Daily Market Analysis By FXOpen

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BTCUSD and XRPUSD Technical Analysis – 04th JAN 2022

BTCUSD: Double Bottom Pattern Above $45,000

Bitcoin started this week on a bearish tone, and the price continued to slide touching a low of $45,725 on 3rd January, after which we can see some fresh buying in bitcoin markets globally.

Some pullback action can be observed in the European trading session today, and the prices of BTCUSD are ranging above the $46,000 handle.

We can clearly see a double bottom pattern above $45,000, which signifies the end of a downtrend and a shift towards an uptrend.

Both Stoch and StochRSI are indicating an OVERBOUGHT level, meaning that in the immediate short-term, a decline in the prices is expected.

With global cryptocurrency markets staging mixed trading signals we will have to wait before entering into any buying positions in bitcoin.

The relative strength index is at 52 indicating a NEUTRAL market and a move towards a market consolidation phase.

Bitcoin is now moving below its 100 hourly simple and exponential moving averages.

The average true range is indicating a lesser market volatility which means that markets are due to enter into a consolidation phase.

• Bitcoin trend reversal is seen above $45,000
• Williams percent range is indicating an OVERBOUGHT level
• The price is now trading just above its pivot levels of $46,489
• All moving averages are giving a NEUTRAL market signal

Bitcoin: Bullish Reversal Above $45,000 Confirmed

Bitcoin is forming a bullish trend pattern which means that the prices can start moving upwards due to the buying pressure that is coming into the global cryptocurrency markets.

The moving averages are giving a NEUTRAL signal; however, we have detected a MA 20 crossover pattern which is an indication for the bullish reversal of the markets. This bullish trend is mild and will have to wait till we can see a STRONG BUY signal from the moving averages.

All of the major technical indicators are giving a STRONG BUY signal, which means that in the immediate short-term we are expecting targets of $47,000 and $48,000.

The price of BTCUSD is now facing its classic resistance level of $46,639 and Fibonacci resistance level of $46,731, after which the path towards $47,000 will get cleared.

In the last 24hrs, BTCUSD has gone DOWN by -1.01% with a price change of 477$, and has a 24hr trading volume of USD 34.438 billion. We can see an Increase of 19.26% in the trading volume as compared to yesterday. This increase is due to the increased buying pressure seen after the recent decline in bitcoin.

The Week Ahead

We can see that bitcoin has started its upside correction after the decline and continues to trade above $46,500.

The recent decline we saw from the high of $68,984 reached on 10th November, 2021, happened due to the profit taking and the market liquidation by big investors and the global hedge funds.

The downside wave correction now seems to be finally over and we are ready for an upswing move towards the $50,000 handle in January 2022.

The short-term outlook is positive; the medium to long-term outlook remains BULLISH for bitcoin with targets of $55,000 to $60,000 in 2022.

BTC Gains in 2021

In 2021, we saw a 66% gain in bitcoin, which was lower than Ethereum's 421% jump.

In contrast, we saw a marginal decline in the value of gold without any gains, whereas the US S&P 500 saw gains of 31% during the same period.

Bitcoin still remains the topmost cryptocurrency of the world with a total market capitalization of 881.48 billion USD.

Technical Indicators:

Commodity channel index (14-day): at 161.63 indicating a BUY

Average directional change (14-day): at 36.94 indicating a BUY

Rate of price change: at 0.399 indicating a BUY

Bull/bear power (13-day): at 316.27 indicating a BUY

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All Eyes On Friday's US Jobs Report

Finally, we left 2021 behind, and the investing community is preparing for what the new year has in store for financial markets. Already, some important economic data is due out this week, despite some market participants still being on their winter break.

For example, banks in Europe, the UK, the US, and Canada are closed today. As such, volatility is likely to remain subdued and levels to hold. However, things are about to change as the market will build momentum towards the most important economic release of the week, the non-farm payrolls (NFP, or, alternatively, the jobs) report.

As a rule, NFP reports are released on the first Friday of the new month, and show the evolution of the US jobs market. Because the Federal Reserve of the US (aka the Fed) has job creation as part of its mandate, changes in the job market may affect the Fed's interest rate decision

Both the number of jobs created and the unemployment rate are important for market participants, especially if they show that the Fed comes closer to its definition of full employment. If so, the US dollar should get a boost as inflation is already running well above the Fed's definition of price stability.

What do we expect of Friday's release?

This Friday's data will refer to December 2021, and the market expects the US economy to create 410k jobs, and the unemployment rate to further decline to 4.1%. The November data showed that the US economy added 210k new jobs, but the unemployment rate was affected by the fact that people have quit their jobs, giving the impression that the unemployment rate is low.

One interesting detail to watch out for is the labor force participation rate change. In November, it increased, but has remained well below its pre-pandemic level. High unemployment and aging numbers justify the decline partially, so more evidence is needed from future releases.

