Bitcoin undecided on a scenario for May
Bitcoin is down 3% over the past week, ending it at around $38.K. Ethereum lost 4.4%, while other leading altcoins in the top 10 fell from 4% (Binance Coin) to 14.7% (XRP).
The total capitalisation of the crypto market, according to CoinGecko, fell 4.6% over the week to $1.75 trillion. The Bitcoin Dominance Index rose by one percentage point to 42.2% over the same period due to weakness in altcoins.
For the week, the cryptocurrency fear and greed index fell by 2 points to 22 ("extreme fear"). The index rose to 28 points on Monday and moved into "fear" status.
Bitcoin has declined over the past four weeks amid weakening US stock indices. On Friday, Amazon and Google shares suffered their most significant falls since 2008, dragging down the tech-rich Nasdaq Index. It lost 12.7% in April, its most considerable dip since 2008.
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Bitcoin is down 3% over the past week, ending it at around $38.K. Ethereum lost 4.4%, while other leading altcoins in the top 10 fell from 4% (Binance Coin) to 14.7% (XRP).
The total capitalisation of the crypto market, according to CoinGecko, fell 4.6% over the week to $1.75 trillion. The Bitcoin Dominance Index rose by one percentage point to 42.2% over the same period due to weakness in altcoins.
For the week, the cryptocurrency fear and greed index fell by 2 points to 22 ("extreme fear"). The index rose to 28 points on Monday and moved into "fear" status.
Bitcoin has declined over the past four weeks amid weakening US stock indices. On Friday, Amazon and Google shares suffered their most significant falls since 2008, dragging down the tech-rich Nasdaq Index. It lost 12.7% in April, its most considerable dip since 2008.
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New correction horizon for US markets
The US S&P500 closed Friday down 3.6%, while the Nasdaq lost as much as 4.2%, the sharpest one-day decline since June 2020.
The decline was triggered by the market reaction to the disappointing reports of tech giants Amazon and Apple, which in previous quarters acted as a driver of optimism, but ended Friday down 14% and 3.7%, respectively.
While on Wednesday and Thursday, we saw that individual high-profile disappointments in the reports did not interfere with the positive dynamics of indices, Friday's dip suggests that investors' worries are reaching a new level.
The S&P500 closed last week at its lowest level since May 2021 last year. The index was in an area where it has found itself repeatedly since February but invariably received support from buyers.
This time the situation looks more worrying, as the week and month closed near the day's lows. Once again, it looks as if the market has come to the edge of the cliff and now has a good chance of going down.
The US S&P500 closed Friday down 3.6%, while the Nasdaq lost as much as 4.2%, the sharpest one-day decline since June 2020.
The decline was triggered by the market reaction to the disappointing reports of tech giants Amazon and Apple, which in previous quarters acted as a driver of optimism, but ended Friday down 14% and 3.7%, respectively.
While on Wednesday and Thursday, we saw that individual high-profile disappointments in the reports did not interfere with the positive dynamics of indices, Friday's dip suggests that investors' worries are reaching a new level.
The S&P500 closed last week at its lowest level since May 2021 last year. The index was in an area where it has found itself repeatedly since February but invariably received support from buyers.
This time the situation looks more worrying, as the week and month closed near the day's lows. Once again, it looks as if the market has come to the edge of the cliff and now has a good chance of going down.
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Technical analysis indicates that the S&P500 correction is crossing a level with a deeper target. From February to the end of April, the index several times supported the dip to 76.4% of the pandemic rally from March 2020 lows to January 2022 highs. A close S&P500 below 4200 indicates a move into a deeper correction horizon, up to 61.8% of the post-pandemic rally, near 3800.
On the side of the bears this time around, is the actions of the FOMC this week, from which investors expect a 50-point rate hike and the launch of a quantitative tightening programme (asset sales with a balance sheet of 95 billion a month). Moreover, investors anticipate that the Fed will warn that it can raise the rate by 50 points (double standard rate hike) in the next few meetings.
Right now, perhaps only the FOMC can bring optimism back to the markets by keeping them from a poorly controlled collapse.
