Crypto market capitalisation was up 1.6% over 24 hours to $1.066 trillion, with impressive gains on Wednesday afternoon. Following the strong rally in US tech stocks, buyers are gently picking up cryptocurrencies after the recent sell-off.
#Bitcoin touched a low for the week of $25.33K - above the local June lows of $24.7K, fuelling hopes that the uptrend is still in play. Meanwhile, BTCUSD remains below its 200-week average and the lower boundary of its former bull corridor.
Technically, Bitcoin is dominated by downside risks, with the potential to fall to $23.8K, where the 50-week moving average lies. However, we see Wednesday's rebound as short-term profit-taking on short positions amid the most oversold RSI conditions since June 2022.
Bitcoin's mining difficulty rose 6.17% to an all-time high of 55.6T. According to Glassnode, the network’s 7-day moving average hash rate peaked at 414 EH/s.
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#Bitcoin touched a low for the week of $25.33K - above the local June lows of $24.7K, fuelling hopes that the uptrend is still in play. Meanwhile, BTCUSD remains below its 200-week average and the lower boundary of its former bull corridor.
Technically, Bitcoin is dominated by downside risks, with the potential to fall to $23.8K, where the 50-week moving average lies. However, we see Wednesday's rebound as short-term profit-taking on short positions amid the most oversold RSI conditions since June 2022.
Bitcoin's mining difficulty rose 6.17% to an all-time high of 55.6T. According to Glassnode, the network’s 7-day moving average hash rate peaked at 414 EH/s.
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There is an important battle for the long-term trend in the euro-dollar pair. The central bank speeches in Jackson Hole on Friday have enough potential to break or reinforce the direction of the past 11 months.
EURUSD is trading near the 1.0850 level after the pair was hit by a sell-off following weak German services PMI data, dragging down the Eurozone Composite PMI.
In minutes, the single currency fell back to the psychologically important round 1.08 level. This is also where the 200-day moving average passes through. These technical factors have rekindled interest in the euro among sellers.
We should also not forget the positive correlation between the single currency and equity indices. The latter’s positive traction helped the EURUSD fully recover, although the move did not develop on Thursday.
The EURUSD is now clinging to the lower boundary of the bullish corridor of the past few months, from which it also reversed in March and early June.
EURUSD is trading near the 1.0850 level after the pair was hit by a sell-off following weak German services PMI data, dragging down the Eurozone Composite PMI.
In minutes, the single currency fell back to the psychologically important round 1.08 level. This is also where the 200-day moving average passes through. These technical factors have rekindled interest in the euro among sellers.
We should also not forget the positive correlation between the single currency and equity indices. The latter’s positive traction helped the EURUSD fully recover, although the move did not develop on Thursday.
The EURUSD is now clinging to the lower boundary of the bullish corridor of the past few months, from which it also reversed in March and early June.
Most likely, the bears haven’t had their last word yet, as the pair hasn’t reached the over-sold region on the daily RSI, even after five and a half weeks of declines, leaving the potential for further drop.
Technically, the bearish reversal followed a failed attempt to break above the 200-week average at 1.12. The single currency has been trading below this since November 2021.
The bears also have the 50-day moving average, which acts as a medium-term trend, on their side. Earlier this month, it turned from support to resistance, taking eight trading sessions. It is, therefore, not surprising that the tug-of-war is intensifying as we approach the long-term trend indicator, the 200-day.
Technically, the bearish reversal followed a failed attempt to break above the 200-week average at 1.12. The single currency has been trading below this since November 2021.
The bears also have the 50-day moving average, which acts as a medium-term trend, on their side. Earlier this month, it turned from support to resistance, taking eight trading sessions. It is, therefore, not surprising that the tug-of-war is intensifying as we approach the long-term trend indicator, the 200-day.
So far, we are seeing more signals in favour of further declines in the pair. However, the most prudent tactic would be to wait for the EURUSD to make a decisive move away from the 200-day moving average. The direction of this breakout promises to be the most accurate indicator of where the pair is headed in the coming months.
If the bulls win, we could see the pair rally to 1.1050 within a few weeks and consolidate the uptrend for months.
A strong EURUSD move below 1.08 in the coming days would be a resounding defeat for the bears, opening a quick path to 1.0650 and the prospect of further weakening the pair to parity in the coming quarters.
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If the bulls win, we could see the pair rally to 1.1050 within a few weeks and consolidate the uptrend for months.
A strong EURUSD move below 1.08 in the coming days would be a resounding defeat for the bears, opening a quick path to 1.0650 and the prospect of further weakening the pair to parity in the coming quarters.
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Data out of the US pointed to a further build-up of pro-inflationary risks from the labour market, giving the Dollar a fresh boost intraday.
