The US dollar has been under relentless pressure since last Thursday, approaching one-month lows against the euro and the pound.
In general, we can identify a downward trend in the dollar index since April 16. This momentum has become more evident since the first days of May, although we have seen a couple of days of dollar strength.
Earlier this week, EURUSD quietly made an important technical breakout. In addition to accelerating the upward trend, over the past two days, the major pair has consolidated above the 50- and 200-day moving averages, which have almost merged into one since early April.
EURUSD has been adding for almost a month and has nearly fully recovered to local peaks in the first half of April. It would be a mistake to think that the dollar is easily rising and slowly retreating. If we take trading volumes into account, we see significant net selling of the dollar, as it takes much less liquidity to cause the pair to collapse over two days than to form a smooth upward trend over a month.
In general, we can identify a downward trend in the dollar index since April 16. This momentum has become more evident since the first days of May, although we have seen a couple of days of dollar strength.
Earlier this week, EURUSD quietly made an important technical breakout. In addition to accelerating the upward trend, over the past two days, the major pair has consolidated above the 50- and 200-day moving averages, which have almost merged into one since early April.
EURUSD has been adding for almost a month and has nearly fully recovered to local peaks in the first half of April. It would be a mistake to think that the dollar is easily rising and slowly retreating. If we take trading volumes into account, we see significant net selling of the dollar, as it takes much less liquidity to cause the pair to collapse over two days than to form a smooth upward trend over a month.
Thus, EURUSD has successfully withstood another test of the 1.05-1.06 support area, which has endured the onslaught of sellers since early 2023. The first significant target of this rise looks like the upper boundary of this range of the significant round level of 1.10. Or even higher - to 1.1150 with a new attempt to overcome the 200-week moving average, which has turned EURUSD three times since the beginning of 2022.
An even more ambitious but realistic task for the bulls could be a new attempt to consolidate above the 1.20-1.25 area, a crucial historical area that served as support between 2004-2014 and resistance for the last 10 years.
Confirmation of a bullish reversal in EURUSD will be a sustained growth above 1.0860 - the April highs area. This ability to rise further will break the downtrend that has been forming since the final days of last year.
An even more ambitious but realistic task for the bulls could be a new attempt to consolidate above the 1.20-1.25 area, a crucial historical area that served as support between 2004-2014 and resistance for the last 10 years.
Confirmation of a bullish reversal in EURUSD will be a sustained growth above 1.0860 - the April highs area. This ability to rise further will break the downtrend that has been forming since the final days of last year.
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#WaveAnalysis
• AUDUSD broke key resistance level 0.6650
• Likely to reach resistance level 0.6760
AUDUSD currency pair recently broke the key resistance level 0.6650, which has been reversing the pair from the start of March.
The breakout of the resistance level 0.6650 coincided with the breakout of the 61.8% Fibonacci correction of the downward correction from the end of December – which accelerated the active impulse wave 3.
Given the strongly bearish USD sentiment, AUDUSD currency pair can be expected to rise further toward the next resistance level 0.6760, former resistance from January and the target for the completion of the active wave 2.
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• AUDUSD broke key resistance level 0.6650
• Likely to reach resistance level 0.6760
AUDUSD currency pair recently broke the key resistance level 0.6650, which has been reversing the pair from the start of March.
The breakout of the resistance level 0.6650 coincided with the breakout of the 61.8% Fibonacci correction of the downward correction from the end of December – which accelerated the active impulse wave 3.
Given the strongly bearish USD sentiment, AUDUSD currency pair can be expected to rise further toward the next resistance level 0.6760, former resistance from January and the target for the completion of the active wave 2.
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#WaveAnalysis
• #Gold broke daily down channel
• Likely to reach resistance level 2415.00
Gold recently broke the resistance trendline of the narrow daily down channel from April, which enclosed the previous ABC correction (4).
The breakout of this down channel accelerated the active intermediate impulse wave (5) – which belongs to the higher order impulse sequence from October.
Given the predominant daily uptrend, Gold can be expected to rise further toward the next resistance level 2415.00, which reversed the price twice in April.
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• #Gold broke daily down channel
• Likely to reach resistance level 2415.00
Gold recently broke the resistance trendline of the narrow daily down channel from April, which enclosed the previous ABC correction (4).
