official Market Update by Solidecn.com

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EURCHF

Our EURCHF analysis shows a bearish trend with the pair trading below the 0.9524 resistance. 

The 4-hour chart reveals a double bottom pattern, suggesting a potential rise. Despite this, our overall outlook remains bearish. Swing traders might see a bullish opportunity, but if the pair closes below 0.946, we expect a decline to 0.942.

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October 19 Market Overview

 

The Reserve Bank of Australia (RBA) has noted that there are distortions in the market prices. For example, the DXY is trading above its 50-year monthly average at around 99.00, and GBP/JPY is trading between 179.50 to 181.07, which is between its 36 and 37-year monthly averages. Last year, WTI traded at the 24-year monthly average when it was in the 70's. USD/JPY and EUR/USD need to align with DXY's 50-year monthly averages.

 

The SPX 500 is trading normally between its 1 and 10-year monthly averages. The speculation for XAU/USD and Gold, priced in all currencies, also trades between their 1 and 10-year monthly averages. However, these will not adjust to distorted locations and prices until the currency price trades normally again.

 

Central banks need to lower interest rates to normalize markets and currency prices. This is because the Federal Reserve's (Fed) increase of 500 points has caused distortions in market prices, especially since these increases did not reduce inflation.

 

The Fed's strategy to follow Volker was a complete failure. If the Fed had not increased rates, markets would be trading normally today and inflation would also be at normal levels and decrease faster than expected.

 

In terms of monetary policy, central banks consider inflation, interest rates, and exchange rates as import lines. The exchange rate should ideally be in the middle of import and export lines. Export lines include GDP, money supplies, and producer prices.

 

The position of the exchange rate is currently incorrect due to central bank increases which have distorted import/export prices and consequently, market prices.

 

Market normalization only occurs two weeks of every month when most vital GDP and inflation are released as import and export lines. GDP and inflation are running per month at differences of 0.10 to 0.20. At this rate, central banks may take until 2050 to normalize inflation at 2% while markets remain distorted and GDP remains low.

 

A major issue is the daily trade of interest rates at 2, 3, and 5 points. Central Banks raise by 500 points but offer daily trades at only 5 points. This problem won't see normalization anytime soon.

 

In terms of exports exceeding imports, the Swiss National Bank (SNB) is doing well compared to the Fed, Bank of Japan (BOJ), Bank of England (BOE), Reserve Bank of Australia (RBA), and Reserve Bank of New Zealand (RBNZ) where imports exceed exports.

 

Last week, EUR/USD and other EUR currencies were oversold but have since risen. This week, EUR/USD, EUR/JPY, and EUR/CHF are deeply oversold while EUR/AUD and EUR/NZD are overbought. GBP is trading similarly to EUR with GBP/USD, GBP/CHF, and GBP/JPY being deeply oversold.

 

There are issues as overbought EUR/AUD trades oversold to GBP/AUD, overbought EUR/NZD trades oversold to GBP/NZD, and oversold GBP/CAD trades oversold to EUR/CAD.

 

Next week we're watching for GBP/AUD at 1.9196 while GBP/NZD and EUR/NZD correct lower but fail to break any significant averages.

 

EUR/USD, GBP/USD, AUD/USD, NZD/USD are all not only massively oversold but close to extreme oversold. There's no concept of shorts for next week.

 

EUR/USD must trade at least to 1.0652 then trade above 1.0685 to easily target 1.0819 or higher.

 

GBP/USD has a minimum target at 1.2332; AUDUSD at 0.6539; NZDUSD has a minimum target between 0.6047 and 0.6214.

 

The anchor pairs must bring us back to normal trading again which means wider ranges, more profitable trades, and more currencies to trade.

 

The USD/JPY pair has a target of 148.07 for next week. The long-term targets are 144.27, 136.53, 131.99, and 128.60. It’s important to note that the 128.60 level in January was at 122.00, and this line has increased by about 60 pips each month for the past nine months.

