Crypto market capitalisation is almost the same level as a week ago - near 1.045 trillion. The Bitcoin pump and dump tickled the market with nerves, formally tied to events surrounding Grayscale's Bitcoin ETF fund.
#Bitcoin has been pegged at $26K for more than two weeks. An attempt to move back above the 200-day average has technically encountered stronger selling, confirming that the bears are not relinquishing market control. This disposition suggests higher risks that the consolidation will end with downside momentum, potentially at $25K or even $24K.
On #Ethereum's daily timeframes, a "death cross" has formed, with the 50-day moving average falling below the 200-day MA. Such a signal suggests a further decline, emphasising the bearish trend here. On the Bitcoin chart, such a pattern could form next week. But we also note that ETH already looks locally oversold.
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#Bitcoin has been pegged at $26K for more than two weeks. An attempt to move back above the 200-day average has technically encountered stronger selling, confirming that the bears are not relinquishing market control. This disposition suggests higher risks that the consolidation will end with downside momentum, potentially at $25K or even $24K.
On #Ethereum's daily timeframes, a "death cross" has formed, with the 50-day moving average falling below the 200-day MA. Such a signal suggests a further decline, emphasising the bearish trend here. On the Bitcoin chart, such a pattern could form next week. But we also note that ETH already looks locally oversold.
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Paradox: Jobs data supports USD but reduces odds of a rate hike
Friday's batch of US statistics boosted the Dollar, while the US stock market was mixed as a sell-off replaced an initial rally.
The data showed that the US economy created 187K jobs in August, but data for the previous two months showed a decline of 110K, painting a gloomier picture for the summer.
The unemployment rate rose from 3.5% to 3.8%—quite an unexpected jump given the steady rise in the employment rate. The increase was driven by a surge in the labour force participation rate from 62.6% to 62.8%. This is still below the pre-Cold War peak of 63.4%. It is even further from the peak of 67.1% in 2000.
People return to work as the stocks built up by the pandemic stimulus fade while fears of illness are receding. Inflation and high interest rates are encouraging people to look for work.
Friday's batch of US statistics boosted the Dollar, while the US stock market was mixed as a sell-off replaced an initial rally.
The data showed that the US economy created 187K jobs in August, but data for the previous two months showed a decline of 110K, painting a gloomier picture for the summer.
The unemployment rate rose from 3.5% to 3.8%—quite an unexpected jump given the steady rise in the employment rate. The increase was driven by a surge in the labour force participation rate from 62.6% to 62.8%. This is still below the pre-Cold War peak of 63.4%. It is even further from the peak of 67.1% in 2000.
People return to work as the stocks built up by the pandemic stimulus fade while fears of illness are receding. Inflation and high interest rates are encouraging people to look for work.
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It is also worth noting that the total number of hours worked in the private sector is virtually stagnant. The corresponding index was 115.5 in August (2007=100), not much higher than 115.1 in January. And labour cost growth has exceeded 2.75% over this period. This puts additional pressure on corporate profits.
Wage growth has slowed. Over the month, average hourly earnings rose by 0.2%, compared with 0.4% m/m in the previous two months. The annualised growth rate fell to 4.3%, weaker than the 4.4% expected and recorded in June and July.
Wage growth has slowed. Over the month, average hourly earnings rose by 0.2%, compared with 0.4% m/m in the previous two months. The annualised growth rate fell to 4.3%, weaker than the 4.4% expected and recorded in June and July.
Some commentators point to the rise in the unemployment rate as an argument for the Fed not to raise rates again this cycle. This is supported by the FedWatch tool, which puts the probability of a November hike at 38%, down from 62.3% a week earlier.
On the other hand, we focus on the still solid inflationary trend in wages at the expense of the swelling service sector, which feeds the inflationary spiral. The Fed may decide not to raise rates any further, but it will keep them on hold for much longer than market participants currently expect, which will dampen economic activity, support a rising dollar and weigh on the equity market.
