A bullish picture is forming on the #Nasdaq100, suggesting that we see the beginning of a bull market and not just a rally in a bear market. If the index can close above 12000 by the end of next week, it would pave the way for 13000 by the end of the first quarter and 13600 by the end of the year.
Last week the index closed above the most important long-term trend line (200-week moving average). The price was also above the downside resistance line, which the index had reversed several times last year.
These long-term signals looked rather weak as the move was very formal. But this week, the rally has continued, confirming buyers’ confidence at current levels.
Moreover, yesterday the Nasdaq100 closed above its 200-day moving average, further confirming the long-term trend reversal. As with last week's close, the excess is nominal, leaving room for doubt.
Last week the index closed above the most important long-term trend line (200-week moving average). The price was also above the downside resistance line, which the index had reversed several times last year.
These long-term signals looked rather weak as the move was very formal. But this week, the rally has continued, confirming buyers’ confidence at current levels.
Moreover, yesterday the Nasdaq100 closed above its 200-day moving average, further confirming the long-term trend reversal. As with last week's close, the excess is nominal, leaving room for doubt.
And those doubts have something to fall back on. The index is up around 13% in three weeks, back to the highs of last December, where the gains have slowed considerably: Wednesday's dip has been bought off, but the swings around 12,000 continue. The 200-day average has been largely breached by the fall.
The index is also close to the over-bought territory on the daily RSI. This indicator is a good predictor of technical corrections, although it sometimes signals too early.
However, our main concern is the extent to which market expectations diverge from the Fed's rhetoric. The build-up of expectations that the Fed will cut rates this year has been the main driver of growth in the high-tech sector.
The index is also close to the over-bought territory on the daily RSI. This indicator is a good predictor of technical corrections, although it sometimes signals too early.
However, our main concern is the extent to which market expectations diverge from the Fed's rhetoric. The build-up of expectations that the Fed will cut rates this year has been the main driver of growth in the high-tech sector.
But all we hear from officials is a willingness to slow the pace of tightening to 25 basis points at a time, with a further 2-3 hikes. If the official FOMC commentary next Wednesday confirms the Fed's hawkish stance, we could see a repeat of the reversal that occurred in June and August last year.
If we are right, the Nasdaq100 could retreat into the 11250-11500 range. The lower boundary of this range is the local lows of the 19th of January, while the upper boundary is the 61.8% retracement of the advance of the 6th of January and the 50-day moving average.
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If we are right, the Nasdaq100 could retreat into the 11250-11500 range. The lower boundary of this range is the local lows of the 19th of January, while the upper boundary is the 61.8% retracement of the advance of the 6th of January and the 50-day moving average.
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Australian inflation remains an important topic for the forex market as it tries to determine the RBA's next steps.
In contrast to consumer inflation, producer prices were surprised by weak growth. They rose 0.7% last quarter (1.7% was expected), with the annual rate slowing from 6.4% to 5.8%.
With producer inflation outpacing consumer inflation, it is reasonable to expect inflationary pressures to ease in the next quarter. Interestingly, the PPI growth rate in Australia is lower than that of the CPI. The former peaked at 6.4% in the 3Q22 quarter, and the latter – at 7.8% in 4Q22.
The cooling of producer inflation strengthens the argument that another 25bp hike at the next meeting on 7 February will be sufficient. On the other hand, the high increase in consumer prices suggests that there will be several hikes before the RBA pauses.
Today's data from Australia halted the #AUDUSD's growth above 0.7130 and dropped the pair below 0.7100.
In contrast to consumer inflation, producer prices were surprised by weak growth. They rose 0.7% last quarter (1.7% was expected), with the annual rate slowing from 6.4% to 5.8%.
With producer inflation outpacing consumer inflation, it is reasonable to expect inflationary pressures to ease in the next quarter. Interestingly, the PPI growth rate in Australia is lower than that of the CPI. The former peaked at 6.4% in the 3Q22 quarter, and the latter – at 7.8% in 4Q22.
The cooling of producer inflation strengthens the argument that another 25bp hike at the next meeting on 7 February will be sufficient. On the other hand, the high increase in consumer prices suggests that there will be several hikes before the RBA pauses.
