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.

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.

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.

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.

#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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#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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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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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

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.

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!

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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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#WaveAnalysis #DJI

Dow Jones reversed from support level 32460.
Likely to rise to resistance level 35000.

Dow Jones recently reversed up from the key support level 32460 (which has been reversing the index from the start of this year), standing near the lower weekly Bollinger Band.

The support area near the support level 32460.00 was further strengthened by the 38.2% Fibonacci correction of the weekly upward impulse from 2020.

Given the clear weekly uptrend – Dow Jones can be expected to rise further toward the next resistance level 35000.

🔔Upcoming #FOMC at 18:00 GMT and press conference starting at 18:30

The Fed is expected 50point rate hike and announce the start of balance sheet reduction.

👉Be prepared for volatility with #USD pairs and across stock markets!

Fed raises rate by 50 points to 1.0% - in line with expectations (neutral for the dollar and equities)

Start of quantitative tightening from 1 June. Initially at $47.5B per month, gradually bringing it to $95 per month - softer than expected (moderately negative for the dollar, positive for equities)

Bitcoin needs to consolidate above $40K to approve the reversal
Bitcoin soared 4.2% overnight, getting close to the meaningful $40K round level, although there is a $400 retreat from the peaks early on Thursday.

Bitcoin rose to its highest level in almost two months amid a sharply weaker dollar and rising stock indices.

If Bitcoin manages to attract new buyers at levels above $40K by the end of the week, we could see a significant expansion in buyer optimism. Some potential buyers are now waiting for reliable signals to break the downtrend of the last month and a half. Yesterday’s upside momentum took the price above the downtrend line, but a confirmation signal in the form of a rise above the previous local highs is also needed.

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Fed’s less hawkish tone triggers dollar correction, equities pullback
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Last night the US Fed raised its rate by 50 bp and announced the looming start of asset sales from its balance sheet.

The market expected these things, but the details and forecasts were a little less hawkish, which played against the dollar and favoured the equity market. We should expect that the market’s adjustment to the Fed’s comments could stretch over several days or even begin a longer trend of market recovery.
The main points we saw:

• A later start. The Fed will start selling in June, whereas markets were expecting this move as early as May.
• A more cautious beginning. $47.5bn worth of paper will be sold in the first three months, while minutes from the previous meeting indicated that the FOMC discussed $95bn in sales per month. The Fed will not release the latest figure until three months later.

• A cap on rate hike step: Powell has rejected the idea of a 75-point rate hike at the next meeting.

Although the states last saw a rate hike of 50 points 22 years ago, the current moves should be perceived as softer than many observers estimate. From this point of view, the Fed maintains some continuity with the previous course and takes the first step more diminutive than the markets expect.

It may well be that an unexpected decline in GDP for the first quarter, according to a preliminary estimate, worked on the Fed’s easing rhetoric. It is also possible that the FOMC is looking with apprehension at the ballooning foreign trade deficit as evidence of a decline in the competitiveness of US goods.

BoE hike rate to 1%, but point clouded outlook
As analysts had expected, the Bank of England raised the rate by 25 points to 1.0%. Three of the nine monetary policy committee members called for a 50-point increase at once, and there were hints in the comments that a 50-point increase could be an option at subsequent meetings.

At the same time, the Bank of England has worsened its economic outlook for 2023, expecting the economy to contract in response to tight financial conditions and the effects of high energy prices. The currency market sees the recession as a notable negative factor, putting pressure on medium and long-term interest rates.

#GBPUSD collapsed to 1.2380 by 2% or more than 230 pips from the start of the day on Thursday, with pressure intensifying after the Bank of England’s bank rate decision announcement.

After consolidating over the last few days and attempting a rebound yesterday after the FOMC, GBPUSD has moved sharply back down and updated to lows from June 2020, a strong bearish signal.

The pair runs the risk of slipping to 1.2000, an area proven to be the Pound’s last line of defence more than once in previous years, without much of a hurdle.

The significant support of the previous six years and the 161.8% Fibonacci target from the last declining momentum since late April are concentrated here.

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