The crypto market has added 1.5% over to the cap of $1.44 trillion, which has been acting as resistance for the last three weeks. The upward movement has intensified since the beginning of December.
#Bitcoin rose 9.4% to $37.7K in November, strengthening for the third consecutive month. In terms of seasonality, December is considered relatively neutral, adding half the time over the past 12 years. The average gain is 30.8%, while the average decline is 12.8%.
December started on the upside, returning BTCUSD to another test of highs near $38.4K. The price went up with the start of a new day and month before touching the lower boundary of the trading channel. Such dynamics look like an attempt to accelerate the growth trend.
#Ethereum is adding 3.8% over the day, having returned to test $2100 - a horizontal resistance which withstood the bulls' onslaught in November and was a turning point in April. A move above opens up a wide untraded range, giving ETH freedom of movement all the way to $3500.
#Bitcoin rose 9.4% to $37.7K in November, strengthening for the third consecutive month. In terms of seasonality, December is considered relatively neutral, adding half the time over the past 12 years. The average gain is 30.8%, while the average decline is 12.8%.
December started on the upside, returning BTCUSD to another test of highs near $38.4K. The price went up with the start of a new day and month before touching the lower boundary of the trading channel. Such dynamics look like an attempt to accelerate the growth trend.
#Ethereum is adding 3.8% over the day, having returned to test $2100 - a horizontal resistance which withstood the bulls' onslaught in November and was a turning point in April. A move above opens up a wide untraded range, giving ETH freedom of movement all the way to $3500.
The #DowJones has taken a high of 36,000, which is only 2.5% below its historical peak of January 2022. Above that round level, the index traded above it for a few days in November 2021 and briefly in December and January 2022.
This was a turning point three years ago and could now be again, and it's not about the magic of numbers at all but a lack of fuel for growth. The Dow Jones rally began on 30 October after closing below 32,400 the day before. The ensuing rally of more than 11.4% was almost without a pullback.
As a result, the Relative Strength Index reached 78.10 on the daily charts, going deep into overbought territory. The index has not climbed higher since the end of 2017. In that period, the RSI spent quite a long time in highly overbought territory, but the Dow Jones 30 growth rate was two to three times lower than the current one.
This was a turning point three years ago and could now be again, and it's not about the magic of numbers at all but a lack of fuel for growth. The Dow Jones rally began on 30 October after closing below 32,400 the day before. The ensuing rally of more than 11.4% was almost without a pullback.
As a result, the Relative Strength Index reached 78.10 on the daily charts, going deep into overbought territory. The index has not climbed higher since the end of 2017. In that period, the RSI spent quite a long time in highly overbought territory, but the Dow Jones 30 growth rate was two to three times lower than the current one.
There is another worry for the bulls - the performance of other equity indices. The #Nasdaq100 – the guiding star of investors in recent years – has stabilised in a narrow range since the beginning of last week. An attempt to develop growth on Wednesday was met with a sell-off, and Thursday also went to the bears' credit.
The #SP500 index, the leading market benchmark, stuck to the 4560 level. The bulls managed to close the gap from the beginning of August and seem to be exhausted. A side effect of this is the compression of volatility and the VIX index falling to multi-year lows, from which reversals have also often occurred.
The small-cap #Russell2000 index, the DJIA’s opposite, has been hitting horizontal resistance near 1810 for more than two weeks now, unable to get above its 200-day moving average despite a spectacular reversal in late October.
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The #SP500 index, the leading market benchmark, stuck to the 4560 level. The bulls managed to close the gap from the beginning of August and seem to be exhausted. A side effect of this is the compression of volatility and the VIX index falling to multi-year lows, from which reversals have also often occurred.
The small-cap #Russell2000 index, the DJIA’s opposite, has been hitting horizontal resistance near 1810 for more than two weeks now, unable to get above its 200-day moving average despite a spectacular reversal in late October.
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On Friday and Monday, we saw legendary moves in gold. On Friday evening, the price rose to $2075 on the background of risk appetite with reduced liquidity in the instrument. On Monday, the price of gold reached $2145, a new historical price maximum.
The nature of the movement on Friday and Monday morning suggests that we have seen the bears in gold wash out of the market. As liquidity returned, the price pulled back to $2060. This is still extreme territory, as the price only spent a few hours above.
