#WaveAnalysis
#NZDCHF reversed from key support level 0.5630
• Likely to rise to resistance level 0.5700
NZDCHF recently reversed up from the key support level 0.5630 (previous monthly low from the middle of March) intersecting with the lower daily Bollinger Band.
The upward reversal from the support level 0.5630 stopped the previous short-term impulse wave 3 – which belongs to the intermediate impulse wave (3) from March.
Given the oversold daily Stochastic, NZDCHF can then be expected to rise further toward the next resistance level 0.5700.
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#NZDCHF reversed from key support level 0.5630
• Likely to rise to resistance level 0.5700
NZDCHF recently reversed up from the key support level 0.5630 (previous monthly low from the middle of March) intersecting with the lower daily Bollinger Band.
The upward reversal from the support level 0.5630 stopped the previous short-term impulse wave 3 – which belongs to the intermediate impulse wave (3) from March.
Given the oversold daily Stochastic, NZDCHF can then be expected to rise further toward the next resistance level 0.5700.
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#WaveAnalysis
#AUDCHF reversed from strong support level 0.6035
• Likely to rise to resistance level 0.6120
AUDCHF recently reversed up from the strong support level 0.6035 (which stopped the previous intermediate impulse wave (1) in March) intersecting with the lower daily Bollinger Band.
The upward reversal from the support level 0.6035 stopped the previous short-term impulse wave 3 – which is a part of the higher order downward impulse wave (3) from last month.
Given the strength of the support level 0.6035 and the clear bullish divergence on the daily Stochastic, AUDCHF can then be expected to rise further toward the next resistance level 0.6120.
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#AUDCHF reversed from strong support level 0.6035
• Likely to rise to resistance level 0.6120
AUDCHF recently reversed up from the strong support level 0.6035 (which stopped the previous intermediate impulse wave (1) in March) intersecting with the lower daily Bollinger Band.
The upward reversal from the support level 0.6035 stopped the previous short-term impulse wave 3 – which is a part of the higher order downward impulse wave (3) from last month.
Given the strength of the support level 0.6035 and the clear bullish divergence on the daily Stochastic, AUDCHF can then be expected to rise further toward the next resistance level 0.6120.
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#Bitcoin gained 1.9% over the past seven days to $28.3K. #Ethereum up 4% to $1860. Other top ten altcoins performance ranging from a 1.4% decline (#XRP) to a 6.2% gain (#Dogecoin).
The total crypto capitalisation rose 2% over the week to $1.185 trillion.
Bitcoin has been consolidating sideways, around $28K, for three weeks now. On Monday morning, the price briefly spiked above $28.5K in a thin market. On the daily timeframe, the range has narrowed since the beginning of the month, forming a bullish triangle. It is believed that the price will continue to move toward the breakout, with a rise above $29K opening the way to $35K, while a break below $27.5K may pave the way to $25.5K.
The latest recalculation of Bitcoin's mining difficulty showed a new record, up 2.23% to 47.89T. The 25% increase in the hash rate since the beginning of the year indicates growing confidence in the network.
The total crypto capitalisation rose 2% over the week to $1.185 trillion.
Bitcoin has been consolidating sideways, around $28K, for three weeks now. On Monday morning, the price briefly spiked above $28.5K in a thin market. On the daily timeframe, the range has narrowed since the beginning of the month, forming a bullish triangle. It is believed that the price will continue to move toward the breakout, with a rise above $29K opening the way to $35K, while a break below $27.5K may pave the way to $25.5K.
The latest recalculation of Bitcoin's mining difficulty showed a new record, up 2.23% to 47.89T. The 25% increase in the hash rate since the beginning of the year indicates growing confidence in the network.
#WaveAnalysis
#GBPJPY reversed from support level 163.55
• Likely to rise to resistance level 166.00
GBPJPY currency pair recently reversed up from the pivotal support level 163.55 (former resistance level which has been reversing the price from the start of March).
