US Inflation Rate Drops to 2.9% in January 2024

Solid ECN - It's likely that the US's yearly inflation rate dropped to 2.9% in January 2024, marking the lowest rate since March 2021, after a short rise to 3.4% in December. Expectedly, the cost of consumer goods might increase by 0.2% from December, which aligns with the adjusted growth seen in the last two months.

Furthermore, the yearly rate of core inflation, which excludes food and energy prices, is predicted to decrease to 3.7%, the smallest since April 2021, down from 3.9% in December. The monthly core inflation rate is expected to stay constant at 0.3%. This comes as inflation continues to decrease from its peak of 9.1% in June 2022, the highest since the early 1980s.

AUDUSD: Bearish Trend Continuation or Bullish Breakout?

Solid ECN - The AUDUSD price currently ranges inside the bearish wedge pattern below the Ichimoku cloud. As of this writing, the pair trades at 0.651. The technical indicators suggest a continuation of the downtrend, which aligns with the primary AUD/USD direction. The Relative Strength Index is crossing below the 50 level, and the Awesome Oscillator bars are in red and about to flip below the signal line.

From a technical standpoint, as long as the currency pair remains below the Ichimoku cloud, the downtrend is valid, and the price will likely test the last lower lows, 0.64678.

Conversely, the bearish trend line (in blue) and the 0.6542 level are pivotal in the bearish and bullish bias. Therefore, if the bulls stabilize the price above the said level, the uptick momentum that began in early February could extend to the January high, 0.6623.

This is a technical analysis perspective, and actual market conditions may vary. Always consider multiple factors when making trading decisions.

BTCUSD Enters Consolidation Phase

Solid ECN - Bitcoin's price has declined after reaching as high as $50,374 in today's trading session. As of writing, the digital gold trades around the $48,700 mark, near the 25 simple moving average. According to the technical indicators, the relative strength index has exited the overbought area, while the awesome oscillator shows a minor divergence. This could signal that Bitcoin might be entering a consolidation phase.

From a technical standpoint, if the BTCUSD price falls below the 25 simple moving average, the phase mentioned above might extend to the $23.6 Fibonacci support level, followed by the $46,877 resistance.

We suggest waiting for the bitcoin price to stabilize above the $46,000 level before adding new or more bids to the bullish market.

NZ Dollar Hits Week Low Amid Policy

The New Zealand dollar fell below $0.61, its weakest in a week, as the market weighed the US Federal Reserve's delayed interest rate cuts against New Zealand's lower inflation forecasts and the Reserve Bank of New Zealand's (RBNZ) firm approach. US data showed a less significant drop in inflation than expected for January, leading investors to delay their expectations for the Fed's policy easing.

In New Zealand, figures showed inflation expectations hitting their lowest in more than two years for the first quarter, indicating that past rate increases effectively controlled rising costs. Yet, RBNZ's Governor Adrian Orr remarked that the battle against inflation isn't over, pointing out widespread financial pressures as the reason for continuing a "restrictive monetary policy."

Swiss Franc Hits 2-Month Low Amid Low Inflation

Solid ECN - The Swiss franc fell below 0.88 against the US dollar in February, hitting its lowest point in over two months, following an unexpectedly low inflation report. This report supported those in the Swiss National Bank who favor less aggressive monetary policy. In January, Switzerland's consumer price index increased by 1.3% compared to the previous year, missing the expected increase of 1.7% and marking the lowest rise over two years.

This was also the seventh month in a row that inflation stayed under the SNB's preferred maximum of 2%. The drop in inflation came even as there were expectations for higher figures amidst the country's gradual removal of electricity subsidies and adjustments to the value-added tax system. This led to increased speculation that the SNB might reduce its key interest rate sometime in the year's first half, possibly as early as March. Additionally, the franc's value was further lowered as the SNB grew its foreign exchange reserves in January for the second consecutive month, signaling a recovery from a continuous decrease over the last two years, bringing the reserves to their lowest in seven years.

Yen Drops to 3-Month Low Amid US Inflation Surge.

Solid ECN - The Japanese yen fell below 150 against the dollar, reaching its lowest point in three months due to unexpectedly high US inflation rates, which reduced the likelihood of the Federal Reserve cutting interest rates soon. This significant drop in the value of the yen led Japan's finance minister, Shunichi Suzuki, to warn that the government is closely monitoring market movements. However, he did not confirm any plans for intervention.

Masato Kanda, the Vice Finance Minister for International Affairs, also mentioned that Japan might take necessary measures in the forex market if the yen continues to drop, as it negatively affects the economy. Economically, Japan faced a setback with a 0.1% decrease in its GDP for the last quarter, contrary to the anticipated 0.3% growth, and after a 0.8% decline in the previous quarter. The economy saw a 0.4% reduction yearly, marking two consecutive quarters of decline.