 

The USD/JPY pair has the potential to move by 1000 pips in a day, but this isn’t seen as a significant move. Currently, USD/JPY is trading with daily movements of only around 50 to 70 pips, indicating significant distortions.

 

For the EUR/JPY pair, there’s a significant drop to 156.21, and for GBP/JPY it’s 180.62. GBP/JPY is expected to lead the way for all JPY cross pairs. Keep an eye on AUD/JPY next week for potential long and short positions at 94.32 and NZD/JPY at 87.61.

 

USD/CAD is trading in an overbought condition as usual and continues to aim for the long-term target in the 1.3100 range. The best strategy is to only trade short in order to follow the trend.

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EURHUF

The EURHUF pair exited the bearish channel, but bulls couldn't surpass the 391.6 resistance, indicated by a long wick pattern on the weekly chart. With RSI and Stochastic oscillator dipping below signal lines, the pair's outlook stays bearish.

On the daily chart, EURHUF broke the bearish trendline on October 23 and is now stabilizing below this level. The RSI is under 50, signaling bearishness, but the Stochastic oscillator is in oversold territory, suggesting a possible correction to 386 before further decline.

If EURHUF remains under the 388 pivot, bears aim for 379. However, if it closes above the pivot, the bearish scenario becomes invalid, and the market could rise to test and potentially breach the 394 resistance.

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EURMXN

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The EURMXN currency pair recently broke out of the bearish channel on the weekly chart. Just last week, the pair retested the broken channel, causing the price to surge to an October high.

 

 

Upon closer inspection of the 4-hour chart, we observe that the EURMXN bulls encountered a formidable barrier around the 19.4 resistance level. This has temporarily halted the rising momentum. The Relative Strength Index (RSI) and the Stochastic Oscillator are both in the overbought area, mirroring the signals from the Bollinger Bands.

 

 

Given these technical indicators pointing to an overbought market, it is plausible that the EURMXN will experience sideways movement in the upcoming session before making another attempt to break through the 19.4 resistance. A close above this level would pave the way for the bulls to reach the 19.6 resistance level.

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Gold Forecast October with Swing Trading

The XAUUSD pair has been on an upward trajectory since October 25. This bullish trend was marked by a significant breakout from the bearish channel, which was subsequently tested on October 17. Currently, the yellow metal is not just surpassing its September high of $1,949 resistance, but also trading above the Ichimoku cloud. The position above the Ichimoku cloud is a strong indicator of a bullish bias in the market. This suggests that investors are optimistic about gold’s future performance and are willing to buy at current prices in anticipation of further increases.

In terms of technical indicators, the Stochastic oscillator is currently in the overbought zone. This typically suggests that the asset has been bought excessively and could be due for a price correction. However, it’s worth noting that the Relative Strength Index (RSI), another momentum indicator, still has some room before reaching the overbought area. This divergence between the two indicators suggests that while gold may be overbought according to the Stochastic oscillator, there may still be some upward momentum left according to the RSI.

Given these conditions, there is potential for gold’s price to rise higher and target the $1,989 resistance level. However, it’s also possible that we might see a retest of the $1,920 level before any further gains are made. This could provide an opportunity for investors who missed out on the initial breakout to enter at a more favorable price point.

Final Word

In conclusion to our gold forecast October, while gold’s current bullish trend and its position above the Ichimoku cloud suggest potential for further gains, investors should also be mindful of technical indicators such as the Stochastic oscillator and RSI which suggest that a price correction could be on the horizon.

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EURSGD

 

In a significant development, the EURSGD pair has successfully broken out of the bearish channel, closing above the crucial 1.45 pivot point on the daily chart. This shift is further confirmed by the RSI indicator, which has flipped above the 50 line, indicating a bullish bias. 

 

Given these factors, it's anticipated that the EURSGD pair will continue its upward trajectory, potentially gaining value and reaching the R1 support level around the 1.461 area. 

 

 

The pivot point serves as a strong support for the bullish scenario in the EURSGD market. However, if the bears manage to push the EURSGD pair to close below this level, it could signal a continuation of the decline. The next target for the pair would be the S1 support level, situated around the 1.434 area. Keep an eye on these key levels in the EURSGD market for potential trading opportunities.

