#WaveAnalysis
#EURNZD reversed from resistance level 1.6795
• Likely to fall to support level 1.6600
EURNZD recently reversed down from the key resistance level 1.6795 (which has been reversing the price from the start of October), intersecting with the upper daily Bollinger Band and the 61.8% Fibonacci correction of the downward impulse from August.
The downward reversal from the resistance level 1.6795 stopped the active impulse waves (iii), 3 and (1).
EURNZD can be expected to fall further toward the next support level 1.6600 (low of the earlier minor correction (ii)).
#EURNZD reversed from resistance level 1.6795
• Likely to fall to support level 1.6600
EURNZD recently reversed down from the key resistance level 1.6795 (which has been reversing the price from the start of October), intersecting with the upper daily Bollinger Band and the 61.8% Fibonacci correction of the downward impulse from August.
The downward reversal from the resistance level 1.6795 stopped the active impulse waves (iii), 3 and (1).
EURNZD can be expected to fall further toward the next support level 1.6600 (low of the earlier minor correction (ii)).
#WaveAnalysis #NTG
• Natural gas reversed from resistance area
• Likely to fall to support level 3.525
Natural gas recently reversed down from the resistance area set between the resistance level 4.4, upper daily Bollinger Band and the 50% Fibonacci correction of the downward price impulse from November.
The downward reversal from the resistance level 4.4 started the active intermediate corrective wave (2).
Natural gas can be expected to fall further toward the next support level 3.525 (previous monthly low from December and the target for the completion of the active wave (2)).
• Natural gas reversed from resistance area
• Likely to fall to support level 3.525
Natural gas recently reversed down from the resistance area set between the resistance level 4.4, upper daily Bollinger Band and the 50% Fibonacci correction of the downward price impulse from November.
The downward reversal from the resistance level 4.4 started the active intermediate corrective wave (2).
Natural gas can be expected to fall further toward the next support level 3.525 (previous monthly low from December and the target for the completion of the active wave (2)).
The crypto market capitalisation fell to 1.83 trillion, losing 7.3% in the past 24 hours. As we had feared, the selloff was triggered by sharply negative sentiment in US equity markets and intensified by the breakdown of critical support levels.
Bitcoin retreated to the $38.8K area.
Without a sharp intraday reversal (chances for this are minimal), we can confidently expect an acceleration of long position liquidation in Bitcoin and further drawdowns. There is nowhere to look for support until the $30-33K area on the chart.
Ether has given up support at $3K, quickly pulling back into the consolidation area of late September, ending up near $2.85K. The intensification of the selloff makes $2K the target of the initial downside wave.
Earlier in 2021, the area of 30K for Bitcoin and near 2K for Ether was the bottom of a deep correction.
But then the external backdrop was favourable, as the US market was returning to growth with drawdowns in the 5% range, having already crossed that barrier earlier last year.
Bitcoin retreated to the $38.8K area.
Without a sharp intraday reversal (chances for this are minimal), we can confidently expect an acceleration of long position liquidation in Bitcoin and further drawdowns. There is nowhere to look for support until the $30-33K area on the chart.
Ether has given up support at $3K, quickly pulling back into the consolidation area of late September, ending up near $2.85K. The intensification of the selloff makes $2K the target of the initial downside wave.
Earlier in 2021, the area of 30K for Bitcoin and near 2K for Ether was the bottom of a deep correction.
But then the external backdrop was favourable, as the US market was returning to growth with drawdowns in the 5% range, having already crossed that barrier earlier last year.
The buying-the-dip reflex can provide a false start for short-term investors. In the previous two years, markets fell on fears of pandemic effects, but central bankers and governments gave a supporting hand to the economy and pulled the markets through it.
So far this year, the downside driver has been an increasingly hawkish tone of commentary, pushing up the risk-free interest rate level. We do not rule out that markets are going too far in their expectations, predicting more than four Fed rate hikes this year.
Since the beginning of the month, market turbulence should send a clear signal to the Fed that the market is not ready for such a drastic move.
