#WaveAnalysis
#AUDCAD reversed from key support level 0.8630
Likely to rise to resistance level 0.8700
AUDCAD recently reversed up from the key support level 0.8630 (which has been repeatedly reversing the pair from last November) intersecting with the lower daily Bollinger Band.
The upward reversal from the support level 0.8630 follows the earlier upward reversal from the same support level – which formed the daily Bullish Engulfing.
Given the oversold daily Stochastic and the strength of the support level 0.8630, AUDCAD can be expected to rise toward the next resistance level 0.8700.
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#AUDCAD reversed from key support level 0.8630
Likely to rise to resistance level 0.8700
AUDCAD recently reversed up from the key support level 0.8630 (which has been repeatedly reversing the pair from last November) intersecting with the lower daily Bollinger Band.
The upward reversal from the support level 0.8630 follows the earlier upward reversal from the same support level – which formed the daily Bullish Engulfing.
Given the oversold daily Stochastic and the strength of the support level 0.8630, AUDCAD can be expected to rise toward the next resistance level 0.8700.
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#WaveAnalysis #US30
Dow Jones index broke key support level 34000
– Likely to fall to support level 33500
Dow Jones index recently broke key support level 34000 (low of the previous wave a) intersecting with the 38.2% Fibonacci correction of the previous upward impulse from March.
The breakout of the support level 34000 was preceded by the breakout of the daily up channel from March – which accelerated the active wave ii.
Dow Jones index can be expected to fall further toward the next support level 33500, target for the completion of the active wave ii.
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Dow Jones index broke key support level 34000
– Likely to fall to support level 33500
Dow Jones index recently broke key support level 34000 (low of the previous wave a) intersecting with the 38.2% Fibonacci correction of the previous upward impulse from March.
The breakout of the support level 34000 was preceded by the breakout of the daily up channel from March – which accelerated the active wave ii.
Dow Jones index can be expected to fall further toward the next support level 33500, target for the completion of the active wave ii.
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Despite the storm in the equity markets, the crypto market remains subdued, losing only 0.3% in 24 hours to $1.045 trillion.
The crypto market did not suddenly become a safe haven. Still, it only temporarily turned out to be of no interest to active speculators, as they focuses on technology giants and government bond prices.
#Bitcoin is trading near $26.2K on Wednesday morning, ending Tuesday with another decline. We don't see the selling accelerating, but for now, it's going on many popular coins like Ethereum, XRP and Solana all at once.
According to CryptoQuant, Bitcoin spot trading volume fell 40 times from March peak last week.
According to Bitfinex, Bitcoin is in the period with the lowest volatility in the history of the asset.
Perhaps, before the revival of interest, we should see a final frontal liquidation of long positions. But only with worries about stocks and bonds, not with the bankruptcies of large crypto companies.
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The crypto market did not suddenly become a safe haven. Still, it only temporarily turned out to be of no interest to active speculators, as they focuses on technology giants and government bond prices.
#Bitcoin is trading near $26.2K on Wednesday morning, ending Tuesday with another decline. We don't see the selling accelerating, but for now, it's going on many popular coins like Ethereum, XRP and Solana all at once.
According to CryptoQuant, Bitcoin spot trading volume fell 40 times from March peak last week.
According to Bitfinex, Bitcoin is in the period with the lowest volatility in the history of the asset.
Perhaps, before the revival of interest, we should see a final frontal liquidation of long positions. But only with worries about stocks and bonds, not with the bankruptcies of large crypto companies.
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The dollar index added for the 11th week in a row - one of the most persistent rallies in its history. But oil has been in a rally for even longer - 13 weeks - adding 35%, albeit with brief interruptions.
The rising dollar is putting pressure on the markets, and it’s easy to see this in key stock indices and even gold. Oil often falls with an even greater amplitude than stocks or other commodities.
But in recent weeks, oil has been aided by geopolitics, which has helped it climb in the form of tighter monetary policy and a slowdown in consumption in most countries.
The rise since the end of June can be divided into several phases with brief corrections at the end. The increase in the price of a barrel of WTI from $67 to $77 was the first stage.
The second stage lost strength in early August on the approach to $84, fitting nicely into a Fibonacci pattern with a 161.8% rise from the first impulse. The corrective pullback was halted on the path to the previous peak.
The rising dollar is putting pressure on the markets, and it’s easy to see this in key stock indices and even gold. Oil often falls with an even greater amplitude than stocks or other commodities.