Fresh data showed weekly jobless claims fell to 230K, down from 240K and 250K in the previous two weeks. This is the lowest level since May. Initial jobless claims fell to 1,702K from 1,711K the previous week, remaining in a downtrend.
Futures markets are pricing in a 48% chance of a hike before November, the highest since early July. This repricing is working on the Dollar’s side, pushing short-term bond yields higher and raising the risk-free yield bar.
Fresh data showed weekly jobless claims fell to 230K, down from 240K and 250K in the previous two weeks. This is the lowest level since May. Initial jobless claims fell to 1,702K from 1,711K the previous week, remaining in a downtrend.
Futures markets are pricing in a 48% chance of a hike before November, the highest since early July. This repricing is working on the Dollar’s side, pushing short-term bond yields higher and raising the risk-free yield bar.
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The other report, Durable Goods Orders, wasn’t very encouraging. Total orders fell 5.2%, almost wiping out the previous two months’ gains (+4.4% and 2.0%). Orders excluding transport, which adds volatility to the indicator, rose by 0.5%.
By the same amount, new orders are now above the previous all-time high reached in the middle of last year. While the latter indicator was above analysts’ average forecasts, it indicates a barely vibrant economic expansion.
This combination of factors suggests that companies are reluctant to invest but are forced to hire and pay higher wages.
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By the same amount, new orders are now above the previous all-time high reached in the middle of last year. While the latter indicator was above analysts’ average forecasts, it indicates a barely vibrant economic expansion.
This combination of factors suggests that companies are reluctant to invest but are forced to hire and pay higher wages.
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#WaveAnalysis
#EURGBP reversed from support level 0.8500
Likely to rise to resistance level 0.8600
EURGBP currency pair recently reversed up from the key support level 0.8500 (previous monthly low from July) and the lower daily Bollinger Band.
The upward reversal from the support level 0.8500 stopped the earlier short-term impulse waves iii and 3 of the impulse wave (3) from February.
Given the strength of the support level 0.8500 and the oversold daily Stochastic, EURGBP can be expected to rise further toward the next support level 0.8600.
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#EURGBP reversed from support level 0.8500
Likely to rise to resistance level 0.8600
EURGBP currency pair recently reversed up from the key support level 0.8500 (previous monthly low from July) and the lower daily Bollinger Band.
The upward reversal from the support level 0.8500 stopped the earlier short-term impulse waves iii and 3 of the impulse wave (3) from February.
Given the strength of the support level 0.8500 and the oversold daily Stochastic, EURGBP can be expected to rise further toward the next support level 0.8600.
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#WaveAnalysis
#GBPCAD reversed from resistance level 1.7300
Likely to fall to support level 1.7020
GBPCAD currency pair recently reversed down from the pivotal resistance level 1.7300 (previous monthly high from July) intersecting with the upper daily Bollinger Band.
The downward reversal from the resistance level 1.7300 started the active short-term correction ii.
Given the still overbought daily Stochastic and strong sterling sales, GBPCAD can be expected to fall further toward the next support level 1.7020 (low of the previous correction ii).
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#GBPCAD reversed from resistance level 1.7300
Likely to fall to support level 1.7020
GBPCAD currency pair recently reversed down from the pivotal resistance level 1.7300 (previous monthly high from July) intersecting with the upper daily Bollinger Band.
The downward reversal from the resistance level 1.7300 started the active short-term correction ii.
Given the still overbought daily Stochastic and strong sterling sales, GBPCAD can be expected to fall further toward the next support level 1.7020 (low of the previous correction ii).
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Thursday's sell-off in the US stock market forced cryptocurrencies to bounce back from the previous day. As a result, the crypto market capitalisation is back at $1.05 trillion (-1.8% in 24 hours).
The Crypto Fear and Greed Index is in "Fear" territory for the latest week but far from oversold and not yet attractive to bargain hunters.
#Bitcoin has entered another long horizontal consolidation and is going down another ladder. The previous two ladders were from late June to mid-July (around $30.5K) and from late July to mid-August (around $29.3K).
#Ethereum is consolidating around $1650, a significant pivot level of the last 12 months. A failure below this level could start a capitulation that could take the price to 1,200 within a week or two. The ability to hold here would indicate buyer support, potentially kick-starting a rally.
However, we still see a higher probability of a continued downturn in the crypto market in the coming months.
The Crypto Fear and Greed Index is in "Fear" territory for the latest week but far from oversold and not yet attractive to bargain hunters.
#Bitcoin has entered another long horizontal consolidation and is going down another ladder. The previous two ladders were from late June to mid-July (around $30.5K) and from late July to mid-August (around $29.3K).
#Ethereum is consolidating around $1650, a significant pivot level of the last 12 months. A failure below this level could start a capitulation that could take the price to 1,200 within a week or two. The ability to hold here would indicate buyer support, potentially kick-starting a rally.
