Over the past two weeks, the EURUSD consolidation in the 1.01-1.03 range may be just a respite before a new round of declines. Historically, parity has not been any significant support or turning point. Do not be surprised if the Euro experiences a new wave of pressure in the coming days or weeks with a retest of the July lows below 1.0.
#WaveAnalysis
#EURJPY reversed from support level 133.30
• Likely to rise to resistance level 136.75
EURJPY currency pair recently reversed up from the key support level 133.30 (which stopped wave 2 in May) – standing far outside of the lower daily Bollinger Band.
The upward reversal from the support level 133.30 created the daily candlesticks pattern Hammer – which started the active intermediate impulse wave (3).
EURJPY currency pair can be expected to rise toward the next resistance level 136.75 (low of wave A of the previous ABC correction (2)).
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#EURJPY reversed from support level 133.30
• Likely to rise to resistance level 136.75
EURJPY currency pair recently reversed up from the key support level 133.30 (which stopped wave 2 in May) – standing far outside of the lower daily Bollinger Band.
The upward reversal from the support level 133.30 created the daily candlesticks pattern Hammer – which started the active intermediate impulse wave (3).
EURJPY currency pair can be expected to rise toward the next resistance level 136.75 (low of wave A of the previous ABC correction (2)).
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#WaveAnalysis
#CADJPY reversed from support level 102.00
• Likely to rise to resistance level 105.00
CADJPY currency pair recently reversed up from the key support level 102.00 (former resistance from April, which stopped the earlier minor correction (a) in June).
The support zone near the support level 102.00 was strengthened by the lower daily Bollinger Band and by the 50% Fibonacci correction of the upward impulse from May.
Given the strong daily uptrend, CADJPY currency pair can be expected to rise in the active impulse wave (iii) toward the next resistance level 105.00 (former support from last month).
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#CADJPY reversed from support level 102.00
• Likely to rise to resistance level 105.00
CADJPY currency pair recently reversed up from the key support level 102.00 (former resistance from April, which stopped the earlier minor correction (a) in June).
The support zone near the support level 102.00 was strengthened by the lower daily Bollinger Band and by the 50% Fibonacci correction of the upward impulse from May.
Given the strong daily uptrend, CADJPY currency pair can be expected to rise in the active impulse wave (iii) toward the next resistance level 105.00 (former support from last month).
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#Bitcoin has added 0.8% to $23100 in the past 24 hours, a worryingly weak result. Ethereum strengthened 1.3% to $1650. Other leading altcoins gained between 0.9% (Cardano) and 7.2% (BNB).
Total crypto market capitalisation, according to CoinMarketCap, rose 1.8% to $1.08 trillion overnight.
Bitcoin's drift towards the lower end of the uptrend channel has paused, but this is a weak result compared to the 2.6% rise in the Nasdaq, with which the cryptocurrency market is closely correlated.
We are still left to guess where the most consistent trend and market noise show. The stock market was pushed yesterday by jumps in individual securities after quarterly earnings reports. In general, the macroeconomic situation is somewhat cautious.
The Fed officials were proving to the markets that they were hoping for a quick reversal of monetary policy from tightening to easing. They hinted at their willingness to raise the rate more than previously estimated. And such altitude is not good for crypto.
Total crypto market capitalisation, according to CoinMarketCap, rose 1.8% to $1.08 trillion overnight.
Bitcoin's drift towards the lower end of the uptrend channel has paused, but this is a weak result compared to the 2.6% rise in the Nasdaq, with which the cryptocurrency market is closely correlated.
We are still left to guess where the most consistent trend and market noise show. The stock market was pushed yesterday by jumps in individual securities after quarterly earnings reports. In general, the macroeconomic situation is somewhat cautious.
The Fed officials were proving to the markets that they were hoping for a quick reversal of monetary policy from tightening to easing. They hinted at their willingness to raise the rate more than previously estimated. And such altitude is not good for crypto.
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Crude Oil affirms downtrend
Wednesday proved to be a busy day for oil traders, but the bears emerged as winners at the end of the day.