But in recent weeks, oil has been aided by geopolitics, which has helped it climb in the form of tighter monetary policy and a slowdown in consumption in most countries.
The rise since the end of June can be divided into several phases with brief corrections at the end. The increase in the price of a barrel of WTI from $67 to $77 was the first stage.
The second stage lost strength in early August on the approach to $84, fitting nicely into a Fibonacci pattern with a 161.8% rise from the first impulse. The corrective pullback was halted on the path to the previous peak.
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The next milestone is reaching 261.8% of the first impulse, just above $93. Last year’s October and November peaks are located near the same level. We should expect a significant intensification of the struggle between bulls and bears on the approach to this level.
Large speculative buyers may want to lock in profits at the end of the month and quarter after a stunning rally against the general market weakening. This will also let off steam in an overheated market, making it attractive to new buyers.
That said, we believe in oil’s long-term bullish outlook given its strong support from the market and authorities on touching crucial technical levels - the 200- and 50-week moving averages.
This promises the world a prolonged fight against inflation, which must be fought through slowing demand, not by falling prices of the key commodity. We got the same signal in 2019, but COVID-19 provided a historic chance for bulls to buy even lower.
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Large speculative buyers may want to lock in profits at the end of the month and quarter after a stunning rally against the general market weakening. This will also let off steam in an overheated market, making it attractive to new buyers.
That said, we believe in oil’s long-term bullish outlook given its strong support from the market and authorities on touching crucial technical levels - the 200- and 50-week moving averages.
This promises the world a prolonged fight against inflation, which must be fought through slowing demand, not by falling prices of the key commodity. We got the same signal in 2019, but COVID-19 provided a historic chance for bulls to buy even lower.
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Alarming signal of credit activity in the eurozone
The ECB started raising interest rates in September last year, which was immediately reflected in the dynamics of money supply and lending. This process has continued to this day.
Credit growth in the eurozone has slowed to 1.0% y/y - the lowest in eight years. However, the monetary aggregates M1 and M3 lead one to expect a contraction in annual terms.
The M3 monetary aggregate showed a contraction of 1.3% y/y in August, renewing the historical lows of 2010 when the largest contraction was 0.4% y/y.
The narrower monetary aggregate M1 has been in uncharted territory since the beginning of the year, contracting already at a rate of 10.4%.
Such contraction in money supply and credit significantly dampens the region's economic outlook.
The ECB started raising interest rates in September last year, which was immediately reflected in the dynamics of money supply and lending. This process has continued to this day.
Credit growth in the eurozone has slowed to 1.0% y/y - the lowest in eight years. However, the monetary aggregates M1 and M3 lead one to expect a contraction in annual terms.
The M3 monetary aggregate showed a contraction of 1.3% y/y in August, renewing the historical lows of 2010 when the largest contraction was 0.4% y/y.
The narrower monetary aggregate M1 has been in uncharted territory since the beginning of the year, contracting already at a rate of 10.4%.
Such contraction in money supply and credit significantly dampens the region's economic outlook.
Unlike in the US, in Europe, most loans are made at floating rates, so an increase in the ECB's key rate simultaneously tightens the conditions for both new and existing loans. Thanks to this feature, the transmission mechanism of monetary policy works faster. As a result, fewer rate hikes are needed to cool the economy and, through it, inflation.
A continued decline in these indicators, also faster than forecast, could be a strong argument for ending the rate hike cycle and bringing the reversal to an easing. And that's bad news for the euro, which pulled back to an eight-month low at 1.0511 on Wednesday.
In addition, Europe seems to be reigniting the flames of debt problems as we saw 12 years ago - another consequence of high interest rates coupled with a weakening economy.
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A continued decline in these indicators, also faster than forecast, could be a strong argument for ending the rate hike cycle and bringing the reversal to an easing. And that's bad news for the euro, which pulled back to an eight-month low at 1.0511 on Wednesday.
In addition, Europe seems to be reigniting the flames of debt problems as we saw 12 years ago - another consequence of high interest rates coupled with a weakening economy.
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#WaveAnalysis
#EURUSD broke key support level 1.0530
Likely to fall to support level 1.0420
EURUSD currency pair recently broke key support level 1.0530 (which has been reversing the price from January) intersecting with the 50% Fibonacci correction of the previous upward impulse from November.
The breakout of the support level 1.0530 was accelerated the active impulse waves iii and 3.
Given the strongly bullish USD sentiment, EURUSD currency pair can be expected to fall further toward the next support level 1.0420.
