The cryptocurrency market capitalisation is marginally lower by 0.1% compared to 24 hours ago, recovering from a 2% drop at the end of the previous day. Most of the top ten cryptocurrencies are losing ground over the last day, while Bitcoin and XRP are slightly gaining.
Bitcoin has risen 0.3% in the last 24 hours and more than 1% since the start of the day. In the early hours of this morning, the price slipped close to $29.5K, the highest level since the end of April. The first cryptocurrency overcame a sharp decline on May 1st and is now testing downside resistance through last month's local highs. A consolidation above this level would be a significant signal for buyers and could trigger a growth surge.
Ethereum’s upward-sloping 50-day moving average regularly supports local dips, as in Bitcoin. The 61.8% Fibonacci retracement of the March-April momentum was also a nominal support line. This is also where the former resistance area from March is located, which now becomes support.
Bitcoin has risen 0.3% in the last 24 hours and more than 1% since the start of the day. In the early hours of this morning, the price slipped close to $29.5K, the highest level since the end of April. The first cryptocurrency overcame a sharp decline on May 1st and is now testing downside resistance through last month's local highs. A consolidation above this level would be a significant signal for buyers and could trigger a growth surge.
Ethereum’s upward-sloping 50-day moving average regularly supports local dips, as in Bitcoin. The 61.8% Fibonacci retracement of the March-April momentum was also a nominal support line. This is also where the former resistance area from March is located, which now becomes support.
The Swiss franc is losing ground due to low inflation
The Swiss franc declined, losing about 1% to 0.8920 after a fresh batch of macroeconomic data. The unemployment rate remains at 1.9%, a historic low. But at the same time, inflation is surprising, falling short of forecasts.
The consumer price index was virtually unchanged over the past month, and the annual inflation rate fell from 2.9% to 2.6%, while economists, on average, expected growth of 0.2% m/m and 2.8% y/y,
respectively. The current inflation rate is the lowest in the last 11 months and very close to the SNB target.
The latter fact has spurred speculation that the country's central bank will refrain from further tightening policy after raising rates by 225 points in the current monetary cycle. However, the head of SNB Jordan is in a hurry to moderate these expectations, not ruling out further rate hikes.
The Swiss franc declined, losing about 1% to 0.8920 after a fresh batch of macroeconomic data. The unemployment rate remains at 1.9%, a historic low. But at the same time, inflation is surprising, falling short of forecasts.
The consumer price index was virtually unchanged over the past month, and the annual inflation rate fell from 2.9% to 2.6%, while economists, on average, expected growth of 0.2% m/m and 2.8% y/y,
respectively. The current inflation rate is the lowest in the last 11 months and very close to the SNB target.
The latter fact has spurred speculation that the country's central bank will refrain from further tightening policy after raising rates by 225 points in the current monetary cycle. However, the head of SNB Jordan is in a hurry to moderate these expectations, not ruling out further rate hikes.
Switzerland's significantly lower inflation is mainly due to the performance of the franc, which is now close to the same levels from which it began its decline against the dollar in early 2021. For comparison, the #EURUSD is now 10% lower; at the worst point, it exceeded 22%.
The franc's strengthening accelerated in March, apparently due to the problems of US banks, which caused steady demand for safe havens such as Switzerland. However, having slipped below 0.8900, #USDCHF was close to the levels from which the SNB turned the pair to growth over the past 11 years.
It is hard to believe that this time the exchange rate will be reversed again by the intervention of the Central Bank since this would contradict the primary policy course. But over the years, support has been formed in this area, which will take a lot of work to pass.
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The franc's strengthening accelerated in March, apparently due to the problems of US banks, which caused steady demand for safe havens such as Switzerland. However, having slipped below 0.8900, #USDCHF was close to the levels from which the SNB turned the pair to growth over the past 11 years.
It is hard to believe that this time the exchange rate will be reversed again by the intervention of the Central Bank since this would contradict the primary policy course. But over the years, support has been formed in this area, which will take a lot of work to pass.
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US stocks and the dollar rose on healthy jobs market report
In April, the US economy added 253k jobs, surpassing expectations of 181k. Over the past 12 months, actual data has consistently exceeded expectations for this indicator.
However, the previous month’s downward revision was considerable, from 71k to 165k.