Brent and WTI traded up almost 3% after reports that OPEC is likely to raise output quotas by 100kbpd in September, as market participants anticipated a more significant rise in quotas in response to a call from the US. Cartel participants, however, cited previous weak investment in the industry, which has now prevented a more aggressive production increase.
We also note that the cartel's actual production has been falling further behind the allowable quotas month on month, which is also working to overheat the market.
Nevertheless, the bulls' situational victory was short-lived. By the start of active trading in the USA, oil prices turned sharply to the downside, exacerbated by the release of weekly inventory data. Commercial crude inventories rose 4.5Mb compared to a 1.4Mb decline last week.
Wednesday proved to be a busy day for oil traders, but the bears emerged as winners at the end of the day.
Brent and WTI traded up almost 3% after reports that OPEC is likely to raise output quotas by 100kbpd in September, as market participants anticipated a more significant rise in quotas in response to a call from the US. Cartel participants, however, cited previous weak investment in the industry, which has now prevented a more aggressive production increase.
We also note that the cartel's actual production has been falling further behind the allowable quotas month on month, which is also working to overheat the market.
Nevertheless, the bulls' situational victory was short-lived. By the start of active trading in the USA, oil prices turned sharply to the downside, exacerbated by the release of weekly inventory data. Commercial crude inventories rose 4.5Mb compared to a 1.4Mb decline last week.
Signs that sales from reserves are allowing commercial inventories to build up added pressure on the oil price, which closed the day at its lowest level since 18 February. WTI lost 5.7% from Wednesday's peak and almost 8% from the start of the week.
WTI was testing the $90 mark early Thursday, a psychologically significant level. The market has staged a strong sell-off near the 200-day moving average, which is an important bearish signal.
Brent is currently testing its 200-day average and last month's support area. However, with American WTI surrendering critical levels one by one while Brent plunges below $100, it is not easy to be on the bulls' side right now.
Having returned to the area of the July lows and zeroed in on the rally since late February, oil is potentially facing an abyss. If we break that downward slide down into phases, the nearest next stop on the way down could be the area of $85 per barrel for Brent and $80 for WTI.
WTI was testing the $90 mark early Thursday, a psychologically significant level. The market has staged a strong sell-off near the 200-day moving average, which is an important bearish signal.
Brent is currently testing its 200-day average and last month's support area. However, with American WTI surrendering critical levels one by one while Brent plunges below $100, it is not easy to be on the bulls' side right now.
Having returned to the area of the July lows and zeroed in on the rally since late February, oil is potentially facing an abyss. If we break that downward slide down into phases, the nearest next stop on the way down could be the area of $85 per barrel for Brent and $80 for WTI.
Bank of England accelerated rate hiking but did not help the Pound
The Bank of England unanimously raised the rate by 50 points to 1.75%, which was widely expected by markets. In addition, the BoE announced that it would start quantitative tightening after the September meeting by selling assets off the balance sheet at 10 billion pounds a month.
Before that, the central bank had raised the rate five times since December in increments of up to 25 points. However, the higher pace of rate hikes has failed to inspire pound buyers for long for several reasons.
The Bank of England unanimously raised the rate by 50 points to 1.75%, which was widely expected by markets. In addition, the BoE announced that it would start quantitative tightening after the September meeting by selling assets off the balance sheet at 10 billion pounds a month.
Before that, the central bank had raised the rate five times since December in increments of up to 25 points. However, the higher pace of rate hikes has failed to inspire pound buyers for long for several reasons.
Firstly, mention must be made of the new increase in inflation forecasts. The expected peak in inflation is now forecast to be near 13% compared to 10% previously. This revision means more pressure on the purchasing power of the British currency as the Bank of England has so far failed to close the gap between the key rate and inflation, with the economy losing growth momentum.
Secondly, the pace of rate hikes in the UK is hardly surprising as the Bank of Canada raised its rate by 100 points last time, and the Fed raised its rate by 75 points twice.
The market reaction to the Bank of England has confirmed the GBPUSD's decline, which is now on its third consecutive day. The situation reminds us that the pair's rise in the second half of July was a corrective respite. And there are growing signs that it is coming to an end.