Today's data from Australia halted the #AUDUSD's growth above 0.7130 and dropped the pair below 0.7100.
#WaveAnalysis #GE
• General Electric broke key resistance level 80.62
• Likely to rise to resistance level 87.500
General Electric earlier broke above the key resistance level 80.62 (which stopped the previous short-term upward impulse wave 3).
The breakout of the resistance level 80.60 accelerated both of the active impulse waves 5 and (3).
Given the clear multi-month uptrend, General Electric can be expected to rise further toward the next resistance level 87.500 (target price for the completion of the active impulse waves 5 and (3)).
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• General Electric broke key resistance level 80.62
• Likely to rise to resistance level 87.500
General Electric earlier broke above the key resistance level 80.62 (which stopped the previous short-term upward impulse wave 3).
The breakout of the resistance level 80.60 accelerated both of the active impulse waves 5 and (3).
Given the clear multi-month uptrend, General Electric can be expected to rise further toward the next resistance level 87.500 (target price for the completion of the active impulse waves 5 and (3)).
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#WaveAnalysis #TSLA
• Tesla broke resistance level 160.00
• Likely to rise to resistance level 200.00
Tesla rising sharply after the price broke the resistance level 160.00 intersecting with the 61.8% Fibonacci correction of the downward impulse from December.
The breakout of the resistance level 160.00 accelerated the active intermediate impulse wave (1) from the start of this year.
Tesla can be expected to rise further toward the next round resistance level 200.00 (top of the earlier minor correction (iv) from December).
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• Tesla broke resistance level 160.00
• Likely to rise to resistance level 200.00
Tesla rising sharply after the price broke the resistance level 160.00 intersecting with the 61.8% Fibonacci correction of the downward impulse from December.
The breakout of the resistance level 160.00 accelerated the active intermediate impulse wave (1) from the start of this year.
Tesla can be expected to rise further toward the next round resistance level 200.00 (top of the earlier minor correction (iv) from December).
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#WaveAnalysis
#AUDUSD reversed from long-term resistance level 0.7110
• Likely to fall to support level 0.7000
AUDUSD currency pair recently reversed down from the long-term resistance level 0.7110 (former top of wave (2) from the start of August).
The downward reversal from the resistance level 0.7110 stopped the earlier impulse waves (C) and 3 .
Given the strong daily downtrend, AUDUSD currency pair can be expected to fall toward the next support level 0.7000.
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#AUDUSD reversed from long-term resistance level 0.7110
• Likely to fall to support level 0.7000
AUDUSD currency pair recently reversed down from the long-term resistance level 0.7110 (former top of wave (2) from the start of August).
The downward reversal from the resistance level 0.7110 stopped the earlier impulse waves (C) and 3 .
Given the strong daily downtrend, AUDUSD currency pair can be expected to fall toward the next support level 0.7000.
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#Bitcoin rose 5.3% last week to close at $23.8K. On Sunday, the first cryptocurrency was one step away from $24K, updating its high since August. Ethereum gained 0.9% to $1640. Top-10 leading altcoins have gained between 2.7% (Dogecoin) and 18.8% (Polygon).
Total cryptocurrency market capitalisation rose 4.4% to $1.08 trillion over the week, according to CoinMarketCap. The cryptocurrency fear and greed index reached the greed zone for the first time since late March last year.
Bitcoin is gradually approaching its key moving averages. The 200-week is just above $24.7K, and the 50-week is now at $24.5K. A break below these levels would be a strong sell signal.
A rebound above them could restore confidence in the crypto market. But be prepared for a prolonged consolidation or correction before a decisive move higher.
Another recalculation showed a 4.7% increase in the mining complexity of the first cryptocurrency. The index renewed its all-time high at 39.35T.
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Total cryptocurrency market capitalisation rose 4.4% to $1.08 trillion over the week, according to CoinMarketCap. The cryptocurrency fear and greed index reached the greed zone for the first time since late March last year.
Bitcoin is gradually approaching its key moving averages. The 200-week is just above $24.7K, and the 50-week is now at $24.5K. A break below these levels would be a strong sell signal.
A rebound above them could restore confidence in the crypto market. But be prepared for a prolonged consolidation or correction before a decisive move higher.