The unemployment rate fell to 3.4%, beating analysts’ expectations of an increase from 3.5% to 3.6%.
The labour force participation rate remains high at 62.6%, approaching the pre-COVID-19 shutdown level of 63.4%. The recovery can be attributed to a reduction in fear of illness and higher inflation, pushing people into work to maintain their standard of living.
In April, the US economy added 253k jobs, surpassing expectations of 181k. Over the past 12 months, actual data has consistently exceeded expectations for this indicator.
However, the previous month’s downward revision was considerable, from 71k to 165k.
The unemployment rate fell to 3.4%, beating analysts’ expectations of an increase from 3.5% to 3.6%.
The labour force participation rate remains high at 62.6%, approaching the pre-COVID-19 shutdown level of 63.4%. The recovery can be attributed to a reduction in fear of illness and higher inflation, pushing people into work to maintain their standard of living.
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Average hourly earnings rose by 0.5% m/m and 4.4% y/y, better than expected. Despite the rise in employment, the index of total hours worked per week has remained flat since the start of the year, a worrying signal also seen in 2007 and at the end of 2019.
Initially, the market reacted with technical selling of the dollar and buying of equity index futures but quickly digested the news and speculation that there are too few signs of inflationary overheating to force the Fed to raise rates further.
The current report argues for keeping rates at current levels for longer. A healthy labour market typically helps the dollar and stock market by highlighting the strength of the US economy compared to other investment destinations.
Initially, the market reacted with technical selling of the dollar and buying of equity index futures but quickly digested the news and speculation that there are too few signs of inflationary overheating to force the Fed to raise rates further.
The current report argues for keeping rates at current levels for longer. A healthy labour market typically helps the dollar and stock market by highlighting the strength of the US economy compared to other investment destinations.
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The total capitalisation of the cryptocurrency market fell by 2% to $1.14 trillion over the last 24 hours. Over the same period, bitcoin lost 2.6%, Ethereum lost 1.7%, and the top 10 altcoins lost between 1.4% (BNB) and 5% (Polygon).
Bitcoin lost around $1500 on Monday to $28.5K amid rumours of a possible collapse of Binance. The world's largest cryptocurrency exchange twice suspended BTC withdrawals due to network congestion.
The technical picture shows local victory for the bears, as the sharp drop in price started from the downside resistance that has been in place since the middle of last month. In a strong move, the price broke below the 50-day moving average. The price is testing support near $27K.
According to CryptoQuant, users withdrew more than 195,000 BTC (over $5.6 billion) from Binance in one day. In addition, according to Bloomberg, the US Department of Justice has launched an investigation into the exchange, suspecting it of violating sanctions against Russia.
Bitcoin lost around $1500 on Monday to $28.5K amid rumours of a possible collapse of Binance. The world's largest cryptocurrency exchange twice suspended BTC withdrawals due to network congestion.
The technical picture shows local victory for the bears, as the sharp drop in price started from the downside resistance that has been in place since the middle of last month. In a strong move, the price broke below the 50-day moving average. The price is testing support near $27K.
According to CryptoQuant, users withdrew more than 195,000 BTC (over $5.6 billion) from Binance in one day. In addition, according to Bloomberg, the US Department of Justice has launched an investigation into the exchange, suspecting it of violating sanctions against Russia.
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For the second month, the Dollar Index finds support from declines in the 101 area. Dollar bulls are defending critical levels in the major currency pairs, which could significantly increase the psychological pressure on the US currency. The resolution of this situation is likely to come from politics and macroeconomic data.
The Dollar Index has been hovering around the 101.30 level for the past four weeks. Attempts to break above 102 have been met with increased selling, but the sellers aren’t picking up the declines below 101 either.
The 101 area of the Dollar Index appears to be more important than the round 100 level, as the Dollar’s rally in the first half of 2020 was halted near this level, apart from a brief spike on the unexpected first lockdowns.
The same level 13 months ago triggered an acceleration of dollar inflows and became a game-changing switch in the currency market. The new switch promises to be as important as last year’s, so it will unlikely be quick and easy.
The Dollar Index has been hovering around the 101.30 level for the past four weeks. Attempts to break above 102 have been met with increased selling, but the sellers aren’t picking up the declines below 101 either.