Secondly, the pace of rate hikes in the UK is hardly surprising as the Bank of Canada raised its rate by 100 points last time, and the Fed raised its rate by 75 points twice.
The market reaction to the Bank of England has confirmed the GBPUSD's decline, which is now on its third consecutive day. The situation reminds us that the pair's rise in the second half of July was a corrective respite. And there are growing signs that it is coming to an end.
#WaveAnalysis
#EURCAD reversed from support level 1.3025
• Likely to rise to resistance level 1.3200
EURCAD currency pair recently reversed up from the pivotal support level 1.3025 (which has been reversing the pair from the middle of July) – intersecting with the lower daily Bollinger Band.
The upward reversal from the support level 1.3025 is likely to form the daily candlesticks pattern Bullish Engulfing.
EURCAD currency pair can be expected to rise toward the next resistance level 1.3200 (which stopped the earlier corrections (2) and 2).
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#EURCAD reversed from support level 1.3025
• Likely to rise to resistance level 1.3200
EURCAD currency pair recently reversed up from the pivotal support level 1.3025 (which has been reversing the pair from the middle of July) – intersecting with the lower daily Bollinger Band.
The upward reversal from the support level 1.3025 is likely to form the daily candlesticks pattern Bullish Engulfing.
EURCAD currency pair can be expected to rise toward the next resistance level 1.3200 (which stopped the earlier corrections (2) and 2).
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#WaveAnalysis #AMZN
• Amazon rising inside the ABC correction 4
• Likely to rise to resistance level 150.00
Amazon continues to rise inside the sharp upward correction 4, which previously broke the key resistance level 125.00, intersecting with the 38.2% Fibonacci correction of the downward impulse from March.
The breakout of the resistance level 125.00, accelerated the active minor impulse wave (c) of the ABC correction 4 from the middle of June.
Amazon can be expected to rise further toward the next round resistance level 150.00 (target for the completion of the active ABC correction 4).
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• Amazon rising inside the ABC correction 4
• Likely to rise to resistance level 150.00
Amazon continues to rise inside the sharp upward correction 4, which previously broke the key resistance level 125.00, intersecting with the 38.2% Fibonacci correction of the downward impulse from March.
The breakout of the resistance level 125.00, accelerated the active minor impulse wave (c) of the ABC correction 4 from the middle of June.
Amazon can be expected to rise further toward the next round resistance level 150.00 (target for the completion of the active ABC correction 4).
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#WaveAnalysis
#WTI broke round support level 90.00
• Likely to fall to support level 85.00
WTI crude oil today broke below the key round support level 90.00 (which has been reversing the pair from the end of February).
The breakout of the support level 90.00 accelerated the active impulse wave 5 of the intermediate impulse sequence (C) from the start of June.
WTI crude oil can be expected to fall toward the next support level 85.00 (target for the completion of the active impulse wave 5).
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#WTI broke round support level 90.00
• Likely to fall to support level 85.00
WTI crude oil today broke below the key round support level 90.00 (which has been reversing the pair from the end of February).
The breakout of the support level 90.00 accelerated the active impulse wave 5 of the intermediate impulse sequence (C) from the start of June.
WTI crude oil can be expected to fall toward the next support level 85.00 (target for the completion of the active impulse wave 5).
📣Trade responsibly at fxpro.com
Bitcoin remains in ascending corridor
Market picture
Bitcoin was down 3.5% on Thursday, ending at around $22,500, but almost fully recovered its losses on Friday morning. As a result, changes over the past 24 hours are minimal, with a 0.2% gain to 23,200, with an amplitude of around 4%. Ethereum was trading near $1660 versus $1650 at the same time yesterday.
Other leading altcoins added between 0.4% (XRP) and 2.6% (BNB). Total market capitalisation, according to CoinMarketCap, rose 0.4% overnight to $1.08 trillion. The cryptocurrency Fear & Greed Index rose 1 point to 31.
Market picture
Bitcoin was down 3.5% on Thursday, ending at around $22,500, but almost fully recovered its losses on Friday morning. As a result, changes over the past 24 hours are minimal, with a 0.2% gain to 23,200, with an amplitude of around 4%. Ethereum was trading near $1660 versus $1650 at the same time yesterday.