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On the side of the bears this time around, is the actions of the FOMC this week, from which investors expect a 50-point rate hike and the launch of a quantitative tightening programme (asset sales with a balance sheet of 95 billion a month). Moreover, investors anticipate that the Fed will warn that it can raise the rate by 50 points (double standard rate hike) in the next few meetings.
Right now, perhaps only the FOMC can bring optimism back to the markets by keeping them from a poorly controlled collapse.
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#WaveAnalysis
#WTI reversed from support level 95.00
• Likely to rise to resistance level 108.80
WTI crude oil recently reversed up from the key support level 95.00, which has been reversing the price from the end of February.
The support area near the support level 95.00 was strengthen by the lower daily Bollinger Band by the 50% Fibonacci correction of the upward impulse from December.
Given the clear daily uptrend – WTI crude oil can be expected to rise further toward the next resistance level 108.80 (top of the previous impulse wave 1).
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#WTI reversed from support level 95.00
• Likely to rise to resistance level 108.80
WTI crude oil recently reversed up from the key support level 95.00, which has been reversing the price from the end of February.
The support area near the support level 95.00 was strengthen by the lower daily Bollinger Band by the 50% Fibonacci correction of the upward impulse from December.
Given the clear daily uptrend – WTI crude oil can be expected to rise further toward the next resistance level 108.80 (top of the previous impulse wave 1).
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#WaveAnalysis
#Gold reversed from support zone
• Likely to rise to resistance level 1940.00
Gold recently reversed up from the support zone located between the support levels 1900.00 and 1800.00.
This support zone is strengthened by the lower daily Bollinger Band by the 61.8% Fibonacci correction of the upward impulse from the middle of December.
Gold can be expected to rise further toward the next resistance level 1940.00 (target price for the completion of the active correction (ii)).
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#Gold reversed from support zone
• Likely to rise to resistance level 1940.00
Gold recently reversed up from the support zone located between the support levels 1900.00 and 1800.00.
This support zone is strengthened by the lower daily Bollinger Band by the 61.8% Fibonacci correction of the upward impulse from the middle of December.
Gold can be expected to rise further toward the next resistance level 1940.00 (target price for the completion of the active correction (ii)).
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#WaveAnalysis
#EURGBP reversed from resistance zone
• Likely to fall to support level 0.8310
EURGBP currency pair recently reversed down from the resistance area located between the pivotal resistance level 0.8465 (which has been reversing the price from December), upper daily Bollinger Band and the resistance trendline of the down channel from last year.
This resistance zone is strengthened by the 61.8% Fibonacci correction of the downward impulse from September.
Given the clear daily downtrend – EURGBP can be expected to fall further toward the next support level 0.8310.
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#EURGBP reversed from resistance zone
• Likely to fall to support level 0.8310
EURGBP currency pair recently reversed down from the resistance area located between the pivotal resistance level 0.8465 (which has been reversing the price from December), upper daily Bollinger Band and the resistance trendline of the down channel from last year.
This resistance zone is strengthened by the 61.8% Fibonacci correction of the downward impulse from September.
Given the clear daily downtrend – EURGBP can be expected to fall further toward the next support level 0.8310.
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#WaveAnalysis
#GBPCAD reversed from support zone
• Likely to rise to resistance level 1.6500
GBPCAD currency pair recently reversed up sharply from the support area located between the key support level 1.5910 (which has been reversing the pair from the end of 2016) and the lower weekly Bollinger Band.
The upward reversal from this support area started the active short-term correction (iv).
Given the oversold weekly Stochastic – GBPCAD can be expected to rise further toward the next resistance level 1.6500.
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#GBPCAD reversed from support zone
• Likely to rise to resistance level 1.6500
GBPCAD currency pair recently reversed up sharply from the support area located between the key support level 1.5910 (which has been reversing the pair from the end of 2016) and the lower weekly Bollinger Band.
The upward reversal from this support area started the active short-term correction (iv).
Given the oversold weekly Stochastic – GBPCAD can be expected to rise further toward the next resistance level 1.6500.
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#WaveAnalysis
#GBPJPY reversed from support zone
• Likely to rise to resistance level 164.65
GBPJPY currency pair recently reversed up strongly from the support level 159.60 (low of wave (a) from last month), standing near the lower daily Bollinger Band and the 50% Fibonacci correction of the upward impulse from March.