The 101 area of the Dollar Index appears to be more important than the round 100 level, as the Dollar’s rally in the first half of 2020 was halted near this level, apart from a brief spike on the unexpected first lockdowns.
The same level 13 months ago triggered an acceleration of dollar inflows and became a game-changing switch in the currency market. The new switch promises to be as important as last year’s, so it will unlikely be quick and easy.
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Moreover, this change is going to take much work. Between 2006 and 2014, the area of 89 for DXY was a similar historical resistance. It then became an insurmountable support from which the Dollar was called upon in the recessions of 2018 and 2021.
The more localised picture remains on the sell side of the Dollar. The DXY reversed its decline at the end of September last year on signals that the Fed would slow the pace of rate hikes and pause soon. The rally from February to March was based on hawkish inflation data and expectations that the final rate would be higher than initially expected.
The banking problems nailed the Dollar to support at 101 as markets put an imminent reversal of a rate cut back on the agenda. Last week’s employment data and the Fed’s decision did not change market expectations meaningfully.
The more localised picture remains on the sell side of the Dollar. The DXY reversed its decline at the end of September last year on signals that the Fed would slow the pace of rate hikes and pause soon. The rally from February to March was based on hawkish inflation data and expectations that the final rate would be higher than initially expected.
The banking problems nailed the Dollar to support at 101 as markets put an imminent reversal of a rate cut back on the agenda. Last week’s employment data and the Fed’s decision did not change market expectations meaningfully.
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However, tomorrow’s inflation data for April may do so. Reading well below 5% YoY would allow the Fed to talk more about outperforming inflation and stop raising rates. On the other hand, a sudden acceleration will lead to a pullback in the Dollar as the markets anticipate more rate hikes in June.
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#WaveAnalysis
#USDCHF reversed from key support level 0.8860
• Likely to rise to resistance level 0.8965
USDCHF currency pair recently reversed up from the key support level 0.8860 (which has been steadily reversing the pair from the middle of April).
The upward reversal from the support level 0.8860 follows the earlier upward reversal which created the daily Morning Star Doji.
Given the triple bullish divergence on the daily Stochastic, USDCHF can be expected to rise further toward the next resistance level 0.8965 (which stopped the earlier waves (iv) and (ii)).
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#USDCHF reversed from key support level 0.8860
• Likely to rise to resistance level 0.8965
USDCHF currency pair recently reversed up from the key support level 0.8860 (which has been steadily reversing the pair from the middle of April).
The upward reversal from the support level 0.8860 follows the earlier upward reversal which created the daily Morning Star Doji.
Given the triple bullish divergence on the daily Stochastic, USDCHF can be expected to rise further toward the next resistance level 0.8965 (which stopped the earlier waves (iv) and (ii)).
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#WaveAnalysis
#AUDCAD reversed from resistance level 0.9100
• Likely to fall to support level 0.9015
AUDCAD earlier reversed down from the pivotal resistance level 0.9100 (which has been repeatedly reversing the price from the start of April).
The downward reversal from the resistance level 0.9100 is the 4th consecutive downward reversal from this price level – signalling its strength.
Given the strength of the resistance level 0.9100, AUDCAD can be expected to fall further toward the next support level 0.9015 (yesterday’s low).
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#AUDCAD reversed from resistance level 0.9100
• Likely to fall to support level 0.9015
AUDCAD earlier reversed down from the pivotal resistance level 0.9100 (which has been repeatedly reversing the price from the start of April).
The downward reversal from the resistance level 0.9100 is the 4th consecutive downward reversal from this price level – signalling its strength.
Given the strength of the resistance level 0.9100, AUDCAD can be expected to fall further toward the next support level 0.9015 (yesterday’s low).
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The crypto market capitalisation grew 0.28% over the last 24 hours, as much as Bitcoin over this period. The market is now in a wait-and-see mode after Monday's sharp drop. The top 10 altcoins show mixed dynamics, ranging from -2% (Polygon) to +1.75% (Litecoin).
Bitcoin is trading around $27.6K, remaining near the lows of the last two months and below the 50-day moving average. The bulls can't gain more than a pause in the slide, but the market has yet to return to the upside.
Moving out of the $27-28.5K range can start a broader move towards a breakout with targets at $25K and $30K, respectively.
