official Market Update by Solidecn.com

[Solid ECN ✔️]

EURUSD

The EURUSD pair begins today with additional positivity to surpass 1.0645 level and settles above it, which pushes the price to achieve more intraday gains, targeting testing 1.0745 as a next station, noting that breaching this level will push the price to continue rising and head towards 1.0800 followed by 1.0925 levels as next main targets.

 

 

Moving above the EMA50 supports the continuation of the expected bullish trend, while stochastic might cause some temporary sideways fluctuation before resuming the bullish bias. On the other hand, we should note that breaking 1.0645 and holding below it will stop the suggested bullish wave and press on the price to decline again.

 

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GBPUSD

The GBPUSD pair rallied upwards to confirm breaching the correctional bearish channel’s resistance, which stops the correctional bearish trend and lead the price to attempt to regain the main bullish trend again, on its way to achieve positive targets that start at 1.2260 and extend to 1.2440.

 

 

Therefore, the bullish bias will be suggested for today, it might be preceded by some temporary sideways fluctuation affected by stochastic negativity, waiting to gather positive momentum that assists to push the price to achieve the expected targets. Note that breaking 1.2050 will put the price under intraday negative pressure that targets testing the most important support at 1.1940 before any new attempt to rise.

 

 

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USDJPY

The USDJPY pair continued to decline strongly to reach the thresholds of the negative target mentioned in our last technical update at 133.30, starting today with additional negativity to support the chances of continuing the bearish bias in the upcoming sessions, noting that breaking the mentioned level will extend the bearish wave to reach 131.75 areas as a next main station.

Note that the continuation of the bearish wave depends on the price stability below 135.40, as breaching it will push the price to recover and head towards achieving gains that start by testing 137.70 areas.
 

[Solid ECN ✔️]

US30 

US index futures traded significantly higher this morning after the Fed and US Treasury stepped in to limit contagion risk from SVB collapse. Emergency lending programm was announced that will allow banks to access liquidity needed to service deposits. US Treasury Secretary Janet Yellen approved necessary decisions assuring that bank deposits are protected and announced that all depositors will be able to access. While broad market performance on Monday morning showed that the situation has calmed, problems may not be over yet. SVB collapsed and FDIC took control over it while Signature Bank was shut down by regulators due to systemic risk following SVB collapse. However, another bank is rumored to be close to collapsing - First Republic Bank. Shares of this bank are trading 60% lower in premarket today and it is said to be the next in-line should the domino effect continue. Slump in First Republic Bank shares are dragging down the whole market with DAX and other European blue chips indices trading 2-3% lower on the day. US equity futures erased all of the gains and are now trading flat or slightly lower compared to Friday's closing prices.

Taking a look at Dow Jones futures chart (US30) at D1 interval, we can see that all of the gains made earlier today were erased already and now the index is trading lower. The index tested resistance zone marked with 38.2% retracement and 200-session moving average this morning but has pulled back since and is now testing support zone ranging around 31,750 pts area.
 

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USDCHF

The USDCHF pair broke 0.9316 level strongly to complete forming double top pattern that its signs appear on the chart, to surpass the negative target mentioned in our last report at 0.9220 and opens the way to continue the decline towards 0.9135 areas, waiting for more bearish bias in the upcoming sessions.

Note that surpassing the last level will push the price to visit the recently recorded low at 0.9060, while breaching 0.9220 will stop the negative scenario and push the price to start recovery attempts that target testing 0.9316 level initially.
 

[Solid ECN ✔️]

Gold

Gold price tested 1878.80 level and rebounds bullishly from there now, reinforcing the expectations of continuing the bullish trend for the rest of the day, which targets 1928.60 followed by 1960 levels as next main stations.

 

 

Therefore, the positive scenario will remain active for the upcoming period, supported by the EMA50 that carries the price from below, reminding you that holding above 1878.80 represents key condition to achieve the waited targets.

 

[Solid ECN ✔️]

EURUSD

The EURUSD pair found solid resistance at 1.0745 and couldn’t manage to breach it, to start providing negative trades by today’s open, noticing that stochastic shows negative signals that press on the price to decline.

 

 

Therefore, we expect to witness bearish bias in the upcoming sessions, and the targets begin at 1.0620 and extend to 1.0515 after surpassing the previous level, noting that breaking 1.0690 will ease the mission of achieving the waited targets. Note that breaching 1.0745 will stop the suggested negative scenario and lead the price to achieve new gains that reach 1.0800 followed by 1.0925.

 

[Solid ECN ✔️]

GBPUSD

The GBPUSD pair resumed its positive trades to test 1.2200 barrier, reinforcing the expectations of continuing the bullish trend, waiting for more rise to visit 1.2260 level that represents our next target.