The upward reversal from this support area started the active short-term impulse wave 5.
Given the clear daily uptrend – GBPJPY can be expected to rise further toward the next resistance level 164.65.
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#GBPJPY reversed from support zone
• Likely to rise to resistance level 164.65
GBPJPY currency pair recently reversed up strongly from the support level 159.60 (low of wave (a) from last month), standing near the lower daily Bollinger Band and the 50% Fibonacci correction of the upward impulse from March.
The upward reversal from this support area started the active short-term impulse wave 5.
Given the clear daily uptrend – GBPJPY can be expected to rise further toward the next resistance level 164.65.
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Oil preparing for sharp moves
The price of crude is down more than 3% by the start of the New York trading session with a tug-of-war around $100 a barrel of WTI. And this is a rather remarkable market reaction, given reports that EU countries are dropping their veto on the Russian oil embargo one by one.
Germany, followed by Austria, Hungary and Slovakia, have withdrawn their vetoes to ban oil purchases from Russia. Moreover, the German finance minister has pointed to the technical possibility of an immediate embargo.
This news, in practice, has not triggered a new wave of oil purchases by speculators. A stronger dollar and signs of slowing activity in China and the US continue to weigh on global demand for risky assets and oil.
The price of crude is down more than 3% by the start of the New York trading session with a tug-of-war around $100 a barrel of WTI. And this is a rather remarkable market reaction, given reports that EU countries are dropping their veto on the Russian oil embargo one by one.
Germany, followed by Austria, Hungary and Slovakia, have withdrawn their vetoes to ban oil purchases from Russia. Moreover, the German finance minister has pointed to the technical possibility of an immediate embargo.
This news, in practice, has not triggered a new wave of oil purchases by speculators. A stronger dollar and signs of slowing activity in China and the US continue to weigh on global demand for risky assets and oil.
WTI sank 3% to $100 on global risk-off mood.
Will the correction continue?
Will the correction continue?
Anonymous Poll
57%
BUY
43%
SELL
Bitcoin lies at the bottom
Bitcoin rose 0.6% on Monday, ending the day near $38.4K, cruising at arm's length from the $38K level for the past five days. Ethereum has settled near $2800, losing 0.5% over the past 24 hours. Other altcoins in the top 10 have shown mixed dynamics, ranging from a decline of 1.9% (Solana) to a rise of 1.5% (Terra).
Total crypto market capitalisation, according to CoinMarketCap, declined 0.7% overnight to $1.74 trillion. Bitcoin's dominance index added 0.2% to 42.1%.
The cryptocurrency Fear and Greed Index was down 1 point to 27 by Tuesday and remains in "fear" mode.
Since late March, the bears have been intensifying from $39K, forming a sequence of lower highs. At the same time, the basis in the form of support at $38K generally remains untouched.
Bitcoin rose 0.6% on Monday, ending the day near $38.4K, cruising at arm's length from the $38K level for the past five days. Ethereum has settled near $2800, losing 0.5% over the past 24 hours. Other altcoins in the top 10 have shown mixed dynamics, ranging from a decline of 1.9% (Solana) to a rise of 1.5% (Terra).
Total crypto market capitalisation, according to CoinMarketCap, declined 0.7% overnight to $1.74 trillion. Bitcoin's dominance index added 0.2% to 42.1%.
The cryptocurrency Fear and Greed Index was down 1 point to 27 by Tuesday and remains in "fear" mode.
Since late March, the bears have been intensifying from $39K, forming a sequence of lower highs. At the same time, the basis in the form of support at $38K generally remains untouched.
Gold and silver at the lower limits
Gold and silver have come under increased pressure in the last two weeks. Silver has ten sessions of back-to-back decline, from $25 to $22.5, and is back near the lower end of its trading range since July 2020. In the middle of last month, the pressure on gold intensified after a failed attempt to climb above $2000.
There was a similar disappointment for the bulls in silver when they failed once again to consolidate the price above the meaningful $25 round level.
