Gold rallied sharply in March, and the market possibly unwound this overheating in the recent 3% correction from the $2048 highs.
The sequence of lower highs in 2020, 2022 and 2023 is worrying. But the series of higher local lows over the past five weeks is worth noting.
Moreover, all this consolidation is taking place at higher levels than in previous similar episodes, reflecting more interest in buying gold.
The historical tendency for the dollar to weaken at a similar stage in the monetary cycle is also worth considering.
In addition to technical analysis, gold buying is also justified by geopolitics, which remains tense and keeps the idea of a move towards supranational stores of value.
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The sequence of lower highs in 2020, 2022 and 2023 is worrying. But the series of higher local lows over the past five weeks is worth noting.
Moreover, all this consolidation is taking place at higher levels than in previous similar episodes, reflecting more interest in buying gold.
The historical tendency for the dollar to weaken at a similar stage in the monetary cycle is also worth considering.
In addition to technical analysis, gold buying is also justified by geopolitics, which remains tense and keeps the idea of a move towards supranational stores of value.
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#WaveAnalysis
#Apple continues daily uptrend
• Likely to rise to resistance level 168.15
Apple recently reversed up from support trendline of the day up channel from March, intersecting with the 20-day moving average and the 38.2% Fibonacci correction of the upward impulse from March.
The upward reversal from theses support levels continues the minor c-wave of the active correction (ii) from January.
Given the clear daily uptrend, Apple can be expected to rise further toward the next resistance level 168.15 (which reversed the price earlier this month).
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#Apple continues daily uptrend
• Likely to rise to resistance level 168.15
Apple recently reversed up from support trendline of the day up channel from March, intersecting with the 20-day moving average and the 38.2% Fibonacci correction of the upward impulse from March.
The upward reversal from theses support levels continues the minor c-wave of the active correction (ii) from January.
Given the clear daily uptrend, Apple can be expected to rise further toward the next resistance level 168.15 (which reversed the price earlier this month).
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#WaveAnalysis
#GBPCHF reversed from long-term support level 1.1065
• Likely to rise to resistance level 1.1225
GBPCHF currency pair recently reversed up from the long-term support level 1.1065 (which has been reversing the pair from November), standing near the lower daily Bollinger Band.
The upward reversal from the support level 1.1065 stopped the C-wave of the medium-term ABC correction (B) from October.
Given the strong Swiss franc sales, GBPCHF currency pair can be expected to rise further toward the next resistance level 1.1225.
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#GBPCHF reversed from long-term support level 1.1065
• Likely to rise to resistance level 1.1225
GBPCHF currency pair recently reversed up from the long-term support level 1.1065 (which has been reversing the pair from November), standing near the lower daily Bollinger Band.
The upward reversal from the support level 1.1065 stopped the C-wave of the medium-term ABC correction (B) from October.
Given the strong Swiss franc sales, GBPCHF currency pair can be expected to rise further toward the next resistance level 1.1225.
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#WaveAnalysis
#USDCHF reversed from support level 0.8860
• Likely to rise to resistance level 0.9000
USDCHF currency pair recently reversed up from the key support level 0.8860 (which stopped the previous impulse wave (iii) at the start of this month).
The support zone near the support level 0.8860 was further strengthened by the lower daily Bollinger Band.
Given the strength of the support level 0.8860 and the bullish divergence on the daily Stochastic, USDCHF currency pair can be expected to rise further toward the next round resistance level 0.9000 (top of the previous correction (iv)).
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#USDCHF reversed from support level 0.8860
• Likely to rise to resistance level 0.9000
USDCHF currency pair recently reversed up from the key support level 0.8860 (which stopped the previous impulse wave (iii) at the start of this month).
The support zone near the support level 0.8860 was further strengthened by the lower daily Bollinger Band.
Given the strength of the support level 0.8860 and the bullish divergence on the daily Stochastic, USDCHF currency pair can be expected to rise further toward the next round resistance level 0.9000 (top of the previous correction (iv)).
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#Bitcoin attempted to approach $30K again on Thursday but hit lower highs than on Wednesday, although it didn’t pull back as hard. Notably, the Nasdaq high tech index was up an impressive 2.75%.
Bitcoin continues to form triangles in the short term and has a reasonably clear support line. At the same time, an impressive supply of sellers is preventing the price from fixing above the psychologically important $30K price.
