#WaveAnalysis
#GBPAUD rising inside impulse wave 3
Likely to reach resistance level 1.9130
GBPAUD currency pair continues to rise inside the minor impulse wave 3, which started earlier with the daily Bullish Engulfing from the support level 1.8525.
The active minor impulse wave 3 belongs to the intermediate impulse sequence (3) from February.
Given the prevailing uptrend, GBPAUD can be expected to rise further toward the next resistance level 1.9130 (which stopped the previous impulse wave (c) at the end of last month).
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#GBPAUD rising inside impulse wave 3
Likely to reach resistance level 1.9130
GBPAUD currency pair continues to rise inside the minor impulse wave 3, which started earlier with the daily Bullish Engulfing from the support level 1.8525.
The active minor impulse wave 3 belongs to the intermediate impulse sequence (3) from February.
Given the prevailing uptrend, GBPAUD can be expected to rise further toward the next resistance level 1.9130 (which stopped the previous impulse wave (c) at the end of last month).
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#WaveAnalysis
#AUDJPY reversed from resistance level 97.50
Likely to fall to support level 95.00
AUDJPY currency pair recently reversed down from the resistance level 97.50, which stopped the weekly uptrend in the middle of last year.
The downward reversal from the resistance level 97.50 stopped the previous weekly upward impulse sequence from March .
Given the strength of the resistance level 97.50 and the overbought weekly Stochastic, AUDJPY can be expected to correct down further to the next string support level 95.00.
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#AUDJPY reversed from resistance level 97.50
Likely to fall to support level 95.00
AUDJPY currency pair recently reversed down from the resistance level 97.50, which stopped the weekly uptrend in the middle of last year.
The downward reversal from the resistance level 97.50 stopped the previous weekly upward impulse sequence from March .
Given the strength of the resistance level 97.50 and the overbought weekly Stochastic, AUDJPY can be expected to correct down further to the next string support level 95.00.
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Short-term vulnerability for precious metals
After a very mixed start to June, platinum, silver and gold are moving into a friendly downtrend. However, a technical correction is unlikely to break the long-term bullish trend.
#Platinum has lost over 3% since the beginning of the month, adding to the previous 10% drop from May's highs, to end the month near $960, the lows of the second half of March.
The current sell-off looks like a liquidation of positions for funds focused on the longer-term technical picture. We see increased selling pressure for the third session back-to-back following a break below the 200 and 50-week moving averages (MA). However, platinum has not entered oversold territory, leaving the potential for a decline towards $900, where it has repeatedly found support since late 2015.
After a very mixed start to June, platinum, silver and gold are moving into a friendly downtrend. However, a technical correction is unlikely to break the long-term bullish trend.
#Platinum has lost over 3% since the beginning of the month, adding to the previous 10% drop from May's highs, to end the month near $960, the lows of the second half of March.
The current sell-off looks like a liquidation of positions for funds focused on the longer-term technical picture. We see increased selling pressure for the third session back-to-back following a break below the 200 and 50-week moving averages (MA). However, platinum has not entered oversold territory, leaving the potential for a decline towards $900, where it has repeatedly found support since late 2015.
#Silver is testing support at $23.2 for the third time since early June, following a sharp 3% fall on Tuesday. However, the metal has rallied more than 7.5% in the two weeks since the end of May. The price has reversed and failed to break above the 50-day MA and the 50% level from May. Silver would need to fall another $1 to $22.15 to reach strong support at the 50 and 200-week MA.
#Gold's bounce back to $1931/oz took it back to the June lows and has not been consistently lower since March. The multi-year bullish trend in 2018 was interrupted by a brief dip below the 200-week MA in August-November last year, the period of global central banks' most aggressive rate hikes. This line is now targeting $1860 by the end of the year.
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The market capitalisation of cryptocurrencies rose 5.7% in the last 24 hours to 1,134 trillion. Bitcoin was the engine of growth, but buyers quickly expanded to some altcoins. Bitcoin is up 7.6%, Ethereum is up 4.7%, and the top altcoins are up from a modest 1.9% (XRP) to 9.4% (Litecoin).
