#WaveAnalysis
#GBPUSD broke resistance level 1.22664
• Likely to rise to resistance level 1.2440
GBPUSD rising after the pair broke above the resistance level 1.22664 (top of the previous correction 2 from the middle of February).
The breakout of the resistance level 1.22664 continues the active short-term impulse wave C, which belongs to the intermediate ABC correction (2) from the start of March.
Given the strong uptrend and the widespread dollar sales, GBPUSD currency pair can then be expected to rise further toward the next resistance level 1.2440 (monthly high from December and January and the target price for the completion of the active impulse wave C).
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#GBPUSD broke resistance level 1.22664
• Likely to rise to resistance level 1.2440
GBPUSD rising after the pair broke above the resistance level 1.22664 (top of the previous correction 2 from the middle of February).
The breakout of the resistance level 1.22664 continues the active short-term impulse wave C, which belongs to the intermediate ABC correction (2) from the start of March.
Given the strong uptrend and the widespread dollar sales, GBPUSD currency pair can then be expected to rise further toward the next resistance level 1.2440 (monthly high from December and January and the target price for the completion of the active impulse wave C).
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Bitcoin Adjusting First Quarter Gains
The crypto market's capitalisation fell by 1.1% over the past day to 1.17 trillion, which resembles profit-taking after 50% of market growth in the first quarter of this year.
Bitcoin underwent an even more active sell-off the night before, losing about 2% in 24 hours, but holding near $ 28K, bringing the result of the first quarter to 70%. A full correction from these levels involves a pullback to $ 26K or even $ 25K.
The fact that the stock market has maintained a positive bias over the past day, and the dollar has been declining, additionally supports the idea of a local shake-up of crypto portfolios, but not the return of pessimism. If this happens, anxiety will kick in when the decline is under $ 25K.
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The crypto market's capitalisation fell by 1.1% over the past day to 1.17 trillion, which resembles profit-taking after 50% of market growth in the first quarter of this year.
Bitcoin underwent an even more active sell-off the night before, losing about 2% in 24 hours, but holding near $ 28K, bringing the result of the first quarter to 70%. A full correction from these levels involves a pullback to $ 26K or even $ 25K.
The fact that the stock market has maintained a positive bias over the past day, and the dollar has been declining, additionally supports the idea of a local shake-up of crypto portfolios, but not the return of pessimism. If this happens, anxiety will kick in when the decline is under $ 25K.
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Dollar preparing to stare into the abyss
The dollar index is ending with a decline for the fourth of the last five weeks, almost completely erasing the gains from February's rise. Although it cannot be ruled out that the quarterly portfolio shakeout will create traction in the Dollar, it is still more likely that the US currency will fall further in the coming quarters.
We consider the sharp reversal of the Dollar from rising to falling at the end of September a turning point. Before that, the DXY had been gaining following an increasingly tight monetary policy stance by the Fed. But after last September's meeting, hopes of an imminent end to tightening loomed on the horizon for financial markets.
The dollar index is ending with a decline for the fourth of the last five weeks, almost completely erasing the gains from February's rise. Although it cannot be ruled out that the quarterly portfolio shakeout will create traction in the Dollar, it is still more likely that the US currency will fall further in the coming quarters.
We consider the sharp reversal of the Dollar from rising to falling at the end of September a turning point. Before that, the DXY had been gaining following an increasingly tight monetary policy stance by the Fed. But after last September's meeting, hopes of an imminent end to tightening loomed on the horizon for financial markets.
The link between the Dollar and Fed policy expectations has become even closer this year. In January, the Dollar was accelerating its fall as markets were banking on a rate cut even before the end of the year. There was a sharp reversal in February when high inflation put a 50-point hike back on the FOMC agenda for March. In March, these expectations melted away with the banks.
The banks' problems are tightening financial conditions as rates do, according to Powell at a press conference on 22 March. This was a hint that further rate rises are not guaranteed.
In contrast, other regions may need to continue their crusade for inflation, thereby reducing the spreads of debt securities yields.
