Bitcoin is Fighting for 24,000 USD Level
Cryptocurrencies gained on the wave of Jerome Powell’s comments and the double-dip of the previous 25bp US rate hike. Although the Fed is far from declaring victory over inflation, and Powell hinted at a possible return of inflation if the central bank does ‘too little,’ markets particularly liked the comments regarding the ‘global disinflation’ process that has begun. As a result, the largest cryptocurrency is struggling to rise near its summer 2022 highs.
- Bitcoin soared above $24,000 but was quickly knocked off these levels by supply and is now struggling to return to levels near the summer 2022 peaks. The strongest gainers are again altcoins including Binancecoin, Algorand, Sushi and Avalanche;
- The volume of the cryptocurrency market rose by nearly 30% yesterday on a daily basis, to about $61 billion. The capitalization of the entire market is now around $1.1 trillion;
- Meta Platforms’ successful report supported sentiment on U.S. index contracts primarily the NASDAQ, with which Bitcoin correlates;
- Wall Street is approaching a key day of earnings season, with today’s post-session shows from Apple, Alphabet and Amazon likely to affect volatility and investor activity in the evening hours in the cryptocurrency market as well;
- If positive sentiment continues traders may increase speculative exposure around Elon Musk’s ‘favorite cryptocurrency,’ Dogecoin in view of recent comments by Tesla’s CEO, who suggested integrating Twitter with both traditional finance and cryptocurrencies.
The sudden surge of interest in Bitcoin in 2023 caused a massive increase in the average daily number of transactions on the network. Their number has grown exponentially from less than 200,000 to nearly 350,000 in a month, the largest increase in the history of a major cryptocurrency.
Bitcoin chart, H4 interval. The largest cryptocurrency remains above the SMA200 (red band) and SMA100 (black band), which is also the lower limit of the upward formation. Bitcoin has also reached the vicinity of the summer 2022 maxima, although this is the second time it has been pushed back by supply from levels above $24,000. The 50 SMA average (blue band) is approaching the cross with the SMA200, which in the past has most often heralded a prolonged price rebound, and has also crossed the SMA100 for the first time in nearly 10 months, which was a resistance even during summer of 2022.
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EURJPY Fluctuates Below the Barrier
The EURJPY pair repeated the weak sideways trades to settle below the additional barrier 142, which allows us to keep the bearish overview, reminding you that it is important to gather the negative momentum to ease the mission of declining towards the initial negative stations represented by 140.80 and 140.25.
The expected trading range for today is between 142.00 and 140.25.
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Gold Technical Analysis
Gold price ended yesterday below the bullish channel’s support line that appears on the chart, to start bearish correction for the rise measured from 1616.65 to 1959.75, on its way to visit 1878.8 as a first correctional target.
Therefore, we expect to witness more decline in the upcoming sessions, taking into consideration that breaching 1928.6 will stop the current negative pressure and lead the price to regain the main bullish trend again. The expected trading range for today is between 1890 support and 1930 resistance.
Crude Oil Price Presses on the Support
Crude oil price attempts to break 75.65 level, to hint heading to achieve more decline in the upcoming sessions, organized inside the bearish channel that appears on the chart, to target 74.10 areas initially.
Therefore, the bearish bias will be suggested for today, noting that breaching 76.2 will stop the expected decline and lead the price to recover and attempt to build bullish wave on the intraday basis. The expected trading range for today is between 73.8 support and 77 resistance.
AUDUSD Under the Negative Pressure
The AUDUSD pair found solid resistance around 0.7150 level, to rebound downwards clearly and head towards potential visit to the bullish channel’s support line, located now around 0.6920.
Therefore, the bearish bias will be expected for today, supported by moving below the EMA50, taking into consideration that breaching 0.7090 will stop the expected decline and lead the price to resume the main bullish wave. The expected trading range for today is between 0.6980 support and 0.7100 resistance.
USDJPY consolidates below the resistance
The USDJPY pair settles below the resistance line formed at 128.90, noticing that stochastic loses its positive momentum clearly, while the EMA50 forms negative pressure against the price.
Therefore, these factors encourage us to continue suggesting the bearish trend that its next target located at 127.15, reminding you that it is important to hold below 128.90 to achieve the waited targets. The expected trading range for today is between 127.60 support and 129.20 resistance.
Dow Jones - Growth on the back of positive financial reports of the components
Yesterday, three market giants included in the top capitalization rating presented their financial data for the fourth quarter of 2022. Technology company Apple Inc. showed revenue of 117.20 billion dollars, which still fell short of the projected 121.88 billion dollars, which was generally expected and did not lead to a serious drop in shares. Google’s holding Alphabet Inc. reported revenue of 76.05 billion dollars, a significant increase from the previous quarter’s 69.09 billion dollars, and one of the largest online retailers, Amazon Inc. reported revenue of 149.2 billion dollars, which exceeded the projected 145.64 billion dollars, which allowed the issuer’s stock quotes to increase immediately by 8.0%.