All in all, expect the price action to build momentum towards Friday's release as more market participants become active.

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EUR/USD Struggle Continues, USD/JPY Extends Rally

EUR/USD started a fresh decline from well above 1.1350. USD/JPY started a major increase above the 115.00 and 115.50 resistance levels.

Important Takeaways for EUR/USD and USD/JPY

• The Euro failed to gain strength above the 1.1350 and 1.1380 resistance levels.
• There is a key bearish trend line forming with resistance near 1.1300 on the hourly chart of EUR/USD.
• USD/JPY started a fresh increase above the 115.00 resistance zone.
• There was a break above a major rising channel with resistance near 115.55 on the hourly chart.

EUR/USD Technical Analysis

Recently, the Euro failed to clear the 1.1385 zone against the US Dollar. The EUR/USD pair started a fresh decline and traded below the 1.1320 support zone.

The pair even broke the 1.1300 level and settled below the 50 hourly simple moving average. A low was formed near 1.1272 on FXOpen and the pair is now consolidating. An immediate resistance on the upside is near the 1.1300 level.

EUR/USD Hourly Chart

It is near the 23.6% Fib retracement level of the recent decline from the 1.1388 swing high to 1.1272 low. The next major resistance is near the 1.1305 level.

There is also a key bearish trend line forming with resistance near 1.1300 on the hourly chart of EUR/USD. The main resistance is near the 1.1320 level and the 50 hourly simple moving average. It is near the 50% Fib retracement level of the recent decline from the 1.1388 swing high to 1.1272 low.

If there is no break above 1.1320, the pair might start a fresh decline. An immediate support is near the 1.1275. The next major support is near 1.1260, below which the pair could dive to 1.1220 in the near term.

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AUD/USD and NZD/USD Could Extend Losses

AUD/USD started a fresh decline from well above 0.7250. NZD/USD is also declining and there is a risk of a move below the 0.6730 support.

Important Takeaways for AUD/USD and NZD/USD

• The Aussie Dollar started a major decline from well above the 0.7250 level against the US Dollar.
• There is a short-term breakout pattern forming with resistance near 0.7175 on the hourly chart of AUD/USD.
• NZD/USD also declined sharply below the 0.6800 support zone.
• There is a contracting triangle forming with resistance near 0.6755 on the hourly chart of NZD/USD.

AUD/USD Technical Analysis

The Aussie Dollar struggled to clear the 0.7270 level against the US Dollar. The AUD/USD pair started a fresh decline below the 0.7250 support level.

The pair even traded below the 0.7220 support level and the 50 hourly simple moving average. It traded as low as 0.7146 on FXOpen and started consolidation. There was a minor move above the 0.7155 level.

AUD/USD Hourly Chart

However, the pair is facing resistance near the 0.7175 level. There is also a short-term breakout pattern forming with resistance near 0.7175 on the hourly chart of AUD/USD. The triangle resistance is near the 23.6% Fib retracement level of the downward move from the 0.7272 swing high to 0.7146 low.

The next major resistance is near the 0.7210 level. It is near the 50% Fib retracement level of the downward move from the 0.7272 swing high to 0.7146 low.

A close above the 0.7210 level could start a steady increase in the near term. The next major resistance could be 0.7250. On the downside, an initial support is near the 0.7150 level. If there is a downside break below the 0.71350 support, the pair could extend its decline towards the 0.7120 level. Any more downsides might send the pair toward the 0.7100 level.

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GBP/USD Gains Momentum, USD/CAD Could Extend Losses

GBP/USD started a major increase above the 1.3500 resistance zone. USD/CAD declined below 1.2700 and remains at a risk of more downsides.

Important Takeaways for GBP/USD and USD/CAD

• The British Pound started a fresh increase from the 1.3320 support zone.
• There is a key bullish trend line forming with support near 1.3545 on the hourly chart of GBP/USD.
• USD/CAD started a fresh decline from well above the 1.2800 pivot level.
• There was a break below a major bullish trend line with support near 1.2730 on the hourly chart.

GBP/USD Technical Analysis

After a major decline, the British Pound found support above 1.3320 against the US Dollar. GBP/USD started a fresh upward wave above the 1.3500 level.

The bulls gained strength and pushed the pair above the 1.3550 level. A high was formed near 1.3597 on FXOpen and the pair is now consolidating gains. It is now trading well above the 1.3550 level and the 50 hourly simple moving average.

GBP/USD Hourly Chart

On the downside, the first support is near the 1.3570 area. It is near the 23.6% Fib retracement level of the upward move from the 1.3490 swing low to 1.3597 high.

The first major support is near the 1.3550 level. There is also a key bullish trend line forming with support near 1.3545 on the hourly chart of GBP/USD. It is close to the 50% Fib retracement level of the upward move from the 1.3490 swing low to 1.3597 high.

If there is a break below 1.3545, the pair could extend its decline. The next key support is near the 1.3500 level. Any more losses might call for a test of the 1.3450 support.

