#Crypto market has been enjoying an influx of buyers since Saturday, with a visible acceleration on Monday. Over the past 24 hours, cap has risen 3.6% to $2.33 trillion. Last week’s drop in the crypto sentiment index to 30 (fear zone) reversed the price twice, as the market is dominated by a ‘buy the dip’ pattern.
#Bitcoin is trading near $63.3K, adding 5% since Saturday morning and reaffirming the importance of support at 61.8% of the Jan-March rally. From another perspective, Bitcoin is adding and bouncing off the lower boundary of the downward channel. Likely, the price is now moving towards the upper boundary at $67K. However, cautious buyers may prefer to wait for confirmation with the price rising above $72-73K - the pivot area of the last four months - which would be confirmation of the start of a new impulsive wave of growth.
Bitcoin ended June down 8.5% to $61.9K. July is considered successful for BTC, as it adds 8 times (22.3% on average) out of the last 13 and drops 5 times (-7.8% on average).
#Bitcoin is trading near $63.3K, adding 5% since Saturday morning and reaffirming the importance of support at 61.8% of the Jan-March rally. From another perspective, Bitcoin is adding and bouncing off the lower boundary of the downward channel. Likely, the price is now moving towards the upper boundary at $67K. However, cautious buyers may prefer to wait for confirmation with the price rising above $72-73K - the pivot area of the last four months - which would be confirmation of the start of a new impulsive wave of growth.
Bitcoin ended June down 8.5% to $61.9K. July is considered successful for BTC, as it adds 8 times (22.3% on average) out of the last 13 and drops 5 times (-7.8% on average).
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#WaveAnalysis
#AUDUSD reversed from strong resistance zone
Likely to fall to support level 0.6620
AUDUSD currency pair recently reversed down from the strong resistance zone located between the key resistance level 0.6685 (which has been steadily reversing the price from the start of May) and the upper daily Bollinger Band.
This resistance zone was further strengthened by the 61.8% Fibonacci correction of the previous downward impulse from December.
AUDUSD currency pair can be expected to fall further toward the next support level 0.6620 (former minor support from the end of June).
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#AUDUSD reversed from strong resistance zone
Likely to fall to support level 0.6620
AUDUSD currency pair recently reversed down from the strong resistance zone located between the key resistance level 0.6685 (which has been steadily reversing the price from the start of May) and the upper daily Bollinger Band.
This resistance zone was further strengthened by the 61.8% Fibonacci correction of the previous downward impulse from December.
AUDUSD currency pair can be expected to fall further toward the next support level 0.6620 (former minor support from the end of June).
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#WaveAnalysis
#EURCAD reversed from support zone
Likely to rise to resistance level 1.4780
EURCAD recently reversed up with the daily Hammer from the support zone located between the key support level 1.4580 (which has been reversing the price from the start of April) and the lower daily Bollinger Band.
The upward reversal from this support zone started the active minor ABC correction 2.
Given the strength of the support level 1.4580, EURCAD currency pair can be expected to rise further toward the next resistance level 1.4780 (former pivotal support from May).
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#EURCAD reversed from support zone
Likely to rise to resistance level 1.4780
EURCAD recently reversed up with the daily Hammer from the support zone located between the key support level 1.4580 (which has been reversing the price from the start of April) and the lower daily Bollinger Band.
The upward reversal from this support zone started the active minor ABC correction 2.
Given the strength of the support level 1.4580, EURCAD currency pair can be expected to rise further toward the next resistance level 1.4780 (former pivotal support from May).
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#Crypto retreated by 0.6% in 24 hours to a total cap of $2.31 trillion. Temporary institutional favourites are suffering losses due to the pull from risk and a stronger dollar. However, the dynamics of coins are not homogeneous. The decline of more than 1% in Bitcoin, Ethereum, and BNB contrasts with the 2.5%+ growth of Toncoin, Cardano, and Tron.
#Bitcoin has pulled back to $62.6K after two failed attempts to break above $63.0K on Monday. Continued market wariness could bring the price back to retest the $60K area in the near term.