Another recalculation showed a 4.7% increase in the mining complexity of the first cryptocurrency. The index renewed its all-time high at 39.35T.
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The dollar is poised for a run
The week’s main event will undoubtedly be the Fed's interest rate decision. More specifically, the comments on the decision and the press conference will follow, where investors and traders will look for answers on when the Fed will stop raising rates. In addition, the ECB and the Bank of England will present their rate decisions, setting the overall agenda for the major central banks. Typically, the other central banks are moving in the same direction, albeit with some deviations.
On the economic data front, the most important releases will be the eurozone inflation figures for January and the US employment figures, which have often set the tone in the past.
As is often the case, the market moved to key levels just before important events. The dollar index fell to 101.60. The local correction in May also ended near the same level. But more importantly, this is the multi-year “ceiling” area in the dollar from which the DXY turned lower in 2017 and 2020.
The week’s main event will undoubtedly be the Fed's interest rate decision. More specifically, the comments on the decision and the press conference will follow, where investors and traders will look for answers on when the Fed will stop raising rates. In addition, the ECB and the Bank of England will present their rate decisions, setting the overall agenda for the major central banks. Typically, the other central banks are moving in the same direction, albeit with some deviations.
On the economic data front, the most important releases will be the eurozone inflation figures for January and the US employment figures, which have often set the tone in the past.
As is often the case, the market moved to key levels just before important events. The dollar index fell to 101.60. The local correction in May also ended near the same level. But more importantly, this is the multi-year “ceiling” area in the dollar from which the DXY turned lower in 2017 and 2020.
Earlier last year, the opportunity to rewrite multi-year highs was provided by the Fed’s decisive moves, which hiked three times by 75 points each, something not seen in over twenty years. It will probably take an equally fundamental change in Fed policy to change the market's mode.
As we enter the fourth month of an active dollar sell-off, the market has accumulated fatigue with the trade. This is reflected in the sideways movement of the index over the past two weeks. The lull also sets the stage for a corrective pullback of 3-4%, allowing participants to take medium-term profits and rebalance portfolios.
The potential correction could take the Dollar Index to 104.5, the level at the start of the year and the 76.4% Fibonacci recovery line from the decline from the September high of 114.73 to the January low of 101.26.
As we enter the fourth month of an active dollar sell-off, the market has accumulated fatigue with the trade. This is reflected in the sideways movement of the index over the past two weeks. The lull also sets the stage for a corrective pullback of 3-4%, allowing participants to take medium-term profits and rebalance portfolios.
The potential correction could take the Dollar Index to 104.5, the level at the start of the year and the 76.4% Fibonacci recovery line from the decline from the September high of 114.73 to the January low of 101.26.
However, there is reason to believe that the recovery in the Dollar Index will be more significant, taking it back to the 106.30 area, which is the 61.8% retracement level from that decline and the 200-day moving average.
In terms of the major pairs, a potential dollar correction pullback would take EURUSD from the current 1.09 to 1.06 in a shallow correction and 1.04 if the Fed forces the market to revise its monetary policy expectations. The GBPUSD could then fall to 1.1900 and 1.1630, respectively.
Gold, which the dollar has primarily driven over the last quarter, could fall to around $1870 in the event of a recovery in the dollar and as low as $1820 in a pessimistic scenario.
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In terms of the major pairs, a potential dollar correction pullback would take EURUSD from the current 1.09 to 1.06 in a shallow correction and 1.04 if the Fed forces the market to revise its monetary policy expectations. The GBPUSD could then fall to 1.1900 and 1.1630, respectively.
Gold, which the dollar has primarily driven over the last quarter, could fall to around $1870 in the event of a recovery in the dollar and as low as $1820 in a pessimistic scenario.
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#WaveAnalysis
#GBPUSD reversed from resistance level 1.2430
• Likely to fall to support level 1.2260
GBPUSD currency pair earlier reversed down from the key resistance level 1.2430 (which stopped the previous intermediate impulse wave (A) at the start of December).
The downward reversal from the resistance level 1.2430 stopped the earlier short-term impulse wave 3 of the impulse wave (C) from January.
Given the overbought daily Stochastic, GBPUSD can be expected to fall further toward the next support level 1.2260 (low of the previous correction 2).