Previously, Powell missed such a signal in autumn 2018 by insisting on further rate hikes in 2019. This harshness was misguided, which the Fed acknowledged by softening the rhetoric and then lowering the rate in 2019.
Did Powell draw the correct conclusions from that episode? This is a question for hundreds of billions of dollars.
So far this year, the downside driver has been an increasingly hawkish tone of commentary, pushing up the risk-free interest rate level. We do not rule out that markets are going too far in their expectations, predicting more than four Fed rate hikes this year.
Since the beginning of the month, market turbulence should send a clear signal to the Fed that the market is not ready for such a drastic move.
Previously, Powell missed such a signal in autumn 2018 by insisting on further rate hikes in 2019. This harshness was misguided, which the Fed acknowledged by softening the rhetoric and then lowering the rate in 2019.
Did Powell draw the correct conclusions from that episode? This is a question for hundreds of billions of dollars.
This corporate earnings season has so far caused more worries and disappointments than pleasant surprises. Judging by market dynamics, investors are getting rid of shares of pandemic favourites.
However, we can't say yet that they are ready to massively add value stocks to their portfolios, though the latter are falling much less than the former.
Shares of Peloton collapsed 24% Thursday on reports that the company is suspending production of exercise bikes and treadmills on scarce demand. The stock now is near the mark where it traded just after its September 2019 IPO and about 85% below the peak levels it reached a year ago.
Netflix hasn't been left out of the strong moves. Its shares lost 20% in the post-market after its earnings report. The company continues to grow, but investors punished it for lowering its growth rate forecasts despite revenue and earnings above expectations last quarter. But the market now values it at June 2020 levels.
However, we can't say yet that they are ready to massively add value stocks to their portfolios, though the latter are falling much less than the former.
Shares of Peloton collapsed 24% Thursday on reports that the company is suspending production of exercise bikes and treadmills on scarce demand. The stock now is near the mark where it traded just after its September 2019 IPO and about 85% below the peak levels it reached a year ago.
Netflix hasn't been left out of the strong moves. Its shares lost 20% in the post-market after its earnings report. The company continues to grow, but investors punished it for lowering its growth rate forecasts despite revenue and earnings above expectations last quarter. But the market now values it at June 2020 levels.
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🔜MICROSOFT CORP (MSFT.O) 🕐 After Market Close Today
Also coming up this week reporting quarterly earnings is Tesla, Apple, Intel, Visa, Mastercard and more.
📅Check out the full calendar of upcoming earning releases and company dividends on our new and improved Earnings calendar to see the dates and any changes to margin requirements:
https://www.fxpro.com/trading-tools/earnings-calendar
⚠️Be prepared for higher volatility!
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#WaveAnalysis
#NZDUSD reversed from support level 0.6700
• Likely to rise to resistance level 0.6800
NZDUSD recently reversed up from the key support level 0.6700 (previous monthly low from December), strengthened by the lower daily Bollinger Band.
The upward reversal from the support level 0.6700 stopped the previous sharp downward impulse wave 3 and (C).
Given the strength of the support level 0.6700 – NZDUSD can be expected to rise further toward the next resistance level 0.6800.
#NZDUSD reversed from support level 0.6700
• Likely to rise to resistance level 0.6800
NZDUSD recently reversed up from the key support level 0.6700 (previous monthly low from December), strengthened by the lower daily Bollinger Band.
The upward reversal from the support level 0.6700 stopped the previous sharp downward impulse wave 3 and (C).
Given the strength of the support level 0.6700 – NZDUSD can be expected to rise further toward the next resistance level 0.6800.
#WaveAnalysis
#Nikkei225 reversed from support level 27375.00
• Likely to rise to resistance level 27750.00
Nikkei 225 index today reversed up sharply from the pivotal support level 27375.00 (which reversed the index multiple times from May of 202 never allowing the price to fall far below this price level).
The upward reversal from the support level 27375.00 stopped the previous sharp downward impulse waves iii and (c).