Other leading altcoins added between 0.4% (XRP) and 2.6% (BNB). Total market capitalisation, according to CoinMarketCap, rose 0.4% overnight to $1.08 trillion. The cryptocurrency Fear & Greed Index rose 1 point to 31.
Bitcoin has been under pressure all Thursday, despite continued positive stock market momentum and a general increase in demand for risk. Such dynamics of the crypto market again show how far it is from the sentiment that pushed the price ahead in the past two years.
From another perspective, BTCUSD has reversed to the upside this morning just above the lower boundary of its ascending corridor, held for the last seven weeks and stayed above its 200-week moving average.
From another perspective, BTCUSD has reversed to the upside this morning just above the lower boundary of its ascending corridor, held for the last seven weeks and stayed above its 200-week moving average.
News background
Ark Invest calculates that BTC has fallen below the 200-WMA only seven times in history. After recovering above that line, the annual return on the asset has averaged around 240%.
Along with the uptrend, the difficulty of mining increased by 1.74% for the first time in two months.
Mastercard noted that it views cryptocurrencies as an asset class rather than a means of payment because of their volatility in price. Stablecoins and DH digital currencies have a better chance of occupying this niche.
FTX CEO Sam Bankman-Fried praised a bill introduced in the US Congress that would give the authority to regulate the crypto market - the Futures Trading Commission (CFTC).
The recent hack of the Project Nomad bridge, in which hackers managed to take out $190 million in assets, was the 13th hack in the industry since the beginning of the year. According to Chainalysis, the total amount of damage was $2bn. Blockchain security agency SlowMist believes that cryptocurrencies are safer than DeFi and firewalls.
According to Peckshield, hackers withdrew $4.8m from ZB, a decentralised crypto exchange that claimed to be the most secure in the world.
Ark Invest calculates that BTC has fallen below the 200-WMA only seven times in history. After recovering above that line, the annual return on the asset has averaged around 240%.
Along with the uptrend, the difficulty of mining increased by 1.74% for the first time in two months.
Mastercard noted that it views cryptocurrencies as an asset class rather than a means of payment because of their volatility in price. Stablecoins and DH digital currencies have a better chance of occupying this niche.
FTX CEO Sam Bankman-Fried praised a bill introduced in the US Congress that would give the authority to regulate the crypto market - the Futures Trading Commission (CFTC).
The recent hack of the Project Nomad bridge, in which hackers managed to take out $190 million in assets, was the 13th hack in the industry since the beginning of the year. According to Chainalysis, the total amount of damage was $2bn. Blockchain security agency SlowMist believes that cryptocurrencies are safer than DeFi and firewalls.
According to Peckshield, hackers withdrew $4.8m from ZB, a decentralised crypto exchange that claimed to be the most secure in the world.
The US Nonfarm Payrolls numbers and the Unemployment rate for July will be announced on August 5th at 12:30 GMT. These releases are expected to cause significant market volatility if differ from the forecasts.
Analysts expect:
↗️ +250K new jobs (+372K last month)
➡️ 3.6% Unemployment rate (unchanged)
↘️ +4.9% y/y hourly earnings (+5.1%y/y last month)
Weak NFP (less than 150K) is likely to put pressure on the USD as investors will increase speculations that the Fed cannot maintain its hawkish path any longer and will quickly turn to easing.
Strong NFP (over 400K) is likely to strengthen the US currency, highlighting the health of the labour market and spurring expectations of another 75 point rate hike in September.
It is important to keep a close eye on the revision of the previous data, which could have a significant impact on market sentiment.
Analysts expect:
↗️ +250K new jobs (+372K last month)
➡️ 3.6% Unemployment rate (unchanged)
↘️ +4.9% y/y hourly earnings (+5.1%y/y last month)
Weak NFP (less than 150K) is likely to put pressure on the USD as investors will increase speculations that the Fed cannot maintain its hawkish path any longer and will quickly turn to easing.
Strong NFP (over 400K) is likely to strengthen the US currency, highlighting the health of the labour market and spurring expectations of another 75 point rate hike in September.
It is important to keep a close eye on the revision of the previous data, which could have a significant impact on market sentiment.