The US dollar has strengthened by 5.8% since April, contributing significantly to the base appreciation in metals and other commodities.
In our view, gold and silver might continue their downward trend until FOMC comments or until the monthly labour market report.
Gold and silver have come under increased pressure in the last two weeks. Silver has ten sessions of back-to-back decline, from $25 to $22.5, and is back near the lower end of its trading range since July 2020. In the middle of last month, the pressure on gold intensified after a failed attempt to climb above $2000.
There was a similar disappointment for the bulls in silver when they failed once again to consolidate the price above the meaningful $25 round level.
The US dollar has strengthened by 5.8% since April, contributing significantly to the base appreciation in metals and other commodities.
In our view, gold and silver might continue their downward trend until FOMC comments or until the monthly labour market report.
The potentially important support is around $1835, the 200 SMA. The performance of gold near that mark could lay the foundations for a prolonged trend, whether it is a reversal to the upside or a final capitulation of the buyers.
For silver, the following potential support line looks at $22. A sharp drop from 1830 in gold or below 22 in silver would confirm a break-up of the established ranges and promises to be the harbinger of an even more furious and prolonged decline.
In a pessimistic scenario, the gold price could retreat below $1500 by the end of the third quarter and to $16 in silver.
But suppose the Fed comments return demand for risk. In that case, the momentum in the precious metals could renew and give an informal start to the rally to update historical highs in gold and above $30 in silver.
For silver, the following potential support line looks at $22. A sharp drop from 1830 in gold or below 22 in silver would confirm a break-up of the established ranges and promises to be the harbinger of an even more furious and prolonged decline.
In a pessimistic scenario, the gold price could retreat below $1500 by the end of the third quarter and to $16 in silver.
But suppose the Fed comments return demand for risk. In that case, the momentum in the precious metals could renew and give an informal start to the rally to update historical highs in gold and above $30 in silver.
Where is EURUSD heading from 1.05? To 0.85 or 1.20?
The EURUSD has been hovering around 1.05 for the fourth day in a row, which is the last round level point before moving towards parity.
This lull could be interpreted as an attempt by the bears to gain strength before a new decline, or it could indicate that the downside momentum is exhausted.
History and fundamentals suggest that a further downside move after a pause is more likely for now. EURUSD looks oversold by the RSI on the high timeframes above one day. However, history suggests that this oversold pattern appears in this pair at times of historical outlook reassessment, which is well within the current framework.
The EURUSD has fallen for another four months since the Relative Strength Index touched 30 in 2014. It took more than two years for the pair to recover from the bottom.
In 2000 it took nine months to reach the bottom, and it took 25 months before the reversal began.
The EURUSD has been hovering around 1.05 for the fourth day in a row, which is the last round level point before moving towards parity.
This lull could be interpreted as an attempt by the bears to gain strength before a new decline, or it could indicate that the downside momentum is exhausted.
History and fundamentals suggest that a further downside move after a pause is more likely for now. EURUSD looks oversold by the RSI on the high timeframes above one day. However, history suggests that this oversold pattern appears in this pair at times of historical outlook reassessment, which is well within the current framework.
The EURUSD has fallen for another four months since the Relative Strength Index touched 30 in 2014. It took more than two years for the pair to recover from the bottom.
In 2000 it took nine months to reach the bottom, and it took 25 months before the reversal began.
#WaveAnalysis
#CADCHF reversed from resistance level 0.7620
• Likely to fall to support level 0.7535
CADCHF currency pair today reversed down from the key resistance level 0.7620, standing near the upper daily Bollinger Band and the resistance trendline of the daily up channel from February.
The downward reversal from resistance level 0.7620 stopped the previous short-term impulse waves (iii) and 3.
Given the strength of the resistance level 0.7620 and the bearish divergence on the daily Stochastic – CADCHF currency pair can be expected to fall further toward the next support level 0.7535.
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#CADCHF reversed from resistance level 0.7620
• Likely to fall to support level 0.7535
CADCHF currency pair today reversed down from the key resistance level 0.7620, standing near the upper daily Bollinger Band and the resistance trendline of the daily up channel from February.
The downward reversal from resistance level 0.7620 stopped the previous short-term impulse waves (iii) and 3.