Bitcoin briefly topped $29K at the start of trading on Wednesday. In terms of technical analysis, this is an important bullish signal as the price closed above its 50-day moving average and above previous local highs in a sharp move on Tuesday.
This move confirms the breakdown of the downtrend that has been in place for the past two months. The next target for the bulls is the area between the April and May highs at $29.4-$30.4K.
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Bitcoin briefly topped $29K at the start of trading on Wednesday. In terms of technical analysis, this is an important bullish signal as the price closed above its 50-day moving average and above previous local highs in a sharp move on Tuesday.
This move confirms the breakdown of the downtrend that has been in place for the past two months. The next target for the bulls is the area between the April and May highs at $29.4-$30.4K.
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Persistent UK inflation will force the Bank of England to do more
UK consumer inflation is in no hurry to recede. Fresh estimates for May showed prices up by 0.7%, following even stronger rises in the previous three months.
Overall, the CPI rose by 4.2% between February and May. Year-over-year price growth stood at 8.7% in May. And the monthly rate of price increases does not give any hope that inflation is on the right track.
Core inflation continues to accelerate, reaching 7.1% y/y, the highest level since 1992. And this upward spiral is the most dangerous part of the inflation report, which overshoots the period of slowing inflation from January to March.
UK consumer inflation is in no hurry to recede. Fresh estimates for May showed prices up by 0.7%, following even stronger rises in the previous three months.
Overall, the CPI rose by 4.2% between February and May. Year-over-year price growth stood at 8.7% in May. And the monthly rate of price increases does not give any hope that inflation is on the right track.
Core inflation continues to accelerate, reaching 7.1% y/y, the highest level since 1992. And this upward spiral is the most dangerous part of the inflation report, which overshoots the period of slowing inflation from January to March.
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What is surprising is the continued slowdown in producer prices. Producer input prices in May were 0.5% higher than a year earlier but weaker than the 1.2% expected and last month's 4.2%. Producer selling prices rose by 2.9%, against expectations of 3.6% and the previous month's 5.2%. Over the month, prices are down 1.5% and 0.5%, respectively, but retailers continue to pass on the gains in final prices.
This is a very important inflation report ahead of the Bank of England's interest rate decision tomorrow.
Markets have priced in a 25-point rise to 4.75%. It is unlikely that the central bank will dare to surprise with a sharper tightening. However, it would be worth bracing for more hawkish rhetoric suggesting that the hikes are far from over. This could be a bullish signal for the GBP, but to maintain the uptrend in GBPUSD, the Bank of England will have to signal that its final rate level will be higher than that of the Fed.
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This is a very important inflation report ahead of the Bank of England's interest rate decision tomorrow.
Markets have priced in a 25-point rise to 4.75%. It is unlikely that the central bank will dare to surprise with a sharper tightening. However, it would be worth bracing for more hawkish rhetoric suggesting that the hikes are far from over. This could be a bullish signal for the GBP, but to maintain the uptrend in GBPUSD, the Bank of England will have to signal that its final rate level will be higher than that of the Fed.
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#WaveAnalysis
#EURAUD broke round resistance level 1.6000
Likely to rise to resistance level 1.6300
EURAUD currency pair recently broke the round resistance level 1.6000, former strong support from April of last year.
The breakout of the resistance level 1.6000 accelerated the active short-term correction 2.
Given the strongly bearish AUD sentiment seen across the FX markets today, EURAUD can be expected to rise further to the next resistance level 1.6300 (target price for the completion of the active correction 2).
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#EURAUD broke round resistance level 1.6000
Likely to rise to resistance level 1.6300
EURAUD currency pair recently broke the round resistance level 1.6000, former strong support from April of last year.
The breakout of the resistance level 1.6000 accelerated the active short-term correction 2.
