2023 Market Forecast by SolidECN

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EURUSD Pair Analysis: Bulls Eye R1, Bears Target Bearish Channel

The EURUSD currency pair is currently testing the S1 support and the upper line of the previously broken channel. A close above the pivot could signal a bullish trend, with R1 as the potential target.

Conversely, if the S1 support is broken, the pair could re-enter the bearish channel, continuing the selling bias. Stay updated for more EURUSD market trends.​

 

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Gold prices hit $2000 as Middle East tension escalates

As tensions rise in the Middle East, gold prices have shot up over $2000 due to increased fighting on the ground.

While all eyes are on the shifting situation, gold has jumped over the crucial $2000 level because of the growing battles. At the same time, oil prices have stabilized above $83, as people investing in the market are on alert for any interruptions in supply from this key oil-producing area. This week is also important because big banks like the Federal Reserve, the Bank of England, and the Bank of Japan will make decisions on interest rates, which could shake up the markets even more. Investors and market experts around the world are paying close attention to these developments as they influence the economy.

 

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EURJPY Technical Analysis

EURJPY is testing the Ichimoku cloud, a key resistance. Our analysis suggests a bullish market, with a strategy to go long. Currently, it’s trading in a bearish channel below the 158.6 pivot. A close above the pivot will confirm bullishness.

If it remains below the pivot, the short-term target is S1 support.​

 

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EURGBP

The EURGBP pair has broken the bearish trendline on the daily chart, indicating a bullish bias. The 4H chart shows it trading above the Ichimoku cloud and weekly pivot, suggesting potential gains.

However, a close below S1 support (0.869) would negate this bullish scenario.​

 

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EURAUD​

The EURAUD pair is currently navigating within a daily bullish channel and is testing the monthly pivot point at 1.6555. If the bulls maintain their position above this pivot point and within the bullish channel, it’s plausible that the EURAUD could ascend to the mid-line of the bullish channel, which is near the R2 support level at 1.712.

However, if the bears manage to close below the pivot point, it would invalidate the bullish scenario. It’s important to note that a closure below the pivot point does not necessarily signal a trend reversal. The support level is at 1.621, and a breach of this level would be required to indicate a trend reversal.​

 

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USD/JPY Market Sentiment: Bullish Post-BoJ, Eyes on Fed​

Tuesday's trading session saw the USD/JPY currency pair surge, reclaiming territory above the pivotal 150.00 mark. This upswing effectively diminishes the losses witnessed in the preceding two days. The yen displayed a broad weakening, a direct response to the Bank of Japan's reaffirmation of its ultra-easy monetary policy aimed at bolstering the domestic economy. In a notable policy adjustment, the BoJ subtly altered its stance on yield curve control, now referencing the 1% cap on the 10-year Japanese government bond yield as a guiding figure rather than a strict limit.

Inflation Projections and Economic Data Weigh on Yen

The BoJ's upward revision of inflation forecasts for the fiscal years 2024 and 2025 hints at a gradual setup for exiting its loose monetary policy. However, this adjustment has not been enough to rally support for the yen, especially against a backdrop of disappointing Japanese industrial and retail data for September.

US Dollar Demand and Fed Expectations Fuel Rally

On the other side of the pair, the US dollar is finding robust support, spurred by the market's belief in the Federal Reserve's commitment to its tight monetary policy, including the possibility of further rate hikes in 2023. Remarks from Fed Chair Jerome Powell about persistently high inflation and the potential for additional rate increases have kept US bond yields near the 5.0% mark, underpinning the dollar's strength.

Caution Ahead of FOMC Meeting

Despite the bullish momentum, there's caution in the air as speculation about potential Japanese intervention to curb yen depreciation persists. Traders are also adopting a wait-and-see approach in anticipation of the Federal Open Market Committee's (FOMC) meeting. The Fed's decision, due on Wednesday, is expected to hold steady, but any signals on future rate adjustments will be pivotal for the currency pair.

Bullish Indicators and Resistance Challenges

From a technical standpoint, the USD/JPY's resilience below the 200-period Simple Moving Average on the 4-hour chart has set a bullish tone. Daily chart oscillators are gaining positive momentum, suggesting room for further upside. However, traders should watch for resistance near the daily highs around 150.35-150.40, with the year-to-date peak and the 151.00 mark as key levels to breach for continued ascent.

Support Levels to Monitor on Pullbacks

Conversely, a retreat below 150.00 could find solid ground near the 100-period SMA on the 4-hour chart at approximately 149.60-149.55. A decisive drop below this could open the path to 149.00 and potentially challenge the bullish outlook. Should selling pressure intensify, the pair may test the monthly low around 147.30-147.25, recorded on October 3, which would tilt the market sentiment towards the bears.

