#WaveAnalysis
#GBPAUD reversed from key support level 1.9135
Likely to rise to resistance level 1.9400
GBPAUD currency pair recently reversed up from the key support level 1.9135, which reversed the price sharply in April.
The support level 1.9135 was strengthened by the lower daily Bollinger Band and by the 50% Fibonacci correction of the previous sharp upward impulse from January.
Given the strength of the support level 1.9135, GBPAUD pair can be expected to rise further to the next resistance level 1.9400 (which has been reversing the price from April).
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#GBPAUD reversed from key support level 1.9135
Likely to rise to resistance level 1.9400
GBPAUD currency pair recently reversed up from the key support level 1.9135, which reversed the price sharply in April.
The support level 1.9135 was strengthened by the lower daily Bollinger Band and by the 50% Fibonacci correction of the previous sharp upward impulse from January.
Given the strength of the support level 1.9135, GBPAUD pair can be expected to rise further to the next resistance level 1.9400 (which has been reversing the price from April).
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#Crypto
#Bitcoin's closing price on Tuesday became the lowest since late February, confirming the downward trend and falling under March and April support and the psychologically important round level.
Bitcoin ended April down 15.5% to $59.9K, after six months of gains out of the last seven (January BTC ended virtually unchanged).
Technical downside targets now look to be $55.7K (61.8% Fibonacci retracement of the rise since October) and the $51-52K area (late January consolidation area). However, both FOMC announcements later today and monthly jobs data on Friday have enough potential to accelerate or reverse the downtrend.
In terms of seasonality, May is not a good month for BTC. Over the past 13 years, bitcoin has ended a given month up on seven occasions and down six times. The average rise was 31.3%, and the average decline was 14.5%. Meanwhile, over the last three years, during May, BTC has slid 20% on average.
#Bitcoin's closing price on Tuesday became the lowest since late February, confirming the downward trend and falling under March and April support and the psychologically important round level.
Bitcoin ended April down 15.5% to $59.9K, after six months of gains out of the last seven (January BTC ended virtually unchanged).
Technical downside targets now look to be $55.7K (61.8% Fibonacci retracement of the rise since October) and the $51-52K area (late January consolidation area). However, both FOMC announcements later today and monthly jobs data on Friday have enough potential to accelerate or reverse the downtrend.
In terms of seasonality, May is not a good month for BTC. Over the past 13 years, bitcoin has ended a given month up on seven occasions and down six times. The average rise was 31.3%, and the average decline was 14.5%. Meanwhile, over the last three years, during May, BTC has slid 20% on average.
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Bears showed strength ahead of the FOMC decision.
U.S. indices sagged on Tuesday as investors opted to risk off. They are awaiting a tighter Fed tone following Wednesday’s meeting.
The S&P500 suffered a sell-off as it attempted to climb above its 50-day moving average. It was a real show of strength, with the index falling more than 1.7% for the day - its biggest one-day drop since August 2023.
In mid-April, the S&P500 fell below its 50-day moving average, which acts as an informal indicator of the medium-term trend, and a stepped-up sell-off followed. On Tuesday, that curve worked out as resistance, a new sign of a reversal to a correction or bear market.
The Fear and Greed Index pulled back to the 39 (fear) level, not far from the low of 32 set on 19 April. The sentiment index showed very similar dynamics in the middle of last year when the correction took more than three months. Then, buyers actively returned only after a 10% correction from the peak.
U.S. indices sagged on Tuesday as investors opted to risk off. They are awaiting a tighter Fed tone following Wednesday’s meeting.
The S&P500 suffered a sell-off as it attempted to climb above its 50-day moving average. It was a real show of strength, with the index falling more than 1.7% for the day - its biggest one-day drop since August 2023.
In mid-April, the S&P500 fell below its 50-day moving average, which acts as an informal indicator of the medium-term trend, and a stepped-up sell-off followed. On Tuesday, that curve worked out as resistance, a new sign of a reversal to a correction or bear market.