The upward reversal from the support level 163.55 runs counter to the active intermediate impulse wave (C) from the start of April.
Given the strong yen sales, GBPJPY can then be expected to rise further toward the next resistance level 166.00 (top of the previous impulse wave C).
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#GBPJPY reversed from support level 163.55
• Likely to rise to resistance level 166.00
GBPJPY currency pair recently reversed up from the pivotal support level 163.55 (former resistance level which has been reversing the price from the start of March).
The upward reversal from the support level 163.55 runs counter to the active intermediate impulse wave (C) from the start of April.
Given the strong yen sales, GBPJPY can then be expected to rise further toward the next resistance level 166.00 (top of the previous impulse wave C).
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#WaveAnalysis
•#FTSE100 broke key resistance level 7600.00
• Likely to rise to resistance level 7800.00
FTSE 100 index recently broke the key resistance level 7600.00 (former top of the impulse wave 1 from the middle of March).
The breakout of the resistance level 7600.00 coincided with the breakout of the 50% Fibonacci correction of the previous sharp downward impulse wave C from the start of last month.
Given the strong daily uptrend, FTSE 100 index can then be expected to rise further toward the next resistance level 7800.00.
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•#FTSE100 broke key resistance level 7600.00
• Likely to rise to resistance level 7800.00
FTSE 100 index recently broke the key resistance level 7600.00 (former top of the impulse wave 1 from the middle of March).
The breakout of the resistance level 7600.00 coincided with the breakout of the 50% Fibonacci correction of the previous sharp downward impulse wave C from the start of last month.
Given the strong daily uptrend, FTSE 100 index can then be expected to rise further toward the next resistance level 7800.00.
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Bitcoin soars past $30K
The total capitalisation of the crypto market rose 4.5% to $1.24 trillion, the highest since June last year and a colourful end to several days of consolidation. Bitcoin was the main driver, although BNB, Cardano, Solana and Litecoin also outperformed the market, rising between 5.5% and 11%.
Bitcoin continued its storm of highs early on Tuesday, peaking at $30.4K and holding above $30K after a minor correction. This jump in a thin market marked the end of a consolidation triangle and a corrective pullback after a March rally.
The target for the first pattern is the $40K area, while the second pattern sets up a rapid rise towards $35K, which is more realistic in the current market, as it already looks slightly speculatively overbought.
Open interest in bitcoin options exceeded open interest in bitcoin futures for the first time, indicating expectations for BTC growth, Glassnode noted.
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The total capitalisation of the crypto market rose 4.5% to $1.24 trillion, the highest since June last year and a colourful end to several days of consolidation. Bitcoin was the main driver, although BNB, Cardano, Solana and Litecoin also outperformed the market, rising between 5.5% and 11%.
Bitcoin continued its storm of highs early on Tuesday, peaking at $30.4K and holding above $30K after a minor correction. This jump in a thin market marked the end of a consolidation triangle and a corrective pullback after a March rally.
The target for the first pattern is the $40K area, while the second pattern sets up a rapid rise towards $35K, which is more realistic in the current market, as it already looks slightly speculatively overbought.
Open interest in bitcoin options exceeded open interest in bitcoin futures for the first time, indicating expectations for BTC growth, Glassnode noted.
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Chinese disinflation
Consumer inflation in China fell to 0.7% YoY in March from 1.0% in the previous month. Last month's producer price index was 2.5% lower than a year earlier, accelerating its decline from 1.4% in February.
The hypothesis that China's move away from a 0-covid policy is driving down prices rather than pushing them up, as has been the case in the developed world, remains valid. In this case, we are seeing a normalisation of the economy, which in turn is normalising prices after the spike of previous years.
Consumer inflation in China fell to 0.7% YoY in March from 1.0% in the previous month. Last month's producer price index was 2.5% lower than a year earlier, accelerating its decline from 1.4% in February.
The hypothesis that China's move away from a 0-covid policy is driving down prices rather than pushing them up, as has been the case in the developed world, remains valid. In this case, we are seeing a normalisation of the economy, which in turn is normalising prices after the spike of previous years.