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XRPUSD Technical Analysis: Ripple’s Breakout and Market Volatility

Ripple (XRP) recently experienced a significant breakout, surpassing the 0.53064 mark. This event led to a surge in momentum indicators, with both the Relative Strength Index (RSI) and Stochastic Oscillator entering the overbought area. This is a clear indication of strong buying pressure and heightened investor interest. 

The recent news surrounding Ripple has added an extra layer of volatility to the market. It’s important to note that market volatility can present both opportunities and risks for traders. High volatility often leads to larger price swings, which can result in higher profits or losses.

Bearish traders have exerted pressure on the XRPUSD pair, resulting in the formation of a long-wick candlestick pattern. This pattern is often seen as a sign of a potential price reversal. The 0.5306 level is playing a crucial role as the main support for the recent gains. As long as the XRP price remains above this level, there’s a valid outlook for bullish traders to push the price towards 0.5488.

However, if bearish traders manage to close the XRP price below 0.5063, it could trigger a price drop targeting 0.477. This scenario underlines the importance of key support and resistance levels in determining potential market movements.

In conclusion, while Ripple’s recent breakout and the subsequent market volatility present potential opportunities for traders, it’s crucial to closely monitor key technical indicators and market news to make informed trading decisions.

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EURUSD

Stable Interest Rates and Outlook: The ECB is expected to keep interest rates and its outlook stable in its upcoming meeting. The current interest rate level is seen as contributing substantially to achieving the inflation target.

 

Impact of Higher Oil Prices: Questions may arise about the impact of higher oil prices due to a potential crisis in the Middle East. The effects could vary, with possible inflation increase on one hand, and loss of purchasing power for households and businesses on the other.

 

Decline in Inflation Rate: A long-term decline in the inflation rate is expected, with uncertainty about the speed. Factors such as a weak economy could accelerate the decline, while stronger wage increases could slow it down.

 

Eurozone PMI Data: A flash estimate of Eurozone PMI data will be published next week, with no immediate improvement in sentiment expected for October. However, an increase in growth momentum in the Eurozone is anticipated from the first half of 2024.

Technical

The currency pair is currently trending downwards within a bearish channel, and the Relative Strength Index (RSI) is on the verge of dipping below the midpoint of 50. If the bears manage to close below the bullish channel (indicated in blue), we can expect the downward trend to persist, with targets set at Support 1 (S1) and subsequently Support 2 (S2).

 

On the other hand, Resistance 1 (R1) is set at 1.06. If the currency pair closes above this resistance level on the 4-hour chart, it would indicate a continuation of the bullish trend that began earlier this month.

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EURCZK Forecast

The EUR CZK (Euro currency against Czech Koruna) has been experiencing a positive trend since May 2023. This bullish momentum has seen the EURCZK price break free from its previous bearish channel, and it is currently trading within a narrow bullish channel near the pivotal 24.73 mark.

The Stochastic oscillator, a popular momentum indicator, is currently in the overbought zone (Weekly chart). This suggests that we might be on the cusp of a trend reversal or a price correction.

For a more detailed view of the EURCZK forecast and price action, it’s recommended to zoom into the 4-hour chart.

Here, you’ll notice that EURCZK is trading within a specific range, highlighted by a box. It’s important to note that this currency pair is nearing the significant 24.73 barrier on the weekly chart, and the Stochastic oscillator remains in the overbought zone. Technical indicators suggest that bearish momentum is gaining strength, so it’s advised not to go long unless the EURCZK bulls manage to break out of the pivot and close above it.

In this forecast, we’re primarily focusing on the bearish scenario. Therefore, FxNews analysts suggest that if the EURCZK closes below the box (which is under the 24.5 area), we can expect the decline to continue to S1 (24.5), followed by the lower line of the bullish channel.

This analysis provides valuable insights for traders and investors looking to navigate the volatile world of forex trading. It’s always important to stay updated with market trends and make informed decisions based on comprehensive technical analysis.

