official Market Update by Solidecn.com

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Euro Climbs: What Traders Need to Know

Solid ECN – The Euro climbed above $1.085, marking its highest point in five weeks. This rise comes as traders anticipate changes in monetary policies between the US and Europe.

The European Central Bank (ECB) is expected to cut interest rates at its meeting on June 6. Market predictions suggest a potential decrease of around 70 basis points over the year. This expectation has contributed to the Euro's recent strength.

There is growing speculation in the US that the Federal Reserve will cut rates this year. This follows a slowdown in core inflation in April, the first in six months. If the Fed does cut rates, it could further influence forex markets.

Recent GDP data showed that the Euro Area has exited recession in the first quarter. The European Commission's latest forecasts indicate a steady economic path ahead. This positive outlook supports the Euro's strength and adds confidence for investors.

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USD/JPY 

The USDJPY traded at about 155.3 in today's trading session, which is inside the wedge pattern on the daily chart. The upper trendline acts as resistance, which the bulls are testing it. % 50 Fibonacci backs this level. 

If the price breaks above the descending trendline and maintains momentum, we could see a retest of the immediate resistance at 157.0. A successful breakout above this level could target the next resistance at 158.4. 

Bearish Scenario

If the price fails to break above the descending triangle and falls below the ascending trendline, we could see a decline toward the immediate support at 151.8. 

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EUR/USD Analysis

Solid ECN—The EUR/USD 4-hour chart reveals a strong uptrend within a well-defined ascending channel. The price is currently trading near the upper boundary of this channel, suggesting that upward momentum is being maintained.

Bullish Scenario:

If the pair continues to respect the ascending channel and the bullish indicators hold, the next immediate target could be the recent high around 1.089. A breakout above this level could see the pair testing the psychological resistance at 1.0900 and potentially extending towards 1.0930.

Bearish Scenario:

Should the pair fail to maintain the current momentum and break below the lower boundary of the ascending channel, immediate support is expected around the 38.2% Fibonacci retracement level at 1.08. A further decline could be seen in the pair testing the 50% retracement level at approximately 1.07.

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UK Labour Data Fuels Rate Cut Expectations

Solid ECN – The British pound edged slightly lower to $1.25 as traders digested recent labor data and the monetary policy outlook. The UK’s unemployment rate rose for the third month, while wage growth remained steady at 6%. This data aligns with the Bank of England’s (BoE) forecast and suggests that a rate cut could be on the horizon.

The probability of a BoE rate cut by June has increased slightly to 50%. Traders are betting that the central bank will deliver two quarter-point cuts by the end of the year. During its May meeting, the BoE maintained interest rates, but two members advocated for a rate cut, indicating a possible shift towards lower borrowing costs.

Governor Andrew Bailey hinted at potential future rate cuts, suggesting a more accommodative monetary policy ahead. This aligns with market expectations and reinforces the view that the BoE might soon reduce interest rates to support the economy.

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GBP/USD Bullish Momentum: Key Levels to Watch

Solid ECN – The GBP/USD daily chart reveals a recent uptrend within a well-defined ascending channel, indicating bullish momentum. Currently, the price is testing a key resistance level (1.27), which will be critical in determining the next direction.

RSI (14)

The Relative Strength Index (RSI) is at 64.99, suggesting bullish momentum. Although it is approaching overbought territory, it still has room to rise before a potential reversal.

Awesome Oscillator (AO)

The Awesome Oscillator shows increasing green bars, indicating strengthening bullish momentum. This positive momentum supports the potential for further upward movement.

Resistance Levels

1.270: The immediate resistance level, which the price is currently testing.
1.280: Next significant resistance level.

Support Levels

1.264: Immediate support level within the ascending channel.
1.259: Lower boundary of the ascending channel and a previous support level.

Bullish Scenario

If the pair breaks above the immediate resistance at 1.270, the next target would be the resistance 1.280. Sustained bullish momentum could see the pair aiming for 1.28 and potentially higher levels towards 1.289. The ascending channel supports this outlook, indicating the trend may continue upward if the price remains within the channel.

Bearish Scenario

If the pair fails to break the resistance at 1.2708 and falls below the immediate support at 1.264, we could see a decline towards the lower boundary of the ascending channel at 1.259. A breakdown below this level could target further support of around 1.2400.
 

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NZD/USD Bullish Momentum Faces Critical Test

Solid ECN – The NZD/USD 4-hour chart shows the pair experiencing a recent uptrend. The price moves between key support and resistance levels, indicating potential future movements.

RSI (14)

The Relative Strength Index (RSI) is at 57.82, suggesting moderate bullish momentum without being overbought.

Awesome Oscillator (AO)

The Awesome Oscillator displays positive bars, indicating bullish momentum. However, the decreasing size of the bars suggests weakening momentum.

Bollinger Bands

The price recently touched the upper Bollinger Band and is now pulling back toward the middle band, indicating a potential consolidation phase.

