#WaveAnalysis
#GBPUSD reversed from support level 1.1855
• Likely to rise to resistance level 1.2050
GBPUSD recently reversed up from the powerful support level 1.1855 (previous monthly low from January) – coinciding with the lower daily Bollinger Band and the 50% Fibonacci correction of the upward impulse from November.
The upward reversal from the support level 1.1855 stopped the previous impulse waves (iii) and C.
Given the still oversold daily Stochastic, GBPUSD currency pair can be expected to rise further toward the next resistance level 1.2050.
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#GBPUSD reversed from support level 1.1855
• Likely to rise to resistance level 1.2050
GBPUSD recently reversed up from the powerful support level 1.1855 (previous monthly low from January) – coinciding with the lower daily Bollinger Band and the 50% Fibonacci correction of the upward impulse from November.
The upward reversal from the support level 1.1855 stopped the previous impulse waves (iii) and C.
Given the still oversold daily Stochastic, GBPUSD currency pair can be expected to rise further toward the next resistance level 1.2050.
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#WaveAnalysis
#GBPCHF reversed from support level 1.1115
• Likely to rise to resistance level 1.1320
GBPCHF currency pair recently reversed up from the key support level 1.1115 (which has been reversing the price from the start of November) – coinciding with the lower daily Bollinger Band.
The upward reversal from the support level 1.1115 stopped the previous minor impulse waves (iii) and B.
Given the strength of the support level 1.1115, GBPCHF currency pair can be expected to rise further toward the next resistance level 1.1320 (top of the earlier correction (ii)).
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#GBPCHF reversed from support level 1.1115
• Likely to rise to resistance level 1.1320
GBPCHF currency pair recently reversed up from the key support level 1.1115 (which has been reversing the price from the start of November) – coinciding with the lower daily Bollinger Band.
The upward reversal from the support level 1.1115 stopped the previous minor impulse waves (iii) and B.
Given the strength of the support level 1.1115, GBPCHF currency pair can be expected to rise further toward the next resistance level 1.1320 (top of the earlier correction (ii)).
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The Canadian Dollar at extremums
USDCAD has been rallying this week, gaining 1.7% since Tuesday and testing the five-month high of 1.3850. The pair looks vulnerable to both a short-term correction and the potential for a longer-term reversal.
The US Dollar has enjoyed gains after Powell's hawkish rhetoric forced the markets to consider a 50-point rate hike on 22 March seriously. This is significant because the markets were pricing in 2-3 more 50-point hikes before that. And even earlier in the year, they were already pricing in a rate cut before the end of the year.
Almost simultaneously, the Bank of Canada avoided surprises by leaving its policy rate unchanged, as it had warned in its commentary on the January decision. This starkly contrasts the Fed's stance, which changed after strong reports on employment and consumer spending inflation.
USDCAD has been rallying this week, gaining 1.7% since Tuesday and testing the five-month high of 1.3850. The pair looks vulnerable to both a short-term correction and the potential for a longer-term reversal.
The US Dollar has enjoyed gains after Powell's hawkish rhetoric forced the markets to consider a 50-point rate hike on 22 March seriously. This is significant because the markets were pricing in 2-3 more 50-point hikes before that. And even earlier in the year, they were already pricing in a rate cut before the end of the year.
Almost simultaneously, the Bank of Canada avoided surprises by leaving its policy rate unchanged, as it had warned in its commentary on the January decision. This starkly contrasts the Fed's stance, which changed after strong reports on employment and consumer spending inflation.
The only change the Bank of Canada decided to make was to warn at the end of the commentary on the decision that further hikes from the current 4.5% were possible. Canada's reluctance is easy to understand as it has only been at the current rate since 2001, from July to October 2007, when it was cut to 0.25%.
The acceleration of rate hikes in the US and the pause after the slowdown in Canada is a major driver for the USD against the CAD. This difference promises to be unprecedented in modern history, with the G7 central banks acting almost in sync and moving in the same direction.
The divergence may exist only in the minds of currency speculators, not central bankers. Powell's speech contained the typical caveats used by the Fed since Greenspan, leaving the door open for future action. The actual actions of the US and Canadian central banks have been at least in the same direction, if not identical.
