#Crypto market closed lower on Thursday, but little changed from the $2.53 trillion market cap over 24 hours.
However, the internal dynamics are mixed. #Bitcoin loses 1.5% and retreats to $66K, while #Ethereum hovers around $3500 (-0.25%), #BNB and #DOGE are up over 5%, and #XRP is up around 4%.
It's as if the cryptocurrencies haven't chosen their shepherd: should they follow negative from the strengthening dollar or positive after new heights of US indices? We lean towards the latter, believing that the dollar strengthens against even weaker peers whose central banks are more dovish.
Overall, G10 central banks’ dovishness eases a liquidity drain, which is positive for cryptocurrencies that are sensitive to it.
However, the internal dynamics are mixed. #Bitcoin loses 1.5% and retreats to $66K, while #Ethereum hovers around $3500 (-0.25%), #BNB and #DOGE are up over 5%, and #XRP is up around 4%.
It's as if the cryptocurrencies haven't chosen their shepherd: should they follow negative from the strengthening dollar or positive after new heights of US indices? We lean towards the latter, believing that the dollar strengthens against even weaker peers whose central banks are more dovish.
Overall, G10 central banks’ dovishness eases a liquidity drain, which is positive for cryptocurrencies that are sensitive to it.
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The Fed left its key interest rate unchanged, and the forecast for its reduction this year was unchanged, but it supported risk appetite in the global markets. After the announcement, the US dollar accelerated its decline, losing around 1% from peak to trough. All three major US stock indexes hit all-time highs, and gold rallied to new highs.
Markets were encouraged by Powell's words that his view of the inflation outlook had not changed in recent weeks. Remember that during this period, inflation reports have come in above expectations and questioned the downward trajectory.
Another positive was the removal of risks that the FOMC would reduce the number of projected rate cuts.
Also positive was the confirmation of the previously announced plans to reduce the pace of securities sales from the balance sheet. This will add some liquidity to the financial system, which is supportive of risk demand, although the overall impact is relatively small.
Markets were encouraged by Powell's words that his view of the inflation outlook had not changed in recent weeks. Remember that during this period, inflation reports have come in above expectations and questioned the downward trajectory.
Another positive was the removal of risks that the FOMC would reduce the number of projected rate cuts.
Also positive was the confirmation of the previously announced plans to reduce the pace of securities sales from the balance sheet. This will add some liquidity to the financial system, which is supportive of risk demand, although the overall impact is relatively small.
The dollar's reaction is in line with our earlier expectations. The Fed's dovish tone triggered an impulsive sell-off in the dollar, with the DXY falling sharply below its 200- and 50-day moving averages.
As expected, and as we wrote before the release, the dollar's downward momentum does not look sustainable, given the strong technical picture that has been building over the past few weeks.
From a fundamental perspective, it isn't easy to sell the dollar when other central banks are set to follow suit. At the end of last year, there was speculation that the Fed would be the first to ease, which weakened the dollar. However, a strong economy and labour market have levelled the playing field. In addition, the SNB unexpectedly cut rates by 25 basis points on Thursday, highlighting Europe's willingness to ease.
The expected synchronised easing by the world's major central banks is feeding buyer interest in equity markets.
As expected, and as we wrote before the release, the dollar's downward momentum does not look sustainable, given the strong technical picture that has been building over the past few weeks.
From a fundamental perspective, it isn't easy to sell the dollar when other central banks are set to follow suit. At the end of last year, there was speculation that the Fed would be the first to ease, which weakened the dollar. However, a strong economy and labour market have levelled the playing field. In addition, the SNB unexpectedly cut rates by 25 basis points on Thursday, highlighting Europe's willingness to ease.
The expected synchronised easing by the world's major central banks is feeding buyer interest in equity markets.
Gold's retreat is not yet a reversal
The Fed's comments led to a 3% rise in gold, but the dollar's recovery in the second half of Thursday reduced this gain to just 0.5%. Technically, the outlook is unclear, but fundamentally, things are still on the side of the bulls.
In early trading on Thursday, gold slipped to $2222 on thin liquidity and the triggering of stop orders, which washed short positions out of the market. Throughout the day on Thursday, a stabilisation above $2200 looked attractive for many to take money off the table.
The technical analysis so far gives a mixed picture on the daily timeframes. ⬇️⬇️
The Fed's comments led to a 3% rise in gold, but the dollar's recovery in the second half of Thursday reduced this gain to just 0.5%. Technically, the outlook is unclear, but fundamentally, things are still on the side of the bulls.