 

 

The EMA50 supports the price from below, and surpassing the targeted level will push the price to 1.2440 as a next main station, while stochastic negativity might cause some temporary sideways fluctuation before rising again. Holding above 1.2070 represents the first condition to continue the bullish wave, as breaking it represents negative factor that will press on the price to visit 1.1940 initially.

 

[Solid ECN ✔️]

USDJPY

The USDJPY pair surpassed 133.30 level and approached 132.00 barrier, but it bounced bullishly to settle around the first level, noticing that the price begins today positively to move away from this level, which hints heading to start bullish wave that we expect to target 135.40 areas initially.

 

 

Therefore, the bullish bias will be suggested for today, supported by stochastic positivity that appears on the four hours’ time frame, being aware that breaking 133.30 will stop the expected rise and press on the price to suffer additional losses that reach 131.75 as a next negative target.

[Solid ECN ✔️]

Bitcoin

CPI inflation data from the United States for February was released today at 12:30 pm GMT and came in-line with market expectations. Headline CPI decelerated from 6.4 to 6.0% YoY (exp. 6.0% YoY) while core gauge moved from 5.6 to 5.5% YoY (exp. 5.5% YoY). Reaction of the FX and equity markets was fairly muted - after initial volatile up and down swings, indices moved slightly higher and USD weakened. However, scale of the moves on USD and stock markets is relatively small. Much more action can be seen on the cryptocurrency market with Bitcoin testing $26,000 mark following the release.

 

 

Taking a look at BITCOIN chart at D1 interval, we can see that the cryptocurrency is trading higher for the third day in a row and, just as it was the case yesterday and on Sunday, the move is quite big. Bitcoin trades almost 9% higher on the day and makes a break above $26,000 mark for the first time in 9 months! Other cryptocurrencies are also trading higher with Ethereum adding 5% and Dogecoin trading over 4% higher.

 

[Solid ECN ✔️]

USDCHF

The USDCHF pair continued to decline to surpass our waited target at 0.9135 and reach few pips away from the recently recorded low at 0.9060, noticing that the price begins to rebound bullishly to build bullish wave that we expect to target 0.9220 followed by 0.9316 levels as next positive stations.

 

 

Therefore, the bullish bias will be expected for today, supported by stochastic positivity, noting that breaking 0.9060 will stop the expected rise and press on the price to resume the main bearish wave.

 

[Solid ECN ✔️]

EURUSD

The EURUSD pair begins today with clear positivity to attack 1.0745 level and attempts to breach it, which hints heading to achieve new gains in the upcoming sessions, while it faces negative pressure by stochastic that might hinder the mission to rise.

 

 

Therefore, we prefer to stay aside until the price confirms its situation according to the mentioned level followed by detecting its next destination clearly, noting that the contradiction between the technical factors provides another reason for neutrality. Note that confirming breaching 1.0745 will push the price to achieve positive targets that start at 1.0800 and extend to 1.0925, while consolidating below it will press on the price to resume the bearish wave that targets 1.0620 followed by 1.0515 as next main stations.

 

[Solid ECN ✔️]

GBPUSD

The GBPUSD pair continues to fluctuate within sideways and tight track since yesterday, noticing that stochastic gets rid of its negative momentum to approach the oversold areas, waiting to motive the price to resume the bullish trend that its next targets located at 1.2260 followed by 1.2440.

 

 

The EMA50 continues to support the suggested bullish wave, which will remain valid unless breaking 1.2070 and holding below it.

[Solid ECN ✔️]

USDJPY

The USDJPY pair settles around 134.00 level since yesterday, affected by stochastic negativity that slows the intraday bullish wave, waiting to resume the rise and achieve our positive targets that start at 135.40 and extend to 137.70 after surpassing the previous level.

Therefore, we will keep our bullish overview conditioned by the price stability above 133.30, as breaking it will put the price under the negative pressure again, to head towards visiting 131.75 areas initially.
 

[Solid ECN ✔️]

EURUSD

A relief on the markets triggered by actions of US authorities over the weekend, aimed at containing risk from SVB collapse, turned out to be short-lived. US and European stock markets rallied yesterday but those moves are being reversed today. German DAX futures (DE30) are trading over 1% lower at press time while S&P 500 futures (US500) drop 0.6%. DE30 bears attempt to break below 15,000 pts mark at press time. A move lower on equity markets is accompanied by strengthening of USD which pressures EURUSD and GOLD.

While there is no clear reason behind the drop, it looks like markets remain nervous due to the situation in the banking sector. However, attention may be turning to the European banking sector. Shares of Credit Suisse are trading 10% lower today and hit a fresh record low. Credit Suisse top shareholder ruled out any further financial assistance to the European bank, which has been plagued by issues over recent years.

EURUSD plunged and tested a key near-term support zone in the 1.0675 area, marked with previous local low, 100-period moving average (H1 interval) as well as the lower limit of market geometry. A break below would, at least in theory, hint a bearish trend reversal.