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#EURUSD broke key support level 1.0530
Likely to fall to support level 1.0420
EURUSD currency pair recently broke key support level 1.0530 (which has been reversing the price from January) intersecting with the 50% Fibonacci correction of the previous upward impulse from November.
The breakout of the support level 1.0530 was accelerated the active impulse waves iii and 3.
Given the strongly bullish USD sentiment, EURUSD currency pair can be expected to fall further toward the next support level 1.0420.
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#WaveAnalysis
#USDCHF broke resistance level 0.9150
Likely to rise to resistance level 0.9300
USDCHF currency pair recently broke above the strong resistance level 0.9150 (former multi-month high from May) standing near the 61.8% Fibonacci correction of the previous upward impulse from March.
The breakout of the resistance level 0.9150 was accelerated the active impulse wave 3 of the intermediate impulse wave (C) from the end of August.
USDCHF currency pair can be expected to rise further toward the next resistance level 0.9300 (former top of wave 2 from the middle of March).
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#USDCHF broke resistance level 0.9150
Likely to rise to resistance level 0.9300
USDCHF currency pair recently broke above the strong resistance level 0.9150 (former multi-month high from May) standing near the 61.8% Fibonacci correction of the previous upward impulse from March.
The breakout of the resistance level 0.9150 was accelerated the active impulse wave 3 of the intermediate impulse wave (C) from the end of August.
USDCHF currency pair can be expected to rise further toward the next resistance level 0.9300 (former top of wave 2 from the middle of March).
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Crypto market cap rose 0.7% in 24 hours to 1.053 trillion. This is a return to the levels seen at the end of last week.
Cryptocurrencies saw increased buying when equity markets were under the most pressure and the dollar was gaining momentum.
However, this momentum didn't last long.
#Bitcoin briefly rose to $26.7K but again found resistance at the 50-day MA, which had already fallen to the abovementioned level. These growth impulses promise to remain a bull trap, offering the best opportunity to sell on the upside.
Cryptocurrencies need banking problems or uncertainty about the solvency of governments to generate sustainable growth momentum.
Recent moves in bond markets show that something like this is brewing. But it's too early to call cryptocurrencies a safe haven from the chaos of the traditional financial system.
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Cryptocurrencies saw increased buying when equity markets were under the most pressure and the dollar was gaining momentum.
However, this momentum didn't last long.
#Bitcoin briefly rose to $26.7K but again found resistance at the 50-day MA, which had already fallen to the abovementioned level. These growth impulses promise to remain a bull trap, offering the best opportunity to sell on the upside.
Cryptocurrencies need banking problems or uncertainty about the solvency of governments to generate sustainable growth momentum.
Recent moves in bond markets show that something like this is brewing. But it's too early to call cryptocurrencies a safe haven from the chaos of the traditional financial system.
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The price of a troy ounce of gold fell 1.4% on Wednesday to $1875, its most significant drop since early June, building this week’s loss to 2.7%.
Gold has not been so cheap in Dollars since the first half of March when the problems of US regional banks triggered a surge in interest in the metal. That situation put pressure on the dollar, but the picture has changed dramatically.
US government bonds are experiencing a solid capital inflow from domestic investors, for whom the current yield levels look very attractive. Against this backdrop, the gold bulls are capitulating.
Technical factors partly support the sell-off. Gold formed a “death cross” yesterday when the 50-day MA crossed below the 200-day MA —however, the fast MA has acted as stiff resistance since last Monday.
While Wednesday’s move in gold was impressive, history suggests that this is unlikely to be the final leg of the decline.
Gold has not been so cheap in Dollars since the first half of March when the problems of US regional banks triggered a surge in interest in the metal. That situation put pressure on the dollar, but the picture has changed dramatically.
US government bonds are experiencing a solid capital inflow from domestic investors, for whom the current yield levels look very attractive. Against this backdrop, the gold bulls are capitulating.
Technical factors partly support the sell-off. Gold formed a “death cross” yesterday when the 50-day MA crossed below the 200-day MA —however, the fast MA has acted as stiff resistance since last Monday.
While Wednesday’s move in gold was impressive, history suggests that this is unlikely to be the final leg of the decline.
The case of the previous death cross in July 2022 is very similar to the current one. And back then, the price was down 7%. In February 2021, the sell-off stopped after only a 9% drop; in August 2021, it was down almost 7%.
In all these cases, gold pulled back to a previous significant support area before we saw a corrective pullback. The following considerable pivot area in the current situation was $1805-1810.