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#GBPUSD reversed from resistance level 1.2430
• Likely to fall to support level 1.2260
GBPUSD currency pair earlier reversed down from the key resistance level 1.2430 (which stopped the previous intermediate impulse wave (A) at the start of December).
The downward reversal from the resistance level 1.2430 stopped the earlier short-term impulse wave 3 of the impulse wave (C) from January.
Given the overbought daily Stochastic, GBPUSD can be expected to fall further toward the next support level 1.2260 (low of the previous correction 2).
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#WaveAnalysis
#USDCHF reversed from long-term support level 0.9150
• Likely to rise to resistance level 0.9300
USDCHF currency pair previously reversed up from the long-term support level 0.9150 (which has been reversing the price from February of 2022, as can be seen below).
The upward reversal from the support level 0.9150 started the active minor impulse wave c.
Given the strengthening USD bullish pressure, USDCHF can be expected to rise further toward the next resistance level 0.9300 (which stopped the earlier minor wave a).
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#USDCHF reversed from long-term support level 0.9150
• Likely to rise to resistance level 0.9300
USDCHF currency pair previously reversed up from the long-term support level 0.9150 (which has been reversing the price from February of 2022, as can be seen below).
The upward reversal from the support level 0.9150 started the active minor impulse wave c.
Given the strengthening USD bullish pressure, USDCHF can be expected to rise further toward the next resistance level 0.9300 (which stopped the earlier minor wave a).
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#Bitcoin lost ground throughout Monday, falling to $22.5K in early trading on Tuesday, down 6% from its Sunday peak. Total cryptocurrency market capitalisation fell 1.1% overnight to $1.04 trillion, with altcoins easy to find with positive overnight trends.
While institutional selloffs pressured bitcoin, it is still trying to swim against the tide, gaining 0.7% today to $22.8K. On the technical side, the latest pullback is too small to be considered a full-blown correction capable of attracting new buyers to the downside. Bitcoin now has a much higher chance of continuing its slide on profit-taking from the rally since the beginning of the year. These can be as low as $22.1K or even $21.0K. The pull into defensive assets intensified ahead of the FOMC's decision when market expectations and Fed rhetoric diverged dramatically.
According to CoinShares, investments in cryptocurrency funds rose by $117m last week, the highest in six months, with investors focusing on bitcoin.
While institutional selloffs pressured bitcoin, it is still trying to swim against the tide, gaining 0.7% today to $22.8K. On the technical side, the latest pullback is too small to be considered a full-blown correction capable of attracting new buyers to the downside. Bitcoin now has a much higher chance of continuing its slide on profit-taking from the rally since the beginning of the year. These can be as low as $22.1K or even $21.0K. The pull into defensive assets intensified ahead of the FOMC's decision when market expectations and Fed rhetoric diverged dramatically.
According to CoinShares, investments in cryptocurrency funds rose by $117m last week, the highest in six months, with investors focusing on bitcoin.
#WaveAnalysis #Nasdaq
• Nasdaq 100 reversed from pivotal resistance level 12200.00
• Likely to fall to support level 11600.00
Nasdaq 100 index recently reversed from the pivotal resistance level 12200.00 (previous monthly high from December), intersecting with the upper daily Bollinger Band and the 50% Fibonacci correction of the downward impulse from August.
The downward reversal from the resistance level 12200.00 created the daily Japanese candlesticks reversal pattern Bearish Engulfing.
Nasdaq 100 index can be expected to fall further toward the next support level 11600.00 (low of the previous daily Hammer from last week).
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• Nasdaq 100 reversed from pivotal resistance level 12200.00
• Likely to fall to support level 11600.00
Nasdaq 100 index recently reversed from the pivotal resistance level 12200.00 (previous monthly high from December), intersecting with the upper daily Bollinger Band and the 50% Fibonacci correction of the downward impulse from August.
The downward reversal from the resistance level 12200.00 created the daily Japanese candlesticks reversal pattern Bearish Engulfing.
Nasdaq 100 index can be expected to fall further toward the next support level 11600.00 (low of the previous daily Hammer from last week).
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#WaveAnalysis
#NZDUSD reversed from resistance level 0.6500
• Likely to fall to support level 0.6360
NZDUSD currency pair recently reversed down from the resistance level 0.6500 (the previous monthly high from last month, which stopped the previous wave (A)).
