#Crypto market cap fell 0.5% to $2.44 trillion as Thursday's growth attempt failed to gain traction due to a new wave of dollar strength. Risk demand is gradually diminishing, forming a sequence of declining intraday highs. However, horizontal support remains in the 2.42 trillion area, where the market also stabilised from May 17th to 20th.
#Bitcoin has pulled back below $67K, losing 0.7% in 24 hours. It continues to test the strength of the 50-day moving average, but it doesn't find enough reason to dive lower. Such persistent testing of the lows sets the bears up for quick success with their next target at $60K.
#Litecoin is trying to cling to the 200-day moving average near $79.4. There has been support around $75 since March, which has been actively playing the role of resistance from November to January. A failure below promises to be a significant trend reversal signal, with next supports near $67 and $60.
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#Bitcoin has pulled back below $67K, losing 0.7% in 24 hours. It continues to test the strength of the 50-day moving average, but it doesn't find enough reason to dive lower. Such persistent testing of the lows sets the bears up for quick success with their next target at $60K.
#Litecoin is trying to cling to the 200-day moving average near $79.4. There has been support around $75 since March, which has been actively playing the role of resistance from November to January. A failure below promises to be a significant trend reversal signal, with next supports near $67 and $60.
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#WaveAnalysis #BABA
Alibaba broke key support level 78.00
Likely to fall to support level 74.00
Alibaba Group today opened with the downward gap breaking below the key support level 78.00 (which has been reversing the price from the middle of May).
The breakout of the support level 78.00 coincided with the breakout of the 61.8% Fibonacci correction of the previous upward impulse C from April.
Given the strength of the active impulse waves 3 and (C) and the weekly downtrend, Alibaba Group can be expected to fall further to the next support level 74.00, former support from the end of April.
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Alibaba broke key support level 78.00
Likely to fall to support level 74.00
Alibaba Group today opened with the downward gap breaking below the key support level 78.00 (which has been reversing the price from the middle of May).
The breakout of the support level 78.00 coincided with the breakout of the 61.8% Fibonacci correction of the previous upward impulse C from April.
Given the strength of the active impulse waves 3 and (C) and the weekly downtrend, Alibaba Group can be expected to fall further to the next support level 74.00, former support from the end of April.
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Since the start of the week, gold has twice pushed off support at $2300, where the round level and the 76.4% retracement from October to May rise. The Bulls are getting temporary reinforcement because this same level was already successfully defended early last month.
But this support looks extremely fragile and unreliable. Firstly, last Friday, Gold went over 4% from peak to bottom, on high volumes and with a horrendous amplitude falling under the 50-day moving average. All other dynamics of this week may well be considered as consolidation of liquidity by bears for a new blow to the metal. This thesis is reinforced by the fact that this 50-day average is already actively working as resistance.
Secondly, the dollar has been rising since last Friday, as if switching into a "buy on the downturn" mode. The dollar index has pushed back from its 200-day moving average since the beginning of the month. And a rising dollar with attractive bond interest yields makes dollar bonds an effective competitor to gold.
But this support looks extremely fragile and unreliable. Firstly, last Friday, Gold went over 4% from peak to bottom, on high volumes and with a horrendous amplitude falling under the 50-day moving average. All other dynamics of this week may well be considered as consolidation of liquidity by bears for a new blow to the metal. This thesis is reinforced by the fact that this 50-day average is already actively working as resistance.
Secondly, the dollar has been rising since last Friday, as if switching into a "buy on the downturn" mode. The dollar index has pushed back from its 200-day moving average since the beginning of the month. And a rising dollar with attractive bond interest yields makes dollar bonds an effective competitor to gold.
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Third, stocks are falling. Separate from the short-squeeze-backed gains in individual stocks in the Nasdaq100 and S&P500, there is noticeable heaviness in the Dow Jones and Russell 2000 indices, not to mention the 5% loss by the French CAC40 for the week. Politics was back to spooking the markets as we heard of new barrages of trade wars and the risks of increased protectionism.
Over the past decade and a half, this is not the first episode of a simultaneous thrust into gold while trouble brews. However, in 2008, 2011 and 2020, the initial rise in the value of an ounce against a background of falling stocks and a rising dollar quickly reversed into a collapse in the gold price.