The Fear and Greed Index pulled back to the 39 (fear) level, not far from the low of 32 set on 19 April. The sentiment index showed very similar dynamics in the middle of last year when the correction took more than three months. Then, buyers actively returned only after a 10% correction from the peak.
Now, a similar pullback will send the S&P500 to the 4750 area, which is the middle of the December-January consolidation area. The 4700-4800 area is now also centred around the 161.8% target of the April decline amplitude and the 200-day moving average. This combination of important levels clearly whets the bears’ appetite.
The fundamental driver of the decline in risk appetite is the change in expectations for the Fed’s key rate. Since the beginning of the year, it has become routine to push back the rate cut forecast and reduce the number of rate cuts from three to 1-2. At Wednesday’s meeting, market watchers expect Powell to formally confirm this shift from the FOMC, which had previously forecast three rate cuts this year.
The fundamental driver of the decline in risk appetite is the change in expectations for the Fed’s key rate. Since the beginning of the year, it has become routine to push back the rate cut forecast and reduce the number of rate cuts from three to 1-2. At Wednesday’s meeting, market watchers expect Powell to formally confirm this shift from the FOMC, which had previously forecast three rate cuts this year.
And that’s where the real intrigue kicks in. In his comments, Powell may recognise the need to keep rates higher for longer but reiterate his intentions to cut them soon. This could be a moment of profit-taking for the bears and a resumption of the upward trend, at least in the coming days.
The opposite and slightly more likely scenario suggests a reaction mirroring that of exactly six months earlier. Now, formalising the sell-off in equities may be the recognition that inflation is on a higher trajectory, and it may take more time to curb it and possibly a new key rate hike.
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The opposite and slightly more likely scenario suggests a reaction mirroring that of exactly six months earlier. Now, formalising the sell-off in equities may be the recognition that inflation is on a higher trajectory, and it may take more time to curb it and possibly a new key rate hike.
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#WaveAnalysis
#Ebay under the bearish pressure
Likely to fall to support level 51.00
Ebay under the bearish pressure after the price reversed down from the strong resistance level 52.50, (which has been reversing the price from March) – strengthened by the upper daily Bollinger Band.
The downward reversal from the resistance level 52.50 is likely to form the daily Japanese candlesticks reversal pattern Evening Star – strong sell signal for Ebay.
Given the strength of the resistance level 52.50 and the overbought daily Stochastic indicator, Ebay can be expected to fall further to the next support level 51.00.
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#Ebay under the bearish pressure
Likely to fall to support level 51.00
Ebay under the bearish pressure after the price reversed down from the strong resistance level 52.50, (which has been reversing the price from March) – strengthened by the upper daily Bollinger Band.
The downward reversal from the resistance level 52.50 is likely to form the daily Japanese candlesticks reversal pattern Evening Star – strong sell signal for Ebay.
Given the strength of the resistance level 52.50 and the overbought daily Stochastic indicator, Ebay can be expected to fall further to the next support level 51.00.
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The monthly ADP labour market report showed that America created 192K new jobs in April, above the forecasted 179K and following +208K in March (revised from 184K).
Overall, there was a slight slowdown in wage growth to 5% y/y from 5.1% a month earlier, which is still quite high because of high employment and the impressive pace of job creation by historical measures.
The report noted weakness in the information sector, which cut jobs and slowed wage growth. When broken down by company size, large companies with more than 500 employees contributed the largest portion (+98K).
When broken down by industry, Construction surprised (+35K), which is huge for an industry that makes up only 5% of the labour force. Among services, Leisure and hospitality (+56K) led the way once again.
The ADP report fuelled expectations of a strong Friday's official statistics. Still, its impact on the market is tempered by the market's focus on today's FOMC meeting and the decline in predictive power in recent months.
Overall, there was a slight slowdown in wage growth to 5% y/y from 5.1% a month earlier, which is still quite high because of high employment and the impressive pace of job creation by historical measures.
The report noted weakness in the information sector, which cut jobs and slowed wage growth. When broken down by company size, large companies with more than 500 employees contributed the largest portion (+98K).