 

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GBPUSD​

GBPUSD shows a bullish signal, breaking above the 1.216 level. With the RSI above 50, it may rise towards the 1.225 resistance, hinting at a possible trend reversal.

 

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GBPJPY​

The GBPJPY pair has broken through the bearish channel on the daily chart and is currently trading above the pivot point of 182.9. The Relative Strength Index (RSI) indicator is hovering above the 50 level, suggesting that the bulls have regained control.

Looking closer at the GBPJPY 4-hour chart, we can see that the bulls are facing a barrier at 183.7. If the GBPJPY price can break this level, it will clear the path towards R2.

However, if the price fails to breach this resistance, it could result in the GBPJPY price returning to the bearish channel depicted on the daily chart.​

 

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GBPAUD​

The GBPAUD currency pair has demonstrated a robust breakout from its previous bearish trendline during today's trading session. This pivotal movement has not only captured the attention of traders but has also signaled a potential shift in the underlying market dynamics. The currency pair's ability to sustain a close above the critical pivot point of 1.917 further boosts the case for a bullish outlook.

The Relative Strength Index (RSI) confrims this bullish sentiment. Currently, the RSI is indicating upward momentum, suggesting that the buying pressure is outpacing selling pressure. This technical alignment could very well pave the way for the GBPAUD price to ascend towards the next notable resistance level at 1.931.​

 

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Gold​

Gold is currently undergoing a test of its support level at $1,970. Interestingly, it's trading below the pivot point in the market. The Relative Strength Index (RSI) is showing signs of divergence, indicating a potential correction in the price of gold. This correction could possibly extend to a level of $1,934.

 

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GBPAUD

The GBPAUD couldn’t hold above the weekly pivot (1.917) in the 4H chart, and the pair slumped to the significant support at 1.9. Moreover, the GBPAUD formed a bullish long wick candlestick pattern in the daily chart, and the RSI indicator shows divergence. These signals can be interpreted as a trend reversal or an imminent correction in the price.

S1 provides support to the bullish scenario. As long as the price holds above 1.899, it is likely for the GBPAUD price to rise and test the weekly pivot again.

On the other hand, if bears close below S1, the bullish scenario is invalidated and the path to S2 will be cleared.​

 

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GBPAUD​

The GBPAUD has broken out of the bearish channel, and the bears are currently testing the 1.895 support level. The market bias remains bearish as the pair is trading below the Ichimoku cloud.

Zooming in on the 4-hour GBPAUD chart provides a detailed insight into the forecast. The decline has approached the lower boundary of the bearish channel on the 4H chart. With the RSI indicator nearing the oversold territory, a pullback to the channel's median line could be anticipated. Additionally, given the current selling pressure, the next target would likely be the 1.884 support level.

Conversely, the 1.917 level acts as the pivot. The bearish scenario would be negated if the price breaks above this pivot or the upper line of the channel.​

 

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EURUSD Technical Analysis

The EURUSD currency pair has been trading in a range from 1.051 to 1.068 since October 23. The pair formed a hammer candlestick pattern on the daily chart and is currently trading above the monthly pivot. Since the pair hovers below the Ichimoku cloud, we will be looking for selling opportunities.

The RSI indicator crossed above the level of 50, indicating that the price of EURUSD might increase to R1 (1.067 resistance). This level offers a decent price to enter short, especially if the market forms a long wick candlestick, a doji, or a bearish engulfing pattern.

Another scenario for short trading in EURUSD is to wait for the pair to break S1 (1.049 support). In this case, the pace of decline in the pair would increase and the next target would be S2 (1.042), followed by S3 (1.032).​

 

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EURJPY Technical Analysis

The EURJPY currency pair is trading within a daily bullish channel and it tested the middle line of the channel in the previous day’s candle. Today, the EURJPY had a pullback to the pivot. With the RSI indicator hovering above the 50 level, it is likely that the bulls will push the EURJPY price to R1 (162.7), followed by the upper line of the channel or R2 (165.0).

The main support for our bullish EURJPY forecast is S1 (156.28). If this level breaks, the uptrend is likely to end and we might see a trend reversal. However, this is unlikely due to the Bank of Japan’s current interest policy.​

 

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EURAUD Forecast​

The EURAUD pair is trading within a weekly bullish channel and above the Ichimoku cloud. This indicates that the trend is bullish, and we should look for buying opportunities in this currency pair.

When we zoom into the EURAUD 4H chart, we see that the bulls added buying pressure when the pair's decline reached the 1.6455 resistance level. Currently, it is testing the 1.6563 resistance level. With the RSI indicator increasing in value and the Awesome Oscillator showing a green bar, if the pair can close above 1.6563, it will pave the way for EURAUD to reach 1.6700. This level aligns with the upper band of the young bearish channel.