The acceleration of rate hikes in the US and the pause after the slowdown in Canada is a major driver for the USD against the CAD. This difference promises to be unprecedented in modern history, with the G7 central banks acting almost in sync and moving in the same direction.
The divergence may exist only in the minds of currency speculators, not central bankers. Powell's speech contained the typical caveats used by the Fed since Greenspan, leaving the door open for future action. The actual actions of the US and Canadian central banks have been at least in the same direction, if not identical.
The USDCAD has reached overbought territory in the currency market on the daily RSI. The exchange rate has now reached levels where selling intensified in October and November last year. The pair have not traded consistently above 1.40 in the past 20 years. Short rallies have only been associated with periods of extreme market volatility and plunging oil prices, which is not the case here.
A pullback from current levels means the pair could slide as low as 1.36, completely erasing the latest growth impulse. However, it is unlikely that the pair will stop there, as it will be a move from the top of the multi-year trading range to its bottom around 1.20-1.25.
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A pullback from current levels means the pair could slide as low as 1.36, completely erasing the latest growth impulse. However, it is unlikely that the pair will stop there, as it will be a move from the top of the multi-year trading range to its bottom around 1.20-1.25.
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🔔Don't miss Nonfarm Payrolls
The US Nonfarm Payrolls numbers and the Unemployment rate for February will be announced on March 10th at 13:30 GMT. These releases are expected to cause significant market volatility.
Analysts expect the US economy added 200K new jobs (Nonfarm Payrolls, NFP) last month.
The Unemployment rate is expected to stay at 3.4%.
Investors and traders also focus on the wage growth rate, which will likely accelerate from 4.4% y/y to 4.7%.
A weak NFP (less than 150K) may pressure the USD as investors will increase speculations that the Fed will ease its monetary policy tone. Strong NFP (over 250K) will likely strengthen the US currency, highlighting the labour market's health and reviving expectations of a higher and longer interest rate hiking cycle.
It is important to keep a close eye on the revision of the previous Nonfarm Payrolls data, which stood at 517K. This could significantly impact market sentiment along with newly published figures.
The US Nonfarm Payrolls numbers and the Unemployment rate for February will be announced on March 10th at 13:30 GMT. These releases are expected to cause significant market volatility.
Analysts expect the US economy added 200K new jobs (Nonfarm Payrolls, NFP) last month.
The Unemployment rate is expected to stay at 3.4%.
Investors and traders also focus on the wage growth rate, which will likely accelerate from 4.4% y/y to 4.7%.
A weak NFP (less than 150K) may pressure the USD as investors will increase speculations that the Fed will ease its monetary policy tone. Strong NFP (over 250K) will likely strengthen the US currency, highlighting the labour market's health and reviving expectations of a higher and longer interest rate hiking cycle.
It is important to keep a close eye on the revision of the previous Nonfarm Payrolls data, which stood at 517K. This could significantly impact market sentiment along with newly published figures.
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Crude oil's triangle
Oil reversed sharply from bullish to bearish on Tuesday, losing around 6.5% and below $75/bbl WTI.
Since last December, oil has formed a triangle with its centre of gravity at $77 (the local lows of September and November) and a steadily shrinking trading range. Oil is successfully balancing news of production cuts and a strong labour market (positive) with monetary tightening and signs of falling demand.
A look at the charts suggests that oil is now choosing its path forward. A reversal to the upside from current levels could be the prologue to a relatively quick return to the $80 area.
A close below $74.5 would signal a break in the consolidation pattern of recent months. Confirmation of the bearish signal would come with a drop below $74.0, close to where oil bounced in February. In that case, oil would face a smooth road to $62-63 by the end of the year’s first half.
Oil reversed sharply from bullish to bearish on Tuesday, losing around 6.5% and below $75/bbl WTI.
Since last December, oil has formed a triangle with its centre of gravity at $77 (the local lows of September and November) and a steadily shrinking trading range. Oil is successfully balancing news of production cuts and a strong labour market (positive) with monetary tightening and signs of falling demand.
A look at the charts suggests that oil is now choosing its path forward. A reversal to the upside from current levels could be the prologue to a relatively quick return to the $80 area.