On the daily chart, the index quotes continue corrective dynamics, again trying to overcome the resistance line of the local Triangle pattern at 34160, the technical indicators remain in the state of a weak buy signal, hinting at an exit from the pattern: the range of EMA fluctuations on the Alligator indicator started expanding in the direction of growth, and the histogram of the AO oscillator is forming new ascending bars in the purchase zone.
Support levels: 33557, 32463 | Resistance levels: 34325, 35524
EURJPY Technical Analysis
The EURJPY pair started to form new correctional bullish wave to surpass the additional barrier 141.75 and notice recording some gains by touching 142.85 level.
Continuing to consolidate above the breached barrier reinforces the chances of renewing the correctional attempts for now, to expect targeting 143.60 and 144.00 levels, while gathering the additional negative momentum and crawling below 141.75 will activate the bearish track again, to increase the chances of crawling towards 141.10 followed by repeating the pressure on 140.25 obstacle.
The expected trading range for today is between 141.75 and 143.60.
Morning Wrap - US500
S&P 500 (US500) failed to break above the 4,165 pts resistance zone last week and started to pull back. The move lower is being continued today. Tensions between China and the US are picking-up after the US Air Force shot down a Chinese spy balloon over the weekend.
Nasdaq 100 - American stock market is preparing for a reversal
One of the leading US indexes Nasdaq 100 shows corrective dynamics, being at around 12500.0, reversing downwards amid disappointing financial results of large companies. The situation cannot be changed even by the strengthening of the positions of the American currency, supported by data on an increase in the Nonfarm Payrolls by 517.0 thousand jobs with an expected growth of only 190.0 thousand.
The largest online retailer Amazon.com Inc. reported close-to-loss quarterly earnings per share of just 0.03 dollars, worse than the 0.17 dollars forecast. At the same time, the company increased its revenue from 127.1 billion dollars to 149.2 billion dollars. Technology giant Apple Inc. posted earnings per share of 1.88 dollars, lower than the expected 1.94 dollars, and revenue of 117.2 billion dollars versus a forecast of 121.88 billion dollars. In turn, Alphabet Inc. reported revenue of 76.05 billion dollars versus a forecast of 76.07 billion dollars and earnings per share of 1.05 dollars, down from the previous quarter’s figure of 1.06 dollars.
On the daily chart, the index quotes are correcting as part of the global Expanding Formation pattern, approaching the resistance line. Technical indicators are holding a buy signal, which is about to start weakening.
Support levels: 12200, 11400 | Resistance levels: 12800, 13600
XAUUSD - Global demand for gold remains at a record high
Yesterday, gold quotes recorded the most significant drop since last June, dropping by 90.0 dollars from 1950.0 to Friday’s low at 1860.0, the key driver of which was the growth of the US dollar from 101.500 to 102.900 in the USD Index against the background of a strong report on the US labor market. Investors perceived the movement as a local correction, which will not receive a serious continuation since the fundamental global background does not contribute to the decline in the asset: according to the report for 2022, global demand for gold amounted to 4.741K tons, which is an absolute record since 2011. Most of the positive momentum came from central banks’ purchases, which mostly wished to remain anonymous. According to experts, regulators thus hope to protect themselves from possible sanctions, providing strong support for national economies.
On the daily chart, the trading instrument is correcting, keeping around the support line of the rising corridor. Technical indicators weaken the buy signal.
Resistance levels: 1900, 1960 | Support levels: 1860, 1800
EURUSD Heads Towards the Second Target
The EURUSD pair broke 1.0830 level strongly to open the way to achieve more decline on the intraday basis, targeting testing 1.0745 as a next negative station, to keep the bearish bias dominant in the upcoming sessions.
It is important to monitor the price when reaching the suggested target, as breaking it will push the price to achieve more decline that its next target reaches 1.0635, taking into consideration that breaching 1.0865 will stop the current negative pressure and lead the price to regain the main bullish trend again.
The expected trading range for today is between 1.0695 support and 1.0865 resistance.
AUDUSD Hits the Target
The AUDUSD pair managed to achieve our waited target at 0.6920 and settles around it now, settling below the bullish channel’s support line to fall under more correctional pressure in the upcoming sessions, targeting visiting 0.6780 areas as a next main station.
Therefore, the bearish bias will remain suggested in the upcoming sessions, taking into consideration that breaching 0.6945 will stop the expected decline and lead the price to return to the main bullish track again.
The expected trading range for today is between 0.6850 support and 0.6980 resistance.
GBPUSD Crawls Downwards
The GBPUSD pair approach 1.2000 barrier, showing tight sideways trades now, noticing that stochastic loses its positive momentum gradually, waiting to motivate the price to resume the bearish bias that targets testing 1.1940 level as a next station.