An immediate resistance is near the 1.3600 level. The first major resistance is near the 1.3620 level. If there is an upside break above the 1.3620 zone, the pair could rise towards 1.3700. The next key resistance could be 1.3750, above which the pair could gain strength.

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Japanese Yen a bastion of nation's stability.. or is it?

Japan has for several decades been considered to be a shining light to the rest of the modern world.

Its technological prowess, civilized society and conservative, process-driven ideology have led it to become one of the most advanced nations on the planet, and for the Yen to be considered by many traders to be a safe Major Currency. A currency backed by Japan's diverse and sophisticated industry base.

The past forty years have demonstrated that Japan is a force to be reckoned with. It is an industrial giant, exporting its ultra-high tech electronics, cars, and science around the entire world and has a reputation for precision, engineering excellence and a degree of 'cool' that is apparent in every area of global society.

More recently, the Japanese economy has been bolstered by its government and population having not succumbed to the narrative relating to lockdowns and restrictions. Japan has remained open for business throughout the entire past 18 months, and with results which demonstrate its good decision-making.

However, as this week's trading begins, the Yen is continuing to fall against the US Dollar.

On Friday, January 7, 2022, Japan's Finance Minister Shunichi Suzuki spoke publicly about the need to stabilize the Yen and explained that he is watching the currency markets carefully due to the Yen's recent declines against the US Dollar.

The US Dollar has been accelerating in value compared to the Japanese Yen for quite some time now, and now stands at 115.66 Yen to the Dollar, meaning that the US Dollar is at its highest point against the Yen in over one year.

On Tuesday last week, the US Dollar hit a five-year high against the Yen with an exchange rate of 116.355 yen to one US Dollar after strengthening on expectations that the U.S. Federal Reserve will embark on steady interest rate increases while the Bank of Japan continued to keep interest rates low.

Another factor that has possibly contributed to an increasingly weak Yen is the increasing reliance on raw material imports by Japanese companies, and the difficulties associated with semi-conductor shortages which could have blighted Japanese engineering and electronics giants, however wholesale inflation is now hitting a record high and driving up the cost of living, which in major urban areas of Japan is among the highest in the world.

Currently, Japanese policymakers see little room to intervene in the currency market to attempt to stem the decline of the Yen against the US Dollar, however this decision has been met with some degree of public discourse given that Japan currently has a weakening economy, with competitiveness slipping and dire public finances.

Japan's government and central bank, both notoriously conservative and non-reactionary, have kept well away from intervening in the currency market since 2011 when horrendous natural disasters and the subsequent Fukushima nuclear crisis triggered volatility in the Yen.

Output is still relatively high, and it could be that local economists are relying on an uninterrupted industrial base to ride out the storm, and look toward the longer term rather than current situation.

Either way, the USDJPY pair remains an unusually volatile instrument in what is notoriously a stable major currency market which has been used to small movements for many years.

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[FXOpen Trader]

BTCUSD and XRPUSD Technical Analysis – 11th JAN 2022

BTCUSD: Double Bottom Pattern Above $40,000

Bitcoin could not sustain its bullish momentum and started to decline after touching a high of $47,527 on 3rd January due to the heavy selling pressure that was observed across global cryptocurrencies in the first week of 2022.

The price of BTCUSD broke the $40,000 handle yesterday, touching a low of $39,719 in the European trading session. Also today, we could see some pullback action in the European trading session, and the prices of BTCUSD are ranging above the $40,000 handle.

A double bottom pattern is clearly seen above $40,000, which signifies the end of a downtrend and a shift towards an uptrend.

Stoch is indicating an OVERBOUGHT market, so a decline is expected to occur in the immediate short-term.

The relative strength index is at 54, indicating a NEUTRAL market and a move towards a market consolidation phase.

Bitcoin is now moving above its 100 hourly simple moving average and below its 200 hourly exponential moving average.

The average true range is indicating a lesser market volatility, meaning that markets are due to enter into a consolidation phase.

• Bitcoin trend reversal seen above $40,000
• Williams percent range indicating an OVERBOUGHT level
• The price is now trading below its pivot levels of $42,196
• Most of the moving averages are giving a BUY market signal

Bitcoin: Bullish Reversal Above $40,000 Confirmed

In today's European trading session, bitcoin is forming a bullish reversal pattern as the prices continue to uptick.

The immediate short-term outlook for bitcoin is mildly bullish, the medium-term outlook is neutral, and the long-term outlook remains bullish.

All of the major technical Indicators are giving a STRONG BUY signal, which means that in the immediate short-term we should expect targets of $43,000 and $44,000.

The price of BTCUSD is now facing its classic resistance level of $42,294 and Fibonacci resistance level of $42,368, after which the path towards $43,000 will get cleared.