A close below $74.5 would signal a break in the consolidation pattern of recent months. Confirmation of the bearish signal would come with a drop below $74.0, close to where oil bounced in February. In that case, oil would face a smooth road to $62-63 by the end of the year’s first half.
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#WaveAnalysis #AA
Alcoa reversed from resistance level 55.00
• Likely to fall to support level 45.00
Alcoa falling sharply today following the earlier reversal from the resistance level 55.00 (which has been reversing the price from last August) – standing near the upper daily Bollinger Band.
The downward reversal from the resistance level 55.00 stopped the previous intermediate ABC correction (2).
Alcoa can be expected to fall further toward the next support level 45.00 (which stopped the earlier impulse wave (1) at the end of last month).
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Alcoa reversed from resistance level 55.00
• Likely to fall to support level 45.00
Alcoa falling sharply today following the earlier reversal from the resistance level 55.00 (which has been reversing the price from last August) – standing near the upper daily Bollinger Band.
The downward reversal from the resistance level 55.00 stopped the previous intermediate ABC correction (2).
Alcoa can be expected to fall further toward the next support level 45.00 (which stopped the earlier impulse wave (1) at the end of last month).
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#WaveAnalysis
#CADCHF broke major support level 0.6775
• Likely to fall to major support level 0.6600
CADCHF falling sharply following the earlier breakout of the major support level 0.6775 (which has been reversing the price from the start of 2020).
The breakout of the support level 0.6775 accelerated the active intermediate impulse wave (3).
Given the predominant weekly downtrend, CADCHF can be expected to fall further toward the next support level 0.6600.
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#CADCHF broke major support level 0.6775
• Likely to fall to major support level 0.6600
CADCHF falling sharply following the earlier breakout of the major support level 0.6775 (which has been reversing the price from the start of 2020).
The breakout of the support level 0.6775 accelerated the active intermediate impulse wave (3).
Given the predominant weekly downtrend, CADCHF can be expected to fall further toward the next support level 0.6600.
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#WaveAnalysis #UK100
FTSE 100 falling inside (c)-wave
• Likely to reach support level 7600.00
FTSE 100 index falling sharply inside the (c)-wave of the sharp ABC correction 2 from the middle of February.
The price earlier broke the daily up channel from October, 50-day moving average and the support level 7725.00 (previous support from January).
FTSE 100 index can be expected to fall further toward the next support level 7600.00 (former multi-month high from December).
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FTSE 100 falling inside (c)-wave
• Likely to reach support level 7600.00
FTSE 100 index falling sharply inside the (c)-wave of the sharp ABC correction 2 from the middle of February.
The price earlier broke the daily up channel from October, 50-day moving average and the support level 7725.00 (previous support from January).
FTSE 100 index can be expected to fall further toward the next support level 7600.00 (former multi-month high from December).
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#WaveAnalysis #AAPL
• Apple reversed from resistance level 154.00
• Likely to fall to support level 145.00
Apple recently reversed down from the key resistance level 154.00, which has been repeatedly reversing the price from September.
The resistance level 154.00 was further strengthened by the upper daily Bollinger Ban and by the 61.8% Fibonacci correction of the downward impulse form August.
Apple can be expected to fall further toward the next support level 145.00 (which stopped the previous minor impulse wave (i)).
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• Apple reversed from resistance level 154.00
• Likely to fall to support level 145.00
Apple recently reversed down from the key resistance level 154.00, which has been repeatedly reversing the price from September.
The resistance level 154.00 was further strengthened by the upper daily Bollinger Ban and by the 61.8% Fibonacci correction of the downward impulse form August.
Apple can be expected to fall further toward the next support level 145.00 (which stopped the previous minor impulse wave (i)).
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The crypto market is now showing increased volatility. On Monday morning, the price climbed from Friday's low of $19.5K up to $22.7K. There are more fundamental factors behind bitcoin's decline, while we see tech behind the rebound in recent days.
The problems at Silicon Valley Bank triggered a sell-off in risky assets, including bitcoin. At one point, it fell below its 200-day average, although it was higher at Friday's close, attracting buyers. Later, the RSI on the daily timeframe moved out of the oversold territory - another early bullish signal.
