2023 Market Forecast by Solid ECN

Australian Dollar Hits 7-Week High as Rate Cut Expectations Grow​


Solid ECN – The value of the Australian dollar has risen above $0.66, marking its highest level in more than seven weeks. This increase is primarily due to the belief that the US Federal Reserve might lower interest rates before other leading global banks. During his US Senate testimony, Fed Chair Powell hinted that the Fed might ease its tight monetary policy sooner if inflation decreases. On the home front, recent figures revealed that Australia's economic growth in the last quarter was less than anticipated.

This has led to increased speculation that the Reserve Bank of Australia (RBA) might begin to cut rates this year. Market predictions suggest an almost 90% likelihood of the RBA reducing its cash rate by August, with expectations of a total ease of 45 basis points throughout the year. Following the disappointing GDP figures, the Commonwealth Bank of Australia has maintained its prediction of 75 basis points in rate cuts for the year.​

AUDUSD Analysis: Signs of Bullish Resurgence​


Solid ECN — The AUDUSD formed a long-wick candlestick pattern during Friday's trading session. As of this writing, the price tested the 38.2% Fibonacci support and is trading at about 0.661. Interestingly, the Awesome Oscillator has flipped above the signal line on the daily chart, which can be interpreted as a sign that the bull market may resume.

From a technical standpoint, the 0.6594 level supports the bull market. If the price remains above it, the next bullish target could be the 61.8% Fibonacci resistance at the 0.6703 mark.

Conversely, if the price dips below the 38.2% level, the decline could extend to the EMA 50, followed by the 23.6% level.​

NZDUSD Outlook: Technical Indicators Suggest Ongoing Bullish Trend​


Solid ECN – The NZDUSD currency pair formed a long-wick candlestick pattern in Friday's trading session, which suggests a possible trend reversal from an uptrend to a downtrend. The technical indicators still signal a bull market; as we know, all technical indicators are inherently lagging.

From a technical standpoint, if the price stabilizes below the 38.2% Fibonacci support following Friday's wick, it could extend to 23.6%. Otherwise, the bull market will continue, and the next target could be the 61.8% Fibonacci level.​

Navigating the USDJPY Oversold Market: Strategy for Professional Trader​


Solid ECN – The RSI has been deep in the oversold area since March 8th. Despite the bulls resisting the extreme selling pressure, the uptick momentum seems weak, even with the RSI's position below 30.

Professional traders typically avoid short positions in an oversold market; therefore, waiting for the market to consolidate and stabilize itself is recommended. If the consolidation phase reaches the upper band of the bearish flag, this level, which coincides with the 23.6% Fibonacci retracement, can offer a better price for joining the bear market.

Fortunately, the Awesome Oscillator bars have turned green, which could be interpreted as the start of the consolidation phase. At the moment, wise traders are waiting for USDJPY to form new higher lows and are adjusting their next moves accordingly.​

EURUSD's Next Move: Navigating Above 1.091 Key Support​


Solid ECN – The EURUSD formed a hammer candlestick pattern on the 4-hour chart, clinging to the 50% Fibonacci support level at the 1.0914 mark. As of writing, the pair is trading at about 1.093, slightly above the resistance. While the European currency gains ground against the U.S. dollar within the bullish channel, the technical indicators do not offer significant insights.

From a technical standpoint, the next target would be 1.1 if the price maintains its position above 50%.

Conversely, if the price dips below the 50% level, it will likely decline to the 38.2% level, coinciding with the lower band of the channel.​

GBPUSD's Potential Downshift and Support Levels​


Solid ECN – The pound sterling has pulled back from a significant level, the 78.6% Fibonacci resistance against the U.S. Dollar, resulting in the pair trading below 1.2827. Concurrently, the RSI indicator has retreated from the overbought area and is heading toward the 50 level.

This downshift could extend to the EMA 50, which aligns with the rising trendline.

Traders should pay close attention to the 61.8% Fibonacci support, which could present buying opportunities. If this level holds, the GBPUSD price will likely rise and retest the 1.2893 resistance.

However, if the rising trendline breaks, it's a clear sign that the bullish scenario should be invalidated. In this case, the consolidation phase will likely extend to the 1.2599 mark, the 50% Fibonacci support.

Therefore, we suggest observing the market's behavior around the EMA 50.​

Bearish Signals: AUDUSD Technical Indicators Review​


Solid ECN – The seller of the AUDUSD pair formed a long wick candlestick pattern on the 4-hour chart, close to the 50% Fibonacci resistance at the 0.666 mark. Consequently, the pair dipped below 38.2% and is testing the EMA 50 as of writing.

The technical indicators signal a bear market, with the RSI closing below 50 and the Awesome Oscillator bars being red and declining.

From a technical standpoint, the AUDUSD pair has created a new higher high since the beginning of the year, and this is the first time the value went as high as 0.666. Therefore, the Australian currency is bullish against the U.S. dollar. That said, if the EMA 50 can withstand today's selling pressure, the market will likely aim for the upper band of the rising flag, which is close to the 61.8% resistance level.

Conversely, if the AUDUSD dips below the EMA 50, the next support level is 23.6%. Traders should watch the EMA 50 closely and adjust their strategy accordingly.​
NZDUSD's Critical Levels: EMA 50 as the Decisive Barrier


Solid ECN – The NZDUSD currency pair failed to stabilize the price above the 38.2% Fibonacci support level, and consequently, it dipped below the descending trendline depicted in blue. The EMA 50 is currently preventing the price from dipping further. If this price breaches the 50-exponential moving average, the next target will likely be 0.6068, followed by the February low.

The 0.6215 mark is the pivotal point between a bull and bear market. If the New Zealand dollar breaks this resistance against the U.S. Dollar, the previously mentioned forecast should be invalidated, and traders must reevaluate the market accordingly.​
Canadian Dollar Dynamics: Economic Insights and Monetary Policy Updates


Solid ECN – The Canadian dollar is currently valued at around 1.35 per USD, returning from a one-month peak of 1.345 USD recorded on March 7. This drop is primarily due to the stability and strength of the US dollar. Meanwhile, the Federal Reserve is expected to hold interest rates steady at its upcoming March 19-20 meeting, with predictions leaning towards a rate cut in June. This decision comes after the consumer price index indicated a slight increase beyond expectations. Specifically, the overall inflation rate went up to 3.2%, surpassing forecasts, while the core inflation rate decreased slightly to 3.8% from 3.9%, still over the expected 3.7%.

In February, the unemployment rate in Canada increased to 5.8%, aligning with analysts' predictions. The country also witnessed an addition of 42,000 jobs, exceeding the anticipated numbers and showcasing a solid job market. Consequently, this strength allows the Bank of Canada to keep its monetary policy tight, helping curb further drops in the value of the Canadian dollar, also known as the loonie.​

Significant Silver Price Dip from Three-Year High​


Solid ECN – Silver's price fell to approximately $24 per ounce, a slight decrease from the three-year peak of $24.4 per ounce in the prior session. This change occurred as investors closely monitored the possibility of the Federal Reserve lowering interest rates following the latest U.S. CPI (Consumer Price Index) figures.

These figures, which showed that the annual and core consumer inflation rates were slightly higher than expected, have significantly influenced the market's anticipation of the Federal Reserve cutting interest rates by June. Earlier, officials from the Federal Reserve and the European Central Bank hinted at potential rate decreases in 2024, which further increased the attractiveness of safe-haven assets like silver.​