Currency Pairs Market Analysis

[Solid ECN]

Saudi Arabia's Dec 2023 Trade Surplus Dips Amid Lower Sales

Solid ECN - In December 2023, Saudi Arabia's trade surplus shrank to SAR 38.2 billion from SAR 44.2 billion the year before. The country's exports dropped by 9.7% to SAR 98.5 billion, mainly due to a 15.8% decrease in oil product sales, which make up 73.1% of total exports. Also, non-oil product exports decreased by 3% to SAR 19.15 billion, with a significant fall in plastics and rubber goods sales by 7.6%.

The main export destinations were China (14.8%), Japan (11%), and India (8.8%). On the other hand, imports decreased by 7.1% to SAR 60.4 billion, though there was a rise in the intake of machinery, appliances, and electrical gear by 21.5% and transportation equipment by 20%. China was the largest source of imports, accounting for 21%, followed by the US (8.1%) and UAE (7.8%).​

 

[Solid ECN]

USDCHF Bullish Trend Supported by Ichimoku Cloud

Solid ECN - The USDCHF currency pair trades sideways above the 0.8782 resistance level inside the Ichimoku cloud. It's worth mentioning that the Ichimoku cloud adds an extra layer of support to the bullish trend that began on February 2 from the 0.8852 mark. The technical indicators on the 4-hour chart don't provide significant data, so we should rely on the horizontal channel depicted in blue on the 4-hour chart.

From a technical standpoint, the upward trend on the 4-hour chart should continue if the bulls cross above the 0.8839 level. This scenario is likely due to the primary USDCHF trend and the awesome oscillator bar turning green in the current trading session.

Conversely, the bears need to stabilize the price below the 0.8782 support to target the 38.2% Fibonacci level. If this scenario comes into play, the high of February 12 can be considered the new higher high, and the price might experience a further decline to the 50% Fibonacci retracement level.​

 

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USDCAD Tests Fibonacci Resistance Amid Bullish Wave

Solid ECN – The USDCAD pair is testing the 23.6% Fibonacci resistance at the 1.3529 mark, following the bullish wave that began on February 15th from the 1.3447 mark, the 61.8% Fibonacci support level. The 4-hour chart shows that the bulls have crossed above the bearish trendline with a long-bodied candlestick. This could be interpreted as a continuation of the uptrend momentum. Interestingly, the technical indicators back up this momentum, with the relative strength index pointing upwards and the awesome oscillator flipping above the signal line.

From a technical standpoint, the U.S. dollar is likely to gain more against the Canadian dollar, and the next target for the buyers could be the 1.3585 resistance.

On the flip side, the bullish trendline is the primary support for the uptrend. The uptrend scenario outlined above should be invalidated if the price falls below this level corresponding to the 50% Fibonacci level or the 1.3471 mark.​

 

[Solid ECN]

USDJPY Trades in Ascending Channel Amid Bullish Indications

Solid ECN – The USDJPY pair trades within an ascending channel, indicating that traders should seek extended opportunities rather than short ones. However, the price has been fluctuating within a bearish flag, depicted in red, since February 13th. Meanwhile, the technical indicators don't provide valuable data on the next market move. The RSI indicator is clinging to the middle line, while the AO bars are small, with a slight increase in the green bars.

From a technical standpoint, the lower band of the bullish flag, depicted in blue, serves as support for the primary trend, which is bullish. As long as the USDJPY price remains within the flag, the ultimate forecast is an increase in the value of the U.S. dollar against the Japanese yen. In this scenario, the bulls must close above the 159.4 resistance for the uptrend to resume. Otherwise, the weak bearish momentum seen on the chart might extend to the lower band of the flag. It's worth noting that the 148.9 resistance area offers a better entry point than the current market value, which is 150 at the time of writing.​

 

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USDCAD Price Analysis: Testing 23.6% Fibonacci Resistance

When writing, the USDCAD price is 1.352, slightly below the 23.6% Fibonacci resistance currently under test. The technical indicators are bullish, with the RSI floating above 50, and the AO bars are green beyond the signal line.

From a technical standpoint, the bulls must break the 1.3529 resistance for the primary uptrend to continue. If this scenario unfolds, the next bullish target will be the February higher high at 1.3585.

On the flip side, if the USDCAD price falls below the 1.3504 mark, the decline would extend to the 50% Fibonacci resistance. This is where the ascending trendline supports the trend. It's worth noting that as long as this trendline remains unbroken, the primary USDCAD trend should be considered bullish.​

 

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Market Dynamics: DAX 40's Ascending Trajectory

The Frankfurt DAX 40 index witnessed a moderate uplift of 0.4%, reaching near-record levels amidst varied earnings reports. This upward movement comes as the market holds its breath for Nvidia's impending quarterly disclosures and the forthcoming details from the US Federal Reserve's January assembly.

This situation reflects the investors' balancing act between optimism driven by promising corporate performances and caution due to economic uncertainties. Adding value to this context, understanding the impact of such high-profile earnings reports and Federal Reserve minutes can offer insights into market sentiment and future trends, potentially guiding investor strategies in the short to medium term.

