2023 Market Forecast by Solid ECN

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Euro Area Q4 GDP Beats Estimates

Q4 GDP report from euro area just came out and turned out to be a positive surprise. Growth reached 0.1% QoQ while market expected a 0.1% QoQ drop. On annual basis, GDP growth reached 1.9% YoY (exp. 1.8% YoY), slightly slower than 2.1% YoY reported in Q3 2022. Simultaneously, Q4 GDP report from Italy was released and it also turned out to be better-than-expected. Italian GDP declined 0.1% QoQ in Q4 2022, but the market expected a 0.2% QoQ drop. On an annual basis growth reached 1.7% YoY (exp. 1.6% YoY).

However, in spite of being a positive surprise, reports did not have much of an impact. EURUSD barely moved while DE30 ticked lower.​

 

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GBPUSD Technical Analysis

The GBPUSD pair trades negatively to break 1.2320 and attempts to hold below it, which urges caution from the upcoming trading and makes us prefer to stay aside until the price confirms its situation according to this level, as confirming the break will push the price to achieve bearish correction that its targets begin by testing 1.2155 and extend to 1.1940, while consolidating above it will reactivate the positive scenario that its targets begin by testing 1.2440.

The expected trading range for today is between 1.2250 support and 1.2400 resistance.​

 

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GBPCHF Begins to Decline

The GBPCHF pair surrendered to the domination of the bearish bias by providing new negative close below 1.1480 resistance and start forming new negative waves by reaching 1.1280.

The negative stability below the moving average 55 and stochastic additional negative momentum signals confirm the continuation of the negativity, to expect suffering additional losses soon by targeting 1.1210 followed by repeating the pressure on the additional support 1.1105. The expected trading range for today is between 1.1340 and 1.1210.​

 

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USDCHF Declines Again​

The USDCHF pair couldn’t hold for long time above 0.9240 level, to trade with strong negativity and reach 0.9160 level now, which puts the price under expected additional negative pressure in the upcoming period, targeting visiting the recently recorded low at 0.9085 as a next negative station.

Therefore, the bearish bias will be expected for today unless breaching 0.9240 and holding above it. The expected trading range for today is between 0.9085 support and 0.9210 resistance.​

 

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EURGBP Continues to Rise

The EURGBP pair succeeded to resume the bullish attack to surpass 0.8870 level and provide positive close above it as appears on the chart, to record some additional gains by touching 0.8900 level.

Note that the main stability within the bullish channel and the major indicators attempt to provide the additional positive momentum support the positive attempts for the near term and medium term period, to keep waiting to achieve new gains that might start at 0.8925 and 0.8970. The expected trading range for today is between 0.8870 and 0.8970.​

 

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EURGBP - Fundamental Analysis

EURGBP is one of major currency pairs that may see some more volatile moves today. This is because the Bank of England and European Central Bank are scheduled to announce monetary policy decisions at 12:00 pm GMT and 1:15 pm GMT, respectively. Both are expected to deliver 50 basis point rate hikes.

While ECB members have been quite vocal about the fact that a 50 basis point rate hike is appropriate for today's meeting, recent cycle pause from BoC and slowdown from Fed raises questions whether ECB will alter its approach. A 50 bp rate move looks like a done deal and should the ECB commit to another 50 bp rate hike in March, EUR may benefit. A 50 bp rate hike and a hint that pace of rate increases will slow going forward would be EUR-negative and may support European stock market indices.

On the other hand, things look less rosy when it comes to the Bank of England. The UK economy is facing a recession and BoE knows it very well. Higher interest rates are magnifying the so-called "cost of living crisis" in the United Kingdom and while another rate hike could help combat inflation, Bank of England is facing an increasing public backlash over its tightening. Having said that, there is a scope for a dovish surprise with BoE going in with a 25 basis point rate hike.

Taking a look at EURGBP chart at D1 interval, we can see that the pair has managed to climb above the 0.8880 resistance zone today and has even briefly traded at the highest level since late-September 2022. If ECB provides more fuel for the upward move by hinting at another 50 bp rate hike in March, the pair may look towards the 0.8990 swing area that was tested a few times in the 2019-2020 period and marks a local high from late-September 2022. A dovish Bank of England would also support a bullish scenario on the pair.​

 

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EURUSD Hits the Target

The EURUSD pair rallied upwards strongly to succeed achieving our waited target at 1.1030, moving within major bullish channel that supports the chances of achieving more rise in the upcoming period, noting that breaching the mentioned level will extend the bullish wave to reach 1.1185 areas.

Therefore, the bullish trend scenario will remain suggested on the intraday and short term basis, noting that failing to breach 1.1030 might force the price to rebound bearishly and achieve some intraday bearish correction before turning back to rise again. The expected trading range for today is between 1.0950 support and 1.1110 resistance.​

 

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EURJPY Fluctuates Below the Barrier

The EURJPY pair repeated the weak sideways trades to settle below the additional barrier 142, which allows us to keep the bearish overview, reminding you that it is important to gather the negative momentum to ease the mission of declining towards the initial negative stations represented by 140.80 and 140.25.

The expected trading range for today is between 142.00 and 140.25.​

 

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Gold Technical Analysis

Gold price ended yesterday below the bullish channel’s support line that appears on the chart, to start bearish correction for the rise measured from 1616.65 to 1959.75, on its way to visit 1878.8 as a first correctional target.

Therefore, we expect to witness more decline in the upcoming sessions, taking into consideration that breaching 1928.6 will stop the current negative pressure and lead the price to regain the main bullish trend again. The expected trading range for today is between 1890 support and 1930 resistance.​

 

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Crude Oil Price Presses on the Support

Crude oil price attempts to break 75.65 level, to hint heading to achieve more decline in the upcoming sessions, organized inside the bearish channel that appears on the chart, to target 74.10 areas initially.

Therefore, the bearish bias will be suggested for today, noting that breaching 76.2 will stop the expected decline and lead the price to recover and attempt to build bullish wave on the intraday basis. The expected trading range for today is between 73.8 support and 77 resistance.​