Given the improvement of the global risk sentiment – Nikkei 225 index can be expected to rise further toward the next resistance level 27750.00 (former support from the middle of December).
#Nikkei225 reversed from support level 27375.00
• Likely to rise to resistance level 27750.00
Nikkei 225 index today reversed up sharply from the pivotal support level 27375.00 (which reversed the index multiple times from May of 202 never allowing the price to fall far below this price level).
The upward reversal from the support level 27375.00 stopped the previous sharp downward impulse waves iii and (c).
Given the improvement of the global risk sentiment – Nikkei 225 index can be expected to rise further toward the next resistance level 27750.00 (former support from the middle of December).
#WaveAnalysis #FB
• Meta reversed from support zone
• Likely to rise to resistance level 327.00
Meta recently corrected up from the support zone lying between the key support level 307.00 (which has been reversing the price from last May) and the lower daily Bollinger Band.
The support zone near the support level 307.00 was strengthened by the nearby 50% Fibonacci correction of the sharp uptrend from the start of 2021.
Given the clear daily uptrend, Meta can be expected to rise further toward the next resistance level 327.00 (former support from the middle of December).
• Meta reversed from support zone
• Likely to rise to resistance level 327.00
Meta recently corrected up from the support zone lying between the key support level 307.00 (which has been reversing the price from last May) and the lower daily Bollinger Band.
The support zone near the support level 307.00 was strengthened by the nearby 50% Fibonacci correction of the sharp uptrend from the start of 2021.
Given the clear daily uptrend, Meta can be expected to rise further toward the next resistance level 327.00 (former support from the middle of December).
We saw the sixth consecutive bearish daily candlestick on Monday morning, and the price rolled back to $35K. The bears may well be able to sell the price down to $32.5K, closing the gap of July and returning the rate to last summer's support area.
Some observers point out that this is a worrying signal, suggesting further market declines, as we have not seen a final capitulation.
Events are developing in a bearish scenario, so far broadly repeating what we saw in 2018 in terms of overall sentiment. Long-term buyers can avoid buying at prices above 30k for bitcoin and 2k for ether.
We believe long-term investors will look out for purchases in the 20-30k per bitcoin area. Whether these purchases will be at the upper or lower boundary depends, among other things, on the situation in the stock markets. The return of buyers there will support the demand for risk among institutional investors. But as long as we see only steady selling from them, it is too early to talk about buying.
Some observers point out that this is a worrying signal, suggesting further market declines, as we have not seen a final capitulation.
Events are developing in a bearish scenario, so far broadly repeating what we saw in 2018 in terms of overall sentiment. Long-term buyers can avoid buying at prices above 30k for bitcoin and 2k for ether.
We believe long-term investors will look out for purchases in the 20-30k per bitcoin area. Whether these purchases will be at the upper or lower boundary depends, among other things, on the situation in the stock markets. The return of buyers there will support the demand for risk among institutional investors. But as long as we see only steady selling from them, it is too early to talk about buying.
Cryptocurrency market: a respite from the fall
The cryptocurrency market is adding 0.2% in the last 24 hours to $1.63 trillion, experiencing some pause or rebound after a prolonged drawdown. Buyer interest in cryptocurrencies came at the expense of a rebound in US equities, where selloff hunters thought their time had come.
The cryptocurrency market capitalisation without Bitcoin became less than 1 trillion last Saturday, and this round level now acts as near-term resistance.
Ether also saw a bounce yesterday towards the end of the day, making it clear that the market is far from surrendering. After seven days of collapse, the primary altcoin managed to close Monday with a tiny gain. Nevertheless, there are no signs of breaking the downtrend yet. Moreover, a death cross is also forming over the ether, as the 50-day moving average is now only a couple of days away from crossing the 200-day from the top down. This signal is often followed by a new bearish attack.
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The cryptocurrency market is adding 0.2% in the last 24 hours to $1.63 trillion, experiencing some pause or rebound after a prolonged drawdown. Buyer interest in cryptocurrencies came at the expense of a rebound in US equities, where selloff hunters thought their time had come.