Kaiko points to the increasing correlation between BTC and gold. The cryptocurrency’s dependence on precious metals has grown since early March. The banking crisis and the risks of financial turmoil are scaring investors around the world and causing them to buy up safe-haven assets.
According to CryptoQuant, bitcoin’s leverage ratio has reached an all-time low of 0.195. This reduces the volatility of the spot VC market, which is becoming less sensitive to futures market activity.
Bitcoin continues to form triangles in the short term and has a reasonably clear support line. At the same time, an impressive supply of sellers is preventing the price from fixing above the psychologically important $30K price.
Kaiko points to the increasing correlation between BTC and gold. The cryptocurrency’s dependence on precious metals has grown since early March. The banking crisis and the risks of financial turmoil are scaring investors around the world and causing them to buy up safe-haven assets.
According to CryptoQuant, bitcoin’s leverage ratio has reached an all-time low of 0.195. This reduces the volatility of the spot VC market, which is becoming less sensitive to futures market activity.
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#WaveAnalysis
#Nikkei225 broke resistance level 28645
• Likely to rise to resistance level 29250
Nikkei 225 index rising sharply after the price broke above the resistance level 28645 (which has been reversing the price from the end of August).
The breakout of the resistance level 28645.00 continues the active short-term impulse wave (iii), which belongs to the higher impulse waves 3 and (3).
Nikkei 225 index can be expected to rise further toward the next resistance level 29250 (target price for the completion of the active impulse wave (iii)).
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#Nikkei225 broke resistance level 28645
• Likely to rise to resistance level 29250
Nikkei 225 index rising sharply after the price broke above the resistance level 28645 (which has been reversing the price from the end of August).
The breakout of the resistance level 28645.00 continues the active short-term impulse wave (iii), which belongs to the higher impulse waves 3 and (3).
Nikkei 225 index can be expected to rise further toward the next resistance level 29250 (target price for the completion of the active impulse wave (iii)).
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#WaveAnalysis
#EURGBP under bearish pressure
• Likely to fall to support level 0.8740
EURGBP falling strongly after the price reversed down from the key resistance level 0.8860 (which has been reversing the price from March) standing near the upper daily Bollinger Band.
The downward reversal from the resistance level 0.8860 created the daily candlesticks reversal pattern Bearish Engulfing.
EURGBP can be expected to fall further toward the next support level 0.8740 (which has been reversing the price from January).
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#EURGBP under bearish pressure
• Likely to fall to support level 0.8740
EURGBP falling strongly after the price reversed down from the key resistance level 0.8860 (which has been reversing the price from March) standing near the upper daily Bollinger Band.
The downward reversal from the resistance level 0.8860 created the daily candlesticks reversal pattern Bearish Engulfing.
EURGBP can be expected to fall further toward the next support level 0.8740 (which has been reversing the price from January).
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#WaveAnalysis
#GBPAUD under bullish pressure
• Likely to rise to resistance level 1.9200
GBPAUD under the bullish pressure after the price broke the resistance level 1.8700 (which stopped the previous impulse wave 3 at the start of April).
The breakout of the resistance level 1.8700 accelerated the active minor impulse wave 5 from the middle of this month.
Given the prevailing daily uptrend, GBPAUD can be expected to rise further toward the next resistance level 1.9200 (intersecting with the daily up channel from February).
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#GBPAUD under bullish pressure
• Likely to rise to resistance level 1.9200
GBPAUD under the bullish pressure after the price broke the resistance level 1.8700 (which stopped the previous impulse wave 3 at the start of April).
The breakout of the resistance level 1.8700 accelerated the active minor impulse wave 5 from the middle of this month.
Given the prevailing daily uptrend, GBPAUD can be expected to rise further toward the next resistance level 1.9200 (intersecting with the daily up channel from February).
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Market Holiday: Labour Day
🚪Today is Labour Day in the UK and across Europe. Therefore
📈UK/EU stock markets will be closed today, so these stocks and several spot indices are unavailable for trading
🌾Agricultural futures will also be closing early.
💱FX, US Stocks and other markets remain open as usual
👉Check the market holidays page for the full schedule
🚪Today is Labour Day in the UK and across Europe. Therefore
📈UK/EU stock markets will be closed today, so these stocks and several spot indices are unavailable for trading
🌾Agricultural futures will also be closing early.