When broken down by industry, Construction surprised (+35K), which is huge for an industry that makes up only 5% of the labour force. Among services, Leisure and hospitality (+56K) led the way once again.
The ADP report fuelled expectations of a strong Friday's official statistics. Still, its impact on the market is tempered by the market's focus on today's FOMC meeting and the decline in predictive power in recent months.
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#WaveAnalysis
#EURJPY under strong bearish pressure
Likely to fall to support level 163.10
EURJPY under the strong bearish pressure after the price reversed down from the major multi-year resistance level 170.00 (which started the sharp weekly downtrend back in 2007).
The resistance level 170.00 was strengthened by the upper daily Bollinger Band and by the resistance trendline of the daily up channel from January.
EURJPY can be expected to fall further to the next support level 163.10 (which reversed the price twice in April).
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#EURJPY under strong bearish pressure
Likely to fall to support level 163.10
EURJPY under the strong bearish pressure after the price reversed down from the major multi-year resistance level 170.00 (which started the sharp weekly downtrend back in 2007).
The resistance level 170.00 was strengthened by the upper daily Bollinger Band and by the resistance trendline of the daily up channel from January.
EURJPY can be expected to fall further to the next support level 163.10 (which reversed the price twice in April).
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#WaveAnalysis
#WTI broke round support level 80.00
Likely to fall to support level 76.00
WTI crude oil recently broke the round support level 80.00 (which has been reversing the price from the middle of March) standing close to the 38.2% Fibonacci correction of the upward impulse from February.
The breakout of the support level 80.00 accelerated the active minor impulse wave c of the ABC correction 4 from the start of April.
Given the strength of the active impulse wave c, WTI crude oil can be expected to fall further to the next support level 76.00 (target price for the completion of the active wave c).
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#WTI broke round support level 80.00
Likely to fall to support level 76.00
WTI crude oil recently broke the round support level 80.00 (which has been reversing the price from the middle of March) standing close to the 38.2% Fibonacci correction of the upward impulse from February.
The breakout of the support level 80.00 accelerated the active minor impulse wave c of the ABC correction 4 from the start of April.
Given the strength of the active impulse wave c, WTI crude oil can be expected to fall further to the next support level 76.00 (target price for the completion of the active wave c).
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#Crypto market capitalisation rose 3.3% in 24 hours to $2.22 trillion. Local capitalisation bottomed near $2.10 trillion, confirming a sequence of declining local lows (2.3 in March, 2.25 in April) and highs (2.76 in mid-March, 2.67 in early April and 2.46 in late April).
#Ethereum and #Solana are adding from the area of the April lows and forming a double bottom. This is a positive but not too reliable signal, as Bitcoin has been in a downtrend throughout April.
After the halving, it is logical to expect miners to increase sales from inventory, to invest in new capacity or to lock in profits. Also, the hype around spot Bitcoin ETFs is going away, which reinforces selling by speculators.
Assuming #Bitcoin stays within the global growth cycle starting in 2023, we should expect further price declines in the coming weeks. The nearest likely target looks to be the $51-52K area, where growth was paused in February and where the 200-day MA will be pulled up by the end of the month.
#Ethereum and #Solana are adding from the area of the April lows and forming a double bottom. This is a positive but not too reliable signal, as Bitcoin has been in a downtrend throughout April.
After the halving, it is logical to expect miners to increase sales from inventory, to invest in new capacity or to lock in profits. Also, the hype around spot Bitcoin ETFs is going away, which reinforces selling by speculators.
Assuming #Bitcoin stays within the global growth cycle starting in 2023, we should expect further price declines in the coming weeks. The nearest likely target looks to be the $51-52K area, where growth was paused in February and where the 200-day MA will be pulled up by the end of the month.
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#USDJPY was slipping below 153 on Friday, having lost over 4.5% from a peak of 160.2 on Monday. Behind the pair's rise is a long-term fundamental factor: a huge and widening interest rate differential with a shrinking trade surplus. Currency interventions of the Japanese Ministry of Finance cause the decline. Let's try to understand at what levels USDJPY interventions will stop.