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EURUSD

 

The Euro to US Dollar exchange rate is currently below the indicator’s signal lines. It’s moving above something called the Ichimoku Cloud, which usually means the exchange rate might increase. 

 

 

We expect it to first reach the lower edge of the Cloud at 1.0550, and then rise to 1.0675. Another sign that it might rise is if it bounces off the lower edge of the ‘bullish channel’. However, if it breaks through the lower edge of the Cloud and goes below 1.0525, this could mean it will drop further to 1.0430.

 

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EURUSD Futures: Technical View

The EURUSD currency pair has been on a downward trend since July 17th, extending to a low of around 1.0493 in January 2023. This decline was triggered by a breakout of the bearish channel by EURUSD bears. Currently, the pair is trading within the Ichimoku cloud, and a hammer candlestick pattern was observed two weeks ago near the support zone. Given that the stochastic oscillator is in the oversold area on the weekly chart, we might see a correction or reversal in the EURUSD futures price.

Weekly Chart

For a more detailed analysis of the EURUSD futures price, let’s take a closer look at the daily chart.

Daily Chart

Despite attempts by the bulls to break out of the bearish channel and pivot at 1.065, they have been unsuccessful. The pair is now trading within a range between 1.0493 and 1.065. These two key levels are crucial for the future price of EURUSD. If the bulls manage to close above the pivot, we could see a continuation of the upward momentum, with initial targets at R1 (1.081) followed by R2 (1.104).

Conversely, if the pair closes below 1.0493, we could see a continuation of the decline that began on July 17th, with a target at S1 (1.025).

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Euro Stays the Same as Everyone Waits for the Big Bank Meeting

The Euro isn't changing much. It's still a little bit less than 1.06 dollars. It's hard for it to go higher right now. People are also watching what's happening in places far away in the Middle East. They're worried things might get worse there. This worry makes it tough for the Euro to start going up a lot.

 

In the United States, they're getting more money back for lending it (this is called high "yields" on something named "Treasuries"), and things are uncertain. So, for now, people like the US dollar more. But, the Euro is trying to stay strong. It's reacting well even when things get tough, and it's not going down just because stock markets might be going down.

 

There's not much news today. The only big thing is how confident people in Europe feel about buying things. There's no big news or talks from the United States today.

 

Everyone is really thinking about a big meeting for the European Central Bank coming on Thursday. They're pretty sure the bank won't change the interest rates (the cost of borrowing money). But they're very curious about what the bank's boss, President Lagarde, will say about how things are going with money and prices going up (that's called inflation).

 

For today, no one thinks anything surprising will happen. The value of money between the Euro and the dollar probably won't change much. If the Euro can stay at or above 1.06 dollars, that's good. But things can always change because of what's happening in the Middle East.

 

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Bitcoin’s Rollercoaster Ride: Predictions from the Pros

As Bitcoin’s wild ride keeps everyone guessing, big names are dropping hints about where it might head next. Currently, Bitcoin is at $30,377, a tiny bit higher than yesterday.

 

The Dollar’s Dive: Schiff’s Scary Prediction

Peter Schiff, a money expert, thinks trouble’s brewing for the US dollar. He predicts a long-lasting money slump and prices going up too fast, which isn’t good news for folks with dollars. But for Bitcoin, it might be a silver lining.

Saylor Says Bitcoin’s a Winner

Then there’s Michael Saylor, a big Bitcoin fan, showing off how well his Bitcoin plan has worked. His company, MicroStrategy, loves Bitcoin so much; they bought more, now owning a stash worth a whopping $4.68 billion. This big move might be giving Bitcoin’s price a nudge up.

Kiyosaki’s Crystal Ball: Gold Glitters, Bitcoin Booms

Robert Kiyosaki, the guy who wrote “Rich Dad Poor Dad,” thinks Bitcoin could shoot up to an amazing $135,000. He’s also big on gold, expecting it to do pretty well.