💱FX, US Stocks and other markets remain open as usual
👉Check the market holidays page for the full schedule
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#Bitcoin approached 30K again on Sunday, from where the selling intensified. The situation looks like the big players are playing games to warm up the thin market over the weekend and early trading hours in Asia, amplifying the amplitude of the move on relatively low volumes.
Worryingly, we have seen a series of declining tops in the last three weeks, and significant downside momentum is building faster and faster.
On the optimistic side, the avalanche of stop orders is not destabilising the market. Bitcoin is starting to buy back quickly as it approaches $28,000, where the 50-day moving average has shifted.
In terms of seasonality, May is considered a relative success for BTC. Over the past 12 years, bitcoin has ended the month up seven times and down five times. The average gain was 29.7%, and the average loss was 15.8%. Meanwhile, the last two Mays have disappointed BTC, with an average loss of 26% each.
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Worryingly, we have seen a series of declining tops in the last three weeks, and significant downside momentum is building faster and faster.
On the optimistic side, the avalanche of stop orders is not destabilising the market. Bitcoin is starting to buy back quickly as it approaches $28,000, where the 50-day moving average has shifted.
In terms of seasonality, May is considered a relative success for BTC. Over the past 12 years, bitcoin has ended the month up seven times and down five times. The average gain was 29.7%, and the average loss was 15.8%. Meanwhile, the last two Mays have disappointed BTC, with an average loss of 26% each.
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Oil has closed the gap but is ready to go lower
WTI oil stabilises near $75 for the third day at the lowest monthly level. The economic slowdown is dragging down the Crude, but OPEC+ coordination supports the market. Oil has returned to a range from which an exit promises to have a dam-breaking effect.
Volatility in oil declined after the market closed a 7% gap that had formed following an unexpected OPEC+ quota cut over the weekend in early April. The current level of around 75 also acted as the bottom of the trading range from December to March.
Oil's decline accelerated in the first half of March, finding support only near $64 as markets began to price in a reversal of the Fed's rate cut. OPEC quota cuts and Russia's voluntary production cuts pushed the price up to $83 by mid-month.
WTI oil stabilises near $75 for the third day at the lowest monthly level. The economic slowdown is dragging down the Crude, but OPEC+ coordination supports the market. Oil has returned to a range from which an exit promises to have a dam-breaking effect.
Volatility in oil declined after the market closed a 7% gap that had formed following an unexpected OPEC+ quota cut over the weekend in early April. The current level of around 75 also acted as the bottom of the trading range from December to March.
Oil's decline accelerated in the first half of March, finding support only near $64 as markets began to price in a reversal of the Fed's rate cut. OPEC quota cuts and Russia's voluntary production cuts pushed the price up to $83 by mid-month.
The 200-day moving average was a critical resistance level in the second half of April. Oil failed to breach this line and remained within the bearish trend. At the beginning of the week, the price fell below the 50-day moving average in a sharp move. The dynamics of oil near key moving averages prove that the market remains bearish, with deteriorating macroeconomic conditions.
The $65-67 area looks like an attractive target for the bears. There are many pivot points from 2021 onwards. Before that, there was significant resistance in 2019. In addition, the 200-week moving average, the most crucial indicator of the long-term trend in commodities, is close to $67.
Nevertheless, sellers should remain cautious, as a sustained decline in prices will almost certainly attract the attention of OPEC.
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The $65-67 area looks like an attractive target for the bears. There are many pivot points from 2021 onwards. Before that, there was significant resistance in 2019. In addition, the 200-week moving average, the most crucial indicator of the long-term trend in commodities, is close to $67.
Nevertheless, sellers should remain cautious, as a sustained decline in prices will almost certainly attract the attention of OPEC.
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China cools more than expected
China's PMIs released over the weekend were much weaker than expected, with the manufacturing index signalling a downturn.
The official manufacturing PMI fell to 49.2 in April from 51.9 the previous month and 51.4 expected. This sudden drop suggests that the economy had lost momentum much more quickly than analysts had expected, following a brief boom at the end of last year after the end of the 0-covid policy. The publication's commentary suggests a contraction in manufacturing demand after several months of rapid growth.
Historically, last month's levels are nothing to write home about. Chinese manufacturing activity is close to stagnation or even contraction, with a downtrend in the PMI from 2018 despite a very bumpy road due to COVID-19.
The non-manufacturing sector feels much better, losing 1.8 percentage points over the month to 56.4. The long history clearly shows that the growth rate of the non-manufacturing sector has long been a drag on the economy.