Among the bullish technical signals, we note the Golden Cross formed when the 50-day moving average exceeded the 200-day moving average. In addition, the price is above this crossover, which also strengthens the bullish signal.
Still, joining the upward move in gold may be too dangerous right now. On the daily charts, the RSI is flirting with overbought territory, creating correction risks.
The nature of the movement on Friday and Monday morning suggests that we have seen the bears in gold wash out of the market. As liquidity returned, the price pulled back to $2060. This is still extreme territory, as the price only spent a few hours above.
Among the bullish technical signals, we note the Golden Cross formed when the 50-day moving average exceeded the 200-day moving average. In addition, the price is above this crossover, which also strengthens the bullish signal.
Still, joining the upward move in gold may be too dangerous right now. On the daily charts, the RSI is flirting with overbought territory, creating correction risks.
The upward movement generally fits into a Fibonacci pattern with an initial impulse from $1810 to $2007, followed by a correction to $1932. The realisation of this pattern suggests a 161.8% retracement of the initial rise to 2129. This is a fairly accurate execution of the pattern, given the low-liquidity trading hours and historical highs.
The next few days for gold are decisive for the subsequent trend. The ability to hold above $2050 will point to continued extreme bullish sentiment in the precious metals market.
The previous three times that gold made highs - in 2011 and three times in the last three years - it went into a sharp and deep correction that lasted for years in the first case and months in the aftermath of the pandemic.
The latter scenario looks more likely, given lower inflation fears and attractive yields in bonds, gold's main competitor.
The next few days for gold are decisive for the subsequent trend. The ability to hold above $2050 will point to continued extreme bullish sentiment in the precious metals market.
The previous three times that gold made highs - in 2011 and three times in the last three years - it went into a sharp and deep correction that lasted for years in the first case and months in the aftermath of the pandemic.
The latter scenario looks more likely, given lower inflation fears and attractive yields in bonds, gold's main competitor.
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#WaveAnalysis
#DowJones broke multi-month resistance level 35735.00
Likely to rise to resistance level 37000.00
Dow Jones index under the bullish pressure after the earlier breakout of the multi-month resistance level 35735.00, which stopped the previous impulse wave (A) at the end of July.
The breakout of the resistance level 35735.00 accelerated both of the active impulse waves 5 and (C).
Given the multi-month uptrend, Dow Jones index can be expected to rise further to the next resistance level 37000.00 (target price for the completion of the active waves 5 and (C)).
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#DowJones broke multi-month resistance level 35735.00
Likely to rise to resistance level 37000.00
Dow Jones index under the bullish pressure after the earlier breakout of the multi-month resistance level 35735.00, which stopped the previous impulse wave (A) at the end of July.
The breakout of the resistance level 35735.00 accelerated both of the active impulse waves 5 and (C).
Given the multi-month uptrend, Dow Jones index can be expected to rise further to the next resistance level 37000.00 (target price for the completion of the active waves 5 and (C)).
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#WaveAnalysis
#CHFJPY reversed from resistance level 170.30
Likely to fall to support level 167.40
CHFJPY currency pair recently reversed down from the key resistance level 170.30, which stopped the previous impulse wave (3) earlier this month.
The resistance level 170.30 was strengthened by the upper daily Bollinger Band.
Given the strength of the resistance level 170.30, bearish divergence on the daily Stochastic, CHFJPY currency pair can be expected to fall further to the next support level 167.40 (previous minor pivot support from the end of November)).
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#CHFJPY reversed from resistance level 170.30
Likely to fall to support level 167.40
CHFJPY currency pair recently reversed down from the key resistance level 170.30, which stopped the previous impulse wave (3) earlier this month.
The resistance level 170.30 was strengthened by the upper daily Bollinger Band.
Given the strength of the resistance level 170.30, bearish divergence on the daily Stochastic, CHFJPY currency pair can be expected to fall further to the next support level 167.40 (previous minor pivot support from the end of November)).
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Gold's historic highs and the surge in risk demand at the end of last week did not spare cryptocurrencies. Cryptos experienced impressive gains on Monday, but one cannot leave aside the weekend bull run as well. The #crypto market capitalisation reached 1.55 trillion, adding 10.5% in seven days.
#Bitcoin proved that the smooth uptrend since late October was just a long consolidation before a new upward spurt. Bitcoin has added over 11.5% since Friday, surpassing $42K at one point on Monday. While Bitcoin is overbought on daily timeframes, this is not necessarily a reason for a correction. In this mode, the first cryptocurrency can move for many more days, drawing more and more layers of investors into FOMO. Technically, up to $46K is thin-air territory for Bitcoin, and price swings between $40K and $46K can be pretty wild.