Therefore, the bearish trend scenario will remain valid and active conditioned by the price stability below 1.2115. The expected trading range for today is between 1.1950 support and 1.2100 resistance.
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NZDUSD Faces Solid Support
The NZDUSD pair found solid support at 0.6290, to show some slight bullish bias and begins attempts to build bullish wave, but it loses the positive momentum clearly, which might force the price to decline again and attack the mentioned level in attempt to achieve more bearish correction.
Therefore, we prefer to stay aside until we get clearer signal for the next trend, noting that breaking the mentioned support will push the price to head towards 0.6210 followed by 0.6140 levels as next negative targets, while breaching 0.6365 represents positive factor that will lead the price to recover and achieve gains that start at 0.6445. The expected trading range for today is between 0.6260 support and 0.6380 resistance.
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ETHUSD - Murray analysis
The ETHUSD pair has been trading within the upward trend since the beginning of this year, however, growth has slowed down in the last three weeks, and quotes have entered the sideways range of 1687.5 - 1562.50 (Murray levels [7/8]-[6/8]), where they are now.
Currently, the price is trying to resume growth from the middle line of the Bollinger Bands (1625) and, if consolidated above the upper limit of the specified range, it will be able to rise to 1750 (Murray level [8/8]) and 1875 (Murray level [+2/8]). In general, the uptrend in the pair is still maintained, which is signaled by the upward reversal of the Bollinger Bands and the stabilization of the MACD histogram in the positive zone. A downward reversal of the Stochastic allows a breakdown of the middle line of the Bollinger bands and a pullback of the price to the area of 1562.5 (Murray level [5/8], the lower line of the Bollinger Bands), however, in this case, an upward reversal is more likely than further development of the downward movement.
Resistance levels: 1687.5, 1750, 1875 | Support levels: 1562.5, 1500, 1375, 1250
Chart of the Day - USDCAD
USDCAD has been trading in a descending triangle pattern since October 2022. The pair failed to break above the resistance zone ranging below the 1.3500 area yesterday and can be seen pulling back today. USDCAD is expected to get more volatile later today as traders will be offered comments from both - Fed Chair Powell (5:40 pm GMT) and BoC Governor Macklem (5:45pm GMT).
Solid jobs data led some to believe that the Fed may switch back to a 50 bp rate hike at its next meeting and Powell’s comments will be key in shaping expectations further. Macklem will deliver a speech titled “How monetary policy works” at CFA Society Quebec. Speech will surely touch on the topic of monetary policy as the title implies. More importantly, Macklem will answer reporters’ questions afterwards at 7:00 pm GMT and it could be a chance for more details on the current policy outlook.
USDCAD is trading around 1% below upper limit of the triangle pattern and around 1.2% above the lower limit. While today’s speeches from BoC and Fed heads may not lead to an immediate breakout, they could set the tone for the coming days, which may lead to a breakout. A textbook range of the breakout from the pattern in either direction is 720 pips.
USDCHF Crawls Upwards
The USDCHF pair shows calm positive trades to gradually approach our waited target at 0.9315, to keep the bullish trend scenario valid and active as long as 0.9220 level remains intact.
Note that breaching the targeted level will extend the bullish wave to reach 0.9475 areas on the near term basis, while breaking 0.9220 represents negative factor that will push the price to the main bearish track again.
The expected trading range for today is between 0.9200 support and 0.9360 resistance.
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XRPUSD - Technical analysis
The XRPUSD pair has been actively growing since the beginning of this year as part of the general market trend. However, at present, the upward dynamics have seriously slowed. The price reached three-month highs around 0.4290, after which it rolled back to 0.3906 (Murrey level [8/8]). Fixation below it will give the prospect of further decline to 0.3662 (Murrey level [7/8]) and 0.3418 (Murrey level [6/8]). If the quotes consolidate above the resistance zone of 0.4050 – 0.4150 (middle line of Bollinger bands, Fibonacci correction 38.2%, Murrey level [+1/8]), growth may continue to 0.4395 (Murrey level [+2/8]), 0.4565 (Fibonacci retracement 61.8%) and 0.4750.
Technical indicators point to the continuation of the uptrend. Bollinger bands are directed upwards, Stochastic is reversing upwards from the oversold zone, and the MACD histogram is stable in the positive zone.
Resistance levels: 0.415, 0.4395, 0.4565, 0.475 | Support levels: 0.3906, 0.3662, 0.3418
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GBPAUD Prepares for New Decline
The GBPAUD pair repeated the strong negative trades affected by the negative momentum coming by the major indicators, to consolidate below 61.8% Fibonacci correction level at 1.7500.
We expect to crawl towards 1.7190 to form the first target for the bearish track, noting that breaking this obstacle will allow the price to continue the decline and target more negative stations that might start at 1.7110 and 1.7055. The expected trading range for today is between 1.7360 and 1.7110.
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