Given the strength of the resistance level 0.7620 and the bearish divergence on the daily Stochastic – CADCHF currency pair can be expected to fall further toward the next support level 0.7535.
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#WaveAnalysis
#Platinum reversed from support zone
• Likely to rise to resistance level 960.00
Platinum recently reversed up strongly from the powerful long-term support level 900.00 (which has been reversing the price from last September), standing near the lower daily Bollinger Band.
The upward reversal from support level 900.00 stopped the previous short-term impulse wave 3 of the higher impulse wave (3) from last month.
Given the strength of the nearby support level 900.00 – Platinum can be expected to rise further toward the next resistance level 960.00 (the former monthly low from March).
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#Platinum reversed from support zone
• Likely to rise to resistance level 960.00
Platinum recently reversed up strongly from the powerful long-term support level 900.00 (which has been reversing the price from last September), standing near the lower daily Bollinger Band.
The upward reversal from support level 900.00 stopped the previous short-term impulse wave 3 of the higher impulse wave (3) from last month.
Given the strength of the nearby support level 900.00 – Platinum can be expected to rise further toward the next resistance level 960.00 (the former monthly low from March).
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The culmination of the battle for the trend in Bitcoin
Bitcoin fell 1.8% on Tuesday, ending the day around $37,700 and temporarily below a meaningful support line. Notably, it was a cryptocurrency selloff as stock indices developed gains. The demand for risk recovery has likely returned interest in cryptos that went into the green on Wednesday.
Locally, bitcoin manages to maintain its balance on support, which has withstood the onslaught of sellers over the past four months. On the other hand, we see a sequence of increasingly lower local peaks since the last days of March.
The lines of these two trends have reached their intersection point with a potential climax later today. More often than not, the outcome of such triangles is to break the support because if it goes under $38K, we might see a rising wave of selloffs. A return to the uptrend will require confirmation with a decisive move above $40K, the area of previous local lows.
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Bitcoin fell 1.8% on Tuesday, ending the day around $37,700 and temporarily below a meaningful support line. Notably, it was a cryptocurrency selloff as stock indices developed gains. The demand for risk recovery has likely returned interest in cryptos that went into the green on Wednesday.
Locally, bitcoin manages to maintain its balance on support, which has withstood the onslaught of sellers over the past four months. On the other hand, we see a sequence of increasingly lower local peaks since the last days of March.
The lines of these two trends have reached their intersection point with a potential climax later today. More often than not, the outcome of such triangles is to break the support because if it goes under $38K, we might see a rising wave of selloffs. A return to the uptrend will require confirmation with a decisive move above $40K, the area of previous local lows.
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Dollar’s make-or-break point
The dollar is near the extremes of the world’s most popular currencies. The dollar index is near the peaks of March 2020 and January 2017. Investors and traders have pushed the dollar to a vital turning point over the past six years, anticipating one of the most hawkish decisions in decades.
Today’s FOMC decisions will determine whether we see the formation of a DXY triple top and the start of a dollar pullback or whether we see further momentum building with the benefit of dollar buyers.
The FOMC is expected to raise its key rate by 50 points - the sharpest tightening since 2001 - along with the announcement of the start of asset sales from the Fed’s balance sheet at $95bn per month.
Market participants are also laying down a near 100% chance of a 75-point rate hike at the subsequent meeting in June, plus a 50-point in July. Such steep rate hikes were last experienced by the US in the 1980s, battling double-digit inflation.
The Fed’s extreme action is justified and necessary
The dollar is near the extremes of the world’s most popular currencies. The dollar index is near the peaks of March 2020 and January 2017. Investors and traders have pushed the dollar to a vital turning point over the past six years, anticipating one of the most hawkish decisions in decades.
Today’s FOMC decisions will determine whether we see the formation of a DXY triple top and the start of a dollar pullback or whether we see further momentum building with the benefit of dollar buyers.
The FOMC is expected to raise its key rate by 50 points - the sharpest tightening since 2001 - along with the announcement of the start of asset sales from the Fed’s balance sheet at $95bn per month.