Given the strongly bearish AUD sentiment seen across the FX markets today, EURAUD can be expected to rise further to the next resistance level 1.6300 (target price for the completion of the active correction 2).
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#WaveAnalysis
Boeing (#BA) reversed from powerful resistance level 220.00
Likely to fall to support level 200.40
Boeing recently reversed down from the powerful resistance level 220.00, which is the upper border of the sideways price range inside which the price has been trading from February.
The downward reversal from the resistance level 220.00 started the active short-term correction (iv).
Given the strength of the resistance level 220.00, Boeing can be expected to fall further to the next support level 200.40 (low of the daily Hammer from the start of this month).
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Boeing (#BA) reversed from powerful resistance level 220.00
Likely to fall to support level 200.40
Boeing recently reversed down from the powerful resistance level 220.00, which is the upper border of the sideways price range inside which the price has been trading from February.
The downward reversal from the resistance level 220.00 started the active short-term correction (iv).
Given the strength of the resistance level 220.00, Boeing can be expected to fall further to the next support level 200.40 (low of the daily Hammer from the start of this month).
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The crypto market has gained another 3.9% in the past 24 hours, reaching a capitalisation of $1.18 trillion. It has diverged from the stock indices, which have fallen sharply in the previous days due to expectations of a rate hike.
#Bitcoin has surged more than 15% in two days, revisiting the area of April highs just above 30k. However, this is where the recovery has paused.
Bitcoin needs to consolidate a bit before it can resume its ascent. Moreover, there are doubts that the cryptocurrency rally will continue soon, as the stock indices create a challenging environment for risk-sensitive assets across the board.
The technical targets for the BTCUSD correction are the 29.3 and 28.5 levels, 76.4% and 61.8% of the latest rally, respectively. If the decline is halted at either of these levels, we could expect new multi-month highs soon.
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#Bitcoin has surged more than 15% in two days, revisiting the area of April highs just above 30k. However, this is where the recovery has paused.
Bitcoin needs to consolidate a bit before it can resume its ascent. Moreover, there are doubts that the cryptocurrency rally will continue soon, as the stock indices create a challenging environment for risk-sensitive assets across the board.
The technical targets for the BTCUSD correction are the 29.3 and 28.5 levels, 76.4% and 61.8% of the latest rally, respectively. If the decline is halted at either of these levels, we could expect new multi-month highs soon.
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The Bank of England’s expected surprise
The Bank of England raised its key rate by 50bp to 5.00% - a sharper move than analysts who had made their forecasts earlier in the week had expected. However, it's a logical move, given that the latest inflation data from the previous day exceeded both market expectations and the Bank's forecasts. We should have expected a tougher stance from the central bank, given the persistently high inflation in the UK.
In a companion commentary, the Bank of England acknowledged the secondary inflationary effects, from external shocks to rising service prices, solid consumer demand and a tight labour market. The forced cooling of the economy is a classic monetary policy response to the last two problems: developed country central banks are tightening policy to fight inflation until they get enough evidence of cooling final demand.
The Bank of England raised its key rate by 50bp to 5.00% - a sharper move than analysts who had made their forecasts earlier in the week had expected. However, it's a logical move, given that the latest inflation data from the previous day exceeded both market expectations and the Bank's forecasts. We should have expected a tougher stance from the central bank, given the persistently high inflation in the UK.
In a companion commentary, the Bank of England acknowledged the secondary inflationary effects, from external shocks to rising service prices, solid consumer demand and a tight labour market. The forced cooling of the economy is a classic monetary policy response to the last two problems: developed country central banks are tightening policy to fight inflation until they get enough evidence of cooling final demand.
The market reaction to the rate surprise deserves a separate mention. GBPUSD jumped 60 pips up to 1.2840 and fell 100 pips down to 1.2740 within 10 minutes of the decision being published.
This was obviously due to the trading robots working off the news headlines but ran into resistance from the sellers near the highs at last week's close. However, the pound soon stabilised near the day’s opening levels, as markets saw the latest decision consistent with the available economic data.