According to CoinShares, investments in crypto funds fell by $54 million last week, the third consecutive week of outflows. Bitcoin investments decreased by $32 million, Ethereum by $2 million, and inflows in funds allowing to short Bitcoin fell by a record $23 million.
Bitcoin is trading around $27.6K, remaining near the lows of the last two months and below the 50-day moving average. The bulls can't gain more than a pause in the slide, but the market has yet to return to the upside.
Moving out of the $27-28.5K range can start a broader move towards a breakout with targets at $25K and $30K, respectively.
According to CoinShares, investments in crypto funds fell by $54 million last week, the third consecutive week of outflows. Bitcoin investments decreased by $32 million, Ethereum by $2 million, and inflows in funds allowing to short Bitcoin fell by a record $23 million.
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German consumer inflation slowed to 7.2% y/y in April, Destatis said in its final estimate.
March data for other price indicators point to further easing of pressure. For example, the wholesale price index rose by only 2% y/y in March, and import prices were 4.8% lower than 12 months earlier. Gas prices at the European hub continue to fall, reaching $403 per 1,000 units. This is the lowest level since July 2021 and the upper limit of the typical price range since 2011.
The slowdown in inflation allows the ECB to hold back and end the hiking cycle sooner, which is potentially negative for the euro. But now investors should pay more attention to how ECB officials assess the situation, as their job of taming inflation is not yet considered done.
In her speech today, Lagarde once again reminded us that more action needs to be taken to curb inflation, which implies further rate hikes. This stance is more hawkish than the Fed, hinting at a pause and an end to the tightening cycle.
March data for other price indicators point to further easing of pressure. For example, the wholesale price index rose by only 2% y/y in March, and import prices were 4.8% lower than 12 months earlier. Gas prices at the European hub continue to fall, reaching $403 per 1,000 units. This is the lowest level since July 2021 and the upper limit of the typical price range since 2011.
The slowdown in inflation allows the ECB to hold back and end the hiking cycle sooner, which is potentially negative for the euro. But now investors should pay more attention to how ECB officials assess the situation, as their job of taming inflation is not yet considered done.
In her speech today, Lagarde once again reminded us that more action needs to be taken to curb inflation, which implies further rate hikes. This stance is more hawkish than the Fed, hinting at a pause and an end to the tightening cycle.
#Gold showed very high volatility on Thursday and Friday, rising to $2081 and falling below $2000 in less than 48 hours.
The sharp rise and fall in gold at the end of last week had a close inverse correlation with US regional banks. Their problems triggered a short squeeze after the close of the regular session on Wednesday. However, the rapid recovery of the banks on Friday caused a sharp pullback.
Banks, by their very nature, are vulnerable to public sentiment. And from that point of view, it is unlikely that the outflow of deposits from regional banks will stop without outside intervention, so the list of bankruptcies is still being determined.
The much more difficult question is whether gold will continue to be in demand of bad news about banks. The gold rallies on the convulsions of regional credit institutions were more about a liquidity crisis, and gradually capital may flow back into dollar-denominated debt assets, which are currently offering impressive yields.
The sharp rise and fall in gold at the end of last week had a close inverse correlation with US regional banks. Their problems triggered a short squeeze after the close of the regular session on Wednesday. However, the rapid recovery of the banks on Friday caused a sharp pullback.
Banks, by their very nature, are vulnerable to public sentiment. And from that point of view, it is unlikely that the outflow of deposits from regional banks will stop without outside intervention, so the list of bankruptcies is still being determined.
The much more difficult question is whether gold will continue to be in demand of bad news about banks. The gold rallies on the convulsions of regional credit institutions were more about a liquidity crisis, and gradually capital may flow back into dollar-denominated debt assets, which are currently offering impressive yields.
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However, it is worth taking a step back to realise that the banks' problems are not the only driver for gold. Investors should also bear in mind the trend towards increasing purchases of gold as a reserve by emerging market central banks, which are also exposed to the risk of being hit by US or EU sanctions that block settlement in dollars and euros.
We also noted earlier a strong technical disposition in gold, whose price is approaching historical highs much more smoothly than in 2020 or 2022, leaving more strength for a breakout.
An important bullish signal for gold could be a weekly close above $2035, the highest close in history. However, a much smoother ride with a touch of the lower end of the uptrend range around $2000 is seen as a more likely scenario before the uptrend resumes.