Market participants are also laying down a near 100% chance of a 75-point rate hike at the subsequent meeting in June, plus a 50-point in July. Such steep rate hikes were last experienced by the US in the 1980s, battling double-digit inflation.
The Fed’s extreme action is justified and necessary
Fed’s hike with toothless BoE could knock GBPUSD down to 1.2000
GBPUSD is hovering around 1.2500 for the sixth consecutive trading session. But this stabilisation is more like the calm before the storm than a new balance point.
The Pound enjoys a fragile equilibrium as investors and traders choose to take a wait-and-see approach ahead of the super week when the Fed (later today) and Bank of England (Thursday) decisions will be released, as well as the US monthly employment report (Friday).
These three events have enough potential to trigger the Pound’s most substantial volatility in weeks, capable of also reversing the decline in mid-April.
On the technical analysis side, GBPUSD, which started April above 1.3100, is highly oversold, typically creating the potential for a rebound to 1.2660 or further to 1.2880.
GBPUSD is hovering around 1.2500 for the sixth consecutive trading session. But this stabilisation is more like the calm before the storm than a new balance point.
The Pound enjoys a fragile equilibrium as investors and traders choose to take a wait-and-see approach ahead of the super week when the Fed (later today) and Bank of England (Thursday) decisions will be released, as well as the US monthly employment report (Friday).
These three events have enough potential to trigger the Pound’s most substantial volatility in weeks, capable of also reversing the decline in mid-April.
On the technical analysis side, GBPUSD, which started April above 1.3100, is highly oversold, typically creating the potential for a rebound to 1.2660 or further to 1.2880.
Market Overview: NASDAQ 100
The Nasdaq index, rich with tech companies, lost more than 15% from peaks at the start of April to lows on April 26th. The pressure is due to index companies' sensitivity to monetary policy: they were the beneficiaries of a period of low-interest rates and are now falling faster than the market due to tightening financial conditions. 📉
🔎Look out for: Markets are pricing in expectations of a 175-point rate hike at the following three Fed meetings (50 + 75 + 50), which could be the most extreme hike since the early 1980s. But it is possible that markets have gone too far in their expectations, and the Fed will soften them, which could have a positive effect on stocks and particularly Nasdaq100.
🔔Be prepared for the FOMC later today at 18:00 GMT!
👉Register https://bit.ly/3n8rYtz & Trade CFDs on #NASDAQ with FxPro.com
The Nasdaq index, rich with tech companies, lost more than 15% from peaks at the start of April to lows on April 26th. The pressure is due to index companies' sensitivity to monetary policy: they were the beneficiaries of a period of low-interest rates and are now falling faster than the market due to tightening financial conditions. 📉
🔎Look out for: Markets are pricing in expectations of a 175-point rate hike at the following three Fed meetings (50 + 75 + 50), which could be the most extreme hike since the early 1980s. But it is possible that markets have gone too far in their expectations, and the Fed will soften them, which could have a positive effect on stocks and particularly Nasdaq100.
🔔Be prepared for the FOMC later today at 18:00 GMT!
👉Register https://bit.ly/3n8rYtz & Trade CFDs on #NASDAQ with FxPro.com
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#WaveAnalysis
#USDCAD reversed from key resistance level 1.2890
• Likely to fall to support level 1.2750
USDCAD recently reversed down strongly from the key resistance level 1.2890 (which has been reversing the price from last August), standing near the upper daily Bollinger Band.
The downward reversal from resistance level 1.2890 stopped the previous short-term impulse wave 3 of the impulse wave (3) from April.
Given the strength of the aforementioned resistance level 1.2890 , overbought daily Stochastic – USDCAD can be expected to fall further toward the next support level 1.2750.
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#USDCAD reversed from key resistance level 1.2890
• Likely to fall to support level 1.2750
USDCAD recently reversed down strongly from the key resistance level 1.2890 (which has been reversing the price from last August), standing near the upper daily Bollinger Band.
The downward reversal from resistance level 1.2890 stopped the previous short-term impulse wave 3 of the impulse wave (3) from April.
Given the strength of the aforementioned resistance level 1.2890 , overbought daily Stochastic – USDCAD can be expected to fall further toward the next support level 1.2750.
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