#Bitcoin proved that the smooth uptrend since late October was just a long consolidation before a new upward spurt. Bitcoin has added over 11.5% since Friday, surpassing $42K at one point on Monday. While Bitcoin is overbought on daily timeframes, this is not necessarily a reason for a correction. In this mode, the first cryptocurrency can move for many more days, drawing more and more layers of investors into FOMO. Technically, up to $46K is thin-air territory for Bitcoin, and price swings between $40K and $46K can be pretty wild.
Swiss inflation falls to 1.4%, will it affect the SNB?
Swiss inflation is falling below expectations, and this may be a reason for the SNB to change its rhetoric next week. Consumer prices fell 0.2% in November, slowing the annual pace from 1.7% to 1.4%, while no changes were expected.
This is a two-year low and down under the historical 101-year average (1.75%), although above the 0.6% average since 2000 when the SNB moved to inflation targeting.
The strong franc is one of the reasons why inflation is falling faster than in the US and the eurozone.
Swiss inflation is falling below expectations, and this may be a reason for the SNB to change its rhetoric next week. Consumer prices fell 0.2% in November, slowing the annual pace from 1.7% to 1.4%, while no changes were expected.
This is a two-year low and down under the historical 101-year average (1.75%), although above the 0.6% average since 2000 when the SNB moved to inflation targeting.
The strong franc is one of the reasons why inflation is falling faster than in the US and the eurozone.
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By early December, the USDCHF pair was near the historical support line of 0.87, which has been in force for the last twelve years. EURCHF is also near historical lows, barring a brief collapse in January 2015.
Other crosses with the franc (JPY, CAD) have also been near historical extremes over the past few days.
The slowdown in inflation triggered an impulsive sell-off in the franc, which lost around 0.5% but almost recovered the losses during the day.
Markets are in no hurry to play down the news, preferring to wait until 14 December, when the Central Bank will present its critical rate decision and quarterly monetary policy estimates. However, today's data is the last piece of the puzzle, as before the rate decision, there will be only the publication of the unemployment rate, which increased from 1.9% to 2.1% in six months.
Other crosses with the franc (JPY, CAD) have also been near historical extremes over the past few days.
The slowdown in inflation triggered an impulsive sell-off in the franc, which lost around 0.5% but almost recovered the losses during the day.
Markets are in no hurry to play down the news, preferring to wait until 14 December, when the Central Bank will present its critical rate decision and quarterly monetary policy estimates. However, today's data is the last piece of the puzzle, as before the rate decision, there will be only the publication of the unemployment rate, which increased from 1.9% to 2.1% in six months.
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#Bitcoin surpassed $42K on Monday, adding more than $2,000. The last time Bitcoin traded above $40K was in April 2022, before the collapse of the Terra ecosystem triggered a massive #crypto market crash. Financial markets are seeing a second day of risk aversion, which has kicked off profit-taking in cryptos.
Bitcoin is losing 1.5% to $41.5K so far on Tuesday after a short squeeze into the $42.4K area. A broader move of profit-taking could take the price back to $40K before attracting new buyers.
According to CoinShares, crypto fund investments rose by $176 million last week; significant inflows continued for the sixth week in a row and the tenth week overall. Bitcoin investments increased by $133 million, Ethereum by $31 million, and Solana by $4.3 million.
Investments in crypto funds reached $1.76bn or 4% of assets under management in 10 weeks, the highest since October 2021 when the US futures ETF was launched. Trading volumes on ETPs remain strong at $2.6bn, CoinShares noted.
Bitcoin is losing 1.5% to $41.5K so far on Tuesday after a short squeeze into the $42.4K area. A broader move of profit-taking could take the price back to $40K before attracting new buyers.
According to CoinShares, crypto fund investments rose by $176 million last week; significant inflows continued for the sixth week in a row and the tenth week overall. Bitcoin investments increased by $133 million, Ethereum by $31 million, and Solana by $4.3 million.
Investments in crypto funds reached $1.76bn or 4% of assets under management in 10 weeks, the highest since October 2021 when the US futures ETF was launched. Trading volumes on ETPs remain strong at $2.6bn, CoinShares noted.