Resistance Levels

0.613: Immediate resistance level.
0.6215: Key resistance level marking a recent high.

Support Levels

0.609: Immediate support level.
0.604: Further support level.
0.598: Key support level indicating a strong foundation for the price.

Bullish Scenario

If the price maintains above the immediate support at 0.609 and rebounds, it could test the resistance at 0.613. A breakout above this level could target the next resistance at 0.621. Sustained bullish momentum could drive the pair towards 0.6250.

Bearish Scenario

If the price falls below the immediate support at 0.609, it could decline towards the next support at 0.604. A breakdown below this level could target the key support at 0.598. Further bearish momentum could push the price to 0.5950.
 

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USCHF Technical Analysis 

Solid ECN – The USD/CHF pair bounced from the 0.9 resistance and is trading at around 0.91 at the time of writing. The American currency is closing above the middle line of the Bollinger Band, a development that could lead to further growth against the Swiss Franc.

From a technical standpoint, the primary trend remains intact if the price exceeds the immediate support at 0.9. If the bulls cross above the immediate resistance at 0.91, the exchange rate could extend to 0.922.

Conversely, if the USD/CHF price dips below the immediate support of 0.9, the decline that began on May 1 will likely escalate and target the 0.88 mark.

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GBP/USD Bullish Trend Faces Overbought Signals

Solid ECN – The GBP/USD pair is trading at about 1.27, above the 61.8% Fibonacci retracement level in today's session. The RSI indicator is at 67.2, suggesting strong bullish momentum and approaching overbought territory. On the other hand, the recent bars of the Awesome Oscillator are smaller, indicating the uptrend is weakening.

From a technical standpoint, the primary trend is bullish, but the RSI signals that the pair might be overbought. Therefore, waiting for the GBP/USD to consolidate near the 50-day EMA would provide a better entry point than going long on the pair at the current price.

Conversely, the bullish trend would be invalidated if the price dips below the 50-day EMA at 1.263.

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Consolidation Phase for AUD/USD

Solid ECN – The AUD/USD currency pair bounced from the EMA 50, trading around $0.666, while the Awesome Oscillator shows a divergence signal. This suggests the trend might reverse or enter a consolidation phase.

The bullish channel supports the uptrend, and as long as AUD/USD stays within this range, the primary trend remains intact.

From a technical standpoint, the consolidation phase that began last week might extend to the immediate support at 0.662 if the price remains below the immediate resistance level of 0.668.

Conversely, the bulls must close and stabilize the price above the 0.668 resistance for the uptrend to resume. If this scenario occurs, the next target could be the 0.671 high.

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NZD/USD Testing Key Support at 0.609

Solid ECN – The NZD/USD is testing immediate support at 0.609 today, aligning with the lower band of the Bollinger Bands. The RSI hovers around the middle line, and the Awesome Oscillator approaches the zero line with red bars, indicating a lack of momentum for the currency pair.

From a technical standpoint, NZD/USD could dip to the 50 EMA, followed by the ascending trendline if bears maintain their position below the immediate resistance at 0.611.

Conversely, if bulls push above 0.611, the bullish trend will likely resume, with the immediate target being the 0.613 mark.

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USD/JPY Eyes Key Resistance Levels!

Solid ECN – The USD/JPY pair trades within a bullish channel and above the EMA 50 and Ichimoku cloud. The pair trades around 156.4 when writing, facing immediate resistance at 156.56.

The primary trend is bullish. If the bulls break out from the immediate resistance at 156.56, the uptrend that began at 153.6 could target 157.9, which aligns with the flag's upper line.

Conversely, 155.26 is the immediate support. If the USD/JPY price dips below this support, the downtrend could likely extend to the ascending trendline.

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Unexpected Rise in US Crude Inventories Amid Rate Concerns

Solid ECN – On Wednesday, TWTI crude futures dropped to about $78 per barrel, marking a downward trend for the third consecutive day. The slide is primarily due to concerns about when the US Federal Reserve will start reducing interest rates. 

This week, Fed officials advocated for prudence and a solid indication that inflation would stabilize at 2% before any rate cuts occur. Contrary to expectations of a decrease, US crude stockpiles rose by 2.48 million barrels last week. Additionally, tension in the Middle East, which typically increases oil prices, has eased without impacting oil supplies. 

The upcoming OPEC+ meeting on June 1 is now in focus. Key oil producers are expected to continue limiting production to avoid a surplus and support higher prices.

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Gold Stable Amid Tensions and Fed Talks

Solid ECN—Gold prices are steady at around $2,410 per ounce this Wednesday. The price calmed a bit after reaching new peaks. As investors ponder comments from Federal Reserve officials, caution remains a theme.

Many Fed leaders suggest waiting a few more months to be sure inflation targets are being met before cutting interest rates. Later today, details from the Fed's recent meeting will be shared, and additional insights are expected from Fed speeches.