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On the other hand, we focus on the still solid inflationary trend in wages at the expense of the swelling service sector, which feeds the inflationary spiral. The Fed may decide not to raise rates any further, but it will keep them on hold for much longer than market participants currently expect, which will dampen economic activity, support a rising dollar and weigh on the equity market.
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#WaveAnalysis
#CADJPY reversed from support level 106.75
Likely to rise to resistance level 108.00
CADJPY currency pair recently reversed up from the key support level 106.75 (which stopped the previous waves A and (2)), coinciding with the lower daily Bollinger Band and the 38.2% Fibonacci correction of the upward impulse from the end of July.
The upward reversal from the support level 106.75 continues the active intermediate impulse wave (3) from the middle of August.
Given the clear daily uptrend and the strong yen sales, CADJPY can be expected to rise further toward the next resistance level 108.00 (top of the previous waves (1) and B).
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#CADJPY reversed from support level 106.75
Likely to rise to resistance level 108.00
CADJPY currency pair recently reversed up from the key support level 106.75 (which stopped the previous waves A and (2)), coinciding with the lower daily Bollinger Band and the 38.2% Fibonacci correction of the upward impulse from the end of July.
The upward reversal from the support level 106.75 continues the active intermediate impulse wave (3) from the middle of August.
Given the clear daily uptrend and the strong yen sales, CADJPY can be expected to rise further toward the next resistance level 108.00 (top of the previous waves (1) and B).
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#WaveAnalysis #TRIP
Tripadvisor reversed from support level 15.00
– Likely to rise to resistance level 16.00
Tripadvisor recently reversed up from the strong support level 15.00 (which has been reversing the price from the start of May), coinciding with the lower daily Bollinger Band.
The upward reversal from the support level 15.00 started the active short-term corrective wave (ii), which belongs to the impulse wave 3 from the middle of August.
Given the strength of the support level 15.00, Tripadvisor can be expected to rise further toward the next resistance level 16.00 (target price for the completion of the active wave ii).
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Tripadvisor reversed from support level 15.00
– Likely to rise to resistance level 16.00
Tripadvisor recently reversed up from the strong support level 15.00 (which has been reversing the price from the start of May), coinciding with the lower daily Bollinger Band.
The upward reversal from the support level 15.00 started the active short-term corrective wave (ii), which belongs to the impulse wave 3 from the middle of August.
Given the strength of the support level 15.00, Tripadvisor can be expected to rise further toward the next resistance level 16.00 (target price for the completion of the active wave ii).
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The bears are in control for crypto, and the pressure seems to be coming from the stock market, as the institutional favourites that are losing the most so far are Bitcoin (-1.1%), Ethereum (-0.9%) and XRP (-0.7%).
The first cryptocurrency is settling increasingly firmly in the territory below $26K. Since March, #Bitcoin has been repeatedly bought on dips to this level, but it seems the support doesn't look as strong now. A failure under $25.4K would signal the end of the corrective rebound to $28K and open the way to $21.5K. However, potentially strong support could come as early as $24K, where the 50-week moving average passes.
#Ethereum has already intertwined the 50 and 200-week MAs and has regularly received support on dips under them over the past four weeks. It's an open question how durable that support will be. It's worth being prepared that a consolidation under $1600 would trigger a deeper sell-off.
The first cryptocurrency is settling increasingly firmly in the territory below $26K. Since March, #Bitcoin has been repeatedly bought on dips to this level, but it seems the support doesn't look as strong now. A failure under $25.4K would signal the end of the corrective rebound to $28K and open the way to $21.5K. However, potentially strong support could come as early as $24K, where the 50-week moving average passes.
#Ethereum has already intertwined the 50 and 200-week MAs and has regularly received support on dips under them over the past four weeks. It's an open question how durable that support will be. It's worth being prepared that a consolidation under $1600 would trigger a deeper sell-off.
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Economic data from China and the eurozone sent markets back into sell-off mode.