At the end of last month, volatility in #XRP was falling after the price returned to the most important support of the last 12 months. Since Saturday, there has been a dominance of buyers, keeping the balance of power on the bullish side until Tuesday morning. In our view, confirmation of the bullish trend recovery is required, which could be a retracement of the $0.50 price where the important round level and the 50-day MA are combined.
#Bitcoin has pulled back to $62.6K after two failed attempts to break above $63.0K on Monday. Continued market wariness could bring the price back to retest the $60K area in the near term.
At the end of last month, volatility in #XRP was falling after the price returned to the most important support of the last 12 months. Since Saturday, there has been a dominance of buyers, keeping the balance of power on the bullish side until Tuesday morning. In our view, confirmation of the bullish trend recovery is required, which could be a retracement of the $0.50 price where the important round level and the 50-day MA are combined.
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#Review
Dollar Rises on Other Currencies’ Problems
The US dollar has been settling near two-month highs since late last week, but this is a pick of the best among the worst. Expectations for the Fed’s key year-end rate have changed little over the past roughly three weeks. Still, the dollar’s main competitors have faced their difficulties one after another, coming under selling pressure.
Political uncertainty remains over France and the UK due to expectations of opposition parties coming to power. Some investors fear accelerating de-globalisation, which is seen as negative by global investors. The results of the first round in France spurred the euro only briefly, and by midday on Tuesday, #EURUSD again approached 1.0710, where it spent the second half of June. It is worth noting that this euro sell-off is also supported by declines in bonds and the equity market.
Dollar Rises on Other Currencies’ Problems
The US dollar has been settling near two-month highs since late last week, but this is a pick of the best among the worst. Expectations for the Fed’s key year-end rate have changed little over the past roughly three weeks. Still, the dollar’s main competitors have faced their difficulties one after another, coming under selling pressure.
Political uncertainty remains over France and the UK due to expectations of opposition parties coming to power. Some investors fear accelerating de-globalisation, which is seen as negative by global investors. The results of the first round in France spurred the euro only briefly, and by midday on Tuesday, #EURUSD again approached 1.0710, where it spent the second half of June. It is worth noting that this euro sell-off is also supported by declines in bonds and the equity market.
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The slightly less one-note but highly dramatic story in the yen continues. The #USDJPY has been hitting highs since 1986, rising to 161.6. The pair has been selling off since the beginning of the week, touching 161.7, but minor pullbacks do not allow for shock-and-awe interventions that could reverse the momentum. Japan’s stock market is taking advantage of the yen’s weakness, trying to return to levels above 40000 on the Nikkei225, despite the decline in key global benchmarks.
The Swiss franc is giving up ground almost daily following the Swiss Central Bank’s second consecutive policy easing on 20 June, taking #USDCHF back above 0.90, a one-month high.
The Swiss franc is giving up ground almost daily following the Swiss Central Bank’s second consecutive policy easing on 20 June, taking #USDCHF back above 0.90, a one-month high.
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Technically, the #DXY Dollar Index continues to hover near the lower boundary of the rising channel. The dollar needs to rise another 0.5% to confirm this upward trend, breaking the area of previous peaks. If the bulls are successful at this stage, the dollar will be able to grow to the upper boundary of the corridor (now at 109), which has the potential to strengthen by about 3% to the current levels.
A more hawkish tone of the central bank officials compared to Europe and more robust economic growth figures will help the USD on this growth path, promising less active easing of monetary policy conditions in the foreseeable future.
A continued bullish bias for the dollar threatens to push EURUSD back below 1.05 before the end of summer, where the pair briefly dipped in early October 2023.
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A more hawkish tone of the central bank officials compared to Europe and more robust economic growth figures will help the USD on this growth path, promising less active easing of monetary policy conditions in the foreseeable future.
A continued bullish bias for the dollar threatens to push EURUSD back below 1.05 before the end of summer, where the pair briefly dipped in early October 2023.
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#EconomicComment
Eurostat Flash estimate saw the euro area CPI stand at 2.5% y/y, hovering between 2.4% and 2.6% for the past five months with no apparent slowing since November when the rate first touched 2.4%.