However, the upside amplitude was provided by reduced liquidity. On Monday, Bitcoin faces an important test of market sentiment. During the day, we must watch closely to see if we have a clean sell-off by the hawks. If so, it's an important signal that the recent rally was false and that the big players are still selling at better prices.
Potential buyers would still be better off waiting for a fix above $23,000 to confirm a bullish reversal.
The problems at Silicon Valley Bank triggered a sell-off in risky assets, including bitcoin. At one point, it fell below its 200-day average, although it was higher at Friday's close, attracting buyers. Later, the RSI on the daily timeframe moved out of the oversold territory - another early bullish signal.
However, the upside amplitude was provided by reduced liquidity. On Monday, Bitcoin faces an important test of market sentiment. During the day, we must watch closely to see if we have a clean sell-off by the hawks. If so, it's an important signal that the recent rally was false and that the big players are still selling at better prices.
Potential buyers would still be better off waiting for a fix above $23,000 to confirm a bullish reversal.
🪙Silver +5% to $21.6 on safe-heaven bet.
What is your attitude for this week?
What is your attitude for this week?
Anonymous Poll
75%
Bullish 📈
25%
Bearish 📉
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#WaveAnalysis
#GBPUSD reversed from support level 1.1855
• Likely to rise to resistance level 1.2250
GBPUSD currency pair recently reversed up from the key support level 1.1855 (previous monthly low from January) standing near the lower daily Bollinger Band and the 50% Fibonacci correction of the upward impulse from November.
The upward reversal from the support level 1.1855 created the daily candlesticks reversal pattern Morning Star.
GBPUSD can be expected to rise further toward the next resistance level 1.2250 (top of wave (b) from February).
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#GBPUSD reversed from support level 1.1855
• Likely to rise to resistance level 1.2250
GBPUSD currency pair recently reversed up from the key support level 1.1855 (previous monthly low from January) standing near the lower daily Bollinger Band and the 50% Fibonacci correction of the upward impulse from November.
The upward reversal from the support level 1.1855 created the daily candlesticks reversal pattern Morning Star.
GBPUSD can be expected to rise further toward the next resistance level 1.2250 (top of wave (b) from February).
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#WaveAnalysis
#Gold broke resistance area
• Likely to rise to resistance level 1950.00
Gold recently broke the resistance area located between the resistance level 1855.00 and the 38.2% Fibonacci correction of the downward correction from the start of February.
The breakout of this resistance area accelerated the active intermediate impulse wave (1).
Gold can be expected to rise further toward the next resistance level 1950.00 (previous multi-month high from the start of February).
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#Gold broke resistance area
• Likely to rise to resistance level 1950.00
Gold recently broke the resistance area located between the resistance level 1855.00 and the 38.2% Fibonacci correction of the downward correction from the start of February.
The breakout of this resistance area accelerated the active intermediate impulse wave (1).
Gold can be expected to rise further toward the next resistance level 1950.00 (previous multi-month high from the start of February).
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Bitcoin is swimming in the troubles of the US banking industry, gaining 9% in the last 24 hours and over 25% from Friday's lows.
BTCUSD returned strongly above its 50-day moving average, indicating that long and medium-term sentiment remains bullish.
At the same time, the short-term sentiment is more wait-and-see. Since last night, bitcoin has been bouncing around the 24.5 level. About a month ago, selling pressure prevented the price from going higher. The latest stop is an attempt to breathe before a new surge.
On the weekly timeframe, bitcoin has passed the 50-week mark and is testing the 200-week mark. After the pullback of the past three weeks, the chances of a breakout have increased significantly.
In less than a week, the markets have gone full circle on expectations, from a 25-point hike to a 50-point hike and back. In addition, expectations for further hikes later this year fell on Monday and Friday, which is positive for cryptocurrencies, the Nasdaq index and gold.
BTCUSD returned strongly above its 50-day moving average, indicating that long and medium-term sentiment remains bullish.
At the same time, the short-term sentiment is more wait-and-see. Since last night, bitcoin has been bouncing around the 24.5 level. About a month ago, selling pressure prevented the price from going higher. The latest stop is an attempt to breathe before a new surge.