China's services PMI fell from 54.1 to 51.8, the smallest growth rate since last December. That's a sharper slowdown than the 53.6 expected. The momentum of the recovery from lifting COVID restrictions is quickly fading, and the stimulus measures announced so far have proved unable to reverse the trend.
Sellers have taken control after a two-week rally in Chinese indices. The dollar is once again approaching 7.31 yuan, back in the range of the multi-year highs reached in August. And that's bad news for global equities, too, given the size of the Chinese economy and its links to others, especially Europe.
China's services PMI fell from 54.1 to 51.8, the smallest growth rate since last December. That's a sharper slowdown than the 53.6 expected. The momentum of the recovery from lifting COVID restrictions is quickly fading, and the stimulus measures announced so far have proved unable to reverse the trend.
Sellers have taken control after a two-week rally in Chinese indices. The dollar is once again approaching 7.31 yuan, back in the range of the multi-year highs reached in August. And that's bad news for global equities, too, given the size of the Chinese economy and its links to others, especially Europe.
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Meanwhile, Europe is, unfortunately, one step ahead of China in this economic cycle. The latest composite PMI estimates for the eurozone marked a contraction in business activity at the fastest pace since November 2020.
The index peaked at 54.1 in April and has declined every month since, falling to 46.7 in August.
Lower gas prices and full storage facilities could not overcome the factor of high interest rates and weaker demand from China.
The index peaked at 54.1 in April and has declined every month since, falling to 46.7 in August.
Lower gas prices and full storage facilities could not overcome the factor of high interest rates and weaker demand from China.
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Since the middle of last month, the EuroStoxx50 has regularly tested its 200-day moving average and found support on the way down to 4220. It is fair to say that the European market is now clinging to hopes of ending the ECB's policy tightening and that the economy is adjusting to higher rates.
The second major factor is the 4% weakening of the euro over the past seven weeks. The EURUSD fell to 1.0750, its lowest level since June. Last Friday, it fell below its 200-day moving average, which signals a change in the long-term trend and could drag the pair down to the 1.0500 area.
The currency market is often one step ahead of the stock market, and in periods of strong trends, the correlation between stocks and the euro is often direct rather than inverse, as in the US or Japan.
Therefore, if EURUSD continues to fall into a bear market, euro zone blue chips are also at risk of an intensified sell-off towards 4000.
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The second major factor is the 4% weakening of the euro over the past seven weeks. The EURUSD fell to 1.0750, its lowest level since June. Last Friday, it fell below its 200-day moving average, which signals a change in the long-term trend and could drag the pair down to the 1.0500 area.
The currency market is often one step ahead of the stock market, and in periods of strong trends, the correlation between stocks and the euro is often direct rather than inverse, as in the US or Japan.
Therefore, if EURUSD continues to fall into a bear market, euro zone blue chips are also at risk of an intensified sell-off towards 4000.
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Business activity in the UK is losing ground, as is the case in Europe and China, although the final reading for August saw the services PMI rise to 49.5 from the first estimate of 48.7. According to today's PMI, the services sector moved from growth to contraction in August, falling to 49.5.
At the end of last week, the PMI for the manufacturing sector fell to 43.0. Apart from April and May 2020, the index was only lower between October 2008 and February 2009.
This dynamic clearly shows the harshness of the current monetary policy for the manufacturing sector. The services sector has only begun correcting, enjoying a long tailwind from the post-pandemic recovery.
At the end of last week, the PMI for the manufacturing sector fell to 43.0. Apart from April and May 2020, the index was only lower between October 2008 and February 2009.
This dynamic clearly shows the harshness of the current monetary policy for the manufacturing sector. The services sector has only begun correcting, enjoying a long tailwind from the post-pandemic recovery.
The markets seem to be paying more attention to signs of a contracting economy than 'better than expected data'. GBPUSD fell as low as 1.2530 during the day before recovering to 1.2570 by the start of active trading in New York.
The pair has lost around 4.5% since mid-July, with successive lows and highs. The pair may find tangible support in the 1.2410-1.2470 area, with the lower boundary being the 200-day average and the upper boundary being the 76.4% Fibonacci level of the entire rally from September last year to July this year.