Core CPI maintained a 2.9% y/y in May and June after touching 2.7% in April. The index has also stabilised at levels above the ‘below but close to 2%’ target for the ECB.
The stabilisation at higher levels is due to increased demand, as producer prices have been losing more than a year’s worth of annual growth, falling 5.7% y/y, according to the latest data for April.
The resilience of inflation is unlikely to allow the ECB to cut rates as aggressively as it has been raising them. This may be more akin to the 2011-2015 easing cycle than the emergency cuts of 2008-2009 or smoother 2001-2002 cuts.
Such a scenario is relatively optimistic for markets, as emergency rate cuts have come with sudden deterioration in financial conditions, requiring liquidity injections to save markets from collapse.
Eurostat Flash estimate saw the euro area CPI stand at 2.5% y/y, hovering between 2.4% and 2.6% for the past five months with no apparent slowing since November when the rate first touched 2.4%.
Core CPI maintained a 2.9% y/y in May and June after touching 2.7% in April. The index has also stabilised at levels above the ‘below but close to 2%’ target for the ECB.
The stabilisation at higher levels is due to increased demand, as producer prices have been losing more than a year’s worth of annual growth, falling 5.7% y/y, according to the latest data for April.
The resilience of inflation is unlikely to allow the ECB to cut rates as aggressively as it has been raising them. This may be more akin to the 2011-2015 easing cycle than the emergency cuts of 2008-2009 or smoother 2001-2002 cuts.
Such a scenario is relatively optimistic for markets, as emergency rate cuts have come with sudden deterioration in financial conditions, requiring liquidity injections to save markets from collapse.
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#WaveAnalysis
#CADJPY broke key resistance level 117.00
Likely to reach resistance level 119.00
CADJPY currency pair recently broke through the key resistance level 117.00 (which stopped the previous sharp upward impulse wave (1) at the end of April, as can be seen below).
The breakout of the resistance level 117.00 accelerated the active impulse wave 3 of the higher order impulse wave (3) from the start of May.
Given the clear daily uptrend and the continuation of the strong yen sales, CADJPY currency pair can be expected to rise further toward the next resistance level 119.00.
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#CADJPY broke key resistance level 117.00
Likely to reach resistance level 119.00
CADJPY currency pair recently broke through the key resistance level 117.00 (which stopped the previous sharp upward impulse wave (1) at the end of April, as can be seen below).
The breakout of the resistance level 117.00 accelerated the active impulse wave 3 of the higher order impulse wave (3) from the start of May.
Given the clear daily uptrend and the continuation of the strong yen sales, CADJPY currency pair can be expected to rise further toward the next resistance level 119.00.
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#WaveAnalysis
#EBAY reversed from support level 52.00
– Likely to rise to resistance level 54.60
EBAY recently reversed up from the pivotal support level 52.00 (which reversed the price twice from the end of May) – standing near the lower daily Bollinger Band and the 50% Fibonacci correction of the sharp upward impulse from May.
The upward reversal from the support level 52.00 stopped the previous short-term correction ii. Given the persistent uptrend that can be seen on the daily and the weekly charts, EBAY can be expected to rise further toward the next resistance level 54.60, which stopped the previous waves 1 and i
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#EBAY reversed from support level 52.00
– Likely to rise to resistance level 54.60
EBAY recently reversed up from the pivotal support level 52.00 (which reversed the price twice from the end of May) – standing near the lower daily Bollinger Band and the 50% Fibonacci correction of the sharp upward impulse from May.
The upward reversal from the support level 52.00 stopped the previous short-term correction ii. Given the persistent uptrend that can be seen on the daily and the weekly charts, EBAY can be expected to rise further toward the next resistance level 54.60, which stopped the previous waves 1 and i
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The pressure on the #crypto has been more sustained than on the stocks. Over the past 24 hours, the total crypto cap has fallen by 2.6%, with most of the downward momentum starting in the US session.