China's PMIs released over the weekend were much weaker than expected, with the manufacturing index signalling a downturn.
The official manufacturing PMI fell to 49.2 in April from 51.9 the previous month and 51.4 expected. This sudden drop suggests that the economy had lost momentum much more quickly than analysts had expected, following a brief boom at the end of last year after the end of the 0-covid policy. The publication's commentary suggests a contraction in manufacturing demand after several months of rapid growth.
Historically, last month's levels are nothing to write home about. Chinese manufacturing activity is close to stagnation or even contraction, with a downtrend in the PMI from 2018 despite a very bumpy road due to COVID-19.
The non-manufacturing sector feels much better, losing 1.8 percentage points over the month to 56.4. The long history clearly shows that the growth rate of the non-manufacturing sector has long been a drag on the economy.
Traditionally, market participants pay more attention to production dynamics as it sheds light on global trends and allows for assessing export and import potential, affecting the renminbi exchange rate. Moreover, production often acts as a leading indicator of economic trends.
In this context, it is unsurprising that the renminbi fell, and the #USDCNH rose on Monday. Last week it broke above its 200-day MA at 6.95 but did not dare to break through. At the same time, the pullback level to 61.8% of the November and February declines is also in this area.
A decisive break of this long-term trend indicator is likely to be postponed by the outcome of the Fed meeting. A move lower in the USDCNH could be the prologue to a move lower to 6.30 in the coming months. A sharp move higher would reclassify the pair's rise in recent weeks from a correction to a new advance and could lead to a significant increase in the pair's volatility.
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In this context, it is unsurprising that the renminbi fell, and the #USDCNH rose on Monday. Last week it broke above its 200-day MA at 6.95 but did not dare to break through. At the same time, the pullback level to 61.8% of the November and February declines is also in this area.
A decisive break of this long-term trend indicator is likely to be postponed by the outcome of the Fed meeting. A move lower in the USDCNH could be the prologue to a move lower to 6.30 in the coming months. A sharp move higher would reclassify the pair's rise in recent weeks from a correction to a new advance and could lead to a significant increase in the pair's volatility.
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#WaveAnalysis
#NZDJPY broke resistance level 83.80
• Likely to rise to resistance level 85.00
NZDJPY currency pair recently broke above the resistance level 83.80 (which stopped the previous waves 2, (1), (a) and B).
The breakout of the resistance level 83.80 continues the active medium-term impulse wave (3) from the end of April.
NZDJPY currency pair can be expected to rise further toward the next resistance level 85.00 (top of wave (B) from the start of March).
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#NZDJPY broke resistance level 83.80
• Likely to rise to resistance level 85.00
NZDJPY currency pair recently broke above the resistance level 83.80 (which stopped the previous waves 2, (1), (a) and B).
The breakout of the resistance level 83.80 continues the active medium-term impulse wave (3) from the end of April.
NZDJPY currency pair can be expected to rise further toward the next resistance level 85.00 (top of wave (B) from the start of March).
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#WaveAnalysis
#EURCAD reversed from long-term resistance level 1.5095
• Likely to fall to support level 1.4800
EURCAD currency pair previously reversed down strongly from the long-term resistance level 1.5095 (which has been steadily reversing the pair from the start of 2021).
The resistance level 1.5095 was strengthened by the resistance trendline of the weekly up channel from the start of this year.
Given the triple bearish divergence one the weekly Stochastic indicator, EURCAD currency pair can be expected to fall further toward the next support level 1.4800.
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#EURCAD reversed from long-term resistance level 1.5095
• Likely to fall to support level 1.4800
EURCAD currency pair previously reversed down strongly from the long-term resistance level 1.5095 (which has been steadily reversing the pair from the start of 2021).
The resistance level 1.5095 was strengthened by the resistance trendline of the weekly up channel from the start of this year.
Given the triple bearish divergence one the weekly Stochastic indicator, EURCAD currency pair can be expected to fall further toward the next support level 1.4800.
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#Bitcoin fell all day yesterday, losing around 6% to $27.6K, raising the question of whether we are seeing the start of a prolonged decline.
Bitcoin closed below its 50-day moving average on Monday. The price stays below that curve and is stuck at $28.0K after rising 1.3% to today. If it can't quickly surpass it again, Bitcoin's fall below $27K will pave the way for a move to $22K, where the 200-day passes, which became a turning point in March.