In early trading on Thursday, gold slipped to $2222 on thin liquidity and the triggering of stop orders, which washed short positions out of the market. Throughout the day on Thursday, a stabilisation above $2200 looked attractive for many to take money off the table.
The technical analysis so far gives a mixed picture on the daily timeframes. ⬇️⬇️
On the bulls' side, gold's ability to break above previous highs confirmed the Fibonacci extension scenario to 2300 (161.8% of the rally) after a correction to 76.4%.
On the bears' side, fatigue after the rise is temporarily evident: the price update of the highs has not been confirmed by the RSI. Moreover, the index left the overbought territory (>70) in the first half of Friday's trading.
Cautious traders may want to wait for a break above the $2155-2190 area, as the chances of further movement in the direction of the break are higher.
In our view, gold's failure on Thursday and the first half of Friday does not look like a reversal, as the push into the dollar in recent hours is the result of speculation that other central banks will be even softer than the Fed. This is a supportive environment for risk assets, including gold. Still, the impressive rally in gold since the second half of February and the recent surge have left the market somewhat overheated and in need of a pause.
On the bears' side, fatigue after the rise is temporarily evident: the price update of the highs has not been confirmed by the RSI. Moreover, the index left the overbought territory (>70) in the first half of Friday's trading.
Cautious traders may want to wait for a break above the $2155-2190 area, as the chances of further movement in the direction of the break are higher.
In our view, gold's failure on Thursday and the first half of Friday does not look like a reversal, as the push into the dollar in recent hours is the result of speculation that other central banks will be even softer than the Fed. This is a supportive environment for risk assets, including gold. Still, the impressive rally in gold since the second half of February and the recent surge have left the market somewhat overheated and in need of a pause.
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Promising Dow Jones growth
The US Dow Jones Industrial Average was one step away from the milestone of 40,000 on Thursday, having gained 3% in four days since the start of the week. Friday saw the traditional quiet pullback as traders took short-term profits.
This breakout to new highs marked the exit of a consolidation of around 39,000 that had been in place for almost a month.
The exit from the consolidation was firm, supporting the thesis that it was not wrong. Very similarly, the Dow Jones came out of a consolidation in January.
The rise of the last two months has not been like the rally we saw in November-December. But this smooth rise is a safe companion to a mature bullish trend that can last for months.
Further bullish confirmation comes from the index update, which gives equal weighting to all stocks in the DJI Composite. It also updates all-time highs but is in a smooth uptrend - a sure sign of expanding growth.
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The US Dow Jones Industrial Average was one step away from the milestone of 40,000 on Thursday, having gained 3% in four days since the start of the week. Friday saw the traditional quiet pullback as traders took short-term profits.
This breakout to new highs marked the exit of a consolidation of around 39,000 that had been in place for almost a month.
The exit from the consolidation was firm, supporting the thesis that it was not wrong. Very similarly, the Dow Jones came out of a consolidation in January.
The rise of the last two months has not been like the rally we saw in November-December. But this smooth rise is a safe companion to a mature bullish trend that can last for months.
Further bullish confirmation comes from the index update, which gives equal weighting to all stocks in the DJI Composite. It also updates all-time highs but is in a smooth uptrend - a sure sign of expanding growth.
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The #crypto market cap rose 4.5% over 24 hours to $2.56 trillion, roughly where it was a week ago, with an active rally over the last three days.
Bitcoin is up 4.7%, and #Ethereum is up 4.3% in 24 hours. Their momentum has encouraged even more robust growth in smaller coins. #Dogecoin is up 15% in 24 hours and 100% in 30 days, #Solana is up +9.5% and 86%, and #BNB remains stronger at +6.7% and 54% respectively.
#Bitcoin rose to $67.1K, a third day of strength from an area near the 61.8% Fibonacci retracement of the rise from the January lows to the March highs. The correction from the peak has removed overbought conditions on a daily timeframe, making room for growth and easing the psychological impact on potential buyers as many are more comfortable buying the asset after a drawdown.
The fundamental development of this pattern suggests further growth towards the previous high of $73.7K. If it is successfully breached, the next target for growth could be $95.5K.
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Bitcoin is up 4.7%, and #Ethereum is up 4.3% in 24 hours. Their momentum has encouraged even more robust growth in smaller coins. #Dogecoin is up 15% in 24 hours and 100% in 30 days, #Solana is up +9.5% and 86%, and #BNB remains stronger at +6.7% and 54% respectively.