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This was obviously due to the trading robots working off the news headlines but ran into resistance from the sellers near the highs at last week's close. However, the pound soon stabilised near the day’s opening levels, as markets saw the latest decision consistent with the available economic data.
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#WaveAnalysis
#CADJPY broke resistance level 107.60
Likely to rise to resistance level 110.
CADJPY under the bullish pressure after the earlier breakout of the resistance level 107.60, which stopped the previous minor impulse wave (i) earlier this month.
The breakout of the resistance level 107.60 accelerated the active short-term impulse wave 5 pf the intermediate impulse sequence (C) from the start of May.
Given the prevailing daily uptrend , CADJPY can be expected to rise further to the next resistance level 110.00 (target for the completion of the active impulse sequence (C).
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#CADJPY broke resistance level 107.60
Likely to rise to resistance level 110.
CADJPY under the bullish pressure after the earlier breakout of the resistance level 107.60, which stopped the previous minor impulse wave (i) earlier this month.
The breakout of the resistance level 107.60 accelerated the active short-term impulse wave 5 pf the intermediate impulse sequence (C) from the start of May.
Given the prevailing daily uptrend , CADJPY can be expected to rise further to the next resistance level 110.00 (target for the completion of the active impulse sequence (C).
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Crypto market cap has adjusted 0.65% in the past 24 hours to 1.17 trillion, remaining near the highs since early May. The correction is primarily due to a 0.55% dollar strengthening over the same period. The current dynamic is still a halt after a 16% rally but not a correction.
#Bitcoin is frozen at $30K, a significant technical level. These levels were pivotal for the first cryptocurrency in April, and last May, it took more than a month for the bears to sell the rate lower. Also, a furious part of the crypto rally started from this level in early 2021. It's worth being prepared for quite a long consolidation, but this week's bullish breakout suggests that long-term investors have already moved to accumulate Bitcoin on drawdowns.
#Ethereum's dynamics are settling into a general uptrend channel with buying on downturns, roughly repeating the dynamics we've seen for 2019 and 2020. It could take months before a FOMO rally.
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#Bitcoin is frozen at $30K, a significant technical level. These levels were pivotal for the first cryptocurrency in April, and last May, it took more than a month for the bears to sell the rate lower. Also, a furious part of the crypto rally started from this level in early 2021. It's worth being prepared for quite a long consolidation, but this week's bullish breakout suggests that long-term investors have already moved to accumulate Bitcoin on drawdowns.
#Ethereum's dynamics are settling into a general uptrend channel with buying on downturns, roughly repeating the dynamics we've seen for 2019 and 2020. It could take months before a FOMO rally.
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The Euro suffered a setback after the June PMIs revealed a slowdown in economic activity. Analysts were caught off guard by the contraction in French services, which dropped from 52.5 to 48.0 - far below the forecast of 52.2. Manufacturing also disappointed, staying below 50 for the tenth time in twelve months.
Germany followed with a grim report, showing a sharp decline in both manufacturing and services. The manufacturing PMI plunged from 43.2 to 41.0 (43.6 expected), and the services PMI slipped from 57.2 to 54.1 (56.3 expected).
These poor results weighed on the euro zone’s overall performance, where the composite business activity index fell to 50.3, its lowest level since January. The manufacturing PMI came in at 43.6, signalling a severe contraction in the region’s economy soon. Apart from the Covid dip, it has only been lower between October 2008 and May 2009, when the economy shrank by more than 5%. Although the current situation is not as dire, fears are mounting.
Germany followed with a grim report, showing a sharp decline in both manufacturing and services. The manufacturing PMI plunged from 43.2 to 41.0 (43.6 expected), and the services PMI slipped from 57.2 to 54.1 (56.3 expected).
These poor results weighed on the euro zone’s overall performance, where the composite business activity index fell to 50.3, its lowest level since January. The manufacturing PMI came in at 43.6, signalling a severe contraction in the region’s economy soon. Apart from the Covid dip, it has only been lower between October 2008 and May 2009, when the economy shrank by more than 5%. Although the current situation is not as dire, fears are mounting.