#DXY
The American dollar is fighting hard for the trend. For the last three trading sessions, the dollar index has been crossing up and down the 200-day moving average every day. All in all, the flirting with this level has been going on for more than three weeks, during which neither bulls nor bears were able to form a stable trend.
Right now, there are about equal chances of a trend forming in one direction or the other, so it is worth watching closely to see which trend crystallises.
The dollar bumped around in October and declined sharply in November, with only some stabilisation late last month. The recent settlement, from this point of view, looks like an attempt to stand still and gather strength before a new downward impulse.
The first signal to switch to a bearish bias could be a sharp downward impulse under the 200-day average at 103.3 versus the current 103.6. The final confirmation will come in the form of an update of the November lows at 102.37.
The American dollar is fighting hard for the trend. For the last three trading sessions, the dollar index has been crossing up and down the 200-day moving average every day. All in all, the flirting with this level has been going on for more than three weeks, during which neither bulls nor bears were able to form a stable trend.
Right now, there are about equal chances of a trend forming in one direction or the other, so it is worth watching closely to see which trend crystallises.
The dollar bumped around in October and declined sharply in November, with only some stabilisation late last month. The recent settlement, from this point of view, looks like an attempt to stand still and gather strength before a new downward impulse.
The first signal to switch to a bearish bias could be a sharp downward impulse under the 200-day average at 103.3 versus the current 103.6. The final confirmation will come in the form of an update of the November lows at 102.37.
But the situation is far from desperate for the bulls as well. The dollar showed a convincing close last month, managing to rebound sharply to close the month above the significant 200-day moving average. An attempt to sell the dollar last Friday failed to gain traction, and the index returned to growth on Monday.
The latest dollar momentum at least created a springboard for a broader bounce and extended profit-taking. A classic Fibonacci retracement of the November decline amplitude opens upside potential at 104.12 (+0.5% from current levels). The dollar's ability to overcome the last level and further gain will be the final confirmation of the trend change to growth.
The latest dollar momentum at least created a springboard for a broader bounce and extended profit-taking. A classic Fibonacci retracement of the November decline amplitude opens upside potential at 104.12 (+0.5% from current levels). The dollar's ability to overcome the last level and further gain will be the final confirmation of the trend change to growth.
Among other factors, we note the extremely dovish expectations from the Fed: rate futures give a 14.5% chance of a cut already in January, and at the March meeting, the odds of a cut exceed 62%. Less than two months ago, the market was giving roughly equal odds between raising and keeping rates on hold.
This dramatic revision in expectations has been the fundamental fuel for the weakening dollar and the rally in equities. In contrast, the Fed is more inclined to raise the rate and is setting up for an extended period of holding it. The return of market expectations to those of the Fed looks like a strong case for a dollar recovery in the coming weeks.
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This dramatic revision in expectations has been the fundamental fuel for the weakening dollar and the rally in equities. In contrast, the Fed is more inclined to raise the rate and is setting up for an extended period of holding it. The return of market expectations to those of the Fed looks like a strong case for a dollar recovery in the coming weeks.
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#CrudeOil remains under pressure, reflecting fears of demand cuts, despite verbal interventions by OPEC+ and US government officials over the past week to shift the balance in favour of a deficit.
Last week, the expanded OPEC+ agreed a production cut of 2.2 million bpd from the set quotas for the first quarter of next year. This is a reduction of 900k bpd from what we have had so far.
This news did not help to bring the oil price back above the 200-day average, which acted as resistance in November.
Already this week, cartel officials have reminded us that they may extend this or even deepen the cuts. But it seems that even this did not impress traders. #WTI prices updated the lows for five months, going under $72.40. #Brent, at the height of the European session on Tuesday, held slightly above the November low.
Last week, the expanded OPEC+ agreed a production cut of 2.2 million bpd from the set quotas for the first quarter of next year. This is a reduction of 900k bpd from what we have had so far.
This news did not help to bring the oil price back above the 200-day average, which acted as resistance in November.
Already this week, cartel officials have reminded us that they may extend this or even deepen the cuts. But it seems that even this did not impress traders. #WTI prices updated the lows for five months, going under $72.40. #Brent, at the height of the European session on Tuesday, held slightly above the November low.
US officials have indicated that they will buy back as much oil to replenish the strategic oil reserve as they can at current prices. Technically, this also supports the price.