The 1.6455 level serves as support for this bullish scenario. If it breaks, the bullish scenario becomes invalid.​

 

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EURNZD Outlook: Downward Momentum Gains Traction

The EURNZD currency pair is currently facing a challenge at the 1.798 pivot point, having already descended below the Kernel line on the daily chart. The RSI's crossing of the middle line signals an intensifying bearish outlook for the EURNZD.

Detailed Analysis on the 4-hour Chart

For a more detailed view, we shift our focus to the 4-hour chart. Here, the market trend is clearly bearish, with EURNZD trading under the Ichimoku cloud. The pair is currently challenging the 0.382 Fibonacci retracement level. If it falls below this level, we might witness the fall extend to the 50% and subsequently the 61% Fibonacci retracement levels.

The Ichimoku cloud poses a resistance. To counter the bearish forecast, EURNZD bulls would have to achieve a close above the cloud.​

 

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EURUSD

The EURUSD has made a significant move, breaking out of the range trading box during the recent currency session. This development was anticipated as the pair had previously exited the bearish channel on the daily chart, forming a hammer candlestick pattern in the process. This pattern emerged near the 1.0493 support level in the daily timeframe, signaling a potential shift in momentum.

If the EURUSD can maintain its position above the pivot point, it could indicate a bullish trend. The next target for the EURUSD bulls is the R2 level at 1.082. This could be a key resistance level to watch for traders following the EURUSD.​

 

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Asian Currencies Climb as US Dollar Falls​

Asian currencies are doing better, with the US dollar reaching a low not seen in six weeks. This is because recent reports show that America's job growth is slow, and the US Federal Reserve might stop increasing interest rates.
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Important Economic Updates Ahead​

Everyone is now looking at new economic information coming from China and what the Reserve Bank of Australia will decide. These will tell us more about how economies in Asia are doing.
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Good Vibes in the Market​

People are feeling good about investing after finding out that the US added fewer jobs than expected last month. This slowdown in job growth could mean the US Federal Reserve won't raise interest rates again.

Investors are starting to put their money into Asian markets, which are usually seen as riskier. The Korean won and the Thai baht went up a little. The biggest winner was the Malaysian ringgit, which went up the most among the Southeast Asian currencies.
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Japanese Yen's Standing​

The Japanese yen went down a bit, staying below 150 against the dollar. This is even though Japan's service sector did better than people thought it would in October.

Still, the yen might not do well because the Bank of Japan wants to keep its policies very loose, and the bank's boss said they're not changing this approach anytime soon.
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Dollar Weakness and What the Fed Might Do Next​

After dropping to a low last seen in late September, the dollar got a bit better in Asia. Investors don't think the US Federal Reserve will raise rates anymore this year.

The pause in rate hikes is good for Asian currencies, but the Fed is expected to keep rates up for a while, which could slow down the growth of these currencies.
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Yuan and Aussie Dollar Get Stronger​

The Chinese yuan got a bit better, helped by the dollar's weakness and China's central bank setting a good rate for it.

People are waiting for China's trade and inflation numbers, which will give us a clearer picture of how China's economy is doing.

The Australian dollar is also strong, with everyone thinking the Australian central bank will raise rates because of higher prices and strong sales in stores. The bank has stopped raising rates since May, but they might increase them again if prices keep going up.​

 

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EURHKD Forecast

The EURHKD currency has broken out of the bearish channel. The pair is currently testing the 38.2% level of Fibonacci retracement, while the RSI indicator is approaching the overbought area and signaling divergence. This suggests that there might be a correction, or the continuation of the bearish trend is likely. Therefore, we should be cautious about going long on the currency pair.

Zooming into the EURHKD 4H chart provides a better insight into the price action. The trend is bullish in the 4H chart, and the price has broken out of the bullish channel and is trading in the overbought area. The RSI indicator is also in the overbought area. Please note that the pair has room to rise and test R1 (8.46). The Kernel line and the 8.3 pivot support the bullish scenario. If these levels are breached, the bullish scenario will be invalidated.

 

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GBPAUD

The GBPAUD currency pair bounced from S1 (1.895 support) and is currently testing the upper line of the bullish channel. The market is bullish with the RSI indicator flipping above the 50 line. However, will the GBPAUD bulls be able to break out of the bearish channel?

Let's zoom into the 4-hour chart to gain a better insight into the currency pair. The GBPAUD situation on the 4H chart is almost the same as on the daily chart, with one difference. The RSI indicator is showing divergence, which means the market might go into a correction or trend reversal.

With the price holding below R1 (1.919 resistance), it is likely that the downtrend will continue, targeting the 1.905 pivot followed by 1.889 (S1).

On the flip side, if the bulls break out of the bearish channel and manage to close above R1 and hold steady, the road to R2 will be paved.​