In the last 24hrs, BTCUSD has gone UP by 0.55% with a price change of 232$, and has a 24hr trading volume of USD 33.986 billion. We can see an Increase of 60.84% in the trading volume as compared to yesterday. This increase is happening thanks to the strengthened buying pressure seen after the recent bitcoin's decline.

The Week Ahead

The price of bitcoin has already touched a 5-month low, sliding below the $40,000 handle. At the start of 2022, such a decline signifies a weaker demand for bitcoin from global investors.

We can see that the prices of BTCUSD have stabilized and are moving in a mildly bullish channel in the European trading session today.

If the prices continue to remain above the important support level of $42,000, we could see an upside correction towards $44,000 this week.

BTC declines more than 40% from 2021 highs

In November 2021, we saw bitcoin touched an all-time high of $68,984; looking at this year's low of $39,719, we can see a decline by 42%. This also explains the highly volatile nature of bitcoin. Looking at these numbers, many investors are not willing to enter into bitcoin markets.

The above reasons also led to the decline in the total market capitalization of bitcoin to below 800 billion USD.

Technical Indicators:

Commodity channel index (14-day): at 98.97 indicating a BUY

Average directional change (14-day): at 40.05 indicating a BUY

Rate of price change: at 1.114 indicating a BUY

StochRSI (14-day): at 67.04 indicating a BUY

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EUR/USD and USD/CHF: Dollar Correcting Gains

EUR/USD is eyeing a key upside break above 1.1380 and 1.1400. USD/CHF remains supported on the downside near the 0.9200 zone.

Important Takeaways for EUR/USD and USD/CHF

• The Euro is slowly moving higher above the 1.1350 resistance zone against the US Dollar.
• There is a key bullish trend line forming with support near 1.1315 on the hourly chart of EUR/USD.
• USD/CHF started a downside correction from the 0.9280 resistance zone.
• There is a major bullish trend line forming with support near 0.9215 on the hourly chart.

EUR/USD Technical Analysis

The Euro remained well bid above the 1.1300 zone against the US Dollar. The EUR/USD pair started a slow increase and there was a break above the 1.1320 resistance zone.

There was a clear break above the 1.1340 and 1.1350 levels. The pair climbed above the 76.4% Fib retracement level of the key decline from the 1.1364 swing high to 1.1284 low (formed on FXOpen).

EUR/USD Hourly Chart

It is now trading above 1.1370 level and the 50 hourly simple moving average. On the upside, an initial resistance is near the 1.1380 level.

The 1.236 Fib extension level of the key decline from the 1.1364 swing high to 1.1284 low is also near the 1.1380 level. The next major resistance is near the 1.1400 zone. A clear upside break above the 1.1400 zone could open the doors for a steady move.

The next major resistance sits near the 1.1450 level. On the downside, an immediate support is near the 1.1340 level. The next major support is near the 1.1320 level.

There is also a key bullish trend line forming with support near 1.1315 on the hourly chart of EUR/USD. A downside break below the 1.1320 support could start another decline. The next major support sits near 1.1300.

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ETHUSD and LTCUSD Technical Analysis – 13th JAN, 2022

ETHUSD: Double Bottom Pattern Above $2,900

Ethereum continued its decline from its weekly high of $3,888 reached on January 4th, after which we saw heavy selling pressure due to which the prices of ETHUSD slid below the $3,000 handle.

ETHUSD touched a low of $2,937 on January 10th, after which we could see buying and a continuous uptick in the price of Ethereum.

We can clearly see a double bottom pattern above the $2,900 handle which is a bullish reversal pattern and signifies the end of a downtrend and a shift towards an uptrend.

ETH is now trading just above its pivot level of $3,340 and moving in a mild bullish channel. The price of ETHUSD is now testing its classic resistance level of $3,361 and Fibonacci resistance level of $3,354, after which the path towards $3,500 will get cleared.

StochRSI is indicating an OVERSOLD level which means markets are due for an upwards correction soon.

All the moving averages are giving a STRONG BUY signal at the current market price of $3,351.

Some of the technical indicators are giving a BUY signal.

ETH is now trading above its 100 hourly and 200 hourly simple moving averages.

• Ethereum bullish trend reversal is seen above the $2,900 mark
• Short-term range appears to be mildly bullish for ETHUSD
• Commodity channel index is indicating a NEUTRAL market
• Average true range is indicating LESSER market volatility

Ether: Bullish Trend Reversal Seen Above $2,900

ETHUSD continues to move into a consolidation channel above the $3,300 handle in the European trading session today.

The bullish trend line formation is clearly visible, indicating that the price of Ethereum will touch the level of $3,500.

We are also due for a major upwards correction in ETHUSD which could be in the form of a rally taking its price close to the $4,000 handle.

We can see a mildly bullish channel in progression today which is pushing the price of ETHUSD towards the $3,400 level.

ETH has gained 3.90% with a price change of 125.95$ in the past 24hrs and has a trading volume of 16.624 billion USD.

We can see an increase of 10.23% in the total trading volume in the last 24 hrs which appears to be normal.