However, we still see a higher probability of a continued downturn in the crypto market in the coming months.
Bears take hold of US indices
It was a very telling performance from the US equity market on Thursday, as three major indices - the S&P500, Nasdaq-100 and Dow Jones 30 - confirmed the dominance of the bearish trend. At least in the medium term.
The most closely followed US market indices experienced a sharp sell-off as they approached their 50-day averages. The amplitude of Thursday's decline was more significant than the market's surge the day before. It was a battle between expectations and reality.
Expectations were represented by the tech sector with the latest hype around AI and its realisation in the form of Nvidia's report and forecasts. The company beat revenue expectations by a wide margin last quarter and raised expectations for the coming quarter. But this optimism managed to fuel further buying interest in the stock. Nvidia shares were up 0.3% by the end of the day, having risen 10% in the pre-market.
It was a very telling performance from the US equity market on Thursday, as three major indices - the S&P500, Nasdaq-100 and Dow Jones 30 - confirmed the dominance of the bearish trend. At least in the medium term.
The most closely followed US market indices experienced a sharp sell-off as they approached their 50-day averages. The amplitude of Thursday's decline was more significant than the market's surge the day before. It was a battle between expectations and reality.
Expectations were represented by the tech sector with the latest hype around AI and its realisation in the form of Nvidia's report and forecasts. The company beat revenue expectations by a wide margin last quarter and raised expectations for the coming quarter. But this optimism managed to fuel further buying interest in the stock. Nvidia shares were up 0.3% by the end of the day, having risen 10% in the pre-market.
Markets came under pressure from restrictive interest rates. In response to another small batch of economic data that fed the hawks at the Fed, demands increased their expectations that the Fed was not done raising rates. For the first time since March, the probability that the Fed Funds rate would be above 5.50-5.75% at the end of the November 1 meeting rose above 51%. That probability fell to 49% on Friday, according to the FedWatch tool, supporting a slight rebound in equity futures.
On Thursday, the Dow Jones Index lost more than 1.6% from its intraday high, with the selling intensifying just after the touch of the 50-day moving average. A similar but less intense dynamic was seen on Monday. By Thursday, however, it was clear that the bears were in control. At least as far as the medium-term trend is concerned. There is now a sparse area on the chart up to 33800, where the 200-day moving average and a few support points pass through. A full-blown correction of the index's rise since October 2022 is around 33000.
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The dynamics of the S&P 500 near its 50-day clearly show the importance of this level. The initial drop below it on August 10 was followed by three days of declines in the index. And Thursday's attempt to cross this curve from the bottom to the top triggered a sharp sell-off that wiped out more than 1.3% of the day's gains and almost all gains made since the beginning of the week. Should the risk-off sentiment persist, the S&P500 could quickly return to 4200.
The Nasdaq-100, which lost around 2.2% on Thursday, also suffered a heavy sell-off as it touched its 50-day moving average. The index also fell out of its bullish corridor for the second time this year. If the severity of high interest rates is indeed becoming a market driver, then growth stocks look the most vulnerable. If this is the case, it makes sense to expect a deeper correction in the Nasdaq, which could take the index as low as 13300, with a chance of an earlier stop in the 13700-14000 area.
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#WaveAnalysis
#CHFJPY reverses from support level 164.30
Likely to rise to resistance level 166.60
CHFJPY currency pair earlier reversed up from the support level 164.30 (former resistance that stopped the previous impulse wave 1 at the start of August).
The support level 164.30 was strengthened by the nearby 20-day moving average and by the support trendline of the daily up channel from March.
Given the strong daily uptrend, CHFJPY can be expected to rise further to the next resistance level 166.60 (which reversed the pair earlier this month).
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#CHFJPY reverses from support level 164.30
Likely to rise to resistance level 166.60
CHFJPY currency pair earlier reversed up from the support level 164.30 (former resistance that stopped the previous impulse wave 1 at the start of August).
The support level 164.30 was strengthened by the nearby 20-day moving average and by the support trendline of the daily up channel from March.
Given the strong daily uptrend, CHFJPY can be expected to rise further to the next resistance level 166.60 (which reversed the pair earlier this month).
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#WaveAnalysis
#USDCAD reverses from support at 1.3500
Likely to rise to resistance level 1.3650
USDCAD recently bounced back from the support level 1.3500 (former resistance that stopped the previous impulse wave (i) at the start of August).
The pair had previously broken the daily descending channel from March, which accelerated the active short-term impulse wave 3 of the intermediate impulse wave (C) from July.
Given the strong gains in the USD, USDCAD is expected to continue rising towards the next resistance level of 1.3650 (which reversed the previous waves B and ii, the target for the completion of the active impulse wave 3).
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#USDCAD reverses from support at 1.3500
Likely to rise to resistance level 1.3650
USDCAD recently bounced back from the support level 1.3500 (former resistance that stopped the previous impulse wave (i) at the start of August).