The resistance level 0.6500 was further strengthened by the upper daily Bollinger Band.
NZDUSD can be expected to fall further toward the next support level 0.6360 (low of the previous short-term correction 2).
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#NZDUSD reversed from resistance level 0.6500
• Likely to fall to support level 0.6360
NZDUSD currency pair recently reversed down from the resistance level 0.6500 (the previous monthly high from last month, which stopped the previous wave (A)).
The resistance level 0.6500 was further strengthened by the upper daily Bollinger Band.
NZDUSD can be expected to fall further toward the next support level 0.6360 (low of the previous short-term correction 2).
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#Gold is declining for the fourth consecutive session, flirting with the $1900 level and $49 below last Thursday's peak. Gold's 2.5% retreat is much more pronounced than the dollar index’s 1% growth over the same period.
The current reversal to the downside is linked to several factors and could be relatively long and deep, although it is unlikely to break the long-term uptrend.
The formal trigger for a wave of dollar buying has now been a pull into defensive assets ahead of a hectic second half of the week, which includes interest rate decisions from the Fed, ECB, and Bank of England, as well as releases on eurozone inflation and US jobs report.
After a rally of more than 20% from the September and November double lows of $1617, a technical correction above $1900 is needed. Accumulated bull fatigue was evident in last week's relatively deep intraday drawdowns.
The current reversal to the downside is linked to several factors and could be relatively long and deep, although it is unlikely to break the long-term uptrend.
The formal trigger for a wave of dollar buying has now been a pull into defensive assets ahead of a hectic second half of the week, which includes interest rate decisions from the Fed, ECB, and Bank of England, as well as releases on eurozone inflation and US jobs report.
After a rally of more than 20% from the September and November double lows of $1617, a technical correction above $1900 is needed. Accumulated bull fatigue was evident in last week's relatively deep intraday drawdowns.
In addition, the RSI has been in overbought territory for two weeks on the daily timeframe and returned to neutral territory below 70 last Wednesday, which often signals the start of a correction. At the end of November, gold lost 3.3% on a similar signal before rebounding.
Gold is also overbought on the weekly timeframe, which has almost always led to a sudden reversal or a prolonged stall in this area.
Now it is worth preparing for a deeper correction as the gains of the past two months have been more significant. The Fibonacci patterns suggest a potential retreat to $1862 if we look at the November-January momentum and to $1822 if we look at a full correction of the entire velocity from the November lows.
The 50-week moving average is also targeting the $1820 area. This is a crucial trend indicator where buyers and sellers will battle it out for the long-term trend. However, it is too early to speculate on the outcome of this battle.
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Gold is also overbought on the weekly timeframe, which has almost always led to a sudden reversal or a prolonged stall in this area.
Now it is worth preparing for a deeper correction as the gains of the past two months have been more significant. The Fibonacci patterns suggest a potential retreat to $1862 if we look at the November-January momentum and to $1822 if we look at a full correction of the entire velocity from the November lows.
The 50-week moving average is also targeting the $1820 area. This is a crucial trend indicator where buyers and sellers will battle it out for the long-term trend. However, it is too early to speculate on the outcome of this battle.
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#WaveAnalysis
#AUDUSD reversed from resistance level 0.7130
• Likely to fall to support level 0.6875
AUDUSD currency pair recently reversed down from the resistance level 0.7130 (previous monthly high from August), standing near the upper daily Bollinger Band.
The downward reversal from the resistance level 0.7130 created the daily Japanese candlesticks reversal pattern Bearish Engulfing.
Having just broken below the round support level 0.7000, AUDUSD currency pair can be expected to fall further toward the next support level 0.6875.
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#AUDUSD reversed from resistance level 0.7130
• Likely to fall to support level 0.6875
AUDUSD currency pair recently reversed down from the resistance level 0.7130 (previous monthly high from August), standing near the upper daily Bollinger Band.
The downward reversal from the resistance level 0.7130 created the daily Japanese candlesticks reversal pattern Bearish Engulfing.
Having just broken below the round support level 0.7000, AUDUSD currency pair can be expected to fall further toward the next support level 0.6875.
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