The cryptocurrency market capitalisation without Bitcoin became less than 1 trillion last Saturday, and this round level now acts as near-term resistance.
Ether also saw a bounce yesterday towards the end of the day, making it clear that the market is far from surrendering. After seven days of collapse, the primary altcoin managed to close Monday with a tiny gain. Nevertheless, there are no signs of breaking the downtrend yet. Moreover, a death cross is also forming over the ether, as the 50-day moving average is now only a couple of days away from crossing the 200-day from the top down. This signal is often followed by a new bearish attack.
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Gold as a fragile hedge against a market drop
Gold is trading near $1840, adding 3.2% from the Jan 7 lows, as a hedge against increased financial market volatility.
At a point like this, we often see a divergence in the dynamics of gold and equities, which revives talk of a safe haven. The critical question for investors now is when there is a switch between a favourable decline for gold and a real fear triggering a circular sell-off in all assets.
We are looking at the performance of the yen and the franc. Both currencies are relatively protected from geopolitical risks on the Eurozone sidelines. So far, these currencies have moderately slid against the dollar, which suggests that we have not yet reached the point of reducing leverage.
The main near-term unknown is the outcome of Wednesday evening's Fed meeting. The central bank's statements and comments could determine the other trend of gold, supporting or, conversely, reversing the latest upside attempts.
Gold is trading near $1840, adding 3.2% from the Jan 7 lows, as a hedge against increased financial market volatility.
At a point like this, we often see a divergence in the dynamics of gold and equities, which revives talk of a safe haven. The critical question for investors now is when there is a switch between a favourable decline for gold and a real fear triggering a circular sell-off in all assets.
We are looking at the performance of the yen and the franc. Both currencies are relatively protected from geopolitical risks on the Eurozone sidelines. So far, these currencies have moderately slid against the dollar, which suggests that we have not yet reached the point of reducing leverage.
The main near-term unknown is the outcome of Wednesday evening's Fed meeting. The central bank's statements and comments could determine the other trend of gold, supporting or, conversely, reversing the latest upside attempts.
El Salvador may abandon Bitcoin
Bitcoin decreased 0.6% on Tuesday, ending the day around $36,600 while Ethereum lost 1.1%. Other leading altcoins from the top ten showed mixed dynamics: from a 7.4% decline of Terra to a 2.3% rise of Polkadot. According to CoinGecko, the total capitalization of the crypto market sank 1.1% to $1.74 trillion over the past day.
In total, the crypto market broke the recent days' decline after bitcoin hit lows of the last six months on Monday, dropping below $33,000. This was followed by a sharp rebound upwards to $37,500. The US market was the reason.
Throughout January, stocks are falling in anticipation of the Fed's monetary policy tightening. The decline in risky assets also had a negative impact on bitcoin, which has already lost about 20% since the beginning of the month.
Bitcoin decreased 0.6% on Tuesday, ending the day around $36,600 while Ethereum lost 1.1%. Other leading altcoins from the top ten showed mixed dynamics: from a 7.4% decline of Terra to a 2.3% rise of Polkadot. According to CoinGecko, the total capitalization of the crypto market sank 1.1% to $1.74 trillion over the past day.
In total, the crypto market broke the recent days' decline after bitcoin hit lows of the last six months on Monday, dropping below $33,000. This was followed by a sharp rebound upwards to $37,500. The US market was the reason.
Throughout January, stocks are falling in anticipation of the Fed's monetary policy tightening. The decline in risky assets also had a negative impact on bitcoin, which has already lost about 20% since the beginning of the month.
Euro and pound are the potential victims of dollar growth
The US dollar has been gaining steadily against the developed countries' currencies since the beginning of the year. By the way, the yen was an exception: it has been adding 1.8% over the past 11 days after the stock market entered the turbulence zone due to a reassessment of the monetary policy outlook.