It is worth keeping a close eye on how events in the currency and stock market unfold. And if the risk-off continues, buying gold will be as dangerous as picking up pennies in front of a train.
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Over the past decade and a half, this is not the first episode of a simultaneous thrust into gold while trouble brews. However, in 2008, 2011 and 2020, the initial rise in the value of an ounce against a background of falling stocks and a rising dollar quickly reversed into a collapse in the gold price.
It is worth keeping a close eye on how events in the currency and stock market unfold. And if the risk-off continues, buying gold will be as dangerous as picking up pennies in front of a train.
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#WaveAnalysis
#EURCHF broke key support level 0.9565
– Likely to fall to support level 0.9450
EURCHF recently broke below the key support level 0.9565, which stopped wave B in April, as can be seen from the daily EURCHF chart below.
The breakout of the support level 0.9565 coincided with the breakout of the 50% Fibonacci correction of the previous upward impulse from December.
Given the strongly bullish Swiss franc sentiment seen across the FX markets today, EURCHF can be expected to fall further to the next support level 0.9450, target for the completion of the active correction (B).
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#EURCHF broke key support level 0.9565
– Likely to fall to support level 0.9450
EURCHF recently broke below the key support level 0.9565, which stopped wave B in April, as can be seen from the daily EURCHF chart below.
The breakout of the support level 0.9565 coincided with the breakout of the 50% Fibonacci correction of the previous upward impulse from December.
Given the strongly bullish Swiss franc sentiment seen across the FX markets today, EURCHF can be expected to fall further to the next support level 0.9450, target for the completion of the active correction (B).
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The #crypto market has lost almost 5% over the past 7 days. It has not given up important support levels but also has no growth drivers. Bitcoin lost 4.7% over the week. Ethereum lost 3%, while the top altcoins' performance ranged between -7.7% (#Solana) and +11.7% (#Toncoin).
#Bitcoin has been trading close to $66K since Friday, hovering around the 50-day MA, testing the medium-term uptrend. The outcome of this test, as well as the market's direction in the short term, depends on risk appetite in global markets. It has waned due to fears over the French election and a series of weak data from the US and China in recent days.
#Ethereum, on optimistic expectations about the ETF, was able to add over 6% after briefly dipping under its 50-day MA on Friday. However, a loss of nearly 1.5% since the start of the day on Monday makes one wary of the near-term performance. The increased liquidity on weekdays will likely play into the hands of bears rather than bulls by increasing selling interest.
#Bitcoin has been trading close to $66K since Friday, hovering around the 50-day MA, testing the medium-term uptrend. The outcome of this test, as well as the market's direction in the short term, depends on risk appetite in global markets. It has waned due to fears over the French election and a series of weak data from the US and China in recent days.
#Ethereum, on optimistic expectations about the ETF, was able to add over 6% after briefly dipping under its 50-day MA on Friday. However, a loss of nearly 1.5% since the start of the day on Monday makes one wary of the near-term performance. The increased liquidity on weekdays will likely play into the hands of bears rather than bulls by increasing selling interest.
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China's Slowdown Risks Stalling Global Growth
China's housing price decline is gaining momentum. New home prices for May fell 0.71% vs. 0.58% and 0.34% in the previous two months. The year-over-year decline increased to 3.9%, with back-to-back slides over the 12 months. China has repeatedly announced measures to support the property market, but they have been limited, failing to reverse the trend. The problems in the housing market are very toxic for stocks as housing prices and sales volumes drag down property developers and banks, sucking liquidity out of the financial system.
China's housing price decline is gaining momentum. New home prices for May fell 0.71% vs. 0.58% and 0.34% in the previous two months. The year-over-year decline increased to 3.9%, with back-to-back slides over the 12 months. China has repeatedly announced measures to support the property market, but they have been limited, failing to reverse the trend. The problems in the housing market are very toxic for stocks as housing prices and sales volumes drag down property developers and banks, sucking liquidity out of the financial system.
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The other bad news was the slowdown in industrial production growth to 5.6% from 6.7% a month earlier, worse than the expected 6.2%. The slowing trend in China's industrial growth has been in place since the peak in February. China's industrial production can be seen as a leading indicator of the global economy, and the fresh data raises the risk of a recession in developed economies before the end of the year. Fixed asset investment is also losing momentum, falling to 4.0% against a peak of 4.5% in March and an expected 4.2%.