The breakout of this down channel accelerated the active intermediate impulse wave (5) – which belongs to the higher order impulse sequence from October.
Given the predominant daily uptrend, Gold can be expected to rise further toward the next resistance level 2415.00, which reversed the price twice in April.
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The release of US inflation data sparked a surge in risk asset purchases, with #crypto leading the charge. This follows a period of prolonged consolidation, which provided enough pent-up energy to fuel increased volatility.
Over the past 24 hours, the crypto market has added 5.3% to $2.39 trillion. The market has broken through the resistance of the descending range and is now testing the previous highs. The market's ability to gain weight on Thursday and Friday will be an important confirmation of the market's bullish bias. Potentially, this break opens the way to the highs of March, when cap exceeded $2.75 trillion.
#Bitcoin has broken out of its short-term triangle in one fell swoop, consolidating above its 50-day moving average and previous local highs. Yesterday may well have seen the end of the correction and the start of a new round of buying. It is worth being prepared for Bitcoin to meet a few obstacles on its way to $72K, although a renewal of historical highs is unlikely to be quiet.
Over the past 24 hours, the crypto market has added 5.3% to $2.39 trillion. The market has broken through the resistance of the descending range and is now testing the previous highs. The market's ability to gain weight on Thursday and Friday will be an important confirmation of the market's bullish bias. Potentially, this break opens the way to the highs of March, when cap exceeded $2.75 trillion.
#Bitcoin has broken out of its short-term triangle in one fell swoop, consolidating above its 50-day moving average and previous local highs. Yesterday may well have seen the end of the correction and the start of a new round of buying. It is worth being prepared for Bitcoin to meet a few obstacles on its way to $72K, although a renewal of historical highs is unlikely to be quiet.
Silver climbed above $29.8, rewriting the highs from January 2021, but once again faced selling intensification from that level for the first time in four years and has pulled back to $29.40 at the time of writing.
Silver does not look overheated, as it is only now entering overbought territory on the RSI on the daily timeframes. Last month, silver was actively added for another three weeks after the RSI entered levels above 70. A two-week pullback in the second half of April later removed that overbought area. Technically, this clears the way up.
The upside potential after the pullback is also indicated by the April correction fitting into a classic Fibonacci pattern with a pullback to 61.8% of the initial rally from late February, followed by a quick recovery. A strong rise above the recent peaks will be an important confirmation of the growth extension and will make the $33 level a likely target for a new impulse.
Silver does not look overheated, as it is only now entering overbought territory on the RSI on the daily timeframes. Last month, silver was actively added for another three weeks after the RSI entered levels above 70. A two-week pullback in the second half of April later removed that overbought area. Technically, this clears the way up.
The upside potential after the pullback is also indicated by the April correction fitting into a classic Fibonacci pattern with a pullback to 61.8% of the initial rally from late February, followed by a quick recovery. A strong rise above the recent peaks will be an important confirmation of the growth extension and will make the $33 level a likely target for a new impulse.
We also note that the fresh assault on the 30 level came just a month after the previous one, and this rally started from a higher level than what we saw in March or 3-4 years ago.
Long-term trends are also on the bulls' side. In the last two years, they have been able to quickly turn the price to the upside after dips under the 200-week moving average. This year, the price is successfully pulling away from that line, but the most furious part of the rally may be ahead.
Silver could be ready to repeat the growth spurt it showed in 2010-2011. Back then, the multi-year resistance was at the $20 level, and the acceleration came after the 50-week moving average exceeded the 200-week moving average, and the price took that important round level. We have already gotten the first signal, so we must wait for the overcoming of $30 at the end of the week to confirm the bullish sentiment.
A move above $30 will make us seriously consider levels above $50/oz as a long-term target, repeating the 2011 and 1980 peaks.
Long-term trends are also on the bulls' side. In the last two years, they have been able to quickly turn the price to the upside after dips under the 200-week moving average. This year, the price is successfully pulling away from that line, but the most furious part of the rally may be ahead.
Silver could be ready to repeat the growth spurt it showed in 2010-2011. Back then, the multi-year resistance was at the $20 level, and the acceleration came after the 50-week moving average exceeded the 200-week moving average, and the price took that important round level. We have already gotten the first signal, so we must wait for the overcoming of $30 at the end of the week to confirm the bullish sentiment.