Healthcare Sector Highlights: Fresenius' Mixed Fortunes

Fresenius emerged as a topic of interest in the healthcare domain, with its shares experiencing minimal fluctuations after an initial surge due to a robust quarterly performance. The German healthcare conglomerate reported a 13% increase in its fourth-quarter operating earnings, surpassing its 2023 cost-efficiency goals. This success story demonstrates Fresenius' operational resilience and strategic planning and offers a learning point on the importance of fiscal management and innovation in healthcare.

Conversely, Fresenius Medical Care faced challenges, with a notable dip in its market standing, attributed to analysts' concerns over dwindling patient volumes, highlighting the sector's vulnerabilities and the critical need for adaptive business models in changing market conditions.

Anticipations and Speculations: Allianz's Promising Horizon

Meanwhile, anticipation surrounds Allianz as its shares climbed to a peak not seen in over twenty years, ahead of its upcoming earnings release. This optimism among investors signifies confidence in Allianz's financial health and prospects. The scenario underscores the influence of forward-looking economic indicators and the weight of investor expectations on stock prices.

Additionally, this anticipation suggests a broader trend where robust financial health and positive future outlooks of companies like Allianz can act as catalysts for market confidence, potentially driving sector-wide gains and offering opportunities for investors to diversify and strengthen their portfolios in the face of market uncertainties.

 

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U.S. Dollar Index Tests Fibonacci Support: A Technical Analysis

Solid ECN – The U.S. Dollar index is testing the $10,341 mark, below the 23.6% Fibonacci support level. Subsequently, the DXY index is experiencing a decline within the bearish flag following its breakdown from the bullish channel, as depicted in the 4-hour chart. The technical indicators also show similar patterns in alignment with this new trend. Specifically, the RSI indicator is floating below 50, and the bars of the awesome oscillator are in red.

Therefore, from a technical standpoint, the trend is downward as long as the index trades below the Ichimoku cloud. If the bears maintain their positions, the next target could be the 38.2% Fibonacci support level, followed by the $10,240 mark.

On the flip side, if the bulls push the price above the Ichimoku cloud, the bearish scenario mentioned earlier would be invalidated. In such a scenario, the index would likely test the February 14th higher high at the $10,460 mark.

Happy trading!​

 

[Solid ECN]

Euro's Struggle Against the U.S. Dollar Amid Fibonacci Resistance

Solid ECN – The Euro is trading above the 38.2% Fibonacci resistance against the U.S. Dollar, which stands at 1.085. This level is clinging to the upper band of the bearish flag. Interestingly, the RSI indicator has stepped into the overbought zone. This could be interpreted as a sign that the uptick in momentum, which began on February 12, might ease near this level.

From a technical standpoint, the primary trend is bearish. However, this could be invalidated if the bulls manage to cross and stabilize the price above the 1.08639 ceiling.

On the other hand, if the 1.08639 level holds, the EURUSD pair will likely turn downward again. In this scenario, the 23.6% Fibonacci support would be tested once more.

Happy trading!​

 

[Solid ECN]

Pound Rises Against Dollar, Eyes Key Levels

Solid ECN – The British pound is on an upward trajectory against the U.S. Dollar, with the exchange rate hovering around 1.2600. The Relative Strength Index (RSI) is poised to enter the overbought zone, suggesting that the pair might soon test the 61.8% Fibonacci retracement level before potentially launching on another bullish wave.

Furthermore, the 61.8% level, or the 1.2668 support, presents a favorable opportunity for traders to place bids in the GBPUSD bullish market. Should the 61.8% level hold, the next target for buyers could be the February high, around the 1.277 resistance mark.

Conversely, a failure to maintain levels above 1.2668 could result in the price descending to test the 50% Fibonacci support. This shift would signify a notable change in market sentiment, potentially leading to reevaluating the current bullish trend.​

 

[Solid ECN]

Bitcoin's Uptrend Amid Range-Bound Trading and EMA Support

Solid ECN – Bitcoin has been between $50,000 and $53,000 and has stayed above the 50 EMA, as shown in the 4-hour chart. When writing, the BTCUSD is trading around $51,600, with the technical indicators promising a continuation of the uptrend.

The RSI indicator flips above 50, and the AO bars have turned green.

The $50,583 level serves as the support to the primary bullish trend. Therefore, from a technical standpoint, if this minor support holds, the uptrend will likely continue, with $53,020 as its first target, followed by the psychological resistance level at $55,000.

On the flip side, if the BTCUSD price falls below the 50 EMA, the 23.6% Fibonacci retracement level will be the first barrier for the bears to confront. This level is further backed up by the Ichimoku cloud, which makes it an exciting price area for the bulls to add new bids.​

 

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Offshore Yuan's Rise Amid Weakening Dollar

Solid ECN – The offshore yuan has seen a notable appreciation, reaching its highest level in three weeks, climbing toward 7.20 against the dollar. This rise is primarily attributed to the dollar's decline amid increasing uncertainties regarding future interest rate decisions in the United States. Additionally, the Chinese currency is riding a wave of positive sentiment as investors show renewed interest in Chinese markets.