Mirroring how quickly gold gained $100 from $1810 in March, we could now see an equally quick landing.
But this is where longer-term forces could come into play. The 200-week MA runs through here. Approaching or briefly dipping below it has attracted big buyers over the past six years.
However, it is essential to note that the $1800 area may become where only some bearish gold positions are fixed. It will be necessary to monitor financial market sentiment very closely. With equity indices continuing to fall and long-term yields rising, a further price fall is quite realistic.
In all these cases, gold pulled back to a previous significant support area before we saw a corrective pullback. The following considerable pivot area in the current situation was $1805-1810.
Mirroring how quickly gold gained $100 from $1810 in March, we could now see an equally quick landing.
But this is where longer-term forces could come into play. The 200-week MA runs through here. Approaching or briefly dipping below it has attracted big buyers over the past six years.
However, it is essential to note that the $1800 area may become where only some bearish gold positions are fixed. It will be necessary to monitor financial market sentiment very closely. With equity indices continuing to fall and long-term yields rising, a further price fall is quite realistic.
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German CPI below forecasts
German consumer inflation slowed more than expected in September, according to Destatis' preliminary estimate.
The price growth rate slowed to 4.5% y/y from 6.1% y/y vs. 4.6% y/y expected. However, the monthly rate growth remains elevated, with the last four months adding 0.3% each, bringing the annual rate to 3.6%.
Separately today, Spanish inflation accelerated to 3.5% from 2.6% the previous month and a low of 1.9% in June.
In general, the release of weaker-than-expected inflation and activity data adds to the pressure on the local currency, arguing for easing monetary policy.
Tomorrow's composite data for the entire Euro-Zone is expected to reach 4.5% y/y, slowing from 5.2% in August.
German consumer inflation slowed more than expected in September, according to Destatis' preliminary estimate.
The price growth rate slowed to 4.5% y/y from 6.1% y/y vs. 4.6% y/y expected. However, the monthly rate growth remains elevated, with the last four months adding 0.3% each, bringing the annual rate to 3.6%.
Separately today, Spanish inflation accelerated to 3.5% from 2.6% the previous month and a low of 1.9% in June.
In general, the release of weaker-than-expected inflation and activity data adds to the pressure on the local currency, arguing for easing monetary policy.
Tomorrow's composite data for the entire Euro-Zone is expected to reach 4.5% y/y, slowing from 5.2% in August.
#EURUSD fights for 1.05
On Thursday, the EURUSD had a chance to hold above the 1.05 level thanks to the US currency's weakness against its major rivals. So far, the move looks more like profit-taking on an eleventh consecutive week of gains for the Dollar.
However, without any significant change in the fundamentals (inflation trends and the Fed's rhetoric), this could temporarily consolidate forces and liquidity before the dollar gains further momentum, threatening to push the euro below parity.
The latter will be particularly true if yields on Italian and other eurozone debt continue to rise because of the failure to control public spending and revive the economy.
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On Thursday, the EURUSD had a chance to hold above the 1.05 level thanks to the US currency's weakness against its major rivals. So far, the move looks more like profit-taking on an eleventh consecutive week of gains for the Dollar.
However, without any significant change in the fundamentals (inflation trends and the Fed's rhetoric), this could temporarily consolidate forces and liquidity before the dollar gains further momentum, threatening to push the euro below parity.
The latter will be particularly true if yields on Italian and other eurozone debt continue to rise because of the failure to control public spending and revive the economy.
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The crypto market has been torn, rising over 2% in the last 24 hours to $1.076 trillion. The excitement came after the approval of the Ethereum Futures ETF from Valkyrie. It's not the victory everyone expected, as they were waiting for a long list of spot Bitcoin ETFs. But the positive news coincided nicely with a rebound in equity markets and US Dollar nosediving.
#Bitcoin surged above $27K on Thursday, gaining over $800 (3.2%). The momentum allowed it to climb above its 50-day moving average, something it has been unable to do since early August. The ability to hold levels above this curve will be the first confirmation of a change in trend and will turn observers' attention to the 27.5 area, where the previous local highs are located. In our view, a move above $28K will attract even more buying interest.
#Ethereum gained over 3.2% in 24 hours, briefly topping $1685. Technically, it has managed to reverse the downtrend, boosting optimism for Bitcoin and the entire crypto market.