One should also be prepared for a deeper dive to 1.2060 for an established (61.8%) retracement of this advance.
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The pair has lost around 4.5% since mid-July, with successive lows and highs. The pair may find tangible support in the 1.2410-1.2470 area, with the lower boundary being the 200-day average and the upper boundary being the 76.4% Fibonacci level of the entire rally from September last year to July this year.
One should also be prepared for a deeper dive to 1.2060 for an established (61.8%) retracement of this advance.
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#WaveAnalysis
#EURJPY reversed from support level 156.95
Likely to rise to resistance level 159.50
EURJPY currency pair recently reversed up from the pivotal support level 156.95 (low of the previous correction 2), intersecting with the support trendline from March.
The support level 156.95 was further strengthened by the lower daily Bollinger Band and the 61.8% Fibonacci correction of the upward impulse from the start of August.
Given the strong daily uptrend, EURJPY can be expected to rise further toward the next resistance level 159.50 (which reversed the price 3 times last month).
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#EURJPY reversed from support level 156.95
Likely to rise to resistance level 159.50
EURJPY currency pair recently reversed up from the pivotal support level 156.95 (low of the previous correction 2), intersecting with the support trendline from March.
The support level 156.95 was further strengthened by the lower daily Bollinger Band and the 61.8% Fibonacci correction of the upward impulse from the start of August.
Given the strong daily uptrend, EURJPY can be expected to rise further toward the next resistance level 159.50 (which reversed the price 3 times last month).
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#WaveAnalysis
#CHFJPY reversed from support level 164.30
Likely to rise to resistance level 166.70
CHFJPY currency pair recently reversed up from the pivotal support level 164.30 (which has been reversing the price from the middle of August), coinciding with the 38.2% Fibonacci correction of the upward impulse from July.
The upward reversal from the support level 164.30 started the active short-term impulse wave 3, which belongs to the higher order impulse wave (5) from July.
Given the clear daily uptrend, CHFJPY can be expected to rise further toward the next resistance level 166.70 (top of the previous impulse wave 1).
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#CHFJPY reversed from support level 164.30
Likely to rise to resistance level 166.70
CHFJPY currency pair recently reversed up from the pivotal support level 164.30 (which has been reversing the price from the middle of August), coinciding with the 38.2% Fibonacci correction of the upward impulse from July.
The upward reversal from the support level 164.30 started the active short-term impulse wave 3, which belongs to the higher order impulse wave (5) from July.
Given the clear daily uptrend, CHFJPY can be expected to rise further toward the next resistance level 166.70 (top of the previous impulse wave 1).
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Crypto is out of volatility mode, moving in a narrow range of around $1.04 trillion over the last 24 hours, with little change in the total cap. This could be another pause before a new step down the ladder, as we have seen since July, or a preparation for further growth. We are now leaning towards the first option.
Bitcoin has stabilised around $25.7K, lower than it was at the end of last week. This dip looks like speculators trying to find demand to push the price higher.
However, we believe that buyers will remain on the sidelines until the $25K level is reached. This has been the critical level for the last 14 months, and we do not expect a real bull-bear battle until this level is reached.
On the monthly timeframe, Bitcoin confirmed an overbought stochastic exit in August, which could be a sign of disappointment for the bulls, notes Fairlead Strategies. The signal generated often indicates the passing of a local top, as happened in late 2017 and early 2021.
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Bitcoin has stabilised around $25.7K, lower than it was at the end of last week. This dip looks like speculators trying to find demand to push the price higher.
However, we believe that buyers will remain on the sidelines until the $25K level is reached. This has been the critical level for the last 14 months, and we do not expect a real bull-bear battle until this level is reached.
On the monthly timeframe, Bitcoin confirmed an overbought stochastic exit in August, which could be a sign of disappointment for the bulls, notes Fairlead Strategies. The signal generated often indicates the passing of a local top, as happened in late 2017 and early 2021.
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