The stabilisation of supply chains is also evident in the stabilisation of container prices, which have returned to the region of $1,500 (the norm, at least from October 2016 to April 2020) after spiking above $10,000 in the last quarter of 2021.
The normalisation of logistics complements the fall in producer prices, taking inflationary pressure off the developed world. And this is good news for risk demand, as it will allow the world's biggest central banks to stop tightening policy more quickly.
However, falling producer prices may also signal a sharp contraction in demand in the developed world. Although it signals the end of the interest rate hike cycle in Europe and America, it promises more negativity. In this case, things will get worse before they get better.
The normalisation of logistics complements the fall in producer prices, taking inflationary pressure off the developed world. And this is good news for risk demand, as it will allow the world's biggest central banks to stop tightening policy more quickly.
However, falling producer prices may also signal a sharp contraction in demand in the developed world. Although it signals the end of the interest rate hike cycle in Europe and America, it promises more negativity. In this case, things will get worse before they get better.
Japan is recovering, but what about the Yen?
After last year's shock, Japan's economic indicators are slowly returning to normal. But conditions are still unsuitable for raising interest rates for the Bank of Japan. This is not good news for the Yen. The interest rate differential, which has risen sharply over the past year, creates the conditions for carry trade. The only obstacle to an active interest rate differential play is the uncertainty surrounding monetary policy due to the change in the central bank governor.
The balance of payments rebounded from last month's record deficit as the February trade deficit fell to its lowest level in 11 months. The balance of payments appears to have turned around. This is supported by lifting China's export restrictions and falling container prices, which should boost demand for goods from Japan.
After last year's shock, Japan's economic indicators are slowly returning to normal. But conditions are still unsuitable for raising interest rates for the Bank of Japan. This is not good news for the Yen. The interest rate differential, which has risen sharply over the past year, creates the conditions for carry trade. The only obstacle to an active interest rate differential play is the uncertainty surrounding monetary policy due to the change in the central bank governor.
The balance of payments rebounded from last month's record deficit as the February trade deficit fell to its lowest level in 11 months. The balance of payments appears to have turned around. This is supported by lifting China's export restrictions and falling container prices, which should boost demand for goods from Japan.
In addition, consumer optimism is on the rise. Household consumer confidence has risen every month since November, from 31.3 to 33.9 in March, the highest level since May last year.
The "economic watchers" survey also returned to last year's highs in current conditions and was at its highest level since October 2021 in terms of forecasts.
A key driver of the Yen's appreciation in recent months has been speculation about a change in monetary policy. Expectations have grown that Kuroda's resignation as governor of the Bank of Japan would trigger a tightening of monetary policy. But so far, there has been no real change or even a hint in that direction from the new BoJ governor, who formally took office on 9 April. His latest speech signalled that he would continue to ease policy.
He has not been seen as a proponent of tightening policy, but a confirmation after his inauguration could potentially trigger a new wave of pressure on the Japanese currency.
The "economic watchers" survey also returned to last year's highs in current conditions and was at its highest level since October 2021 in terms of forecasts.
A key driver of the Yen's appreciation in recent months has been speculation about a change in monetary policy. Expectations have grown that Kuroda's resignation as governor of the Bank of Japan would trigger a tightening of monetary policy. But so far, there has been no real change or even a hint in that direction from the new BoJ governor, who formally took office on 9 April. His latest speech signalled that he would continue to ease policy.
He has not been seen as a proponent of tightening policy, but a confirmation after his inauguration could potentially trigger a new wave of pressure on the Japanese currency.
The #USDJPY jumped more than 1% on Monday, taking advantage of the dollar's general bullishness. Today, however, the Yen is in no hurry to regain its losses, as the Pound and Euro are doing. And this may not be the end of the samurai path.