A move above $30 will make us seriously consider levels above $50/oz as a long-term target, repeating the 2011 and 1980 peaks.
#WaveAnalysis
#USDCHF reversed from round support level 0.9000
Likely to rise to resistance level 0.9100
USDCHF currency pair recently reversed up from the round support level 0.9000 (which stopped the previous corrections iv, 4 ii, 1).
The support level 0.90000 was strengthened by the lower daily Bollinger Band and by the 50% Fibonacci correction of the previous upward impulse from March.
Given the strong daily uptrend, USDCHF currency pair can be expected to rise further to the next resistance level 0.9100, top of the previous waves a, 2.
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#USDCHF reversed from round support level 0.9000
Likely to rise to resistance level 0.9100
USDCHF currency pair recently reversed up from the round support level 0.9000 (which stopped the previous corrections iv, 4 ii, 1).
The support level 0.90000 was strengthened by the lower daily Bollinger Band and by the 50% Fibonacci correction of the previous upward impulse from March.
Given the strong daily uptrend, USDCHF currency pair can be expected to rise further to the next resistance level 0.9100, top of the previous waves a, 2.
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The #crypto market cooled off on Thursday afternoon, but on Friday morning, buyers stepped up again, bringing cap back to levels from the day before at $2.39 trillion. Strong growth was followed by rapid profit-taking, which is a necessary part of healthy growth, suggesting a high chance of continued gains in the coming days.
#Bitcoin was pulling back towards $65K on Thursday but is already trying to regain its footing above $66K on Friday morning. If cryptocurrencies get support from the global risk appetite on Friday, Bitcoin could exceed $70K over the weekend. A test of the $71K-$74K highs area, in our view, could happen as early as early next week, triggering a new episode of FOMO.
#Solana has been revived, adding over 10% in less than three days. On Thursday, the coin managed to break out of the $125-155 consolidation range. The day before, it consolidated above the 50-day moving average. Potentially, this opens the way to $200, and this is a case where altcoins are moving better than Bitcoin.
#Bitcoin was pulling back towards $65K on Thursday but is already trying to regain its footing above $66K on Friday morning. If cryptocurrencies get support from the global risk appetite on Friday, Bitcoin could exceed $70K over the weekend. A test of the $71K-$74K highs area, in our view, could happen as early as early next week, triggering a new episode of FOMO.
#Solana has been revived, adding over 10% in less than three days. On Thursday, the coin managed to break out of the $125-155 consolidation range. The day before, it consolidated above the 50-day moving average. Potentially, this opens the way to $200, and this is a case where altcoins are moving better than Bitcoin.
#WaveAnalysis #AMZN
Amazon reversed from resistance level 190.00
Likely to fall to support level 180.00
Amazon recently reversed down from the resistance level 190.00 (previous monthly high from April), strengthened by the upper daily Bollinger Band.
The downward reversal from the resistance level 190.00 started the active ABC correction ii.
Amazon can be expected to fall further to the next support level 180.00, target for the completion of the active wave ii.
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Amazon reversed from resistance level 190.00
Likely to fall to support level 180.00
Amazon recently reversed down from the resistance level 190.00 (previous monthly high from April), strengthened by the upper daily Bollinger Band.
The downward reversal from the resistance level 190.00 started the active ABC correction ii.
Amazon can be expected to fall further to the next support level 180.00, target for the completion of the active wave ii.
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The US dollar is not giving up without a fight, gaining for the second day in a row against a basket of major currencies. Buyers seized the initiative after the Dollar touched the lower bound of its uptrend, coinciding with the 200-day MA.
From the current level of 104.6, the DXY needs to consolidate below 103.6 to confirm the fall down from its uptrend. At that level, the dollar will drop below the previous local bottom and consolidate below the 200-day MA.
Earlier in the week, the USD's sharp decline followed weak CPI, causing markets to return to pricing 100% probability of two rate cuts for this year. However, the dollar has already been adding to its gains on Thursday and since the start of the day on Friday. Traders are probably taking note that leading indicators of inflation exceeded expectations.
The producer price index increased 0.5% in April—impressively higher than the expected 0.3%. The annual rate of increase was 2.2%, the highest in 12 months, reversing a rise since last November.
From the current level of 104.6, the DXY needs to consolidate below 103.6 to confirm the fall down from its uptrend. At that level, the dollar will drop below the previous local bottom and consolidate below the 200-day MA.