S&P500: bear market rally or return to growth?
The S&P500 is at 4150, having returned to the rebound highs of late May. The direction of the breakout outside the 4100-4200 range will determine its future for the next days or weeks.
In mid-June, the S&P500 halted its correction from the all-time highs. After losing around 25% in just over six months and returning to the lows since December 2020, the stocks have turned up, despite the background rather than thanks to it. In the last month and a half, the financial world has seen two 75-point Fed rate hikes, a shocking downturn in the housing market and a cooling of consumer demand. That said, the index has continued to crawl upwards, even if this recovery cannot be called flat.
The S&P500 is at 4150, having returned to the rebound highs of late May. The direction of the breakout outside the 4100-4200 range will determine its future for the next days or weeks.
In mid-June, the S&P500 halted its correction from the all-time highs. After losing around 25% in just over six months and returning to the lows since December 2020, the stocks have turned up, despite the background rather than thanks to it. In the last month and a half, the financial world has seen two 75-point Fed rate hikes, a shocking downturn in the housing market and a cooling of consumer demand. That said, the index has continued to crawl upwards, even if this recovery cannot be called flat.
Technically, the S&P500 made a classic Fibonacci correction of the rally from March 2020 to all-time highs in early 2022, getting support on the 61.8% retracement area.
Late last month, a significant signal to break the downtrend was the consolidation above the 50-day moving average, which later turned from resistance into support.
However, locally, it is too early for the bulls to celebrate the return of the bull market. The RSI index on the daily charts is approaching the overbought area, raising the question of a legitimate pullback after a month and a half rally. Separately, the S&P500 index is approaching the circular 4200 level, almost coinciding with the 76.4% retracement of the global rally.
Late last month, a significant signal to break the downtrend was the consolidation above the 50-day moving average, which later turned from resistance into support.
However, locally, it is too early for the bulls to celebrate the return of the bull market. The RSI index on the daily charts is approaching the overbought area, raising the question of a legitimate pullback after a month and a half rally. Separately, the S&P500 index is approaching the circular 4200 level, almost coinciding with the 76.4% retracement of the global rally.
The above disposition shows that gravitational pressure is building up in the equity market, and the downside momentum risks are rising markedly in the near term.
From a longer-term perspective, however, a consolidation above the 4200 levels would mark the start of a new, more solid phase of the equity market recovery. The further upside would no longer be called a "bear market rally". It would be more of a "return to the upside after a six-month correction".
And if the immediate correction takes the S&P500 under 4100 - below the previous local lows - it would indicate that the bearish momentum is taking hold, and we might see a new decline. In that case, investors should be prepared that the markets will not only return to the lows of June but also rewrite them, taking the index towards 3000.
From a longer-term perspective, however, a consolidation above the 4200 levels would mark the start of a new, more solid phase of the equity market recovery. The further upside would no longer be called a "bear market rally". It would be more of a "return to the upside after a six-month correction".
And if the immediate correction takes the S&P500 under 4100 - below the previous local lows - it would indicate that the bearish momentum is taking hold, and we might see a new decline. In that case, investors should be prepared that the markets will not only return to the lows of June but also rewrite them, taking the index towards 3000.
Dollar soars as strong job growth paves the way for the third 75 points rate hike
The US economy created 528K new jobs in July, doubling expectations and exceeding the peak employment level set before the pandemic. Notably, construction and manufacturing recovered, probably due to falling commodity prices in these sectors.
The hourly earning rate has maintained at 5.2% y/y with an upward revision of the previous month and a gain of 0.5% for July. The unemployment rate declined from 3.6% to 3.5%, but this is mainly due to a decline in the active labour force from 62.2% to 62.1%.
The US economy created 528K new jobs in July, doubling expectations and exceeding the peak employment level set before the pandemic. Notably, construction and manufacturing recovered, probably due to falling commodity prices in these sectors.
The hourly earning rate has maintained at 5.2% y/y with an upward revision of the previous month and a gain of 0.5% for July. The unemployment rate declined from 3.6% to 3.5%, but this is mainly due to a decline in the active labour force from 62.2% to 62.1%.