This is a typical story in the currency market, with the Fed at the forefront of the monetary cycle, which initially forms 12-18 months of dollar growth on rate hikes, but then triggers a move in the opposite direction. In the last six months, we have seen the quite typical and understandable reversal of the Dollar.
Last year, the rise in the Dollar also helped with inflation, bringing the expected policy reversal closer to easing. However, now it is the turn of other developed country currencies, where central banks will try to tighten financial conditions to suppress inflation.
The banks' problems are tightening financial conditions as rates do, according to Powell at a press conference on 22 March. This was a hint that further rate rises are not guaranteed.
In contrast, other regions may need to continue their crusade for inflation, thereby reducing the spreads of debt securities yields.
This is a typical story in the currency market, with the Fed at the forefront of the monetary cycle, which initially forms 12-18 months of dollar growth on rate hikes, but then triggers a move in the opposite direction. In the last six months, we have seen the quite typical and understandable reversal of the Dollar.
Last year, the rise in the Dollar also helped with inflation, bringing the expected policy reversal closer to easing. However, now it is the turn of other developed country currencies, where central banks will try to tighten financial conditions to suppress inflation.
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We also see the beauty of the technical picture in the Dollar. Thanks to the rise in February, the oversold nature of the Dollar has been removed.
That said, on the weekly timeframes, the DXY rebound in March lost strength on the approach to the 50-week average, leaving it within a long-term bearish trend.
If we are right, the immediate downside target looks to be the area of the year's low at 100.7 on the DXY against the current 102.
A consolidation below that level would cause the Dollar to stare into the abyss, where there is only minor technical support in the area of the 90.00 level.
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That said, on the weekly timeframes, the DXY rebound in March lost strength on the approach to the 50-week average, leaving it within a long-term bearish trend.
If we are right, the immediate downside target looks to be the area of the year's low at 100.7 on the DXY against the current 102.
A consolidation below that level would cause the Dollar to stare into the abyss, where there is only minor technical support in the area of the 90.00 level.
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#WaveAnalysis
#USDCAD under the bearish pressure
• Likely to fall to support level 1.3300
USDCAD under the bearish pressure after the price broke the key support level 1.3555 (which has been reversing the price from the middle of 2021, as can be seen below), intersecting with the 50% Fibonacci correction of the upward impulse from the start of February.
The price then broke the long-term support trendline from June – which accelerated the active ABC correction 2.
USDCAD can then be expected to fall further toward the next support level 1.3300 (base of the Morning Star from the middle of February).
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#USDCAD under the bearish pressure
• Likely to fall to support level 1.3300
USDCAD under the bearish pressure after the price broke the key support level 1.3555 (which has been reversing the price from the middle of 2021, as can be seen below), intersecting with the 50% Fibonacci correction of the upward impulse from the start of February.
The price then broke the long-term support trendline from June – which accelerated the active ABC correction 2.
USDCAD can then be expected to fall further toward the next support level 1.3300 (base of the Morning Star from the middle of February).
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#WaveAnalysis
#EURAUD reversed from resistance level 1.6235
• Likely to fall to support level 1.5880
EURAUD recently reversed down from the major resistance level 1.6235 (which has been reversing the price from the middle of 2021, as can be seen below)
The resistance level 1.6235 was strengthened by the upper weekly and the daily Bollinger Band.
Given the overbought weekly Stochastic indicator, EURAUD can then be expected to fall toward the next support level 1.5880 (former resistance from the end of 2022).
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#EURAUD reversed from resistance level 1.6235
• Likely to fall to support level 1.5880
EURAUD recently reversed down from the major resistance level 1.6235 (which has been reversing the price from the middle of 2021, as can be seen below)
The resistance level 1.6235 was strengthened by the upper weekly and the daily Bollinger Band.
Given the overbought weekly Stochastic indicator, EURAUD can then be expected to fall toward the next support level 1.5880 (former resistance from the end of 2022).
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Over the weekend, OPEC+ unexpectedly announced a production cut of 1.16 million bpd. Separately, Russia extended its voluntary cut by 0.5 million barrels from March to the end of the year.
