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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#WaveAnalysis
#EURCHF reversed from pivotal support level 0.9525
Likely to rise to resistance level 0.9600
EURCHF currency pair recently reversed up from the pivotal support level 0.9525 (which stopped the previous waves 3 and i), intersecting with the lower daily Bollinger Band.
The upward reversal from the support level 0.9525 stopped the active short-term impulse wave iii from the end of August.
Given the strength of the support level 0.9525 and the triple bullish divergence on the daily Stochastic, EURCHF can be expected to rise toward the next resistance level 0.9600 (top of the previous waves ii and b).
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#EURCHF reversed from pivotal support level 0.9525
Likely to rise to resistance level 0.9600
EURCHF currency pair recently reversed up from the pivotal support level 0.9525 (which stopped the previous waves 3 and i), intersecting with the lower daily Bollinger Band.
The upward reversal from the support level 0.9525 stopped the active short-term impulse wave iii from the end of August.
Given the strength of the support level 0.9525 and the triple bullish divergence on the daily Stochastic, EURCHF can be expected to rise toward the next resistance level 0.9600 (top of the previous waves ii and b).
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#WaveAnalysis
#AUDUSD reversed from key support level 0.6360
Likely to rise to resistance level 0.6440
AUDUSD currency pair recently reversed up from the key support level 0.6360 (previous monthly low from August), intersecting with the support trendline of the wide weekly down channel from February.
The support level 0.6360 was further strengthened by the lower daily Bollinger Band.
Given the strength of the support level 0.6360 and the bullish divergence on the daily Stochastic, AUDUSD can be expected to rise further toward the next resistance level 0.6440.
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#AUDUSD reversed from key support level 0.6360
Likely to rise to resistance level 0.6440
AUDUSD currency pair recently reversed up from the key support level 0.6360 (previous monthly low from August), intersecting with the support trendline of the wide weekly down channel from February.
The support level 0.6360 was further strengthened by the lower daily Bollinger Band.
Given the strength of the support level 0.6360 and the bullish divergence on the daily Stochastic, AUDUSD can be expected to rise further toward the next resistance level 0.6440.
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It looks like sellers in cryptocurrencies are losing patience. The crypto market remains tightly pinned at $1.04 trillion in capitalisation. An attempt to break away and cross the $1.05 trillion mark has been met with heavy selling, and it's well below the $1.1 trillion pivot late last month.
Similarly, #Bitcoin is finding it increasingly difficult to keep its balance as it rises above $26.0K. The last such attempt on Friday morning was quickly thwarted, and BTCUSD is again trading near $25.8K.
Bitcoin's technical picture on daily timeframes remains bearish, as the 50-day is approaching 200-day MA from above. The crossing (probably next week) can potentially trigger an impulsive sell-off, which is very dangerous in such a thin market.
#Ethereum is trading near its 50- and 200-week averages and near its lows from March. This is a bearish disposition, especially given the strengthening dollar and pressure on US stock indices in the background.
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Similarly, #Bitcoin is finding it increasingly difficult to keep its balance as it rises above $26.0K. The last such attempt on Friday morning was quickly thwarted, and BTCUSD is again trading near $25.8K.
Bitcoin's technical picture on daily timeframes remains bearish, as the 50-day is approaching 200-day MA from above. The crossing (probably next week) can potentially trigger an impulsive sell-off, which is very dangerous in such a thin market.
#Ethereum is trading near its 50- and 200-week averages and near its lows from March. This is a bearish disposition, especially given the strengthening dollar and pressure on US stock indices in the background.
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Better-than-expected Canadian jobs data made the Loonie seem stronger than the Greenback for a while, and it made another attempt to get back below 1.36 for USDCAD.
Payrolls rose by 39.9k, double the expected 19K. On a more positive note, 32.2K of the new jobs were full-time, showing confidence among employers.
The strong labour market underlines the persistence of a breeding ground for inflation. This is the most alarming type, as it is more difficult to cool down than the one provoked by a jump in raw materials. However, the recent rise in oil prices does not make life easier for central bankers.
Earlier in the week, the Bank of Canada also sided with the CAD, noting the risks of a return to inflationary pressures. The BoC made it clear that it is open to further rate hikes.
Payrolls rose by 39.9k, double the expected 19K. On a more positive note, 32.2K of the new jobs were full-time, showing confidence among employers.