Retail sales, on the other hand, strengthened growth and beat expectations. The year-to-date gain to May was 3.7% vs. 2.3% previously and 3.0% expected. It cannot be ruled out that this is only a temporary surge, and its positive effect is unlikely to be global.
Retail sales, on the other hand, strengthened growth and beat expectations. The year-to-date gain to May was 3.7% vs. 2.3% previously and 3.0% expected. It cannot be ruled out that this is only a temporary surge, and its positive effect is unlikely to be global.
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These data and statistical reports last week failed to lift renminbi volatility. The USDCNH pair seems to have found its ceiling just below 7.27, having been turning downwards from there since the end of March. That said, the downside momentum is getting smaller and smaller, preparing us for a new floor.
Next, which seems to be more important for the Chinese authorities, is 7.35. From here, USDCNH was actively sold from August to November last year, and there was a powerful reversal in November 2022. The yuan will be able to sag to this level if there is still a pullback from risks and towards the dollar in global markets. But it will probably take an economic crisis to overcome it.
Technically, it is now more comfortable to be bullish in USDCNH as the previous 2019-2020 global "ceiling" below 7.20 this year works as a "floor".
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Next, which seems to be more important for the Chinese authorities, is 7.35. From here, USDCNH was actively sold from August to November last year, and there was a powerful reversal in November 2022. The yuan will be able to sag to this level if there is still a pullback from risks and towards the dollar in global markets. But it will probably take an economic crisis to overcome it.
Technically, it is now more comfortable to be bullish in USDCNH as the previous 2019-2020 global "ceiling" below 7.20 this year works as a "floor".
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#WaveAnalysis #AAPL
– Apple reversed from resistance zone
– Likely to fall to support level 205.00
Apple recently reversed down from the resistance zone located between the resistance level 215.00 and the resistance trendline of the wide weekly up channel from last year.
The downward reversal from the resistance level 215.00 created the daily Japanese candlesticks reversal pattern Long-legged Doji.
Given the strength of the resistance level 215.00, Apple can be expected to fall further to the next support level 205.00, target for the completion of the active wave iv.
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– Apple reversed from resistance zone
– Likely to fall to support level 205.00
Apple recently reversed down from the resistance zone located between the resistance level 215.00 and the resistance trendline of the wide weekly up channel from last year.
The downward reversal from the resistance level 215.00 created the daily Japanese candlesticks reversal pattern Long-legged Doji.
Given the strength of the resistance level 215.00, Apple can be expected to fall further to the next support level 205.00, target for the completion of the active wave iv.
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CAC40 could lose another 9%, breaking the upward trend
French stocks were under intense pressure last week due to political fears. Although paused on Monday, that sell-off has probably already undermined index gains.
France’s CAC40 (#France40) lost 6.2% last week, the sharpest decline in two years, and the sell-off only gained momentum on Friday. The new Monday started with a rise after reassuring words from Marine Le Pen about respect for European institutions. Recovering from last week’s sell-off, the CAC40 is adding 0.6 per cent to Friday’s closing level - half of what it was shortly after the start of trading. However, technical analysis is setting up further declines.
On daily timeframes, the CAC40 accelerated its decline late last month with a dip under its 50-day moving average. Late last week, it broke and consolidated below the 200-day moving average in a sharp move. Thus, the medium—and long-term uptrend broke down over three weeks. The RSI fell below 25 on Friday, the oversold area.
French stocks were under intense pressure last week due to political fears. Although paused on Monday, that sell-off has probably already undermined index gains.
France’s CAC40 (#France40) lost 6.2% last week, the sharpest decline in two years, and the sell-off only gained momentum on Friday. The new Monday started with a rise after reassuring words from Marine Le Pen about respect for European institutions. Recovering from last week’s sell-off, the CAC40 is adding 0.6 per cent to Friday’s closing level - half of what it was shortly after the start of trading. However, technical analysis is setting up further declines.
On daily timeframes, the CAC40 accelerated its decline late last month with a dip under its 50-day moving average. Late last week, it broke and consolidated below the 200-day moving average in a sharp move. Thus, the medium—and long-term uptrend broke down over three weeks. The RSI fell below 25 on Friday, the oversold area.