#Bitcoin retreated to $60.5K at the lows of the Asian session, partially recovering to $61K. However, it remains in a technical correction after the upward momentum. Only a drop below $58K will disrupt the bullish picture, breaking the concentrated support area in the form of the 61.8% level ($60.3K), the 200-day MA ($58.3K) and the previous low ($58.2K). In this case, be prepared for a drop to $51.0K with alarming consequences for the entire cryptocurrency market.
#Solana has been up over the last 24 hours but is down 3% since the start of the day on Wednesday, having found technical resistance in the form of its 50-day moving average. The fundamental picture is one of a worrying sell-off in the major cryptocurrencies despite the overall positivity in equities.
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#Bitcoin retreated to $60.5K at the lows of the Asian session, partially recovering to $61K. However, it remains in a technical correction after the upward momentum. Only a drop below $58K will disrupt the bullish picture, breaking the concentrated support area in the form of the 61.8% level ($60.3K), the 200-day MA ($58.3K) and the previous low ($58.2K). In this case, be prepared for a drop to $51.0K with alarming consequences for the entire cryptocurrency market.
#Solana has been up over the last 24 hours but is down 3% since the start of the day on Wednesday, having found technical resistance in the form of its 50-day moving average. The fundamental picture is one of a worrying sell-off in the major cryptocurrencies despite the overall positivity in equities.
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#Review
Fed Chairman Greenspan once said, ‘If I've made myself too clear, you must have misunderstood me’. It seems that over the past 15 years, the Fed has become increasingly transparent in its reasoning and expectations. Therefore, there is only a small chance that the markets misinterpreted Fed Chairman Powell's speech yesterday.
At the ECB conference on Tuesday, the current Fed’s chief noted that the US is back on a "disinflationary path". Of course, this was followed by caveats that more data is needed to decide on a rate cut. However, this is a very clear hint that a rate cut is imminent unless the data holds some unpleasant surprises.
This is a very bold assumption. The core price index growth rate is drifting downwards (3.4%), almost half the peak rate of 6.6% in September 2022. The Fed's preferred measure of inflation, the core PCE deflator, is slowing, falling to 2.6%, the lowest since April 2021. Meanwhile, the overall inflation rate has been in the 3.0-3.7% range for the past 12 months.
Fed Chairman Greenspan once said, ‘If I've made myself too clear, you must have misunderstood me’. It seems that over the past 15 years, the Fed has become increasingly transparent in its reasoning and expectations. Therefore, there is only a small chance that the markets misinterpreted Fed Chairman Powell's speech yesterday.
At the ECB conference on Tuesday, the current Fed’s chief noted that the US is back on a "disinflationary path". Of course, this was followed by caveats that more data is needed to decide on a rate cut. However, this is a very clear hint that a rate cut is imminent unless the data holds some unpleasant surprises.
This is a very bold assumption. The core price index growth rate is drifting downwards (3.4%), almost half the peak rate of 6.6% in September 2022. The Fed's preferred measure of inflation, the core PCE deflator, is slowing, falling to 2.6%, the lowest since April 2021. Meanwhile, the overall inflation rate has been in the 3.0-3.7% range for the past 12 months.
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However, we also note that current levels are still weighted above the 2% target. In addition, it is also worth considering that the Fed is targeting inflation at the long-run average. This means that it will take a long time to average out after more than three years of significant excess above the target.
An important reason for rising prices is the strong labour market, which is creating jobs faster than the trend rate. As a result, wages have been rising at a rate above 4% y/y for the past three years and above the rate of inflation for the past 13 months.
A tight monetary policy is likely to pressure the prices of food commodities and energy. Lower interest rates can quickly bring prices back to the upside, but stock markets seemed to have had enough, even with yesterday's speech.
An important reason for rising prices is the strong labour market, which is creating jobs faster than the trend rate. As a result, wages have been rising at a rate above 4% y/y for the past three years and above the rate of inflation for the past 13 months.
A tight monetary policy is likely to pressure the prices of food commodities and energy. Lower interest rates can quickly bring prices back to the upside, but stock markets seemed to have had enough, even with yesterday's speech.
