2023 Market Forecast by Solid ECN

[SOLID ECN LLC]

Silver Prices Bounce Back​

Solid ECN – Silver prices have risen above $27 per ounce after a dip to one-month lows near $26.3 last week. This rebound aligns with other precious metals and reflects investor anticipation of a possible interest rate cut by the Federal Reserve in September.

The recent U.S. jobs report, which did not meet analysts' expectations, has further convinced traders that the Fed might reduce interest rates later this year. Such economic signals are critical for investors looking to understand potential market movements.

Additionally, silver's demand increased as investors sought safe-haven assets following a military operation in Rafah by Israel, prompting evacuation warnings to Palestinian civilians. This situation has added to the precious metal's appeal during geopolitical uncertainty.​

 

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Canadian Dollar Climbs as US Jobs Disappoint​

Solid ECN – The Canadian dollar peaked at 1.36 per USD, marking its strongest position since April 9th. This surge comes as the U.S. dollar experiences widespread weakness triggered by disappointing labor market data.

The U.S. economy added 175,000 jobs in April, falling short of the anticipated 243,000. This underperformance, coupled with a higher jobless rate and slowed wage growth, fuels speculation that the Federal Reserve might implement its first rate cut in September.​

Economic Slowdown Signals Potential Rate Cuts in Canada​

In parallel, Canada's economic indicators suggest a similar downturn, hinting at a possible earlier rate adjustment by the Bank of Canada. The Manufacturing PMI in Canada dropped to 49.4 in April 2024, signaling continuous contraction in factory activity for a twelfth consecutive month and falling below the expected 50.2.

Furthermore, with the economy only growing by 0.2% in February and predictions of stagnation in March, pressures mount for monetary policy adjustments.​

 

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Economic Indicators Show Growth and Stability in Mexico​

Solid ECN – The Mexican peso has rallied to approximately 16.8 per USD, marking a significant rebound from its five-month trough of 17.2 on April 25th. This upturn is primarily attributed to a widespread weakening of the U.S. dollar, spurred by indications that the Federal Reserve might implement two rate cuts within the year.

These speculations were fueled by a moderated growth in U.S. job numbers for April and a surprising increase in the unemployment rate, compounded by Federal Reserve Chair Powell's earlier dismissal of any forthcoming rate hikes.​

Stable Monetary Outlook as Mexican Economy Grows​

On the domestic front, Mexico's central bank, Banxico, is expected to maintain its interest rates at 11% in its upcoming May 9th meeting, consistent with its rate cut in March. However, emerging data might spark discussions among Banxico's Governing Council members about potential policy adjustments.

Additionally, Mexico's economic growth has accelerated, with a 0.2% expansion in Q1 of 2024 compared to 0.1% in the previous quarter, surpassing market expectations. Business confidence remains robust, near an 11-year peak, even as inflation persists above 4%.​

 

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BTC Bulls Eye Higher Targets Despite Price Dip​

Solid ECN – Bitcoin broke out of the descending trendline (in blue), but the bulls failed to stabilize the price above the EMA 50 and the middle line of the Bollinger Band. Consequently, the pair formed a long-wick bearish candle on the daily chart. As of this writing, the BTC/USD pair has dipped and is currently testing the broken resistance at $61,896.

The technical indicators provide mixed signals. RSI hovers below 50, but AO is bullish, showing a green line.

From a technical perspective, the bullish outlook remains valid if the BTC/USD price remains above $61,896. In this case, the next target could be $67,333.

On the flip side, the downtrend will resume if the price falls below the support level, with $56,460 as the next support level.​