Earlier in the week, the USD's sharp decline followed weak CPI, causing markets to return to pricing 100% probability of two rate cuts for this year. However, the dollar has already been adding to its gains on Thursday and since the start of the day on Friday. Traders are probably taking note that leading indicators of inflation exceeded expectations.
The producer price index increased 0.5% in April—impressively higher than the expected 0.3%. The annual rate of increase was 2.2%, the highest in 12 months, reversing a rise since last November.
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The import price index, released on Thursday, is also not expected to ease inflationary pressures. It added 0.9% m/m last month and 2.8% over the 4 months, although the year-over-year rate is still quite low at 1.1%.
Both figures are shaping upward inflation risks for the coming months. The latest round of tariff hikes on several imported goods from China also raises inflation risks.
On balance, the dollar has not gone into a tailspin but got its buy-the-dip pattern on pro-inflation risks, which prevent markets from reverting to expectations of aggressive rate cuts.
On the other hand, the dollar's position looks more vulnerable against the euro and the pound. EURUSD and GBPUSD have already broken above their 50- and 200-day MAs and briefly exceeded previous highs, breaking the downward trend. This comparative divergence in dynamics between the DXY and the dollar's relationship to the euro and pound makes it worth watching developments with interest.
Both figures are shaping upward inflation risks for the coming months. The latest round of tariff hikes on several imported goods from China also raises inflation risks.
On balance, the dollar has not gone into a tailspin but got its buy-the-dip pattern on pro-inflation risks, which prevent markets from reverting to expectations of aggressive rate cuts.
On the other hand, the dollar's position looks more vulnerable against the euro and the pound. EURUSD and GBPUSD have already broken above their 50- and 200-day MAs and briefly exceeded previous highs, breaking the downward trend. This comparative divergence in dynamics between the DXY and the dollar's relationship to the euro and pound makes it worth watching developments with interest.
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#WaveAnalysis
#Brent crude oil reversed from key support level 81.00
Likely to test resistance level 84.00
Brent crude oil recently reversed up from the key support level 81.00 (which has been reversing the price from the start of February) intersecting with the lower daily Bollinger Band and the 50% Fibonacci correction of the upward impulse from December.
The upward reversal from the support level 81.00 created the daily Hammer, which stopped the earlier correction ii.
Brent crude oil can then be expected to rise further to the next resistance level 84.00, which reversed the price at the start of May.
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#Brent crude oil reversed from key support level 81.00
Likely to test resistance level 84.00
Brent crude oil recently reversed up from the key support level 81.00 (which has been reversing the price from the start of February) intersecting with the lower daily Bollinger Band and the 50% Fibonacci correction of the upward impulse from December.
The upward reversal from the support level 81.00 created the daily Hammer, which stopped the earlier correction ii.
Brent crude oil can then be expected to rise further to the next resistance level 84.00, which reversed the price at the start of May.
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#Crypto market capitalisation rose 5.2% over the past seven days to $2.41 trillion. Over the weekend, it reached $2.44 trillion, its highest level in nearly four weeks.
#Bitcoin is treading near local highs, remaining just below $67K. That's a gain of 8.4% in seven days and a retest of the previous peak area in late April. Despite the burgeoning risk appetite in global markets, demand for Bitcoin, Ethereum and many altcoins is rather subdued. However, BTCUSD remains firmly above the 50-day moving average, indicating an upward trend.
Investors are more optimistic about #Solana, whose price rose to its highest since early April at $177 (+1.5% in 24h). It may well reach the March highs before Bitcoin, acting as a more sensitive indicator of risk appetite in cryptocurrencies.
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#Bitcoin is treading near local highs, remaining just below $67K. That's a gain of 8.4% in seven days and a retest of the previous peak area in late April. Despite the burgeoning risk appetite in global markets, demand for Bitcoin, Ethereum and many altcoins is rather subdued. However, BTCUSD remains firmly above the 50-day moving average, indicating an upward trend.
Investors are more optimistic about #Solana, whose price rose to its highest since early April at $177 (+1.5% in 24h). It may well reach the March highs before Bitcoin, acting as a more sensitive indicator of risk appetite in cryptocurrencies.
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Oil is losing about 0.75% of its peak on Monday, having hit a strengthening sell-off as it attempts to climb above $80 for #WTI and $84 for #Brent.