The Week Ahead

Ethereum continues to outperform bitcoin in 2022 with a gain of 3.85% in the last 24hrs, as compared to bitcoin which gained 2.86% during the same period.

The immediate short-term outlook for Ether has turned mildly bullish, the medium-term outlook is NEUTRAL, and the long-term outlook for Ether is BULLISH with a RALLY formation towards the $4,000 handle.

ETHUSD continues to remain above the important psychological support level of $3,000, and is now on its path to cross $3,500.

This week, we can expect to see $3,500 to $3,600; and the next week Ether is expected to trade at a level above $3,600.

ETH 2.0

Ethereum is close to replacing Proof-of-Work with Proof-of-Stake with the launch of ETH 2.0. As of today, over 9 million ETH is now deposited in the Ethereum 2.0 deposit contract. This new network will be more energy efficient and reduce the total energy requirements by 99.9%.

To become a validator in the ETH 2.0, the investor will need to pledge 32ETH to the blockchain.

Technical Indicators:

Ultimate oscillator: at 51.13 indicating a BUY

Relative strength index (14-day): at 60.89 indicating a BUY

Moving averages convergence divergence (12,26): at 21.90 indicating a BUY

Bull/Bear power (13-day): at 2.99 indicating a BUY

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Gold Price and Crude Oil Price Aim More Upsides

Gold price is gaining pace above the $1,805 resistance zone. Crude oil price is correcting gains, but dips might be limited below the $80.00 support.

Important Takeaways for Gold and Oil

• Gold price is gaining pace and trading above the $1,820 zone against the US Dollar.
• There is a key bullish trend line with support near $1,820 on the hourly chart of gold.
• Crude oil price started a downside correction from the $82.50 resistance zone.
• There is a major bullish trend line forming with support near $81.20 on the hourly chart of XTI/USD.

Gold Price Technical Analysis

Gold price started a fresh increase from the $1,784 support zone against the US Dollar. The price gained pace above the $1,800 resistance to move into a positive zone.

The price settled well above the $1,810 level and the 50 hourly simple moving average. The price traded as high as $1,828 before there was a downside correction. The price declined below $1,820, but the bulls were active above $1,810.

Gold Price Hourly Chart

A low is formed near $1,812 on FXOpen and the price is now rising. There is also a key bullish trend line with support near $1,820 on the hourly chart of gold. There was a clear move above the 50% Fib retracement level of the downward move from the $1,828 swing high to $1,812 low.

It is now trading near the $1,825 level. It is near the 76.4% Fib retracement level of the downward move from the $1,828 swing high to $1,812 low.

On the upside, the price is facing resistance near the $1,828 level. The main resistance is near the $1,830 level. A close above the $1,830 level could open the doors for a steady increase towards $1,850. The next major resistance sits near the $1,865 level.

On the downside, an initial support is near the $1,820 level. The first major support is near the $1,810 level. A downside break below the $1,810 support zone may possibly spark a steady decline. In the stated case, the price could test the $1,780 support.

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GBP/USD and GBP/JPY Eye Upside Continuation

GBP/USD started a fresh increase from the 1.3500 zone and climbed above 1.3600. GBP/JPY is also rising, but it is facing resistance near 156.60.

Important Takeaways for GBP/USD and GBP/JPY

• The British Pound started a fresh increase above the 1.3500 and 1.3600 resistance levels against the US Dollar.
• There is a major bullish trend line forming with support near 1.3645 on the hourly chart of GBP/USD.
• GBP/JPY also started a steady increase above the 156.00 and 156.20 resistance levels.
• There is a key bearish trend line forming with resistance near 156.65 on the hourly chart.

GBP/USD Technical Analysis

After a major decline, the British Pound found support near the 1.3500 zone against the US Dollar. The GBP/USD pair started a fresh increase above the 1.3550 and 1.3600 resistance levels to move into a positive zone.

There was also a break above the 1.3680 zone and the 50 hourly simple moving average. It traded as high as 1.3748on FXOpen and is currently correcting gains.

GBP/USD Hourly Chart

There was a minor decline below the 1.3720 level. The pair traded below the 23.6% Fib retracement level of the upward move from the 1.3490 swing low to 1.3748 high. On the downside, an immediate support is near the 1.3680 level.

There is also a major bullish trend line forming with support near 1.3645 on the hourly chart of GBP/USD. The next major support is near the 1.3620 level.

The 50% Fib retracement level of the upward move from the 1.3490 swing low to 1.3748 high is also near the 1.3620 zone. If there is a break below the 1.3620 support, the pair could test the 1.3550 support. If there are additional losses, the pair could decline towards the 1.3500 level.

On the upside, the pair is facing resistance near the 1.3720 level. A close above the 1.3720 level could open the doors for more gains. The next major hurdle is near 1.3750, above which the pair could surge towards 1.3850.