The pair had previously broken the daily descending channel from March, which accelerated the active short-term impulse wave 3 of the intermediate impulse wave (C) from July.
Given the strong gains in the USD, USDCAD is expected to continue rising towards the next resistance level of 1.3650 (which reversed the previous waves B and ii, the target for the completion of the active impulse wave 3).
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#WaveAnalysis #COST
Costco falling inside impulse wave i
– Likely to reach support level 520.00
Costco continues to fall inside the impulse wave i of the weekly impulse wave (C), which started earlier from the major resistance level 564.00.
The resistance level 564.00 was strengthened by the upper weekly Bollinger Band and the upper resistance trendline of the weekly up channel from the start of this year.
Given the still overbought weekly Stochastic, Costco can be expected to fall further to the next support level 520.00 (former resistance from January).
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Costco falling inside impulse wave i
– Likely to reach support level 520.00
Costco continues to fall inside the impulse wave i of the weekly impulse wave (C), which started earlier from the major resistance level 564.00.
The resistance level 564.00 was strengthened by the upper weekly Bollinger Band and the upper resistance trendline of the weekly up channel from the start of this year.
Given the still overbought weekly Stochastic, Costco can be expected to fall further to the next support level 520.00 (former resistance from January).
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Despite a mid-week spike in volatility, the cryptocurrency market remained virtually unchanged from the previous week's capitalisation level, hovering around $1.050 trillion (-1% in 7 days). Bitcoin's decline was a negligible 0.7%, while altcoins suffered losses of around 2%.
The technical picture for Bitcoin remains bearish on weekly timeframes, as the price is below its 200-week average and outside of its ascending channel. The most likely short-term outlook is for a decline to the $23.9-24.6K region, with the lower boundary being the 50-week average and the upper one being the pivot area from last August.
According to Santiment, large investors continue to accumulate positions. The number of wallets with balances between 10 and 10,000 BTC totalled 156,600, and these accounts have accumulated $308.6 million since the 17th of August.
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The technical picture for Bitcoin remains bearish on weekly timeframes, as the price is below its 200-week average and outside of its ascending channel. The most likely short-term outlook is for a decline to the $23.9-24.6K region, with the lower boundary being the 50-week average and the upper one being the pivot area from last August.
According to Santiment, large investors continue to accumulate positions. The number of wallets with balances between 10 and 10,000 BTC totalled 156,600, and these accounts have accumulated $308.6 million since the 17th of August.
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The dollar cleared the way up but is short-term overbought
Have the dollar bulls finally won, or do the sellers still have a chance? The answer may not come until later in the week.
The dollar index finished with growth for the sixth week in a row, climbing on Friday to its highest since March and trading above 104.
The dollar formally broke a multi-month downtrend by climbing above the May highs. The trend breakdown is also indicated by the fact that the DXY last week rebounded solidly from the 200-day moving average and the previous resistance line of the descending channel.
Also, the 50-day moving average reversed to the upside last week, providing further evidence of a bullish trend reversal.
Have the dollar bulls finally won, or do the sellers still have a chance? The answer may not come until later in the week.
The dollar index finished with growth for the sixth week in a row, climbing on Friday to its highest since March and trading above 104.
The dollar formally broke a multi-month downtrend by climbing above the May highs. The trend breakdown is also indicated by the fact that the DXY last week rebounded solidly from the 200-day moving average and the previous resistance line of the descending channel.
Also, the 50-day moving average reversed to the upside last week, providing further evidence of a bullish trend reversal.
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The multi-week dollar rally created certain risks of a short-term correction, as the RSI index entered the overbought area, exceeding 70 on daily intervals. During the dollar's rally in the first nine months of last year, the dollar was running out of steam after entering overbought territory, but it could take anywhere from a week to three weeks.
If the dollar correction starts, the index may roll back to 102.1-102.4 from current levels, clearing the way for a new growth impulse.
If one looks beyond the short-term moves, the latest rise cleared the way for the dollar to make more critical highs near 105.3 before the end of the quarter. The DXY can return to 107.5 in the longer term, last seen back in November.
Speeches at Jackson Hole last week failed to stoke the fire of volatility in the markets, and now a meaningful trigger won't come until Friday in the form of the monthly labour market report.
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If the dollar correction starts, the index may roll back to 102.1-102.4 from current levels, clearing the way for a new growth impulse.
If one looks beyond the short-term moves, the latest rise cleared the way for the dollar to make more critical highs near 105.3 before the end of the quarter. The DXY can return to 107.5 in the longer term, last seen back in November.
Speeches at Jackson Hole last week failed to stoke the fire of volatility in the markets, and now a meaningful trigger won't come until Friday in the form of the monthly labour market report.
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