DE30 has once again failed to break above the 15,244-15,285 pts resistance zone and launched a pull back. The index is attempting to make a break below psychological 15,000 pts at press time.
 

[Solid ECN ✔️]

AUDJPY

Monthly activity data from China was released during the Asian trading session and turned out to be mixed. This was the first monthly activity reading from China in 2023 and included year-to-date data for February, so for January and February combined. Industrial production missed expectations slightly, retail sales came more or less in-line with market expectations and urban investments beat expectations. While data came in mixed compared to expectations, a point to note is that all three metrics increased compared to year ago values. Small beat in retail sales data is welcome as Chinese authorities hinted they aim to leave fiscal spending more or less unchanged compared to 2022, meaning that domestic demand will be key in achieving goals set for 2023.

China, Monthly activity data for January-February period

• Industrial Production: 2.4% YoY vs 2.7% YoY expected
• Retail Sales: 3.5% YoY vs 3.4% YoY expected
• Urban Investments: 5.5% YoY vs 4.3% YoY expected

As it is usually the case, the Australian dollar moved following the release of Chinese data as China is a key trading partner for Australia, especially when it comes to commodities exports. Taking a look at AUDJPY at D1 interval, we can see that the pair jumped earlier today (orange circle) but has since erased all of the gains and turned lower. A point to note is that today's upward move could be seen as an attempt to break back above the lower limit of a recently broken upward channel. Attempts to climb back above this hurdle were made today, yesterday and on Monday and failed on all three days, suggesting that resumption of declines may be on the cards.
 

[Solid ECN ✔️]

AUDUSD

AUDUSD broke above the 0.6630 resistance zone following a solid jobs report from Australia. The pair is now testing the 200-hour moving average (purple line).

 

 

[Solid ECN ✔️]

EURUSD

EURUSD pair’s strong decline stopped at 1.0515 yesterday, which formed solid support against the price, to rebound bullishly and start building bullish wave on the intraday basis, motivated by stochastic positivity.

 

 

Therefore, we expect to witness more bullish bias in the upcoming sessions, and the targets begin at 1.0640 and extend to 1.0745 after surpassing the previous level. On the other hand, we should note that breaking 1.0515 will stop the expected rise and press on the price to suffer additional losses that reach 1.0440.

 

[Solid ECN ✔️]

GBPUSD

GBPUSD pair attempted to break the minor support 1.2060 but it consolidates above it, to keep the chances valid to resume the bullish trend on the intraday basis, waiting to visit 1.2260 as a next main target.

 

 

Stochastic provides clear positive signals now to support the expectations to rise in the upcoming sessions, and breaching 1.2145 will ease the mission of achieving the waited positive targets. We remind you that breaking 1.2060 will push the price to decline to test the most important support at 1.1940 before any new positive attempt.

 

[Solid ECN ✔️]

EURUSD

 

ECB to announce rates at 1:15 pm GMT, markets split between +25 and +50 bp

 

The European Central Bank is scheduled to announce the rate decision today at 1:15 pm GMT with ECB President Lagarde holding a post-meeting press conference at 1:45 pm GMT. Economists surveyed by Bloomberg and Reuters point to a 50 basis point rate hike but those surveys may be outdated already and do not reflect real expectations, following latest turmoil in the banking sector. Let's take a look at today's decision!

 

What's priced in?

Economists expected the European Central Bank to hike rates by 50 basis points today, putting the deposit rate at 3.00% - the highest level since late-2008. Such an outcome is expected by 55 out of 56 economists in a Bloomberg poll. Deutsche Bank is the only one predicting a 25 basis point move. However, it should be said that Deutsche Bank changed its forecast to 25 basis points as recently as yesterday amid a turmoil in the European banking sector. As money markets are much quicker to react to developments in financial markets than economists, a look at market pricing for today's meeting may offer a better picture. Markets currently price in around 40% chance of a 50 basis point rate hike and around 60% chance of a 25 basis point rate move.

 

 

Money markets are 60-40 split between a 25 and 50 basis point rate hike at today's meeting. 

 

How things changed after SVB-CS turmoil

Disconnect between economists' expectations and money market pricing is quite massive and it is easy to pinpoint the reason behind it - turmoil in the US and European banking sectors. While market participants were not too concerned about the ECB abandoning the plan to hike by 50 basis points, things changed this week as contagion fears spread to Europe with Credit Suisse shares freefalling yesterday. This has led to a massive drop in rate hike expectations with a chance of 50 basis points rate hike dropping from almost-100% to around-40%! 

 

 

Markets were almost fully pricing in a 50 basis point rate hike at today's meeting as recently as a week ago! 