This is evidenced by the significant upswing in mainland stocks, which have soared their highest points in two months. This surge in investor confidence and currency value reflects a broader trend of optimism in Chinese financial assets.

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China's Aggressive Monetary Easing

In a move that surprised many, the People's Bank of China (PBOC) significantly reduced its five-year loan prime rate by 25 basis points, bringing it down to 3.95%. This decision exceeded the expectations of a modest 15 basis points cut and marked the most substantial reduction since this rate's inception in 2019.

The aggressive cut underscores China's intensified efforts to stimulate economic growth amidst various domestic and global challenges. However, the PBOC opted to maintain the one-year loan prime rate at 3.45%, indicating a nuanced approach to monetary policy. These measures are part of a broader strategy to invigorate the Chinese economy, reflecting a balanced mix of short-term stability and long-term growth initiatives.
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Unleashing Capital for Growth

Earlier in the month, the PBOC took another significant step by reducing the reserve requirements for banks by 50 basis points. This strategic decision has released approximately 1 trillion yuan in long-term capital, aiming to lubricate the economy's gears by enhancing liquidity and encouraging lending.

This substantial capital is anticipated to bolster economic activities, support small and medium-sized enterprises, and stimulate consumer spending. By easing the reserve requirements, the PBOC is providing banks with a greater capacity to finance business projects and consumer needs, thereby fueling the overall growth trajectory of the Chinese economy amidst evolving global financial landscapes.​

 

[Solid ECN]

Euro Faces Bearish Trends Against U.S. Dollar

Solid ECN – The Euro trades around 1.083 against the U.S. Dollar in today's trading session, remaining within the bearish channel. Despite an upward jump in Friday's session, the bears quickly pushed the price back down, firmly within the channel, indicating that the bulls' attempt to break out of the bearish channel might have failed.

From a technical standpoint, as long as the pair trades below the 38.2% Fibonacci resistance level, the downtrend will likely persist. The 1.0802 level acts as minor support; if this level is breached, the decline is expected to continue. In this scenario, the following targets for the bear market would be around the 1.076 mark.

Conversely, the 38.2% Fibonacci level serves as the primary resistance point. Should the price sustain itself above this level, it could invalidate the current bearish scenario.​

 

[Solid ECN]

GBPUSD Bullish Trend Faces Slowdown

Solid ECN – The GBPUSD trades inside the bullish channel and above the 50 exponential moving average (EMA). This indicates that the primary trend is bullish. However, the awesome oscillator shows signs of a slowdown in the trend.

From a technical standpoint, the 50%Fibonacci retracement level supports the bull market, and the bottom line of the flag further supports this zone. Therefore, as long as the pair trades above it, the technical analysis for the GBPUSD predicts more upward momentum. In this case, the channel's upper band can be considered the next bullish target. It is worth noting that the price must exceed the declining trendline, depicted in blue, to reach the target.

Conversely, the above technical analysis would be invalidated if the price falls below %50 Fibonacci. If this scenario continues, traders should wait to see how the price reacts to the 50 EMA and the Ichimoku cloud support zone.​

 

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AUDUSD Trading Analysis: Clinging to Fibonacci Support and 50 EMA

Solid ECN – In today's trading sessions, the Australian dollar trades around 0.655 against the U.S. Dollar, clinging to the 23.6% Fibonacci support and the 50 EMA. However, other technical indicators are providing a bearish signal. The RSI indicator has crossed below the median line, and the bars of the awesome oscillator have turned red and are about to flip below the signal line.

From a technical standpoint, the 0.6532 level supports the bullish momentum, which broke out from the descending trendline, depicted in blue on the AUDUSD 4-hour chart. If the price stays above this level, the 38.2% Fibonacci support could still be the target. This resistance level is further supported by the upper line of the bullish flag, depicted in red on the chart.

Despite these factors, the bullish scenario seems weak for this pair. This can be figured from the candlesticks, where the number of full-bodied bear candles exceeds the bull candles.

Conversely, if the AUDUSD price falls below the 50 EMA, the decline from 0.6594 could lead to the bottom of the bullish flag. This scenario is more likely to play out.

Therefore, traders should monitor the 50 exponential moving average closely.​

 

[Solid ECN]

US Building Permits Dip Slightly in January 2024

Solid ECN – In January 2024, the US saw a slight drop in building permits by 0.3%, adjusting to 1.489 million from the previous month's 1.493 million, yet this was still above the early estimate of 1.470 million. The permits for more significant developments, specifically those with five or more units, decreased significantly by 5.8% to 419 thousand, marking the lowest point since October 2020.

However, there was a positive turn in the permits for single-family homes, which climbed 2.2% to reach a 20-month peak of 1.021 million. Geographically, permit numbers went down in the South by 7.8% to 793 thousand but rose in other areas: 0.3% to 339 thousand in the West, 5.6% to 208 thousand in the Midwest, and a substantial 52% to 149 thousand in the Northeast.​

 

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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.​

 

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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.​

 

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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.​

 

[Solid ECN]

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.​

 

[Solid ECN]

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.​