It was logical to expect oil to quickly move higher on such news, but we see a fourth session of declines.
Apparently, sellers are on the side of falling actual demand, which pressurises prices despite promises to cut production.
But it is quite possible that the pressure on prices in recent days was a sell-off after a failed test of the 200-day moving average. From current levels, oil has downside potential to $66-70 per barrel WTI and $70-73 for Brent, from where it was repurchased from March to the end of June and several more times from July 2021. A decline in this area would bring the 200-week average back into focus, which requires global events such as a rupture within OPEC, a global pandemic or abnormal volatility in financial markets to break.
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It was logical to expect oil to quickly move higher on such news, but we see a fourth session of declines.
Apparently, sellers are on the side of falling actual demand, which pressurises prices despite promises to cut production.
But it is quite possible that the pressure on prices in recent days was a sell-off after a failed test of the 200-day moving average. From current levels, oil has downside potential to $66-70 per barrel WTI and $70-73 for Brent, from where it was repurchased from March to the end of June and several more times from July 2021. A decline in this area would bring the 200-week average back into focus, which requires global events such as a rupture within OPEC, a global pandemic or abnormal volatility in financial markets to break.
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There were more signs of a cooling US labour market ahead of Friday's employment report. The number of open job vacancies in October fell to 8.733 million from 9.35 million a month earlier and 9.31 million expected.
With occasional bounces, the figure is down from 12 million since March last year. However, the job market is still hotter than it was at its peak in January 2019 at 7.5 million.
US markets remain in "bad is good" mode. This logic makes sense for inflation, suggesting the Fed is easing its stance or bringing the date for an interest rate cut closer.
But it is a very volatile game when we look at indicators of economic activity such as the labour market or consumption. A deterioration in these indicators may first prove to be the cause of market turbulence before a softening of the Central Bank's stance and a "natural recovery" of the market reverses the trend.
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With occasional bounces, the figure is down from 12 million since March last year. However, the job market is still hotter than it was at its peak in January 2019 at 7.5 million.
US markets remain in "bad is good" mode. This logic makes sense for inflation, suggesting the Fed is easing its stance or bringing the date for an interest rate cut closer.
But it is a very volatile game when we look at indicators of economic activity such as the labour market or consumption. A deterioration in these indicators may first prove to be the cause of market turbulence before a softening of the Central Bank's stance and a "natural recovery" of the market reverses the trend.
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#WaveAnalysis
#EURUSD broke daily up channel
Likely to fall to support level 1.0700
EURUSD currency pair under the bearish pressure after the earlier breakout of the support trendline of the daily up channel, which enclosed the previous impulse wave (C) from the start of November.
The breakout of this daily up channel accelerated the active impulse wave 1.
Given the clear daily downtrend and the strong USD bullish sentiment seen today, EURUSD can be expected to fall further to the next support level 1.0700 (former monthly high from October).
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#EURUSD broke daily up channel
Likely to fall to support level 1.0700
EURUSD currency pair under the bearish pressure after the earlier breakout of the support trendline of the daily up channel, which enclosed the previous impulse wave (C) from the start of November.
The breakout of this daily up channel accelerated the active impulse wave 1.
Given the clear daily downtrend and the strong USD bullish sentiment seen today, EURUSD can be expected to fall further to the next support level 1.0700 (former monthly high from October).
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#WaveAnalysis
#Gold reversed from multi-year resistance level 2065
Likely to fall to support level 1900
Gold recently reversed down from the major multi-year resistance level 2065, which has been reversing the price from the middle of 2020, as can be seen below.
The resistance level 2065.00 was strengthened by the upper daily and the weekly Bollinger Bands.
Given the strength of the resistance level 2065 (which was never broken on a closing basis over the last few years) and the overbought weekly Stochastic, Gold can be expected to fall further to the next round support level 2000 – the breakout of which can lead to further losses to 1900.
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#Gold reversed from multi-year resistance level 2065
Likely to fall to support level 1900
Gold recently reversed down from the major multi-year resistance level 2065, which has been reversing the price from the middle of 2020, as can be seen below.
The resistance level 2065.00 was strengthened by the upper daily and the weekly Bollinger Bands.
Given the strength of the resistance level 2065 (which was never broken on a closing basis over the last few years) and the overbought weekly Stochastic, Gold can be expected to fall further to the next round support level 2000 – the breakout of which can lead to further losses to 1900.
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