Meanwhile, tensions between the U.S. and China, alongside worries about increased conflicts in the Middle East following the death of Iran's President Ebrahim Raisi, are preventing a significant drop in gold prices. Also, efforts in China to address troubles in its real estate sector are helping to support gold prices.

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Silver Prices Hold Steady Amid Fed Policy Evaluations

Solid ECN – Silver prices have settled at around $31.7 per ounce, maintaining the peak levels not seen since December 2012. This stability comes as investors reevaluate the U.S. Federal Reserve's future actions based on recent statements from the officials. 

Fed Vice Chair Michael Barr highlighted the need for patience in assessing the impact of current policies. At the same time, Atlanta Fed President Raphael Bostic projected only a single interest rate reduction this year. Although higher interest rates generally reduce the attractiveness of non-yield-bearing assets like silver, its demand continues due to widespread industrial use. 

Furthermore, silver supply shortages persist, entering the fourth year of deficits. Stock levels at the London Bullion Market Association have dropped to near-record lows in April, with similar trends observed in New York and Shanghai's exchanges.

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Bitcoin Stability Above $62,918 Signals Bullish Trend

Solid ECN – Bitcoin's price has stabilized above the 78.6% Fibonacci retracement level at $62,918, aligning with the middle line of the Bollinger Band indicator. The Awesome Oscillator shows red bars, indicating bearish momentum. Meanwhile, the RSI has moved down from the overbought territory, staying above 50, which suggests continued strength. 

From a technical standpoint, the primary trend remains bullish. Immediate resistance is found at $70,346. If Bitcoin breaks through the current support, the upward trend could resume, possibly reaching a new target of $73,720.

Conversely, a drop below the immediate support of $69,218 might extend today's consolidation phase toward the 61.8% Fibonacci level at $64,466.

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Ethereum Price Correction After Bullish Breakout

Solid ECN – Ethereum experienced a significant price surge after breaking out from $3,141. The robust bullish momentum eased when the ETH/USD price reached the 78.6% target of $3,813. This surge pushed the RSI into oversold territory, and it currently hovers around the 70 line, indicating a potential correction.

From a technical perspective, entering long positions in an overbought market is not advisable. Traders should wait for the crypto pair to consolidate, which may lead to a dip to the 61.8% Fibonacci support at $3,598, followed by secondary support at $3,446.

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EUR/USD Analysis: Bearish Signals and Key Fibonacci Levels

Solid ECN – The EUR/USD currency pair broke below the ascending trendline and is trading a bearish flag in today's session at approximately $1.0827. The technical indicators are bearish, with the RSI hovering below the 50 line and the Awesome Oscillator bars red and below the signal line.

The 23.6% Fibonacci level is the immediate resistance. If the price stays below this level, the downtrend could extend to the 38.2% Fibonacci level at $1.082.

Conversely, the primary uptrend will resume if the bulls close and stabilize the price above the immediate support at $1.083. In this case, the first target would be retesting the $1.089 ceiling.

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AUD/USD Downtrend and Potential Reversal Signals

Solid ECN–The AUD/USD price dipped below the ascending trendline and the EMA 50. As of this posting, the pair is in a downtrend, trading at about $0.662. The technical indicators are bearish, with the RSI value at 38 and the Awesome Oscillator value at -0.004. However, the AUD/USD formed a hammer candlestick pattern, clinging to the 38.2% Fibonacci level, which could indicate a potential trend reversal.

From a technical standpoint, it is recommended that the pair break either the immediate support at $0.660 or the resistance at $0.664 before joining the market. If the price drops below $0.660, the downtrend will likely target the 50% Fibonacci level, followed by the $0.657 mark.

Conversely, the primary bullish trend should resume if the bulls close and stabilize the price above the immediate resistance at $0.664.

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USD/CAD Faces Crucial 50% Fibonacci Test

Solid ECN – The USD/CAD trend reversed after the price neared the descending trendline, and as of writing, the pair is testing the 50% Fibonacci level at 1.362. The technical indicators signal a continuation. The Awesome Oscillator bar turned red in the current trading session, and the RSI value has dropped to 55 from 65.

From a technical standpoint, the primary trend is bearish. However, for the downtrend to resume, the price must close and stabilize below 1.366. If this scenario continues, the next target will likely be the 61.8% Fibonacci level at 1.361.

Conversely, if the bulls maintain their position above the immediate support at 1.366, the trend can reverse in the short term and target the 1.370 mark.

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Bearish Momentum in USD/CNH Currency Pair

Solid ECN – The USD/CNH currency pair is dipping from the 78.6% Fibonacci level at $7.257. The RSI indicator also demonstrates bearish momentum by turning downward, and the awesome oscillator bar has just turned green.

The immediate resistance that paused the robust bullish momentum is at $7.257. If the price remains below this ceiling, the Chinese Yuan will likely erase some recent losses against the U.S. Dollar. Additionally, the USD/CNH price could dip to the 61.8% Fibonacci level at $7.237.

As mentioned above, bulls must push the price beyond the key resistance level for the uptrend to resume.