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US Consumers Spent Less Than Expected in December

The first two trading weeks of the new year are behind us, and investors have received and digested the last pieces of economic data for the just-concluded year. In the first trading week, the NFP (or non-farm payrolls) disappointed – the US economy added fewer jobs in December than the market expected.

The same can be said about the retail sales data for December released last Friday. Against the expectations of +0.2%, the core retail sales, the ones that exclude automobiles, fell by -2.3%.

In other words, the US consumer is cautious, and uncertainty is triggering a big pullback in spending. Inflation is eroding demand, and supply issues for goods remain persistent. Moreover, labor supply constraints and omicron fear are affecting consumer spending.

With only a week away ahead of the Fed's January meeting, is the Fed going to hike into a slowing economy?

Fed signaled the start of a new tightening cycle

The monetary policy in the US is closely watched by the developed economies. It often acts as a benchmark for other central banks, which quickly follow in the Fed's footsteps.

The Fed is currently engaged in tapering its asset purchases. Effectively, it means that it still eases the monetary policy, albeit at a slower pace, despite inflation running hot at four decades high.

As such, with interest rates at the lower boundary and inflation so high, many fear that the Fed is trapped. The tapering is supposed to end in March, and so the institution cannot raise the federal funds rate at its January meeting.

However, the January meeting is important as the forward guidance may change. So far, a 25 basis points rate hike is in the cards, but one should not be surprised if the Fed is more aggressive.

In order to regain credibility in the face of rising inflation, the Fed may decide to shock the market with a 50 basis points rate hike. In any case, the January meeting will bring more details regarding what the Fed might do in March.

As such, the US dollar should be supported on dips.

The problem comes from the economic slowdown. By March, the economic growth may weaken considerably, and so the Fed may be forced to hike while the economy cools.

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[FXOpen Trader]

Australian Dollar falls in major move against Euro as consumer confidence hits 30 year low

After a week-long period of no movement, the Euro has suddenly leapt into life this morning against the Australian Dollar.

Suddenly, as the markets in Europe began their trading week, the Euro rose to 1.584 against the Australian Dollar in the pre-opening early hours of the morning, representing a considerable move given that major currencies are not known for their volatility. Indeed, some entire trading strategies have become based on low volatility as this has been the status quo for many years now.

At the beginning of this month, the EURAUD pair was trading at 1.558, therefore a rise to 1.584 is, by comparison to general movements among major currency pairs, absolutely massive.

Whilst the Euro's move against the Australian Dollar is the largest currency move of the day, it is worth noting that the British Pound made a similar gain over the Australian Dollar, for similar reasons.

It is possible that part of this lack of confidence in the Australian Dollar may come from the continual hectoring that the Australian government appears to be engaging in toward its businesses and citizens.

For example, yesterday it was reported that Australian citizens returning from overseas trips have been asked to hand their smartphones over to the Australian Border Force, with one particular report having stated that a man and his partner were instructed to write their phone passcodes on a piece of paper, before the border officials took their phones into another room.

This is the latest in a long line of draconian restrictions and surveillance efforts being carried out by the Australian government, which has become known as one of the most stringent on earth when it comes to enforcing curbs over Covid 19, and curbs, data security and privacy issues, and a seemingly illiberal position taken by government are not often viewed as favorable conditions for a thriving economy.

Such curbs have therefore dented confidence in the Australian economy, and cast doubts over its position as a liberal and poltically free country going forward.

It could be that as parts of Europe still have some restrictions whereas others have none, trade between Euro-denominated countries and other regions of the world is becoming a bit easier, whereas Australia, whose main trading partner is China and in which personal movement and what could have been considered the normal way of life before March 2020 has shown no sign of return.

The EURAUD pair has moved 0.54% since yesterday, which was already an upward turn over Friday's close at just over 1.57.

The real elephant in the room is that Australia's Consumer Confidence index, which is used to measure how buoyant the retail part of the economy is, is at a very low point.

Figures were revealed for January 2022 this morning and it shows that many Australians are avoiding spending. In fact, confidence is at its lowest point since 1992, and just last week alone, Australian consumer confidence fell by 7.6%, sinking to its lowest rate since October 2020.

Data for all of Australia's states fell below the neutral confidence level of 10o, and to accompany this negativity, all of the subindices were also down, including current financial conditions having declined by 11.3%. The number of respondents to the confidence index survey who stated that now was "the time to buy a major household item" also reduced by 11.4%.

Things are very different in today's Australia compared to how they were at the beginning of 2020, and the terse relationship with China combined with the ongoing government position on Covid are weighing heavily on the minds of investors looking at the immediate future.

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BTCUSD and XRPUSD Technical Analysis – 18th JAN 2022

BTCUSD: Double Top Pattern Below $44,000

Bitcoin was unable to carry the bullish momentum seen last week and touched a high of $44,432 on 13th January, after which the decline started which continues to push its prices lower in the European trading session today.