Lower inflation eases the pressure on the BoJ to raise interest rates. The USDJPY's pullback from 151 to 127 corrected 50% of the rally on the monetary policy change and stopped the pair's uncontrolled rise. Technically, the path to the upside for the pair is now clear, but it is difficult to identify a clear technical target for this path. The 140 level could be a medium-term target.
Much more helpful is the dynamics of interest rate expectations. The fundamental pressure on the Yen may continue as long as the spread between the Yen's government bond yields and those of its major rivals widens.
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Lower inflation eases the pressure on the BoJ to raise interest rates. The USDJPY's pullback from 151 to 127 corrected 50% of the rally on the monetary policy change and stopped the pair's uncontrolled rise. Technically, the path to the upside for the pair is now clear, but it is difficult to identify a clear technical target for this path. The 140 level could be a medium-term target.
Much more helpful is the dynamics of interest rate expectations. The fundamental pressure on the Yen may continue as long as the spread between the Yen's government bond yields and those of its major rivals widens.
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The Sentix investor confidence index rose from -11.1 to -8.7 in April. This is roughly where the index was in February. However, it has been in negative territory for 13 months and has shown no positive trend in the last three months.
Eurostat reported that retail sales fell by 0.8% in February, after the same increase in the previous month. On a yearly basis, sales are down by 3%. The retail sales index has been downward since November 2021, breaking the long-term upward trend that began around ten years ago.
Melting retail sales and investor pessimism cast doubt on whether the ECB still needs to raise interest rates. However, everything is relative in the currency market, and expectations are now much higher that the Fed will end its hikes sooner and be the first to start easing, supporting the euro's rise against the dollar.
Eurostat reported that retail sales fell by 0.8% in February, after the same increase in the previous month. On a yearly basis, sales are down by 3%. The retail sales index has been downward since November 2021, breaking the long-term upward trend that began around ten years ago.
Melting retail sales and investor pessimism cast doubt on whether the ECB still needs to raise interest rates. However, everything is relative in the currency market, and expectations are now much higher that the Fed will end its hikes sooner and be the first to start easing, supporting the euro's rise against the dollar.
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#WaveAnalysis
#AUDNZD reversed from support level 1.0625
• Likely to rise to resistance level 1.0780
AUDNZD currency pair recently reversed up from the key support level 1.0625 (which has been reversing the price from last December).
The upward reversal from the support level 1.0625 created the two consecutive upward reversal candlesticks patterns Bullish Engulfing – signalling the strength of this support level.
AUDNZD can then be expected to rise further toward the next resistance level 1.0780 (which stopped the previous waves 4 and (B)).
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#AUDNZD reversed from support level 1.0625
• Likely to rise to resistance level 1.0780
AUDNZD currency pair recently reversed up from the key support level 1.0625 (which has been reversing the price from last December).
The upward reversal from the support level 1.0625 created the two consecutive upward reversal candlesticks patterns Bullish Engulfing – signalling the strength of this support level.
AUDNZD can then be expected to rise further toward the next resistance level 1.0780 (which stopped the previous waves 4 and (B)).
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#WaveAnalysis
#USDCHF reversed from resistance level 0.9095
• Likely to fall to support level 0.9000
USDCHF currency pair recently reversed down from the key resistance level 0.9095 (former powerful support which has been reversing the price from the middle of January).
The downward reversal from the resistance level 0.9095 continues the active short-term impulse wave (iii) – which belongs to the impulse waves 3 and (3).
Given the long-term downtrend, USDCHF can then be expected to fall further toward the next round support level 0.9000 (low of the earlier Hammer from the start of this month).
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#USDCHF reversed from resistance level 0.9095
• Likely to fall to support level 0.9000
USDCHF currency pair recently reversed down from the key resistance level 0.9095 (former powerful support which has been reversing the price from the middle of January).
The downward reversal from the resistance level 0.9095 continues the active short-term impulse wave (iii) – which belongs to the impulse waves 3 and (3).
Given the long-term downtrend, USDCHF can then be expected to fall further toward the next round support level 0.9000 (low of the earlier Hammer from the start of this month).