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However, the last time the index was this low was in February-March 2020, and after the RSI first touched this level, the CAC40 fell 35% before reversing. Clearly, the current degree of oversold French equities is not a buy signal. It is prudent to wait for a recovery to the area above 30 on the RSI.
It is also worth being prepared that the French equity index is heading towards the lows of October and March last year at 6800 from the current 7527.
An alternative optimistic scenario suggests that the French equity market will get support on the dip to the 7320-7520 area if last year’s April-September resistance area becomes support.
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It is also worth being prepared that the French equity index is heading towards the lows of October and March last year at 6800 from the current 7527.
An alternative optimistic scenario suggests that the French equity market will get support on the dip to the 7320-7520 area if last year’s April-September resistance area becomes support.
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#WaveAnalysis #COST
– Costco broke resistance level 855.00
– Likely to rise to resistance level 880.00
Costco recently broke the resistance level 855.00, which stopped the previous impulse wave 1at the start of June, as can be seen from the daily Costco chart below.
The breakout of the resistance level 855.00 coincided with the breakout of the resistance trendline of the daily up channel from April – which accelerated the active impulse wave 3.
Given the clear daily uptrend, Costco can be expected to rise further to the next resistance level 880.00, target for the completion of the active correction (B).
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– Costco broke resistance level 855.00
– Likely to rise to resistance level 880.00
Costco recently broke the resistance level 855.00, which stopped the previous impulse wave 1at the start of June, as can be seen from the daily Costco chart below.
The breakout of the resistance level 855.00 coincided with the breakout of the resistance trendline of the daily up channel from April – which accelerated the active impulse wave 3.
Given the clear daily uptrend, Costco can be expected to rise further to the next resistance level 880.00, target for the completion of the active correction (B).
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#WaveAnalysis #F
– Ford reversed from key support level 11.50
– Likely to rise to resistance level 12.40
Ford recently reversed up from the key support level 11.50 (which has been steadily reversing the price from the start of February) coinciding with the lower daily Bollinger Band.
The upward reversal from the support level 11.50 created the daily Hammer – which stopped the previous ABC correction (2).
Given the strength of the support level 11.50, Ford can be expected to rise further to the next resistance level 12.40, top of the previous impulse wave (1).
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– Ford reversed from key support level 11.50
– Likely to rise to resistance level 12.40
Ford recently reversed up from the key support level 11.50 (which has been steadily reversing the price from the start of February) coinciding with the lower daily Bollinger Band.
The upward reversal from the support level 11.50 created the daily Hammer – which stopped the previous ABC correction (2).
Given the strength of the support level 11.50, Ford can be expected to rise further to the next resistance level 12.40, top of the previous impulse wave (1).
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In 24 hours, the #crypto cap fell 2.2% to $2.36 trillion. Bitcoin’s relatively moderate 1% decline contrasts with a much deeper dive in altcoins. Ethereum fell 3.3%, Solana plunged 7.8%, and Dogecoin dropped 9.2%.
The main momentum came in early Asian trading, showing that the bears have the upper hand in crypto. This is somewhat surprising given the impressive rally in the US Indices.
#Bitcoin was down to $64.5K this morning, its lowest since 15 May. It has been declining for the past 12 days. It's also attempting to gain ground below the 50-day MA and the 76.4% retracement from the January-March rise.
#Solana has lost over 20% in 12 days of active declines, and the selling is picking up. At one point intraday on Tuesday, losses exceeded 11% but are down to 4.5% at the time of writing. The sell-off hunters came in buying on a touch of the 200-day MA. The latest slip may turn the market to the upside for the coming days, as it did in April at roughly these same levels.
The main momentum came in early Asian trading, showing that the bears have the upper hand in crypto. This is somewhat surprising given the impressive rally in the US Indices.
#Bitcoin was down to $64.5K this morning, its lowest since 15 May. It has been declining for the past 12 days. It's also attempting to gain ground below the 50-day MA and the 76.4% retracement from the January-March rise.
#Solana has lost over 20% in 12 days of active declines, and the selling is picking up. At one point intraday on Tuesday, losses exceeded 11% but are down to 4.5% at the time of writing. The sell-off hunters came in buying on a touch of the 200-day MA. The latest slip may turn the market to the upside for the coming days, as it did in April at roughly these same levels.