The #EURUSD lost around 1.5% in less than a day after touching 1.10 in the middle of the European session on Thursday. It accelerated as it broke below 1.0920 on Friday morning following the release of the Eurozone PMI estimates.
Intraday, the EURUSD is hovering around its 50-day moving average. If it can hold above this level in the coming days, it could attract active buyers and further push the pair to test previous highs above 1.1070. However, weak macroeconomic data and dwindling risk appetite in global markets increase the odds of a downward move, at least to the lower border of the rising channel at 1.0700 or further to the previous local lows at 1.0550.
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Intraday, the EURUSD is hovering around its 50-day moving average. If it can hold above this level in the coming days, it could attract active buyers and further push the pair to test previous highs above 1.1070. However, weak macroeconomic data and dwindling risk appetite in global markets increase the odds of a downward move, at least to the lower border of the rising channel at 1.0700 or further to the previous local lows at 1.0550.
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#WaveAnalysis
#USDJPY broke resistance level 142.00
– Likely to rise to resistance level 145.00
USDJPY recently broke above the resistance level 142.00, former top of the minor correction (4) from last November.
The breakout of the resistance level 142.00 coincided with the breakout of the wide daily up channel from January – which accelerated active short-term impulse wave 3.
Given the strong daily uptrend, USDJPY can be expected to rise further toward the next resistance level 145.00 (forecast price for the completion of the active impulse 3).
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#USDJPY broke resistance level 142.00
– Likely to rise to resistance level 145.00
USDJPY recently broke above the resistance level 142.00, former top of the minor correction (4) from last November.
The breakout of the resistance level 142.00 coincided with the breakout of the wide daily up channel from January – which accelerated active short-term impulse wave 3.
Given the strong daily uptrend, USDJPY can be expected to rise further toward the next resistance level 145.00 (forecast price for the completion of the active impulse 3).
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#WaveAnalysis
#AUDNZD under bearish pressure
– Likely to fall to support level 1.0800
AUDNZD currency pair under the bearish pressure after the pair broke the support level 1.090 , low of the Bullish Engulfing from the start of this month, former monthly high from April.
The breakout of the support level 1.090 accelerated active short-term corrective wave 2.
Given the strongly bearish AUD sentiment, AUDNZD can be expected to fall further toward the next support level 1.0800 (50% Fibonacci correction of the previous impulse wave 1).
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#AUDNZD under bearish pressure
– Likely to fall to support level 1.0800
AUDNZD currency pair under the bearish pressure after the pair broke the support level 1.090 , low of the Bullish Engulfing from the start of this month, former monthly high from April.
The breakout of the support level 1.090 accelerated active short-term corrective wave 2.
Given the strongly bearish AUD sentiment, AUDNZD can be expected to fall further toward the next support level 1.0800 (50% Fibonacci correction of the previous impulse wave 1).
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#WaveAnalysis #AMZN
Amazon broke resistance level 127.30
Likely to rise to resistance level 135.00
Amazon continues to rise steadily after the price broke above the key resistance level 127.30, which has been reversing the price from the start of this month.
The breakout of the resistance level 127.30 accelerated active short-term impulse wave (iii) – which belongs to the higher order impulse waves 5 and (C).
Given the clear daily uptrend, Amazon can be expected to rise further toward the next resistance level 135.00 (target for the completion of the active impulse wave (iii)).
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Amazon broke resistance level 127.30
Likely to rise to resistance level 135.00
Amazon continues to rise steadily after the price broke above the key resistance level 127.30, which has been reversing the price from the start of this month.
The breakout of the resistance level 127.30 accelerated active short-term impulse wave (iii) – which belongs to the higher order impulse waves 5 and (C).
Given the clear daily uptrend, Amazon can be expected to rise further toward the next resistance level 135.00 (target for the completion of the active impulse wave (iii)).
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