On the weekly timeframe, bitcoin has passed the 50-week mark and is testing the 200-week mark. After the pullback of the past three weeks, the chances of a breakout have increased significantly.
In less than a week, the markets have gone full circle on expectations, from a 25-point hike to a 50-point hike and back. In addition, expectations for further hikes later this year fell on Monday and Friday, which is positive for cryptocurrencies, the Nasdaq index and gold.
The UK labour market remains strong
Unemployment claims in the UK fell by 11.2k in February, against analysts' average forecast of a rise of 12.5K. Jobless claims have fallen by nearly 50K over the past three months after a sustained period of stabilisation, a sure sign that the economy is firmer than previously thought.
Unemployment remained at 3.7% in the three months to January, close to a nearly 50-year low. Demand in the labour market continues to push up wages. In the three months to January, total wages and salaries, including bonuses, were 5.7% higher than a year earlier - below last year's peak but well above the inflation target.
A very high earnings growth reinforces the expectation of further policy tightening by the Bank of England. Short-term market liquidity concerns drove yesterday's repricing of market expectations for the rate. A surge in demand for short-term gilts indicates that markets are waiting for a significant tone softening.
Unemployment claims in the UK fell by 11.2k in February, against analysts' average forecast of a rise of 12.5K. Jobless claims have fallen by nearly 50K over the past three months after a sustained period of stabilisation, a sure sign that the economy is firmer than previously thought.
Unemployment remained at 3.7% in the three months to January, close to a nearly 50-year low. Demand in the labour market continues to push up wages. In the three months to January, total wages and salaries, including bonuses, were 5.7% higher than a year earlier - below last year's peak but well above the inflation target.
A very high earnings growth reinforces the expectation of further policy tightening by the Bank of England. Short-term market liquidity concerns drove yesterday's repricing of market expectations for the rate. A surge in demand for short-term gilts indicates that markets are waiting for a significant tone softening.
Robust employment data provides local support for the Pound, fueling the rally. The technical picture for the GBPUSD remains bullish. Late last week, the pair was bought on a break below the 200-day moving average, potentially ending a shallow correction and consolidation in the pair since the beginning of the year.
The pair closed above its 50-day average on Monday, confirming a bullish medium-term sentiment. The Pound may now have an open path to 1.2400, repeating the December and February highs.
However, a solid move higher will likely require a divergence in monetary policy between the Bank of England and the Fed. We may get that divergence in the next few weeks if the UK continues struggling with inflation and the Fed suddenly shifts to banking sector problems.
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The pair closed above its 50-day average on Monday, confirming a bullish medium-term sentiment. The Pound may now have an open path to 1.2400, repeating the December and February highs.
However, a solid move higher will likely require a divergence in monetary policy between the Bank of England and the Fed. We may get that divergence in the next few weeks if the UK continues struggling with inflation and the Fed suddenly shifts to banking sector problems.
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US inflation sparks risk appetite
The US consumer price index rose 0.4% in February, slowing the annual rate to 6.0%, in line with economists' expectations. The core price index, which excludes food and energy, rose 0.5% for the month (0.4% expected) and slowed slightly to 5.5% for the year from 5.6%.
It is important to note that the monthly price increase remains above the 0.17% needed to reach an annual inflation rate of 2%. This is despite falling commodity prices. Technically, the latest figures do not support the hypothesis of a sustained slowdown in inflation.
Nevertheless, price increases are not out of control, and the effects of the previous policy tightening are not yet fully reflected in the economic data.
The US consumer price index rose 0.4% in February, slowing the annual rate to 6.0%, in line with economists' expectations. The core price index, which excludes food and energy, rose 0.5% for the month (0.4% expected) and slowed slightly to 5.5% for the year from 5.6%.
It is important to note that the monthly price increase remains above the 0.17% needed to reach an annual inflation rate of 2%. This is despite falling commodity prices. Technically, the latest figures do not support the hypothesis of a sustained slowdown in inflation.
Nevertheless, price increases are not out of control, and the effects of the previous policy tightening are not yet fully reflected in the economic data.