#Bitcoin rose to $67.1K, a third day of strength from an area near the 61.8% Fibonacci retracement of the rise from the January lows to the March highs. The correction from the peak has removed overbought conditions on a daily timeframe, making room for growth and easing the psychological impact on potential buyers as many are more comfortable buying the asset after a drawdown.
The fundamental development of this pattern suggests further growth towards the previous high of $73.7K. If it is successfully breached, the next target for growth could be $95.5K.
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US New home sales have slowed the recovery, rising by 0.3% to 662k in February, weaker than the 3% increase expected. These are normal levels for recent years, seen from early 2019 to February 2020.
Perhaps the only reminder that the Fed’s interest rates are close to multi-decade highs is the decline in prices. In February, the median sales price fell 3.5% to $400.5K, the lowest since June 2021 and nearly 20% below the peak of $496.8K in October 2022. The decline in new home prices from the peak in 2007 to the trough in 2009 was of roughly the same magnitude.
Prices are falling from clearly inflated levels, contributing to lower inflation. Maintaining sales volumes at "healthy" levels does not raise the flag of concern about the economy.
Perhaps the only reminder that the Fed’s interest rates are close to multi-decade highs is the decline in prices. In February, the median sales price fell 3.5% to $400.5K, the lowest since June 2021 and nearly 20% below the peak of $496.8K in October 2022. The decline in new home prices from the peak in 2007 to the trough in 2009 was of roughly the same magnitude.
Prices are falling from clearly inflated levels, contributing to lower inflation. Maintaining sales volumes at "healthy" levels does not raise the flag of concern about the economy.
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#WaveAnalysis #AAPL
Apple reversed from support level 169.60
Likely to rise to resistance level 178.75
Apple recently reversed up from the key support level 169.60, which has been steadily reversing the price from May.
The support level 169.60 was strengthened by the lower daily Bollinger Band and by the 38.2% Fibonacci correction of the upward impulse from January.
Given the prevailing daily uptrend, Apple can be expected to rise further to the next resistance level 178.75 (which stopped the previous impulse wave 1).
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Apple reversed from support level 169.60
Likely to rise to resistance level 178.75
Apple recently reversed up from the key support level 169.60, which has been steadily reversing the price from May.
The support level 169.60 was strengthened by the lower daily Bollinger Band and by the 38.2% Fibonacci correction of the upward impulse from January.
Given the prevailing daily uptrend, Apple can be expected to rise further to the next resistance level 178.75 (which stopped the previous impulse wave 1).
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#WaveAnalysis #ANF
Abercrombie & Fitch Co reversed from resistance level 140.00
Likely to fall to support level 115.00
Abercrombie & Fitch Co recently reversed down with two daily Dojis from the pivotal resistance level 140.00, which stopped the previous impulse wave 1 in March.
The resistance level 140.00 was strengthened by the upper daily Bollinger Band.
Given the strength of the resistance level 140.00, Abercrombie & Fitch Co can be expected to fall further to the next support level 115.00 (which stopped the previous corrective wave 2).
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Abercrombie & Fitch Co reversed from resistance level 140.00
Likely to fall to support level 115.00
Abercrombie & Fitch Co recently reversed down with two daily Dojis from the pivotal resistance level 140.00, which stopped the previous impulse wave 1 in March.
The resistance level 140.00 was strengthened by the upper daily Bollinger Band.
Given the strength of the resistance level 140.00, Abercrombie & Fitch Co can be expected to fall further to the next support level 115.00 (which stopped the previous corrective wave 2).
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#Crypto market capitalisation regained another 5% in 24 hours, peaking earlier in the day at $2.7 trillion against a recent peak of 2.7 in mid-March and around $3 trillion at the end of 2021. The recovery is faster than before the decline, promising prospects for further growth.
#Bitcoin has once again surpassed the psychologically important 71K. The main intrigue of the next few days is the ability to overcome the previous highs at $73.7K. Strengthening above $75K will make the growth scenario up to 95.5 workable. But until then, one should be prepared for a re-intensification of selling in the first cryptocurrency.
According to CoinShares, investments in crypto funds fell by a record $942 million last week after two weeks of updating all-time highs in inflows. Investments in Bitcoin were down $904 million; Ethereum was down $34 million, and Solana was down $5.6 million. Investments in funds that allow for bitcoin shorts were down $4 million.
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#Bitcoin has once again surpassed the psychologically important 71K. The main intrigue of the next few days is the ability to overcome the previous highs at $73.7K. Strengthening above $75K will make the growth scenario up to 95.5 workable. But until then, one should be prepared for a re-intensification of selling in the first cryptocurrency.
