A Broader Perspective


On a larger scale, investors seem to have brushed aside the recent downgrade of the US debt outlook to negative by Moody’s. Instead, the focus has shifted to key inflation releases due this week. The impact of these releases on the global and Spanish economy will be something to watch closely.


In conclusion, the rebound of the Spanish stocks, led by the banking sector, paints a positive picture for the country’s economy. However, it’s important to keep an eye on the broader economic landscape, including inflation rates and international credit ratings, to fully understand the potential implications for the economy.

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EURUSD Market Outlook: Bullish Trend Amid Bearish Flags

The EURUSD currency pair is currently navigating within a bearish flag pattern, yet it remains above the Ichimoku Cloud, signaling a potential bullish market. As the pair tests the resistance at 1.06988, the market anticipates a possible upward trend.

EURUSD bulls face the challenge of the bearish flag, which stands as an obstacle to driving the price towards the next resistance level at 1.07353. However, as long as the EURUSD continues to trade within the confines of the bearish flag, the primary target remains at testing Support 1 (S1).



Conversely, should the bulls manage to break out of the bearish channel, it could pave the way towards Resistance 3 (R3). This scenario would indicate a significant shift in market dynamics, potentially triggering a new wave of bullish momentum for the EURUSD pair.

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Bitcoin Technical Analysis

FxNews - Bitcoin has successfully broken out of the bullish channel on the 4-hour chart. The BTCUSD pair is currently testing the R2 support level at $36,983, with the Relative Strength Index (RSI) nearing the overbought territory. On this chart, we observe an inverted hammer pattern, which may indicate potential bearish momentum. Nevertheless, the overall bitcoin market remains bullish, and analysts at FxNews recommend waiting for a breakout above the bearish trendline (illustrated in red) before initiating long positions.





Conversely, while the price trades below the weak bearish trendline (in red), there exists a possibility of the BTCUSD price declining to the R1 support level at $36,009, especially if the bears manage to close below R2. These levels could also provide substantial supply, enabling the bulls to initiate new bullish trades.


In summary, with the bitcoin market maintaining a bullish outlook, it appears more prudent to seek buying opportunities rather than placing sell orders.

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USDCAD Analysis

FxNews - The USDCAD pair is trading within a bullish channel. This week, the bulls in USDCAD closed above the pivot, and currently, the price is struggling to break out above the median line of the bullish channel.



The RSI indicator is hovering above the 50 level. The trend is bullish and is likely to aim for R1 (1.399 resistance). S1 and the lower line of the bearish channel support the bullish scenario. As long as the pair is trading within the channel, the overall outlook of the trend is bullish.

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Yen's Fall: Impact of Divergent Monetary Policies

The Japanese yen has once again fallen below 151 per dollar, potentially heading towards its lowest value since 1990. This is largely due to the contrasting stances of the US Federal Reserve and the Bank of Japan (BOJ) on monetary policy. Earlier this week, Jerome Powell, the Chair of the Fed, suggested that additional interest rate increases might be necessary to control inflation.


Diverging Monetary Policies

On the other hand, Kazuo Ueda, the Governor of the BOJ, has advised caution given the current uncertainties. He recognized that the divergence in policies has contributed to the yen's depreciation but did not explicitly express support for the currency. Earlier this month, the BOJ held its policy rate steady at -0.1% and kept the 10-year JGB yield target at approximately 0%. It also made minor modifications to its yield curve control policy, loosely defining 1% as an "upper bound" rather than a strict limit and removed a commitment to uphold this level by offering to purchase an unlimited quantity of bonds.

In terms of the economy, a weaker yen can be both beneficial and detrimental. On one hand, it can boost exports by making Japanese goods cheaper for foreign buyers, which can stimulate economic growth. On the other hand, it can increase the cost of imports and potentially lead to inflation. Therefore, whether it's good or bad for the economy depends on a variety of factors, including the balance of trade, the rate of inflation, and the overall health of the global economy.

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USDMXN


FxNews - The USDMXN downtrend eased at the 61.8% level of Fibonacci retracement. This level coincides with the Ichimoku cloud, which makes this resistance level powerful. Moreover, the RSI indicator shows divergence, which can be a signal for a range market or trend reversal.





To gain better insight and find triggers, we zoom into the USDMXN 4H chart. The pair is currently trading in a narrow range, shown with the blue box on the 4-hour chart. The pivot plays the role of resistance. If the price holds below this level, another fall is expected, targeting S1 (16.998).





On the other hand, if the USDMXN price can stabilize above the pivot, we can expect the pair to see some upward momentum toward R1 (17.8 resistance).