The unexpected decision caused oil to jump at the week's opening, bringing the price back to the upper end of the trading range it had been in since December before breaking through its lower boundary.
The cartel presents the decision as an attempt to balance supply and demand in the market. And this is an interesting passage, given that the developed economies are actually performing noticeably better than expected of them a couple of quarters ago. The US has not increased production, and OPEC+ has changed its original plan to restore production.
It is more accurate to call the latest decision an attempt to support the price, which briefly moved below the $65/bbl WTI level last month, with Brent testing support at $70.
The unexpected decision caused oil to jump at the week's opening, bringing the price back to the upper end of the trading range it had been in since December before breaking through its lower boundary.
The cartel presents the decision as an attempt to balance supply and demand in the market. And this is an interesting passage, given that the developed economies are actually performing noticeably better than expected of them a couple of quarters ago. The US has not increased production, and OPEC+ has changed its original plan to restore production.
It is more accurate to call the latest decision an attempt to support the price, which briefly moved below the $65/bbl WTI level last month, with Brent testing support at $70.
Looking at the price dynamics from the side of tech analysis, it is worth being cautious about further purchases. The price stabilised at the upper boundary of the trading range, approaching the overbought area on the RSI on the daily charts. The 200-day moving average (now $83.58) also points into the same area. One dollar lower is the reversal area for oil from December.
Short-term selling strength should be expected in the $82.50-83.5 area. If that happens, you should be prepared for oil to close the gap at the start of this week.
In our view, traders should be prepared for the US trying to put pressure back on oil quotations, as it is an important tool to keep inflation and inflation expectations in check.
Nevertheless, a quicker development cannot be ruled out with another short squeeze in oil and a capitulation of the bears. After the price consolidates at the 200-day average, this scenario is worth considering, which would open a direct path to the $85-90 area.
Short-term selling strength should be expected in the $82.50-83.5 area. If that happens, you should be prepared for oil to close the gap at the start of this week.
In our view, traders should be prepared for the US trying to put pressure back on oil quotations, as it is an important tool to keep inflation and inflation expectations in check.
Nevertheless, a quicker development cannot be ruled out with another short squeeze in oil and a capitulation of the bears. After the price consolidates at the 200-day average, this scenario is worth considering, which would open a direct path to the $85-90 area.
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#WaveAnalysis
#GBPUSD under the bullish pressure
• Likely to rise to resistance level 1.2600
GBPUSD under the bullish pressure after the price broke the key resistance level 1.2440 (which has been reversing the price from the middle of 2022, as can be seen below).
The breakout of the resistance level 1.2440 accelerated the C-wave of the active ABC correction (2).
Given the strongly bullish sterling sentiment sent today, GBPUSD can then be expected to rise further toward the next resistance level 1.2600 (target for the completion of the active wave C).
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#GBPUSD under the bullish pressure
• Likely to rise to resistance level 1.2600
GBPUSD under the bullish pressure after the price broke the key resistance level 1.2440 (which has been reversing the price from the middle of 2022, as can be seen below).
The breakout of the resistance level 1.2440 accelerated the C-wave of the active ABC correction (2).
Given the strongly bullish sterling sentiment sent today, GBPUSD can then be expected to rise further toward the next resistance level 1.2600 (target for the completion of the active wave C).
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#WaveAnalysis
#Nasdaq100 broke resistance area
• Likely to rise to resistance level 13400.00
Nasdaq100 index recently broke the resistance area located between the resistance levels 12885.00 (which has been reversing the price from the start of February) and 13160.00
The breakout of this resistance area accelerated the active impulse wave 3 of the intermediate impulse wave (C) from last month.
Given the clear daily uptrend, Nasdaq-100 index can then be expected to rise further toward the next resistance level 13400.00 (target price for the completion of the active impulse wave 3).
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#Nasdaq100 broke resistance area
• Likely to rise to resistance level 13400.00
Nasdaq100 index recently broke the resistance area located between the resistance levels 12885.00 (which has been reversing the price from the start of February) and 13160.00
The breakout of this resistance area accelerated the active impulse wave 3 of the intermediate impulse wave (C) from last month.