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RBA readiness to hike is positive for AUD
The Reserve Bank of Australia kept its key rate at a 12-year high of 4.35%. The market widely expected the decision, so it did not cause a spike in volatility. However, we note that the RBA warned that it was ready to raise the rate.
In its commentary on the rate decision, the Australian central bank emphasised that inflation is roughly at the same level as in December, at 3.6% y/y overall and 4.1% y/y with the exclusion of volatile components.
Despite the normalising trend, the economy remains in excess demand; employment is above sustainable full employment; wage growth is above productivity gains.
A "wait-and-see" approach is reasonable in this situation. However, the RBA still notes a shift in risks towards pro-inflationary risks and indicates a willingness to change the rate in either direction — an important shift from the dovish rhetoric of the second half of last year.
The Reserve Bank of Australia kept its key rate at a 12-year high of 4.35%. The market widely expected the decision, so it did not cause a spike in volatility. However, we note that the RBA warned that it was ready to raise the rate.
In its commentary on the rate decision, the Australian central bank emphasised that inflation is roughly at the same level as in December, at 3.6% y/y overall and 4.1% y/y with the exclusion of volatile components.
Despite the normalising trend, the economy remains in excess demand; employment is above sustainable full employment; wage growth is above productivity gains.
A "wait-and-see" approach is reasonable in this situation. However, the RBA still notes a shift in risks towards pro-inflationary risks and indicates a willingness to change the rate in either direction — an important shift from the dovish rhetoric of the second half of last year.
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While we haven't seen a meaningful reaction from AUDUSD, it is performing better than its major peers. It is losing 0.5% this month against the dollar index, which is strengthening over 1%.
The Aussie has not dipped below 0.66 for long since early May, making the 50-day moving average an active support line, and is steady above the 200-day average. Both curves are pointing upwards, emphasising the positive trend.
AUDUSD has been recording higher yearly lows for the past two years, marking increased buying interest on downturns.
The strength of the US Dollar this month is making it harder for the AUD to rise, hindered both by strengthening the denominator and by impacting the price of commodities and metals that Australia exports.
The Aussie has not dipped below 0.66 for long since early May, making the 50-day moving average an active support line, and is steady above the 200-day average. Both curves are pointing upwards, emphasising the positive trend.
AUDUSD has been recording higher yearly lows for the past two years, marking increased buying interest on downturns.
The strength of the US Dollar this month is making it harder for the AUD to rise, hindered both by strengthening the denominator and by impacting the price of commodities and metals that Australia exports.
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Potential buyers are probably better off waiting for AUDUSD to break above 0.67, where we saw a reversal last month. It would also break the sequence of lower local highs seen over the past three years and at an even higher level since 2011.
A reversal in the tone of monetary policy has the potential to feed AUDUSD buying, adding to the local positive picture. The ability to break the long-term downtrend could attract even more buyers, launching a rally.
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A reversal in the tone of monetary policy has the potential to feed AUDUSD buying, adding to the local positive picture. The ability to break the long-term downtrend could attract even more buyers, launching a rally.
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Jump in US manufacturing and consumer caution
US retail sales rose 0.1% in value for May, worse than the 0.3% rise expected after a 0.2% decline a month earlier. Total sales were 2.5% higher than a year earlier, lagging the 3.3% inflation over the same period.
In other words, there was a decline in consumption in real terms. At first glance, this is surprising given that wages are adding at a 4.0% y/y rate, and employment is growing steadily. However, adding to the equation the soaring cost of servicing credit card debt and a very low savings rate by historical standards, things start to look up.
We don't see a decline in consumption as we do in times of crisis, but a clear slowdown that may precede it.
US retail sales rose 0.1% in value for May, worse than the 0.3% rise expected after a 0.2% decline a month earlier. Total sales were 2.5% higher than a year earlier, lagging the 3.3% inflation over the same period.
In other words, there was a decline in consumption in real terms. At first glance, this is surprising given that wages are adding at a 4.0% y/y rate, and employment is growing steadily. However, adding to the equation the soaring cost of servicing credit card debt and a very low savings rate by historical standards, things start to look up.
We don't see a decline in consumption as we do in times of crisis, but a clear slowdown that may precede it.
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