According to CoinShares, investments in crypto funds fell by a record $942 million last week after two weeks of updating all-time highs in inflows. Investments in Bitcoin were down $904 million; Ethereum was down $34 million, and Solana was down $5.6 million. Investments in funds that allow for bitcoin shorts were down $4 million.
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#WaveAnalysis #NDX
Nasdaq-100 index reversed from resistance level 18400.00
Likely to fall to support level 18000.00
Nasdaq-100 index recently reversed down from the key resistance level 18400.00 (strengthened by the upper daily Bollinger Band), which has been reversing the index from the start of March.
The downward reversal from the resistance level 18400.00 started the active minor correction (b).
Given the strength of the resistance level 18400.00 and the bearish divergence on the daily Stochastic, Nasdaq-100 index can be expected to fall further to the next round support level 18000.00.
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Nasdaq-100 index reversed from resistance level 18400.00
Likely to fall to support level 18000.00
Nasdaq-100 index recently reversed down from the key resistance level 18400.00 (strengthened by the upper daily Bollinger Band), which has been reversing the index from the start of March.
The downward reversal from the resistance level 18400.00 started the active minor correction (b).
Given the strength of the resistance level 18400.00 and the bearish divergence on the daily Stochastic, Nasdaq-100 index can be expected to fall further to the next round support level 18000.00.
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#WaveAnalysis
#USDCHF broke the resistance level 0.8875
Likely to rise to resistance level 0.9100
USDCHF currency pair recently broke the resistance level 0.8875 (which has been reversing the price from February), intersecting with the 61.8% Fibonacci correction of the downward impulse from October.
The breakout of the resistance level 0.8875 accelerated the C-wave of the active intermediate ABC correction (4).
Given the strongly bearish Swiss France sentiment seen today, USDCHF currency pair can be expected to rise further to the next resistance level 0.9100 (target for the completion of the active impulse wave C).
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#USDCHF broke the resistance level 0.8875
Likely to rise to resistance level 0.9100
USDCHF currency pair recently broke the resistance level 0.8875 (which has been reversing the price from February), intersecting with the 61.8% Fibonacci correction of the downward impulse from October.
The breakout of the resistance level 0.8875 accelerated the C-wave of the active intermediate ABC correction (4).
Given the strongly bearish Swiss France sentiment seen today, USDCHF currency pair can be expected to rise further to the next resistance level 0.9100 (target for the completion of the active impulse wave C).
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#Crypto cap has stabilised around the $2.63 trillion level, losing 1.7% in 24 hours, but very close to where it was at Monday's end of the day.
Bitcoin is down 1.2%, Ethereum lost 2.3%, BNB sank 3%, and Solana is minus 4%. On the surface, the trend is for a deeper pullback in the coins that have rallied the most in recent days.
#Bitcoin has fallen back below $70K, which can be attributed to the bulls' need to let off steam and the general decline in risk appetite in global markets. The short-term focus for traders will be to see if Bitcoin can retest Tuesday's intra-day lows near $69.5K. A break below this level could signal a more protracted correction.
The US Department of Justice has filed charges against one of the world's largest crypto exchanges, KuCoin, and two of its founders. The exchange is accused of ignoring US anti-money laundering laws and failing to monitor suspicious transactions as US law requires.
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Bitcoin is down 1.2%, Ethereum lost 2.3%, BNB sank 3%, and Solana is minus 4%. On the surface, the trend is for a deeper pullback in the coins that have rallied the most in recent days.
#Bitcoin has fallen back below $70K, which can be attributed to the bulls' need to let off steam and the general decline in risk appetite in global markets. The short-term focus for traders will be to see if Bitcoin can retest Tuesday's intra-day lows near $69.5K. A break below this level could signal a more protracted correction.
The US Department of Justice has filed charges against one of the world's largest crypto exchanges, KuCoin, and two of its founders. The exchange is accused of ignoring US anti-money laundering laws and failing to monitor suspicious transactions as US law requires.
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Gold: Suspicious storm of $2200
Gold breached the $2200 mark for the second time in history on Tuesday before retreating to $2182 in early US trading. Cryptocurrencies are trading in the same direction as gold today, but silver, platinum and copper are failing to make similar gains, causing some unease.
Gold's break above $2195 tested the rally high from late February to 8th March. A fix above this level would be the first step towards a new rally, making the scenario of growth to $2300 viable.
Strictly speaking, there is a higher price on the charts, but it is the result of slippage in low liquidity trading, so it is not considered a full-fledged breakout.