Predicting Bitcoin’s Next Move

Looking at Bitcoin’s recent price chart, there are some key numbers to watch. It’s swinging around $29,208, with the next big hurdle at $31,207. If it breaks through that, it could head for $32,440 or even $34,473. But if it starts slipping, it might drop to around $29,174 or lower.

 

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GBPJPY

The GBPJPY currency pair is currently experiencing a bearish trend, having exited the bullish channel in a downward direction. This shift in market dynamics is further confirmed by the Stochastic indicator, which is presently hovering in the overbought zone. With the GBPJPY price steadfastly holding below the 182.9 mark, the bearish outlook for this currency pair remains strong. Traders keeping a close eye on this pair might want to set their sights on the next target of 176.

However, it's important to note that this bearish outlook could be invalidated if there's a breakout of the GBPJPY price at the pivot point. In such a scenario, bullish traders could potentially look forward to a next target at R2, which stands at 187.9.

In summary, while the current market sentiment for the GBPJPY currency pair leans towards the bearish side, traders should remain vigilant for any potential price breakouts at the pivot point that could signal a shift towards a bullish market.

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Gold 

Gold prices have stopped rising just below a five-month high on Monday. The rapid increase in prices slowed down as it got close to the $2000 mark. After a strong push back on Friday, it's clear that the $2000 area is a big hurdle. This has led traders to take some profits from the over 7% increase in the last two weeks.

 

 

Daily indicators suggest that this pause was expected, although the slight drop shows that buyers are still interested in pushing the price above $2000.

 

Due to unrest in the Middle East, traders are looking for safer options. The possibility of conflict escalating increases the demand for gold, which continues to drive up its price.

 

The slight drop in price has stabilized above the rising 5-day moving average ($1960). Any further drops are expected to stay above $1945 (the halfway point between $2080 and $1810), indicating a normal correction and keeping the overall upward trend intact.

 

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EURUSD

 

The eurusd graph indicates a sharp decline, potentially in five distinct stages. We're currently experiencing a temporary rise in the fourth stage. The third stage seems finished, and now we're in a phase of slight recovery.

 

The price is moving along a track at 1.07, corresponding to a key financial marker known as the 38.2 Fibonacci level. Our hope is for prices to adhere to this boundary and then plummet swiftly to round off the fifth stage. We anticipate the price might settle around 1.03000 when the fifth stage ends. Our projection is that the euro will become more robust as 2023 progresses.

 

 

Inflation rates in Europe are dipping, and the prediction is that the European Central Bank (ECB) will maintain the current interest rates throughout 2023. Expenses, especially for fuel, are surging due to turmoil in the Middle East. If these expenses stabilize, the euro is likely to fortify against other currencies.

 

Upcoming crucial updates this week: On EURO 23rd October, we expect news on French and German manufacturing and services. October 25th will bring insights into the German business climate and a speech from ECB President Lagarde. October 26th will feature announcements on interest rates, the ECB's financial strategy, and a major press event.

 

Potential high points: 1.07; 1.07580; 1.083

Potential low points: 1.04; 1.036; 1.03

 

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Recession Looms Over Eurozone: PMI Indices Disappoint, EURUSD Dips

The economy in Europe is slowing down, which is causing worries about a possible recession in Germany and the entire eurozone.

The PMI indices, which are often used by investors to predict economic trends, have shown disappointing results for October. Instead of the hoped-for improvement, they indicate that the recession is getting worse.

The German services sector was particularly disappointing. Its index dropped from 50.3 to 48.0, indicating a contraction rather than growth. This was much weaker than the expected 50.1.

In France, the services index was 46.1, which is better than the expected 44.9 but still quite low.

Because of these results, the PMI for the whole euro area dropped to 47.8, the lowest it’s been since February 2021.

The manufacturing sector in the euro area also showed a faster contraction, with its index falling from 43.4 to 43.0 instead of rebounding to 43.6 as expected.

The composite index dropped from 47.2 to 46.5, which is the biggest drop since October 2020. This was unexpected and led to a sell-off in the single currency.