#Bitcoin surged above $27K on Thursday, gaining over $800 (3.2%). The momentum allowed it to climb above its 50-day moving average, something it has been unable to do since early August. The ability to hold levels above this curve will be the first confirmation of a change in trend and will turn observers' attention to the 27.5 area, where the previous local highs are located. In our view, a move above $28K will attract even more buying interest.
#Ethereum gained over 3.2% in 24 hours, briefly topping $1685. Technically, it has managed to reverse the downtrend, boosting optimism for Bitcoin and the entire crypto market.
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#WaveAnalysis
#WTI reversed from resistance level 92.00
Likely to fall to support level 87.00
WTI crude oil earlier reversed down from the pivotal resistance level 92.00 (which reversed the price strongly at the end of 2022) intersecting with the upper weekly Bollinger Band and the 50% Fibonacci correction of the downtrend from the middle of the last tear.
The downward reversal from the resistance level 92.00 will create the second consecutive weekly candlesticks reversal pattern Doji – signalling the strength of the resistance level 92.00.
Given the strength of the resistance level 92.00, WTI crude oil can be expected to fall further toward the next support level 87.00.
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#WTI reversed from resistance level 92.00
Likely to fall to support level 87.00
WTI crude oil earlier reversed down from the pivotal resistance level 92.00 (which reversed the price strongly at the end of 2022) intersecting with the upper weekly Bollinger Band and the 50% Fibonacci correction of the downtrend from the middle of the last tear.
The downward reversal from the resistance level 92.00 will create the second consecutive weekly candlesticks reversal pattern Doji – signalling the strength of the resistance level 92.00.
Given the strength of the resistance level 92.00, WTI crude oil can be expected to fall further toward the next support level 87.00.
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#WaveAnalysis
#EURCAD reversed from long-term support level 1.4245
Likely to rise to resistance level 1.4400
EURCAD currency pair recently reversed up from the long-term support level 1.4245 (which has been reversing the price from January) intersecting with the lower daily Bollinger Band.
The upward reversal from the support level 1.4245 created the daily candlesticks reversal pattern Bullish Engulfing – strong buy signal for this currency pair.
Given the strength of the support level 1.4245, EURCAD currency pair can be expected to rise further toward the next resistance level 1.4400 (top of the previous wave iv).
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#EURCAD reversed from long-term support level 1.4245
Likely to rise to resistance level 1.4400
EURCAD currency pair recently reversed up from the long-term support level 1.4245 (which has been reversing the price from January) intersecting with the lower daily Bollinger Band.
The upward reversal from the support level 1.4245 created the daily candlesticks reversal pattern Bullish Engulfing – strong buy signal for this currency pair.
Given the strength of the support level 1.4245, EURCAD currency pair can be expected to rise further toward the next resistance level 1.4400 (top of the previous wave iv).
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#Crypto
The crypto market cap has risen over 2.7% in the last 24 hours to over $1.11 trillion.
#Bitcoin managed to hold above its 50-day MA over the weekend, which it surpassed in a strong move on the 28th of September.
BTCUSD surged over $1000 with a 4% gain, hitting a 7-week high of $28.3K. Contrary to the upward momentum at the end of last week, the intraday rally may be too stretched for now. After a long march, the price touched the technically and emotionally important 200-day moving average (currently $28K). There is a risk that we could see a repeat of the August 29 reversal to the downside. But that's a risk, not the main scenario.
Bitcoin ended September up 4.1% at $27.1K, bucking the seasonal trend of the worst month of the year, which was hard to expect in an environment of a rising dollar and a falling S&P 500. Over the past 12 years, bitcoin has ended October higher on eight occasions. The average gain was 29.6%, and the average loss was 15.2%.
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The crypto market cap has risen over 2.7% in the last 24 hours to over $1.11 trillion.
#Bitcoin managed to hold above its 50-day MA over the weekend, which it surpassed in a strong move on the 28th of September.
BTCUSD surged over $1000 with a 4% gain, hitting a 7-week high of $28.3K. Contrary to the upward momentum at the end of last week, the intraday rally may be too stretched for now. After a long march, the price touched the technically and emotionally important 200-day moving average (currently $28K). There is a risk that we could see a repeat of the August 29 reversal to the downside. But that's a risk, not the main scenario.
Bitcoin ended September up 4.1% at $27.1K, bucking the seasonal trend of the worst month of the year, which was hard to expect in an environment of a rising dollar and a falling S&P 500. Over the past 12 years, bitcoin has ended October higher on eight occasions. The average gain was 29.6%, and the average loss was 15.2%.
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