Today, BTCUSD touched an intraday low of $41,458 and continues to remain under heavy selling pressure by the global investors.

We can clearly see a double top pattern below the $44,000 handle which signifies the end of an uptrend and a shift towards a downtrend.

Stoch and StochRSI is indicating an OVERBOUGHT level which means that in the immediate short-term, a decline in the prices is expected.

The relative strength index is at 42, indicating a WEAKER demand for bitcoin and selling pressure in the markets.

Bitcoin is now moving below its 100 hourly simple moving average and below its 200 hourly exponential moving average.

The average true range is indicating high market volatility with a bearish zone formation.

• Bitcoin trend reversal is seen below $44,000
• Williams percent range is indicating an OVERBOUGHT level
• The price is now trading just above its pivot levels of $41,829
• All of the moving averages are giving a STRONG SELL market signal

Bitcoin: Bearish Reversal Below $44,000 Confirmed

Bitcoin is forming a bearish reversal pattern as the prices continue to decline in the European trading session today.

The immediate short-term outlook for bitcoin is bearish, medium-term outlook is neutral, and the long-term outlook remains bullish.

All the major technical indicators are giving a STRONG SELL signal, which means that in the immediate short-term we should expect targets of $41,000 and $40,000.

The price of BTCUSD is now facing its classic support level of $41,205 and Fibonacci support level of $41,683, after which the path towards $40,000 will get cleared.

In the last 24hrs, BTCUSD has gone DOWN by 2.28% with a price change of 977$, and has a 24hr trading volume of USD 23.214 billion. We can see an increase of 16.29% in the trading volume as compared to yesterday. This increase can be attributed to the increased selling pressure seen in the cryptocurrency exchanges globally.

The Week Ahead

The price of Bitcoin continues to slide without any visible upside correction. This is also due to the bearish trend which started below the $44,000 handle.

At these levels many of the new and long-term investors are also expected to enter into the markets for long-term gains.

If the prices continue to remain above the important support level of $40,000, we could see an upside correction towards the $44,000 handle in the next week.

The ON-chain metrics are also suggesting that the price of bitcoin is expected to touch the $40,000 handle after which could see a bullish pattern with a rally towards $45,000.

Technical Indicators:

Commodity channel index (14-day): at -63.44 indicating a SELL

Average directional change (14-day): at 33.49 indicating a SELL

Rate of price change: at -0.268 indicating a SELL

Moving averages convergence divergence (12,26): at -183.30 indicating a SELL

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EUR/USD and EUR/JPY Show Bearish Signs

EUR/USD started a fresh decline below the 1.1420 support. EUR/JPY is declining and could accelerate lower below 129.70.

Important Takeaways for EUR/USD and EUR/JPY

• The Euro started a fresh decline after it faced sellers near the 1.1480 level.
• There was a break below a key bullish trend line with support near 1.1405 on the hourly chart.
• EUR/JPY gained bearish momentum below the 130.50 and 130.20 support levels.
• There is a major bearish trend line forming with resistance near 130.90 on the hourly chart.

EUR/USD Technical Analysis

The Euro gained pace above the 1.1400 and 1.1450 resistance levels against the US Dollar. However, the EUR/USD pair struggled to gain pace above 1.1480 and started a fresh decline.

The pair traded below the 1.1420 support and settled below the 50 hourly simple moving average. There was a clear break below the 50% Fib retracement level of the upward move from the 1.1284 swing low to 1.1482 high (formed on FXOpen).

EUR/USD Hourly Chart

Besides, there was a break below a key bullish trend line with support near 1.1405 on the hourly chart. The pair is now trading below the 1.1350 level and the 50 hourly simple moving average.

It is now trading near the 76.4% Fib retracement level of the upward move from the 1.1284 swing low to 1.1482 high. Any more losses might send the pair towards the 1.1280 support zone. On the upside, the pair is facing resistance near the 1.1350 level.

The next major resistance is near the 1.1380 level. The main resistance is forming near the 1.1400 level. A clear break above the 1.1400 resistance could push EUR/USD towards 1.1450. If the bulls remain in action, the pair could rise above the 1.1480 resistance zone in the near term.

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ETHUSD and LTCUSD Technical Analysis – 20th JAN, 2022

ETHUSD: Double Bottom Pattern Above $3,000

Ethereum was unable to sustain its bullish momentum this week, and after touching a high of $3,409 on 12th January, started declining against the US dollar.

ETHUSD touched an intraday low of $3,080 in the Asian trading session today, after which we can see some consolidation in its prices above the $3,000 handle.

We can clearly see a double-bottom pattern above the $3,000 handle which is a bullish reversal pattern and signifies the end of a downtrend and a shift towards an uptrend.

ETH is now trading just below its pivot levels of $3,131 and is moving in a consolidation channel. The price of ETHUSD is now testing its classic resistance levels of $3,138 and Fibonacci resistance level of $3,146, after which the path towards $3,300 will get cleared.