The strong labour market underlines the persistence of a breeding ground for inflation. This is the most alarming type, as it is more difficult to cool down than the one provoked by a jump in raw materials. However, the recent rise in oil prices does not make life easier for central bankers.
Earlier in the week, the Bank of Canada also sided with the CAD, noting the risks of a return to inflationary pressures. The BoC made it clear that it is open to further rate hikes.
#USDCAD mainly traded between 1.362 and 1.3680 for the third consecutive session. This is an impressive feat in the face of a generally strengthening dollar. An attempt to slip lower on the back of upbeat data could further prove the pair's desire to break away from resistance near 1.36.
Technically, the pair is forming a divergence between the price and the RSI on the daily timeframe. In addition, the latter has retreated from the overbought region.
The start of a full-fledged correction in USDCAD from current levels allows us to consider the 1.3570 area as the final correction target. The 200-day moving average and the 61.8% Fibonacci retracement from the pair's July lows are concentrated here.
Technically, the pair is forming a divergence between the price and the RSI on the daily timeframe. In addition, the latter has retreated from the overbought region.
The start of a full-fledged correction in USDCAD from current levels allows us to consider the 1.3570 area as the final correction target. The 200-day moving average and the 61.8% Fibonacci retracement from the pair's July lows are concentrated here.
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#WaveAnalysis
#CHFJPY reversed from support level 164.30
Likely to rise to resistance level 166.00
CHFJPY currency pair recently reversed up from the pivotal support level 164.30 (which has been reversing the pair from the middle of August), intersecting with the lower daily Bollinger Band and the 38.2% Fibonacci correction of the upward impulse from July.
The upward reversal from the support level 164.30 stopped the earlier short-term wave b, which belongs to wave B from the end of August.
Given the clear daily uptrend and the continuation of the yen sales, CHFJPY can be expected to rise further toward the next resistance level 166.00 (which has been reversing the price from the middle of August).
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#CHFJPY reversed from support level 164.30
Likely to rise to resistance level 166.00
CHFJPY currency pair recently reversed up from the pivotal support level 164.30 (which has been reversing the pair from the middle of August), intersecting with the lower daily Bollinger Band and the 38.2% Fibonacci correction of the upward impulse from July.
The upward reversal from the support level 164.30 stopped the earlier short-term wave b, which belongs to wave B from the end of August.
Given the clear daily uptrend and the continuation of the yen sales, CHFJPY can be expected to rise further toward the next resistance level 166.00 (which has been reversing the price from the middle of August).
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#WaveAnalysis #UK100
FTSE 100 reversed from resistance level 7528.00
Likely to rise to resistance level 7600.00
FTSE 100 index recently broke the resistance level 7528.00 (top of the pervious impulse wave i), intersecting with the resistance trendline of the daily down channel from April.
The breakout of the resistance level 7528.00 accelerated the active short-term impulse wave iii.
FTSE 100 index can be expected to rise further toward the next resistance level 7600.00 (which coincides with the daily down channel from April).
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FTSE 100 reversed from resistance level 7528.00
Likely to rise to resistance level 7600.00
FTSE 100 index recently broke the resistance level 7528.00 (top of the pervious impulse wave i), intersecting with the resistance trendline of the daily down channel from April.
The breakout of the resistance level 7528.00 accelerated the active short-term impulse wave iii.
FTSE 100 index can be expected to rise further toward the next resistance level 7600.00 (which coincides with the daily down channel from April).
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We saw another attempt to shake up the crypto market on Monday and Tuesday.
On a broader basis, the market is still sliding down bit by bit, as the equilibrium level was closer to 1.05 from the 18th to the 30th of August, dropping to 1.04 in early September, and is now hovering just above 1.033.
BTCUSD failed spectacularly and bounced from 25k at the beginning of the week, reinforcing the belief that this price is an inflexion point. It also rallied from there in June and accelerated higher in March. From August last year to February this year, it repeatedly played the role of resistance.
On the other hand, a death cross has formed on the daily timeframe, which means that more traders focused on long-term technical analysis will be looking to sell on the upside.
On Wednesday and Thursday, Bitcoin may have no problem rising from the current $26.0K to $26.4K. The question is whether this will cause the sell-off to intensify.
On a broader basis, the market is still sliding down bit by bit, as the equilibrium level was closer to 1.05 from the 18th to the 30th of August, dropping to 1.04 in early September, and is now hovering just above 1.033.
