2023 Market Forecast by Solid ECN

NZDUSD: Inside Bullish Channel and Above Fibonacci Resistance​


The NZDUSD pair is trading around 0.6180, inside the bullish channel and above the 38.2% Fibonacci resistance level. Although the technical indicators are giving mixed signals, from a technical standpoint, the trend is bullish.

As long as the Fibonacci level holds, the next milestone for the pair could be the 61.8% Fibonacci resistance, which is the 0.6239 mark.​
Natural Gas Prices Edge Up Amid Oversupply Issues


Solid ECN – US natural gas prices slightly increased to just over $1.65 per million British thermal units (MMBtu) after falling by 7.5% in the previous session. This change is happening as the market deals with an excess supply, high levels of storage, and reduced need for heating because of the hot winter. Nevertheless, there is some upward pressure on prices as producers cut back on how much they produce.

Although there was a short interruption in supply in January because of freezing weather, gas production is still at all-time highs. The warm conditions have resulted in much higher than average gas reserves, with recent data from the Energy Information Administration indicating that storage is 22.3% above normal levels. Chesapeake Energy has reduced its production outlook for 2024 by about 30% after a significant price fall to the lowest point in over three years. Important companies like Antero Resources, Comstock Resources, and EQT have also reduced their drilling and production activities due to the current market scenario.​

Yen Stays Low as Japan Faces Slower Inflation​


Solid ECN – The value of the Japanese yen remained weak, staying over 150 against the dollar, following recent inflation data. In January, Japan's central and underlying inflation rates dropped to 2.2% and 2%, down from December's 2.6% and 2.3%, marking the lowest since March 2022. Despite this, the underlying inflation was still higher than the anticipated 1.8%, suggesting a slower decrease in inflation than expected. With inflation easing, the Bank of Japan will likely continue its lenient monetary policies for a while longer.

The yen is also struggling due to unfavorable trading strategies and weak economic figures, leading to a recession at the end of the year. This poor performance has led to official comments to support the yen, the lowest among major global currencies this year.​

USDJPY Pair Analysis: Bullish Channel and Ichimoku Cloud​


Solid ECN – The USDJPY pair is testing the lower band of the bullish channel, which coincides with the Ichimoku cloud. The 4-hour chart has formed a doji candlestick, which can be interpreted as a signal for the continuation of the bull market.

From a technical standpoint, if the Ichimoku cloud remains intact, the bullish trend should continue, and the first milestone would be the 150.8 resistance.

On the other hand, if the USDJPY price falls below the Ichimoku cloud, the consolidation might extend to the 148.9 support.​

EURUSD Trading at 1.085 Amid Multiple Resistance Levels​


Solid ECN – The EURUSD currency pair trades around 1.085 today. Currently, the price is in conjunction with multiple resistance levels. These include the 38.2% Fibonacci support, the upper band of the bearish flag, and the rising trendline. While the technical indicators give mixed signals, the EURUSD 4-hour chart has formed a long-wick candlestick pattern, which can be interpreted as the bears being more active than the bulls in the current session.

From a technical standpoint, the primary trend remains bearish as long as the price is suppressed below 1.0865s, the 38.2% Fibonacci retracement level. However, for the downtrend to continue, the price must fall below the ascending, precisely the 1.0832 mark.

On the other hand, the uptick momentum that began on February 13th should continue if the bulls cross above the Fibonacci level under discussion and maintain a position above it.​

Gold Analysis: Bearish Signals Emerge Amid Technical Indicators​


Solid ECN – The price of gold has fallen to \$2,030 against the U.S. dollar, reaching the lower band of the bullish flag, depicted in red. The Awesome Oscillator indicator shows signs of divergence, suggesting that the bears attempt to cross below the \$2,028 threshold. Adding to this bearish sentiment, the Relative Strength Index (RSI) indicator is closing below the median line, lending credibility to the recent XAU/USD price decline.

From a technical perspective, for the bull market to continue, the price of gold needs to stabilize above the 61.8% Fibonacci retracement level, a task that it failed to achieve this week.

On the flip side, if the price crosses the bullish flag and maintains a position below the \$2,039 resistance level, the decline will likely extend its reach to the Ichimoku cloud, a resistance level further powered by the 50% Fibonacci level.​

Sweden's Producer Prices Drop Slows in January 2024​

Solid ECN – In January 2024, Sweden saw a 2.3% annual decrease in producer prices, which improved from the previous month's 7.7% decline. This falling price trend continues in its ninth month, but the decrease is the least since July 2023. The price drop for energy products was less steep (-10.9% compared to -37.6% in December 2023).

Meanwhile, prices for consumer and capital goods slowed to 1.5% and 4%, respectively, from higher rates the previous month. Ignoring energy products, producer prices fell by 0.5% in January, a change from a 1.4% increase the month before. Month-over-month, producer prices increased by 0.3%, recovering from a 1.6% drop.​

EURUSD Analysis: Bearish Trend is Likely to Continue​


Solid ECN – The Euro trades around 1.082 against the U.S. Dollar in Wednesday's trading session, stabilizing itself below the broken ascending trendline, as illustrated in the 4-hour chart. This breakout could be interpreted as a temporary or long-term shift in market direction, transitioning from a bull to a bear market.

Furthermore, as the EURUSD tests the 38.2% Fibonacci support level, technical indicators suggest that the decline, which began from the 1.0865 higher low, is likely to continue.

Therefore, from a technical standpoint, with the price maintaining its position within the bearish flag, depicted in black lines, the bear market is expected to extend and potentially test the 50% Fibonacci support, followed by the 61.8% level.

Conversely, the 1.0866 level acts as resistance. The bearish outlook should be invalidated if the EURUSD price exceeds this level.​

U.S. Dollar Leads in Today's Market Against GBP​


Solid ECN – The U.S. Dollar is leading in today's trading against the pound sterling, with the GBPUSD pair trading around 1.263. The Ichimoku cloud supports this price area. From a technical standpoint, for the downtrend to continue, bears must stabilize the price below this level. Although technical indicators support a bearish scenario, there is still a chance for the bulls to take control, especially if the 1.2611 level holds firm.

In conclusion, the price must fall below the cloud for the bear market to extend further. Otherwise, we will likely witness the GBPUSD pair rise again, aiming for the 1.2709 resistance level.​

USDJPY Bullish Trend: Key Resistance and Potential Invalidations​


Solid ECN – As expected, the USDJPY price rose from the 150.0 mark, maintaining a bullish trend due to this support from the Ichimoku cloud and the bullish channel. For the pair to continue its growth, the bulls must break above the 150.88 resistance.

Conversely, the bull market could be invalidated if the price dips below the cloud, specifically below the 150.0 mark.​