Given the clear daily uptrend, Nasdaq-100 index can then be expected to rise further toward the next resistance level 13400.00 (target price for the completion of the active impulse wave 3).
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The cryptocurrency market has gained over 3% in the last 24 hours, reaching $1.21 trillion. Interestingly, #Bitcoin has not kept pace with the overall growth, adding 2.3% to $28.55K over the same period. #Ethereum, on the other hand, has risen by 5.5% to $1910.
The first cryptocurrency is stuck in local highs, above which it has been unable to consolidate since 19th March. This prolonged consolidation sets the stage for the next big move. The resolution of this consolidation is likely to be linked to the market's reaction to Friday's Non-Farm Payrolls. Technically, a pullback to the $27k level to correct the rally of the 10th of March is likely.
A more bullish scenario is offered by Ethereum, which broke through resistance in a sharp move yesterday and continues to gain traction, reaching an 8-month high. The dynamics within the Fibonacci theory suggest that a target near $2150 could be considered.
The first cryptocurrency is stuck in local highs, above which it has been unable to consolidate since 19th March. This prolonged consolidation sets the stage for the next big move. The resolution of this consolidation is likely to be linked to the market's reaction to Friday's Non-Farm Payrolls. Technically, a pullback to the $27k level to correct the rally of the 10th of March is likely.
A more bullish scenario is offered by Ethereum, which broke through resistance in a sharp move yesterday and continues to gain traction, reaching an 8-month high. The dynamics within the Fibonacci theory suggest that a target near $2150 could be considered.
Rate surprise from New Zealand
The Reserve Bank of New Zealand made another rate hike of 50 points to 5.25%. Contrary to forecasts of a 25-point rate hike and the global trend towards a slowdown in policy tightening, the RBNZ has not slowed down a step. In this cycle, the rate has already been increased by 500 points.
A higher-than-expected rate hike caused the NZDUSD to rise 1.2% within a minute to 0.6378. However, a few minutes later, the excitement for the New Zealand currency eased, and the pair almost erased this rise, returning to the 0.6310 level at the start of the day.
In our view, the pressure on the NZD was due to hints that this could be the end of the RBNZ's hike cycle, suggesting a slowdown in domestic demand and normalisation of domestic price pressures as the weather in the north of the country normalises.
The Reserve Bank of New Zealand made another rate hike of 50 points to 5.25%. Contrary to forecasts of a 25-point rate hike and the global trend towards a slowdown in policy tightening, the RBNZ has not slowed down a step. In this cycle, the rate has already been increased by 500 points.
A higher-than-expected rate hike caused the NZDUSD to rise 1.2% within a minute to 0.6378. However, a few minutes later, the excitement for the New Zealand currency eased, and the pair almost erased this rise, returning to the 0.6310 level at the start of the day.
In our view, the pressure on the NZD was due to hints that this could be the end of the RBNZ's hike cycle, suggesting a slowdown in domestic demand and normalisation of domestic price pressures as the weather in the north of the country normalises.
The #NZDUSD has maintained an upward trend for almost a month, receiving support from increasingly higher levels. We consider the smooth reversal to the upside in the pair in March from the 200-day average line as a milestone. On Monday, the Kiwi crossed above its 50-day average, which is also a signal that Today's intraday trend shows that the bulls cannot increase the momentum of this trend.
Despite a strong sell-off shortly after the rate decision, the NZDUSD doesn't look overbought, and there are no significant resistance levels until the area of 0.6500.
And the Kiwi might continue. The pair had an almost canonical Fibonacci retracement from the October-January rise in February and early March and has been moving gently upwards since then, with the potential to reach 0.70-0.71 before the end of the year.
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Despite a strong sell-off shortly after the rate decision, the NZDUSD doesn't look overbought, and there are no significant resistance levels until the area of 0.6500.
And the Kiwi might continue. The pair had an almost canonical Fibonacci retracement from the October-January rise in February and early March and has been moving gently upwards since then, with the potential to reach 0.70-0.71 before the end of the year.