Among the developed and liquid currencies, three scenarios can be considered. The first way is to sell EURUSD. The euro is weaker than the dollar due to the ECB being on several steps behind the Fed. That means that the EU rates will remain lower for a longer period of time, and the balance of bond yields will be shifted towards the dollar. Given the pace the Fed intends to take in tightening monetary policy, this yield gap promises to widen further.
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The US dollar has been gaining steadily against the developed countries' currencies since the beginning of the year. By the way, the yen was an exception: it has been adding 1.8% over the past 11 days after the stock market entered the turbulence zone due to a reassessment of the monetary policy outlook.
Among the developed and liquid currencies, three scenarios can be considered. The first way is to sell EURUSD. The euro is weaker than the dollar due to the ECB being on several steps behind the Fed. That means that the EU rates will remain lower for a longer period of time, and the balance of bond yields will be shifted towards the dollar. Given the pace the Fed intends to take in tightening monetary policy, this yield gap promises to widen further.
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📣Will the Fed shake the markets?
Don't miss FOMC Meeting today!
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📍When does the Fed meeting take place?
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📍How to monitor the news like a pro?
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Be prepared for increased volatility!
Don't miss FOMC Meeting today!
📍What is the FOMC?
📍When does the Fed meeting take place?
📍How does the FOMC affect the market?
📍How to monitor the news like a pro?
Visit the dedicated page on the FxPro website for information:
👉🏻 https://www.fxpro.com/fomc 👈🏻
Be prepared for increased volatility!
How the Fed sent Bitcoin down
Bitcoin decreased by 0.6% on Wednesday, ending the day at around $36,400. Ethereum added 0.2%, while other top-ten altcoins mostly saw declines from 3.1% (Binance Coin) to 6.6% (Terra, an outsider of the day).
According to CoinGecko, the total capitalization of the crypto market sank by 0.5%, to $1.73 trillion.
Bitcoin showed positive dynamics all day against the backdrop of growing stock indices. Up until the Fed meeting, the first cryptocurrency was gaining over 6%, hitting 5-day highs above $38,800. However, BTC began to fall almost immediately after the announcement of the results of the Fed's two-day meeting.
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Bitcoin decreased by 0.6% on Wednesday, ending the day at around $36,400. Ethereum added 0.2%, while other top-ten altcoins mostly saw declines from 3.1% (Binance Coin) to 6.6% (Terra, an outsider of the day).
According to CoinGecko, the total capitalization of the crypto market sank by 0.5%, to $1.73 trillion.
Bitcoin showed positive dynamics all day against the backdrop of growing stock indices. Up until the Fed meeting, the first cryptocurrency was gaining over 6%, hitting 5-day highs above $38,800. However, BTC began to fall almost immediately after the announcement of the results of the Fed's two-day meeting.
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Roller coaster of the ruble: is it already at the bottom?
The rate of the Russian currency reached 80.40 per dollar and 90.70 per euro yesterday after the close of the regular session. However, from these levels, the ruble seemed attractive for purchases. This brought the price back down from the psychologically significant round marks.
The dollar was temporarily near peak levels, from where it has been unfolding since the end of 2014. Of course, the fact that the ruble previously went up from 80 does not allow one to blindly hope that the same will happen this time.
However, it is a good reason to closely monitor the dynamics of the Russian currency, as well as the rhetoric of officials and the central bank when approaching these levels.
📣Trade responsibly at fxpro.com 👈🏻
The rate of the Russian currency reached 80.40 per dollar and 90.70 per euro yesterday after the close of the regular session. However, from these levels, the ruble seemed attractive for purchases. This brought the price back down from the psychologically significant round marks.
The dollar was temporarily near peak levels, from where it has been unfolding since the end of 2014. Of course, the fact that the ruble previously went up from 80 does not allow one to blindly hope that the same will happen this time.
However, it is a good reason to closely monitor the dynamics of the Russian currency, as well as the rhetoric of officials and the central bank when approaching these levels.
📣Trade responsibly at fxpro.com 👈🏻