The #Nasdaq100 added about 1.5% after Powell's speech, closing above 20,000, from where it has sold off twice in the past two weeks. The S&P500 also had a record close.
Also showing a noteworthy reaction was the dollar (#DXY), which lost 0.5%. This small but important reversal emphasised the strength of resistance around the June highs and raised doubts as to whether the dollar will be able to stay within an upward channel.
We may get the final answer to this when we see the market reaction to Friday's employment report.
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Also showing a noteworthy reaction was the dollar (#DXY), which lost 0.5%. This small but important reversal emphasised the strength of resistance around the June highs and raised doubts as to whether the dollar will be able to stay within an upward channel.
We may get the final answer to this when we see the market reaction to Friday's employment report.
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#EconomicComment
Weak data hammers USD
The US private sector created 150K jobs in June, according to fresh ADP estimates. This is slightly weaker than expected and the lowest growth since January. Once again, the leisure sector (+63K) led the growth.
Construction stands out, with net job growth of 27K for the month and nearly 3% growth in the last seven months of accelerated hiring, which is surprising given the collapse in lumber prices, the proxy for construction activity.
Falling employment in mining (-8K) and manufacturing (-5K) acts as a wake-up call. Impressive growth momentum remains in the service sector, continuing to be a pro-inflationary factor.
Weak data hammers USD
The US private sector created 150K jobs in June, according to fresh ADP estimates. This is slightly weaker than expected and the lowest growth since January. Once again, the leisure sector (+63K) led the growth.
Construction stands out, with net job growth of 27K for the month and nearly 3% growth in the last seven months of accelerated hiring, which is surprising given the collapse in lumber prices, the proxy for construction activity.
Falling employment in mining (-8K) and manufacturing (-5K) acts as a wake-up call. Impressive growth momentum remains in the service sector, continuing to be a pro-inflationary factor.
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Weekly jobless claims continue to signal a new phase in the labour market. The four-week moving average of initial claims climbed to 238.5K, adding 15.5K for the month. The same indicator for continued claims rose by 45K. Such indicators retain a theoretical chance of negative data on employment change of NFP numbers due on Friday. Remember that analysts, on average, expect +190K.
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Indicators of foreign trade activity present another batch of negative data. The trade deficit widened to 75.1bn in May—the highest since October 2022. The driver is the accelerated growth of imports (+6.2% y/y) vs exports (+4.3% y/y). Export volumes reached a plateau in September, while imports have been on an upward trend since last August.
Altogether, this is negative news for the dollar, suggesting increased pressure due to trade and signs of a reversal in the labour market trend, bringing a rate cut closer. According to FedWatch, the market gives a 68% chance of a rate cut in September versus 62% a week ago and 59.5% a month ago.
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Altogether, this is negative news for the dollar, suggesting increased pressure due to trade and signs of a reversal in the labour market trend, bringing a rate cut closer. According to FedWatch, the market gives a 68% chance of a rate cut in September versus 62% a week ago and 59.5% a month ago.
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#WaveAnalysis #UK100
FTSE 100 index reversed from key support level 8130;
Likely to rise to resistance level 8300.
FTSE 100 index recently reversed up from the key support level 8130 (which has been steadily reversing the price from the end of April) – strengthened by the lower daily Bollinger Band and the 50% Fibonacci correction of the sharp upward impulse from April.
The upward reversal from the support level 8130 stopped the previous short-term impulse wave 1.
Given the clear daily uptrend, FTSE 100 index can be expected to rise further toward the next resistance level 8300, top of the earlier correction B.
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FTSE 100 index reversed from key support level 8130;
Likely to rise to resistance level 8300.
FTSE 100 index recently reversed up from the key support level 8130 (which has been steadily reversing the price from the end of April) – strengthened by the lower daily Bollinger Band and the 50% Fibonacci correction of the sharp upward impulse from April.
The upward reversal from the support level 8130 stopped the previous short-term impulse wave 1.
Given the clear daily uptrend, FTSE 100 index can be expected to rise further toward the next resistance level 8300, top of the earlier correction B.
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