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#Bitcoin hit a 10-month high above $30,500 on Tuesday. However, two attempts by the bulls to build a sustained rally were not supported by the market. On Wednesday morning, the price pulled back below $30K, losing 0.4% over the past 24 hours.
The crypto market has lost more than 1.2% over the same period to $1.22 trillion. Traders are rushing to lock in profits from the recent rally amid concerns about volatility ahead of today's US inflation figures.
According to CoinShares, investments in cryptocurrencies rose by $57M last week, the third consecutive week of inflows. Bitcoin investments increased by $56M, Ethereum by $0.6M, Uniswap by $0.5M and Polkadot by $0.4M.
Despite the positive investor sentiment, trading volumes for the week were low at $970M. The same trend was seen in the global BTC exchange market, where trading volumes for the week were only 25% of the average since the beginning of the year, Coinshares noted.
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The crypto market has lost more than 1.2% over the same period to $1.22 trillion. Traders are rushing to lock in profits from the recent rally amid concerns about volatility ahead of today's US inflation figures.
According to CoinShares, investments in cryptocurrencies rose by $57M last week, the third consecutive week of inflows. Bitcoin investments increased by $56M, Ethereum by $0.6M, Uniswap by $0.5M and Polkadot by $0.4M.
Despite the positive investor sentiment, trading volumes for the week were low at $970M. The same trend was seen in the global BTC exchange market, where trading volumes for the week were only 25% of the average since the beginning of the year, Coinshares noted.
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What to expect from US inflation
The currency market has moved little over the past week, waiting for significant drivers. The Easter lull is likely to end today, as inflation data and the Fed's March meeting minutes are expected to be released.
US inflation reports have moved markets more than NFP in recent months and have often been a bellwether for the Dollar in the coming weeks as they have influenced interest rate expectations.
On average, market analysts are forecasting a 0.2% rise in prices for March and a slowdown in annual inflation to 5.1% from 6.0% the previous month and a peak of 9.1% in June last year.
However, economists expect core inflation to rise from 5.5% to 5.6% YoY, reversing the downward trend that has been in place since September.
The currency market has moved little over the past week, waiting for significant drivers. The Easter lull is likely to end today, as inflation data and the Fed's March meeting minutes are expected to be released.
US inflation reports have moved markets more than NFP in recent months and have often been a bellwether for the Dollar in the coming weeks as they have influenced interest rate expectations.
On average, market analysts are forecasting a 0.2% rise in prices for March and a slowdown in annual inflation to 5.1% from 6.0% the previous month and a peak of 9.1% in June last year.
However, economists expect core inflation to rise from 5.5% to 5.6% YoY, reversing the downward trend that has been in place since September.
In our view, a deeper slowdown in headline inflation, as we saw in China earlier this week, cannot be ruled out. Moreover, we should not be surprised if the rate of increase in prices, excluding energy and food, also falls short of expectations. A recovery in supply chains and a slowdown in wage growth are working against inflation.
A weaker-than-expected reading or other reliable signs of waning inflation could unleash a wave of pressure on the Dollar, reducing the chances of another Fed rate hike. Weaker inflation data is also good for demand for equities and commodities, as markets will reinforce expectations that inflation has peaked. The Dollar would then stand a good chance of rallying off this year's lows.
On the other hand, if prices rise significantly more than expected, this will push the Dollar higher. Technically, the DXY could form a double bottom with lows in early February and April. Equities and commodities could go down.
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A weaker-than-expected reading or other reliable signs of waning inflation could unleash a wave of pressure on the Dollar, reducing the chances of another Fed rate hike. Weaker inflation data is also good for demand for equities and commodities, as markets will reinforce expectations that inflation has peaked. The Dollar would then stand a good chance of rallying off this year's lows.
On the other hand, if prices rise significantly more than expected, this will push the Dollar higher. Technically, the DXY could form a double bottom with lows in early February and April. Equities and commodities could go down.
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