Twitter analyst Bluntz, who predicted a bear market bottom for BTC in 2018, expects Bitcoin to fall to $25K. In his view, the first cryptocurrency is unlikely to break $30,000 soon. BTC has completed a 5-wave and is now in a corrective A-B-C formation.
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Bitcoin closed below its 50-day moving average on Monday. The price stays below that curve and is stuck at $28.0K after rising 1.3% to today. If it can't quickly surpass it again, Bitcoin's fall below $27K will pave the way for a move to $22K, where the 200-day passes, which became a turning point in March.
Twitter analyst Bluntz, who predicted a bear market bottom for BTC in 2018, expects Bitcoin to fall to $25K. In his view, the first cryptocurrency is unlikely to break $30,000 soon. BTC has completed a 5-wave and is now in a corrective A-B-C formation.
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RBA rate hike helps AUD form reversal
The Reserve Bank of Australia surprisingly did what it promised to the markets. The RBA this morning raised the rate by 25 points to 3.85%, warning that it may further tighten monetary policy.
The Bank had previously urged markets to be prepared for such a move, but analysts and traders did not expect the change.
As a result of the "surprise", AUDUSD gained more than 1.3% in the three hours after the decision was announced to 0.6715, rolling back to 0.6690 at the time of writing. The AUDUSD has been trying to form a 'bottom' below 0.66 for the past two months, and the RBA decision creates the necessary positive momentum that has a high chance of starting a trend in the coming days.
The Reserve Bank of Australia surprisingly did what it promised to the markets. The RBA this morning raised the rate by 25 points to 3.85%, warning that it may further tighten monetary policy.
The Bank had previously urged markets to be prepared for such a move, but analysts and traders did not expect the change.
As a result of the "surprise", AUDUSD gained more than 1.3% in the three hours after the decision was announced to 0.6715, rolling back to 0.6690 at the time of writing. The AUDUSD has been trying to form a 'bottom' below 0.66 for the past two months, and the RBA decision creates the necessary positive momentum that has a high chance of starting a trend in the coming days.
The pressure on the Aussie in the last hours has more to do with general market wariness, where there is a pull into defensive assets and the dollar ahead of the Fed decision tomorrow evening. A quarter-point rate hike is also expected there. The RBA's latest move seems like an attempt to curb the widening of yield spreads between Australia and the US and support the Aussie.
The strengthening of the domestic currency can curb inflation, which stood at 7% in the first quarter, a sharper-than-expected decline from a peak of 7.8% a quarter earlier.
Now the #AUDUSD is trying to consolidate above its 50-day moving average. An ability to close the day above 0.6685 would make a test of the 200-day moving average (currently at 0.6730) an issue. The ability to consolidate above would be an essential signal of a long-term trend reversal.
However, one should remember that a similar signal triggered the AUDUSD to rise for the next three weeks in January but gave up all gains later.
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The strengthening of the domestic currency can curb inflation, which stood at 7% in the first quarter, a sharper-than-expected decline from a peak of 7.8% a quarter earlier.
Now the #AUDUSD is trying to consolidate above its 50-day moving average. An ability to close the day above 0.6685 would make a test of the 200-day moving average (currently at 0.6730) an issue. The ability to consolidate above would be an essential signal of a long-term trend reversal.
However, one should remember that a similar signal triggered the AUDUSD to rise for the next three weeks in January but gave up all gains later.
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#WaveAnalysis
#GBPJPY reversed from long-term resistance level 172.00
• Likely to fall to support level 168.85
GBPJPY currency pair recently reversed down strongly from the long-term resistance level 172.00 (former multi-month high from October), standing above the upper daily Bollinger Band.
The downward reversal from the resistance level 172.00 stopped the previous short-term impulse waves 3 and (v) of wave C from March.
Given the overbought daily Stochastic, GBPJPY can be expected to fall further toward the next support level 168.85 (former resistance from November and December).
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#GBPJPY reversed from long-term resistance level 172.00
• Likely to fall to support level 168.85
GBPJPY currency pair recently reversed down strongly from the long-term resistance level 172.00 (former multi-month high from October), standing above the upper daily Bollinger Band.
The downward reversal from the resistance level 172.00 stopped the previous short-term impulse waves 3 and (v) of wave C from March.
Given the overbought daily Stochastic, GBPJPY can be expected to fall further toward the next support level 168.85 (former resistance from November and December).
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