After this data was released, the EURUSD lost almost 0.5% and moved sharply away from 1.07. Sellers increased pressure after the pair touched its 50-day moving average, which is an indicator of medium-term trends.

If it closes below 1.07, it suggests that the recent recovery from 1.05 levels was just a correction and not a trend change.

In terms of fundamentals, Europe is having a hard time growing due to rising interest rates and fluctuating energy prices. These conditions have caused the ECB to stop raising rates earlier than the Fed. It’s possible that, like in the previous cycle of rate hikes after the global financial crisis, the ECB might start easing earlier than the Fed. This is a significant factor that’s putting pressure on the euro against the dollar, especially now that carry trade has become a key market driver.

 

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Crude Oil

The U.S. oil industry, known as "Big Oil", is seeing growth in production and mergers. Active drilling rigs increased to 502 for oil and 122 for gas last week, marking a second week of growth. Daily oil production has hit a record 13.2 million barrels per day. 

 

Crude oil stocks are 4% lower than last year, possibly encouraging more investment in oil production. The U.S. government's decision to buy oil for its Strategic Petroleum Reserve may have also played a part.

 

Chevron is buying Hess for $60 billion, following Exxon Mobil's acquisition of Pioneer Natural Resources for $58 billion. The easing of sanctions on Venezuela could benefit U.S. oil producers with operations there.

 

Long-term factors like Middle East conflicts and potential supply disruptions are encouraging investment in U.S. oil production. Despite this, OPEC+ countries are limiting production to maintain prices.

 

This could signal a shift from focusing on profits to a battle for market share, a challenging task given years of record interest rates. However, major players with substantial capital reserves and strong government lobbying power are now involved.

 

 

Crude oil prices are currently testing the lower boundary of a bullish channel, with the Stochastic oscillator indicating an oversold market condition. If prices manage to settle below this critical level, we could see a continuation of the downward trend, potentially reaching the S2 support level around $83.

 

 

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Eurozone's Inflation Slowdown: A Simplified Insight

Eurozone inflation is slowing down, affecting many sectors and making things less expensive compared to the European Central Bank's (ECB) goals. However, overall inflation is still higher than what the ECB wants. If this trend continues, it may take until next September for the yearly inflation rate to stabilize at 2%. Rising global tensions might push up energy costs, making everything else pricier and slowing the reduction in overall inflation.

 

Here's what happened in September: Yearly inflation dropped to 4.3% from 5.2% in August and 9.9% last year. Costs for things like energy went down, and prices for factory goods (excluding energy) and services rose less than before. Charts show that this slowdown is widespread, with most sectors experiencing inflation below the ECB's target recently.

 

Let's break it down by sectors using October last year as a reference:

1. Most sectors, except energy, still have higher yearly inflation than the ECB's target as of September 2023.
2. Good news: Recent data shows food and factory goods (excluding energy) prices are rising slower.
3. Bad news: Energy costs might be going up again, which is worrying because it affects everything from household budgets to business costs, and overall inflation.
4. Services are mixed: Some areas are more expensive than last year, while others are cheaper. Most are still pricier than the ECB's target.
5. Core inflation (excluding energy, food, alcohol, and tobacco) looks promising, with prices recently increasing at a rate slightly below the target.

In simple terms, while the cost of living in the Eurozone is rising slower, it's still more expensive than what's considered ideal, and global events might make things costlier soon.

 

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Gold

The price of gold has retreated from the $2,000 mark and is currently testing the $1,949 support level. This decline was anticipated as the RSI and Stochastic indicators were in the overbought zone.

A closer look at the 4-hour chart provides a clearer picture of gold’s price action. The precious metal formed a hammer candlestick pattern at the pivot point ($1,962), and the stochastic oscillator is nearing the overbought zone, indicating a potential exit from this area. The RSI indicator remains above 50.

Considering current market data, technical indicators, and key levels, if the price can maintain above $1,949, it’s likely that the XAUUSD price will rise to R3 ($2,025).

Conversely, if bears manage to push the price below $1,949, we could see a continued decline towards the upper line of the bearish channel around $1,900.

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