Gold Hits $2000 Amid Economic Concerns.

Solid ECN - The price of gold climbed to $2,000 per ounce last Thursday, boosted by a weaker dollar and lower bond yields. This increase came as investors welcomed the latest U.S. economic figures and looked forward to insights from Federal Reserve officials regarding when they might start reducing interest rates. U.S. retail sales fell significantly more than expected in January, and the number of people filing for unemployment benefits unexpectedly hit a four-week low, hinting that the economy could be weaker than previously believed. 

Austan Goolsbee, the President of the Chicago Federal Reserve, expressed concern on Wednesday about the risk of delaying interest rate cuts too long. At the same time, Michael Barr, the Federal Reserve's Vice Chair for Supervision, mentioned that recent inflation numbers suggest achieving the 2% inflation goal could be challenging.

USDCAD Analysis: Bullish Trendline Supports Above 50% Fibonacci Level

Solid ECN - The USDCAD currency pair dipped to 1.3447 in today's trading session. The current USDCAD price is 1.348, which is above the 50% Fibonacci retracement level. This deck is further supported by the Ichimoku cloud and the bullish trendline, both visible in red on the USDCAD 4-Hour chart. From a technical perspective, if the bulls maintain the market above the 61.8% Fibonacci support, the bullish trend will likely persist. In this scenario, the following targets could be the 23.6% retracement level, followed by the recent peak of 1.3585.

Conversely, if the bears manage to lower the price below the 1.3447 support and stabilize it there, the downward momentum could extend to the 1.3357 support level.

Silver Prices Rise Amid U.S. Economic Shifts

Solid ECN - The price of silver climbed to almost $23 for each ounce as market participants weighed the possibility of the Federal Reserve reducing interest rates in May, following the latest economic indicators from the United States. The drop in U.S. retail sales was unexpectedly sharp at 0.8% for January, representing the most significant fall since March of the previous year.

Surprisingly, new unemployment claims fell to the lowest point in four weeks, mitigating the impact of the previously non-farm solid payroll figures. Additionally, Austan Goolsbee of the Chicago Federal Reserve advised caution against delaying interest rate cuts. In parallel, Michael Barr, the Federal Reserve's Vice Chair for Supervision, remarked that the recent inflation figures suggest a challenging journey to achieving the 2% inflation goal.

GBPUSD Tests Ichimoku Resistance: Bullish Trend Insight

Solid ECN - The GBPUSD pair is currently testing the Ichimoku cloud resistance. Interestingly, this level is backed up by the descending trendline, depicted in red. The price of the GBPUSD stands at 1.261, and the technical indicators show signs of the bullish trend that began last week.

From a technical standpoint, the uptick momentum will likely continue if the bulls stabilize the price above the descending trendline. If this scenario comes into play, the next bullish target would be the 61.8% Fibonacci resistance level.

Conversely, the 1.2590 level supports the bullish scenario mentioned above. However, should the bears breach this level, the price would likely experience a further decline to 1.255, followed by 1.251.

Aluminum Prices Dip Amid Global Demand Concerns

Solid ECN - Aluminum prices dropped to around $2,200 per ton in February, the lowest in a month, due to growing negativity around the demand for metals worldwide. Recent reports from China, the leading buyer, show a weakening economy and lower consumer interest, affecting the expected purchases by major producers. The situation worsened as the UAE stepped in to help with the export of bauxite from Guinea following an explosion at a fuel tank, which posed risks to aluminum production logistics.

Meanwhile, the market is also considering how new EU sanctions on Russian aluminum could affect its availability. These sanctions could expand the existing prohibitions on various aluminum products. However, the European Aluminium association mentioned that the current sanctions cover only 12% of the EU's aluminum imports, leading to calls for a broader ban.

GBPUSD Price Decline: Ichimoku Cloud and Channel Analysis

Solid ECN - The GBPUSD price has declined from 1.2629, which aligns with the Ichimoku cloud and the descending trendline, depicted in red. The pair is currently testing the 23.6% Fibonacci support level, which appears weak and may not keep the price from falling. Moreover, the technical indicators support the bearish market, with the RSI indicator hovering below the middle line and the Awesome Oscillator flipping below the signal line.

From a technical standpoint, the downtrend will likely continue as long as the GBPUSD price maintains a position below the 1.2629 resistance. The next target could be 1.2550, followed by 1.2517, the lower low of February 5th.

On the flip side, to invalidate the bearish scenario, the bulls must close and stabilize the price above 1.2629