BTCUSD failed spectacularly and bounced from 25k at the beginning of the week, reinforcing the belief that this price is an inflexion point. It also rallied from there in June and accelerated higher in March. From August last year to February this year, it repeatedly played the role of resistance.
On the other hand, a death cross has formed on the daily timeframe, which means that more traders focused on long-term technical analysis will be looking to sell on the upside.
On Wednesday and Thursday, Bitcoin may have no problem rising from the current $26.0K to $26.4K. The question is whether this will cause the sell-off to intensify.
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The latest US report was a reminder that the fight against inflation will not be easy. We would guess that the most challenging period for the authorities has just begun.
In August, the US CPI rose by 0.6% m/m, taking the annual rate to 3.7%. The latest reading was above the average forecast (3.6%) and accelerated from 3.0% in June and 3.2% in July. Roughly half of the price rise can be explained by the increase in fuel prices. Since the end of August, exchange-traded oil prices have regained their upward momentum, which could pose a problem for the monetary authorities in the coming months.
In August, the US CPI rose by 0.6% m/m, taking the annual rate to 3.7%. The latest reading was above the average forecast (3.6%) and accelerated from 3.0% in June and 3.2% in July. Roughly half of the price rise can be explained by the increase in fuel prices. Since the end of August, exchange-traded oil prices have regained their upward momentum, which could pose a problem for the monetary authorities in the coming months.
The core price index - excluding energy and food - rose by 0.3% m/m after two months of 0.2% growth. The annual rate of increase slowed from 4.7% to 4.3%. Although the annual rate continues to fall, it remains elevated. Core inflation rose by 1.8% over six months. That's double the average annual rate ten years before the pandemic.
Interestingly, the new release seems to have only reinforced the markets' view that the Fed is done raising rates. The odds of keeping rates on hold in November rose to 57% from 53% a week earlier, hardly in keeping with the picture painted by the more robust recent inflation data.
Interestingly, the new release seems to have only reinforced the markets' view that the Fed is done raising rates. The odds of keeping rates on hold in November rose to 57% from 53% a week earlier, hardly in keeping with the picture painted by the more robust recent inflation data.
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🚀 Exciting Tech IPO Alert! 📈
Arm, the UK based chip design giant, is gearing up for a massive initial public offering (IPO) on the Nasdaq stock exchange in New York on the 14th of September.
🎉 They're aiming to raise a whopping $4.87 billion, potentially valuing the company at a staggering $52 billion!
💰 This IPO is set to be the tech blockbuster of the year, and investors are eagerly anticipating it as a potential game-changer for the IPO market, which has been relatively quiet since 2022. 📊💼
Keep an eye on Arm's IPO journey and see how it performs – it could be a game-changer! 💡
🔜Get ready to see ARM Holdings available for trading on our MT5 platform very soon!
Arm, the UK based chip design giant, is gearing up for a massive initial public offering (IPO) on the Nasdaq stock exchange in New York on the 14th of September.
🎉 They're aiming to raise a whopping $4.87 billion, potentially valuing the company at a staggering $52 billion!
💰 This IPO is set to be the tech blockbuster of the year, and investors are eagerly anticipating it as a potential game-changer for the IPO market, which has been relatively quiet since 2022. 📊💼
Keep an eye on Arm's IPO journey and see how it performs – it could be a game-changer! 💡
🔜Get ready to see ARM Holdings available for trading on our MT5 platform very soon!
#WaveAnalysis
#GBPCHF currency pair reversed from support level 1.1095
– Likely to rise to resistance level 1.1200
GBPCHF currency pair recently reversed up from the key support level 1.1095 (lower boundary of the sideways price range inside which the pair has been trading from last December, as can be seen below).
The support level 1.1095 was strengthened by the lower daily Bollinger Band.
GBPCHF currency pair can be expected to rise further toward the next resistance level 1.1200 (top of the pervious minor correction ii).
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#GBPCHF currency pair reversed from support level 1.1095
– Likely to rise to resistance level 1.1200
GBPCHF currency pair recently reversed up from the key support level 1.1095 (lower boundary of the sideways price range inside which the pair has been trading from last December, as can be seen below).
The support level 1.1095 was strengthened by the lower daily Bollinger Band.
GBPCHF currency pair can be expected to rise further toward the next resistance level 1.1200 (top of the pervious minor correction ii).
📣Trade responsibly with fxpro.com
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