The yen's growth impulses are diminishing. In October 2022, USDJPY went from a peak at 151.8 to a bottom at 127.3 (-16.3%) in about three months. The pullback in November 2023 was half as short (January) and half as deep (7.6%).
Yen growth impulses without direct intervention are also becoming less pronounced. There have also been two sustained declines in USDJPY, in July 2023 (around 5%) and March 2024 (around 2.7%), on speculation that the Bank of Japan will turn to active monetary tightening.
The authorities are in no hurry to burn foreign exchange reserves, content with more modest success than in the 1990s.
The yen's growth impulses are diminishing. In October 2022, USDJPY went from a peak at 151.8 to a bottom at 127.3 (-16.3%) in about three months. The pullback in November 2023 was half as short (January) and half as deep (7.6%).
Yen growth impulses without direct intervention are also becoming less pronounced. There have also been two sustained declines in USDJPY, in July 2023 (around 5%) and March 2024 (around 2.7%), on speculation that the Bank of Japan will turn to active monetary tightening.
The authorities are in no hurry to burn foreign exchange reserves, content with more modest success than in the 1990s.
The time with the least FX liquidity is chosen for intervention, allowing for more visible effects on the charts for less money.
We also note that the Bank of Japan has been dramatically slow in tightening monetary policy. After a rate hike in March, there was no further tightening as many expected.
This slowness is quite in the spirit of false hope from Japan's monetary policy in recent years. The financial and monetary authorities hardly aim to put the yen on a growth path but only to slow its decline. This will allow Japan to increase the competitiveness of its exports further, revitalising domestic demand at the expense of inflation.
We assume that the interest in Yen appreciation will abruptly subside as USDJPY approaches the 50-week moving average. This is how it was in 2023. At the end of the year, that curve will be around 150 and is now passing through 147.
A more ambitious target of a USDJPY decline towards 122, where the pair has had two peaks in 2007 and 2015, cannot be completely ruled out.
We also note that the Bank of Japan has been dramatically slow in tightening monetary policy. After a rate hike in March, there was no further tightening as many expected.
This slowness is quite in the spirit of false hope from Japan's monetary policy in recent years. The financial and monetary authorities hardly aim to put the yen on a growth path but only to slow its decline. This will allow Japan to increase the competitiveness of its exports further, revitalising domestic demand at the expense of inflation.
We assume that the interest in Yen appreciation will abruptly subside as USDJPY approaches the 50-week moving average. This is how it was in 2023. At the end of the year, that curve will be around 150 and is now passing through 147.
A more ambitious target of a USDJPY decline towards 122, where the pair has had two peaks in 2007 and 2015, cannot be completely ruled out.
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#WaveAnalysis
#EURGBP reversed from support zone
Likely to rise to resistance level 0.8625
EURGBP recently reversed up from the support zone lying between the key support levels 0.8500, 0.8550 and the lower daily Bollinger Band.
The upward reversal from this support zone created the daily Japanese candlesticks reversal pattern Morning Star Doji.
EURGBP can be expected to rise further to the next resistance level 0.8625 (which has been reversing the price from January).
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#EURGBP reversed from support zone
Likely to rise to resistance level 0.8625
EURGBP recently reversed up from the support zone lying between the key support levels 0.8500, 0.8550 and the lower daily Bollinger Band.
The upward reversal from this support zone created the daily Japanese candlesticks reversal pattern Morning Star Doji.
EURGBP can be expected to rise further to the next resistance level 0.8625 (which has been reversing the price from January).
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#Crypto market cap has been up 2% over the past seven days and has added over 13% from the lows of the 1st of May. A timid bottom formation on Wednesday was followed by a modest rebound on Thursday and more robust buying on Friday after the monthly US jobs report. Over the weekend and at the start of the day on Monday, the crypto market’s growth was halted in a 10-day resistance area near $2.31 trillion.
#Bitcoin’s upward surge from the beginning of the month to $64.4K by the start of active trading in Europe on Monday allowed the weekly candle to close higher, showing that buyers are ready to buy back deep drawdowns. On daily timeframes, Bitcoin managed to break above the descending resistance line. To confirm a bullish reversal in this case, it is necessary to consolidate the price above $65K.