Oil is declining despite the death of Iran's president, which should reinforce the risk premium, and despite a strong rally in metals and other commodities in response to China's stimulus measures.
News on the US oil industry points to relative stagnation. According to Friday's report from Baker Hughes, the total number of Oil rigs in the US was 497 compared to 496 and 499 in the last two weeks. We have been seeing fluctuations around the 500 level since last October.
The official weekly report from the US Energy Information Administration last week also pointed to stagnant production at 13.1 million bpd over the last ten weeks. This volume also is the average over the period since mid-September.
The conclusion is that current prices are neutral for the industry, not creating incentives to increase production but not causing it to decline either.
Oil is declining despite the death of Iran's president, which should reinforce the risk premium, and despite a strong rally in metals and other commodities in response to China's stimulus measures.
News on the US oil industry points to relative stagnation. According to Friday's report from Baker Hughes, the total number of Oil rigs in the US was 497 compared to 496 and 499 in the last two weeks. We have been seeing fluctuations around the 500 level since last October.
The official weekly report from the US Energy Information Administration last week also pointed to stagnant production at 13.1 million bpd over the last ten weeks. This volume also is the average over the period since mid-September.
The conclusion is that current prices are neutral for the industry, not creating incentives to increase production but not causing it to decline either.
The price chart shows a balance of power for more than two weeks now. Since December, the price has been moving in an ascending channel. Oil briefly fell out of this range last week but found buyers rising from $76.4 to $79.8 in less than three days.
The bulls are also not yet able to unequivocally retake the lead, as an attempt to exceed the 200-day moving average on Monday was met with increased selling. This may be a signal that the bears are still in control of the situation and are now gathering strength for a new downward impulse. We will get confirmation of this hypothesis only in case of consolidation under $76.5. It is also relatively easy for oil to roll back to $75, where the 200-week moving average lies. However, a failure below $70-$71 could start a real corkscrew in oil with a potential first target at $50 and a final target at $30.
The ability to get back above $80 would be a sign of a bullish recovery and set the mood for a quick exit to $85 within weeks and above $92 by mid-summer.
The bulls are also not yet able to unequivocally retake the lead, as an attempt to exceed the 200-day moving average on Monday was met with increased selling. This may be a signal that the bears are still in control of the situation and are now gathering strength for a new downward impulse. We will get confirmation of this hypothesis only in case of consolidation under $76.5. It is also relatively easy for oil to roll back to $75, where the 200-week moving average lies. However, a failure below $70-$71 could start a real corkscrew in oil with a potential first target at $50 and a final target at $30.
The ability to get back above $80 would be a sign of a bullish recovery and set the mood for a quick exit to $85 within weeks and above $92 by mid-summer.
The crypto market cap has stabilised at $2.6 trillion. Among the top coins over 24 hours, Toncoin is down 5%, leading the decline, while Dogecoin is up 3.4%.
#Bitcoin is losing 1.9% in 24 hours to just below $70K, having come under pressure after it rallied above $71.3K, as short-term speculators rush to take profits around the all-time highs reached in March. The local highs are just below the peaks in April and March, and now all eyes are on the market's next move. A break of resistance at $72K has the potential to trigger a real FOMO. A pullback below would force a $60K correction scenario to be considered as the main one.
#Ethereum has rallied around 22% since Monday evening, surpassing $3800. Technically, we got a signal of a powerful spurt above the 50-day moving average, meaning a return to the bull trend. Short-term, Ethereum has a clear path to $4000, the March peak, after which the bulls can target $4600. Now is the time when Bitcoin's next move depends on Ethereum.
#Bitcoin is losing 1.9% in 24 hours to just below $70K, having come under pressure after it rallied above $71.3K, as short-term speculators rush to take profits around the all-time highs reached in March. The local highs are just below the peaks in April and March, and now all eyes are on the market's next move. A break of resistance at $72K has the potential to trigger a real FOMO. A pullback below would force a $60K correction scenario to be considered as the main one.
#Ethereum has rallied around 22% since Monday evening, surpassing $3800. Technically, we got a signal of a powerful spurt above the 50-day moving average, meaning a return to the bull trend. Short-term, Ethereum has a clear path to $4000, the March peak, after which the bulls can target $4600. Now is the time when Bitcoin's next move depends on Ethereum.
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