 

ECB faces dilemma amid Credit Suisse turmoil

Turmoil in the European banking sector is causing a dilemma for the ECB - should it press on with significant rate hikes in an attempt to get inflation control even if it risks triggering a European banking crisis? This is a tricky choice to make.

 

On one hand, Credit Suisse managed to get assurances from the Swiss National Bank and Swiss regulator that it will receive support should the situation require. Credit Suisse announced that it intends to exercise an option to borrow an additional 50 billion CHF from Swiss National Bank via a covered-loan facility in order to improve its liquidity position. This led to relief on the market and an over-30% jump in Credit Suisse shares so far today.

 

On the other hand, support from SNB does not mean that woes for Credit Suisse are over. It is not a secret that Credit Suisse has been involved in some of recent high-profile market scandals, like Archegos or Greensill scandals. It looks like there may be some significant compliance and risk management flaws in the Swiss bank and it is having a negative impact on investors' confidence in the bank. While support from authorities helped ease concerns for now, another worrying piece of news on Credit Suisse may see troubles and market turmoil reignite.

 

Cautious message from Lagarde looks likely

Having said that, a cautious decision today if made, like hiking by just 25 basis points or even holding rates unchanged, should not come as a surprise. It will likely trigger dovish reaction on the markets (EUR down and equities up) given that expectations are split between +25 and +50 bp move. However, the accompanying statement is likely to be very cautious. ECB President Lagarde will face questions on banks' condition during the press conference but it looks highly likely that she will play down current risks, applaud actions by Swiss authorities and hint that ECB needs to better understand the situation and reasons behind it before making any response. She is also likely to be prudent when making statements on future policy moves and refrain from making clear comments on the size of rate hikes as she did last month when she strongly hinted that a 50 basis point rate increase is coming at the March meeting.

 

It should also be noted that it will be a quarterly ECB meeting and it means that a new set of economic projections will be released. Those are likely to point to lower headline inflation in the months ahead while core price growth is expected to be little change compared to previous forecasts.

 

A look at the markets: EURUSD and DE30

EURUSD slumped yesterday as banking sector woes spread across the Atlantic. The pair tested a short-term upward trendline but bulls managed to defend it. A point to note is that this trendline can be seen as the neckline of the head and shoulders pattern with the shoulderline being in 1.0740. A dovish ECB could see that pair erase today's daily gains and slump below the trendline. This would pave the way for a deeper drop.

 

 

Markets were almost fully pricing in a 50 basis point rate hike at today's meeting as recently as a week ago!

 

ECB faces dilemma amid Credit Suisse turmoil

Turmoil in the European banking sector is causing a dilemma for the ECB - should it press on with significant rate hikes in an attempt to get inflation control even if it risks triggering a European banking crisis? This is a tricky choice to make.

 

On one hand, Credit Suisse managed to get assurances from the Swiss National Bank and Swiss regulator that it will receive support should the situation require. Credit Suisse announced that it intends to exercise an option to borrow an additional 50 billion CHF from Swiss National Bank via a covered-loan facility in order to improve its liquidity position. This led to relief on the market and an over-30% jump in Credit Suisse shares so far today.

 

On the other hand, support from SNB does not mean that woes for Credit Suisse are over. It is not a secret that Credit Suisse has been involved in some of recent high-profile market scandals, like Archegos or Greensill scandals. It looks like there may be some significant compliance and risk management flaws in the Swiss bank and it is having a negative impact on investors' confidence in the bank. While support from authorities helped ease concerns for now, another worrying piece of news on Credit Suisse may see troubles and market turmoil reignite.

 

Cautious message from Lagarde looks likely

Having said that, a cautious decision today if made, like hiking by just 25 basis points or even holding rates unchanged, should not come as a surprise. It will likely trigger dovish reaction on the markets (EUR down and equities up) given that expectations are split between +25 and +50 bp move. However, the accompanying statement is likely to be very cautious. ECB President Lagarde will face questions on banks' condition during the press conference but it looks highly likely that she will play down current risks, applaud actions by Swiss authorities and hint that ECB needs to better understand the situation and reasons behind it before making any response. She is also likely to be prudent when making statements on future policy moves and refrain from making clear comments on the size of rate hikes as she did last month when she strongly hinted that a 50 basis point rate increase is coming at the March meeting.

 

It should also be noted that it will be a quarterly ECB meeting and it means that a new set of economic projections will be released. Those are likely to point to lower headline inflation in the months ahead while core price growth is expected to be little change compared to previous forecasts.

 

 

A look at the markets: EURUSD and DE30

EURUSD slumped yesterday as banking sector woes spread across the Atlantic. The pair tested a short-term upward trendline but bulls managed to defend it. A point to note is that this trendline can be seen as the neckline of the head and shoulders pattern with the shoulderline being in 1.0740. A dovish ECB could see that pair erase today's daily gains and slump below the trendline. This would pave the way for a deeper drop.