We assume that the dynamics of BTCUSD around the 50-day moving average going through $65.7K on Monday could hold considerably greater importance.
#Bitcoin’s upward surge from the beginning of the month to $64.4K by the start of active trading in Europe on Monday allowed the weekly candle to close higher, showing that buyers are ready to buy back deep drawdowns. On daily timeframes, Bitcoin managed to break above the descending resistance line. To confirm a bullish reversal in this case, it is necessary to consolidate the price above $65K.
We assume that the dynamics of BTCUSD around the 50-day moving average going through $65.7K on Monday could hold considerably greater importance.
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#WaveAnalysis #ADBE
Adobe reversed from support zone
Likely to rise to resistance level 500.00
Adobe recently reversed up from the support zone lying between the support level 460.00, lower daily Bollinger Band and the 61.8% Fibonacci correction of the uptrend from May.
The upward reversal from the support level 460.00 stopped the previous impulse waves 3 and (C).
Given the strength of the support level 460.00, Adobe can be expected to rise further to the next round resistance level 500.00.
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Adobe reversed from support zone
Likely to rise to resistance level 500.00
Adobe recently reversed up from the support zone lying between the support level 460.00, lower daily Bollinger Band and the 61.8% Fibonacci correction of the uptrend from May.
The upward reversal from the support level 460.00 stopped the previous impulse waves 3 and (C).
Given the strength of the support level 460.00, Adobe can be expected to rise further to the next round resistance level 500.00.
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The number of operating oil rigs in the US fell by 7 to 499. This is the lowest in 12 weeks and further confirmation that even with relatively favourable oil prices, producers are in no hurry to ramp up production but are looking to keep it flat for the foreseeable future.
This news, published late on Friday, has a small positive impact on quotations, reducing fears of oil overproduction. However, they are hardly decisive.
Production has been at 13.1 million bpd for the past eight weeks, compared to 12.3 million a year earlier and an average of 12.9 million over the past 12 months. And that’s enough to rebuild inventories. According to the latest EIA report, commercial stocks are over 460 million barrels (highest since June 2023), with over 366 million barrels in the strategic reserve (highest since April 2023).
This news, published late on Friday, has a small positive impact on quotations, reducing fears of oil overproduction. However, they are hardly decisive.
Production has been at 13.1 million bpd for the past eight weeks, compared to 12.3 million a year earlier and an average of 12.9 million over the past 12 months. And that’s enough to rebuild inventories. According to the latest EIA report, commercial stocks are over 460 million barrels (highest since June 2023), with over 366 million barrels in the strategic reserve (highest since April 2023).
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One could be much more successful in attributing the 1% bounce in oil prices on Monday to a rebound from oversold conditions. In the week of the active oil sell-off since 26th April, the WTI price has fallen 7.6% from peak to bottom.
Early last week, the price fell under the 50-day and then the 200-day moving averages. The bulls didn’t even fight back, although since November, touching the 200-day has been accompanied by a rather prolonged tug-of-war.
It may well be that the bulls are only now joining the game in full force, defending the lower boundary of the upward channel formed in December.
Early last week, the price fell under the 50-day and then the 200-day moving averages. The bulls didn’t even fight back, although since November, touching the 200-day has been accompanied by a rather prolonged tug-of-war.
It may well be that the bulls are only now joining the game in full force, defending the lower boundary of the upward channel formed in December.
We also believe that despite the price pullback, the time for heavy artillery in the form of OPEC+ has not come. All last year and at the start of this one, they interfered with the supply-demand balance when the barrel price fell below the 200-week moving average, which is now at $74.7 for WTI and $78 for Brent, which is about 5% below spot prices.
Thus, if WTI crude oil prices fall below $77, the uptrend will be broken, forcing bulls to focus on supporting the $75 area, a crucial area for the past few years.
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Thus, if WTI crude oil prices fall below $77, the uptrend will be broken, forcing bulls to focus on supporting the $75 area, a crucial area for the past few years.
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