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We also noted earlier a strong technical disposition in gold, whose price is approaching historical highs much more smoothly than in 2020 or 2022, leaving more strength for a breakout.
An important bullish signal for gold could be a weekly close above $2035, the highest close in history. However, a much smoother ride with a touch of the lower end of the uptrend range around $2000 is seen as a more likely scenario before the uptrend resumes.
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#WaveAnalysis
#USDCAD reversed from support level 1.3310
• Likely to rise to resistance level 1.3500
USDCAD recently reversed up from the key support level 1.3310 (which has been steadily reversing the price from November).
The support level 1.3310 was further strengthened by the lower daily Bollinger Band and by the 50% Fibonacci correction of the upward impulse from August.
Given the bullish divergence on the daily Stochastic, USDCAD can be expected to rise further toward the next resistance level 1.3500.
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#USDCAD reversed from support level 1.3310
• Likely to rise to resistance level 1.3500
USDCAD recently reversed up from the key support level 1.3310 (which has been steadily reversing the price from November).
The support level 1.3310 was further strengthened by the lower daily Bollinger Band and by the 50% Fibonacci correction of the upward impulse from August.
Given the bullish divergence on the daily Stochastic, USDCAD can be expected to rise further toward the next resistance level 1.3500.
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#WaveAnalysis
#CADJPY reversed from pivotal resistance level 101.00
• Likely to fall to support level 99,00
CADJPY earlier reversed down once again from the pivotal resistance level 101.00 (which has reversed the pair multiple times from December), strengthened by the upper daily Bollinger Band.
The downward reversal from the resistance level 101.00 stopped the previous impulse wave C.
Given the bearish divergence on the daily Stochastic, CADJPY can be expected to fall further toward the next support level 99,00.
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#CADJPY reversed from pivotal resistance level 101.00
• Likely to fall to support level 99,00
CADJPY earlier reversed down once again from the pivotal resistance level 101.00 (which has reversed the pair multiple times from December), strengthened by the upper daily Bollinger Band.
The downward reversal from the resistance level 101.00 stopped the previous impulse wave C.
Given the bearish divergence on the daily Stochastic, CADJPY can be expected to fall further toward the next support level 99,00.
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#Bitcoin rallied at the start of Wednesday's US session but unexpectedly plunged $1400 or 5% to $26.7K mid-session. This short-term dip shows continued demand for Bitcoin on dips below $27.5K.
The sharp price drop has sparked rumours that US government officials were behind it, selling previously confiscated Bitcoins. However, we also note that the fall was preceded by a rally, during which speculators may have built up liquidity for a following dump.
Either way, the price dynamics are becoming increasingly bearish: the formation of a series of descending highs, a consolidation below the 50-day moving average and a break of the April lows suggest that sellers are dominating.
#Ethereum is also forming horizontal support at $1830, which has existed since early April. The fact that the price is increasingly testing this level, and one needs to develop a sustainable rally, makes one cautious about its short-term prospects.
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The sharp price drop has sparked rumours that US government officials were behind it, selling previously confiscated Bitcoins. However, we also note that the fall was preceded by a rally, during which speculators may have built up liquidity for a following dump.
Either way, the price dynamics are becoming increasingly bearish: the formation of a series of descending highs, a consolidation below the 50-day moving average and a break of the April lows suggest that sellers are dominating.
#Ethereum is also forming horizontal support at $1830, which has existed since early April. The fact that the price is increasingly testing this level, and one needs to develop a sustainable rally, makes one cautious about its short-term prospects.
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US price growth remains above the Fed target
US consumer inflation slowed to 4.9%, just below the expected 5.0% and unchanged from the previous month. The initial market impulse was to sell the dollar and buy equities as the slowdown in price growth brings the end of the rate hike phase and the Fed’s dovish stance closer.
However, the strong market move had no chance of being sustained as it was too early to celebrate victory over inflation. Moreover, there are increasing signs that an inflationary spiral is taking hold.
US consumer inflation slowed to 4.9%, just below the expected 5.0% and unchanged from the previous month. The initial market impulse was to sell the dollar and buy equities as the slowdown in price growth brings the end of the rate hike phase and the Fed’s dovish stance closer.
However, the strong market move had no chance of being sustained as it was too early to celebrate victory over inflation. Moreover, there are increasing signs that an inflationary spiral is taking hold.