Gold breached the $2200 mark for the second time in history on Tuesday before retreating to $2182 in early US trading. Cryptocurrencies are trading in the same direction as gold today, but silver, platinum and copper are failing to make similar gains, causing some unease.
Gold's break above $2195 tested the rally high from late February to 8th March. A fix above this level would be the first step towards a new rally, making the scenario of growth to $2300 viable.
Strictly speaking, there is a higher price on the charts, but it is the result of slippage in low liquidity trading, so it is not considered a full-fledged breakout.
#Silver is losing ground daily for the fourth consecutive session, falling to $24.4. Platinum is trading near $900 - near local lows after a 5% pullback from its 15th March high. Copper has been trending lower since early last week.
Gold is the most liquid metal in the exchange, but its divergence from other metals is setting it up for a false breakout on Tuesday.
This is evidenced by the persistent sideways movement in gold miners over the past three weeks despite gold's impressive rally.
Technically, gold needs to consolidate above $2200 to start a new bullish momentum. In the event of further declines, we should keep an eye on the dynamics around $2150: a failure of this support could trigger a deeper correction with the first target at $2130.
Gold is the most liquid metal in the exchange, but its divergence from other metals is setting it up for a false breakout on Tuesday.
This is evidenced by the persistent sideways movement in gold miners over the past three weeks despite gold's impressive rally.
Technically, gold needs to consolidate above $2200 to start a new bullish momentum. In the event of further declines, we should keep an eye on the dynamics around $2150: a failure of this support could trigger a deeper correction with the first target at $2130.
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USDJPY Eyes 1990 Highs: Intervention or Reversal?
The Bank of Japan's monetary policy tightening at the beginning of March not only failed to reverse but also added to the Yen's weakness. The systematic pressure on the JPY raises even more questions, given that the Fed and ECB are less than three months away from widely expected rate cuts.
The #USDJPY rose to 151.97 on Wednesday morning, 7 p above the November 2022 peak and 4 p above the October 2022 peak. Wednesday's high was the highest since 1990.
The 152 level looks like a tried and tested intervention zone. In recent days, we have heard repeated statements from government and central bank officials that there is no fundamental reason for the Yen to drop. Such signs sound like the threat of intervention, which is dangerous for short-term speculators.
This is the 3rd time in two years that the Yen has approached this level. On the previous two occasions, it works like strong pivot point, and the market is close to forming a reflex against this level.
The Bank of Japan's monetary policy tightening at the beginning of March not only failed to reverse but also added to the Yen's weakness. The systematic pressure on the JPY raises even more questions, given that the Fed and ECB are less than three months away from widely expected rate cuts.
The #USDJPY rose to 151.97 on Wednesday morning, 7 p above the November 2022 peak and 4 p above the October 2022 peak. Wednesday's high was the highest since 1990.
The 152 level looks like a tried and tested intervention zone. In recent days, we have heard repeated statements from government and central bank officials that there is no fundamental reason for the Yen to drop. Such signs sound like the threat of intervention, which is dangerous for short-term speculators.
This is the 3rd time in two years that the Yen has approached this level. On the previous two occasions, it works like strong pivot point, and the market is close to forming a reflex against this level.
However, the bulls also have a strong argument on their side.
Corrections are becoming increasingly shallow. USDJPY lost 16% in three months after approaching 152 in 2022. In 2023, however, the decline was around 7.5%. At the end of February, the pair rose gently towards 151 and turned sharply lower but rallied again after a 3.5% decline.
The initial USDJPY spike in 2022 made an impressive contribution to inflation, as, at its peak, the pair was over 33% higher than a year earlier. Long-term yen volatility is falling, and inflation is on track to stabilise around the target of 2%.
Therefore, it makes no sense for the Ministry of Finance and the Bank of Japan to continue making 152 a red line. We are likely to see more rhetoric and possibly more policy rate hikes in the coming months, but not as dramatic FX interventions as in 2022 or late 2023.
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Corrections are becoming increasingly shallow. USDJPY lost 16% in three months after approaching 152 in 2022. In 2023, however, the decline was around 7.5%. At the end of February, the pair rose gently towards 151 and turned sharply lower but rallied again after a 3.5% decline.
The initial USDJPY spike in 2022 made an impressive contribution to inflation, as, at its peak, the pair was over 33% higher than a year earlier. Long-term yen volatility is falling, and inflation is on track to stabilise around the target of 2%.
Therefore, it makes no sense for the Ministry of Finance and the Bank of Japan to continue making 152 a red line. We are likely to see more rhetoric and possibly more policy rate hikes in the coming months, but not as dramatic FX interventions as in 2022 or late 2023.
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