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💰 On this day 90 years ago, April 5th, 1933: Franklin D. Roosevelt signed Executive Order 6102 in response to the worsening depression, banning US citizens from hoarding gold in any form. People had until May 1st to turn in excess gold to the Fed at $20.67 per oz. ⚠️ Failure to comply could result in a fine of up to $10k or ten years imprisonment, or both!
🎉 Today, April 5th, is also believed to be the birthday of Satoshi Nakamoto, the mysterious creator of Bitcoin. 🎂🎁
🎉 Today, April 5th, is also believed to be the birthday of Satoshi Nakamoto, the mysterious creator of Bitcoin. 🎂🎁
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#WaveAnalysis
#EURUSD under the bearish pressure
• Likely to fall to support level 1.0800
EURUSD under the bearish pressure after the price reversed down from the key resistance area located between the long-term resistance level 1.0950 (which has been reversing the price from the end of April) and the upper daily Bollinger Band.
The price is likely to form the daily Bearish Engulfing – if the pair closes today near the current levels.
Given the overbought daily Stochastic, EURUSD can then be expected to fall further toward the next support level 1.0800 (low of the pervious correction B).
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#EURUSD under the bearish pressure
• Likely to fall to support level 1.0800
EURUSD under the bearish pressure after the price reversed down from the key resistance area located between the long-term resistance level 1.0950 (which has been reversing the price from the end of April) and the upper daily Bollinger Band.
The price is likely to form the daily Bearish Engulfing – if the pair closes today near the current levels.
Given the overbought daily Stochastic, EURUSD can then be expected to fall further toward the next support level 1.0800 (low of the pervious correction B).
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#WaveAnalysis
#EURJPY reversed from key resistance level 145.40
• Likely to fall to support level 142.00
EURJPY recently reversed down from the key resistance level 145.40 (which has been reversing the price from the start of March) intersecting with the upper daily Bollinger Band.
The downward reversal from the resistance level 145.40 created the daily Japanese candlesticks reversal pattern Shooting Star Doji.
Given the strong yen sentiment, EURJPY can then be expected to fall further toward the next support level 142.00.
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#EURJPY reversed from key resistance level 145.40
• Likely to fall to support level 142.00
EURJPY recently reversed down from the key resistance level 145.40 (which has been reversing the price from the start of March) intersecting with the upper daily Bollinger Band.
The downward reversal from the resistance level 145.40 created the daily Japanese candlesticks reversal pattern Shooting Star Doji.
Given the strong yen sentiment, EURJPY can then be expected to fall further toward the next support level 142.00.
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The crypto market lost 1.4% overnight to $1.19 trillion. Bitcoin, down 1.6% at $28K, once again underperformed the market. Ethereum fell just over 1% to $1890. This Bitcoin dynamic can be attributed to its outperformance in the March episode of capital flight from banks. That money is now neatly parked elsewhere while Bitcoin is "resting".
Bitcoin's recent pullback has confirmed that the trading range of the past two weeks remains in place. The first cryptocurrency does not see any significant obstacles on the way down to levels near $27K. The deepening drawdown could be influenced by negative sentiment in traditional financial markets.
MicroStrategy additionally bought 1,045 bitcoins for approximately $29.3 million at an average price of $28,016 per BTC. And now owns 140K BTCs at an average price of $29,803.
According to Kaiko, the correlation index between bitcoin and gold has reached 50%. Meanwhile, BTC's dependence on the US stock market has fallen to 20%.
Bitcoin's recent pullback has confirmed that the trading range of the past two weeks remains in place. The first cryptocurrency does not see any significant obstacles on the way down to levels near $27K. The deepening drawdown could be influenced by negative sentiment in traditional financial markets.
MicroStrategy additionally bought 1,045 bitcoins for approximately $29.3 million at an average price of $28,016 per BTC. And now owns 140K BTCs at an average price of $29,803.
According to Kaiko, the correlation index between bitcoin and gold has reached 50%. Meanwhile, BTC's dependence on the US stock market has fallen to 20%.