The relative strength index is at 49, indicating a NEUTRAL market and a move towards the consolidation phase after the decline.

We have detected an MA 20 crossover pattern above the $3,124 level which signifies a bullish trend reversal in the short-term.

Some of the technical indicators are giving a BUY signal.

ETH is now trading below the 100 hourly and 200 hourly simple moving averages.

• Ethereum consolidation is seen above the $3,000 mark
• Short-term range appears to be NEUTRAL
• Ultimate oscillator is indicating a NEUTRAL market
• Average true range is indicating LESSER market volatility

Ether Consolidation Channel Seen Above $3,000

ETHUSD continues to move into a consolidation channel above the $3l000 handle in the European trading session today.

Most of investors are not entering the markets and are waiting for a bullish momentum.

The commodity channel index is indicating a NEUTRAL market, and the overall sentiment is also neutral at these levels.

We are also due for a major upwards correction in the ETHUSD which could manifest in the form of a rally taking its prices close to the $4,000 handle.

We can see a mildly bullish channel in progression today which is expected to push the prices of ETHUSD towards the $3,300 level.

ETH has gained 1.47% with a price change of 45.44$ in the past 24hrs, and has a trading volume of 11.474 billion USD.

We can see a decrease of 16.90% in the total trading volume in the last 24 hrs., which appears to be normal.

The Week Ahead

Ethereum is now approaching its important support level of $3,000 which will decide whether we will see a bullish reversal in the markets.

If the price of ETHUSD continues to remain above the $3,000 handle, as we can see today, it will signify a bullish reversal with an upside target of $3,300 to $3,500 in the next week.

The immediate short-term outlook for Ether has turned NEUTRAL, the medium-term outlook is MILDLY BULLISH, and the long-term outlook for Ether is BULLISH with a RALLY formation towards $4,000.

MACD has indicated a bullish crossover which is also giving a BUY signal at the current market levels.

This week, we can expect to see $3,300 to $3,400, and in the next week Ether is expected to trade at levels above $3,500.

Technical Indicators:

Williams percent range: at -37.39 indicating a BUY

Stoch (9,6): at 71.39 indicating a BUY

Moving averages convergence divergence (12,26): at 1.75 indicating a BUY

StochRSI (14): at 58.95 indicating a BUY

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AUD/USD and NZD/USD Remain At Risk

AUD/USD started a fresh decline from the 0.7275 zone. NZD/USD is also declining and there is a risk of a move below the 0.6720 support.

Important Takeaways for AUD/USD and NZD/USD

• The Aussie Dollar started another decline from well above the 0.7250 level against the US Dollar.
• There was a break below a key bullish trend line with support near 0.7200 on the hourly chart of AUD/USD.
• NZD/USD also declined sharply below the 0.6750 support zone.
• There is a connecting bearish trend line forming with resistance near 0.6790 on the hourly chart of NZD/USD.

AUD/USD Technical Analysis

The Aussie Dollar struggled to clear the 0.7275 level against the US Dollar. The AUD/USD pair started a fresh decline below the 0.7250 support level to move into a bearish zone.

The bears were able to push the pair below the 50% Fib retracement level of the upward move from the 0.7170 swing low to 0.7275 high (formed on FXOpen). Besides, there was a break below a key bullish trend line with support near 0.7200 on the hourly chart of AUD/USD.

AUD/USD Hourly Chart

The pair settled below the 0.7220 support level and the 50 hourly simple moving average. It is now consolidating near the 0.7185 level.

The 76.4% Fib retracement level of the upward move from the 0.7170 swing low to 0.7275 high is also protecting losses. On the downside, an initial support is near the 0.7170 level. If there is a downside break below the 0.7170 support, the pair could extend its decline towards the 0.7125 level.

Any more downsides might send the pair toward the 0.7100 level. On the upside, the pair is facing resistance near the 0.7210 level.

The next major resistance is near the 0.7240 level. A close above the 0.7240 level could start a steady increase in the near term. The next major resistance could be 0.7300.

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GBP/USD Starts Fresh Decline, EUR/GBP Remains Supported

GBP/USD started a fresh decline from well above the 1.3700 level. EUR/GBP is showing positive signs, with a strong support near the 0.8340 level.

Important Takeaways for GBP/USD and EUR/GBP

• The British Pound started a fresh decline from well above 1.3700 against the US Dollar.
• There was a break below a key bullish trend line with support near 1.3620 on the hourly chart of GBP/USD.
• EUR/GBP found support near 0.8300 and started a fresh increase.
• There was a break above a major bearish trend line with resistance near 0.8330 on the hourly chart.

GBP/USD Technical Analysis

The British Pound struggled to settle above the 1.3750 resistance zone against the US Dollar. The GBP/USD pair started a fresh decline below the 1.3620 support zone.

There was a clear move below the 1.3600 level and the 50 hourly simple moving average. Besides, there was a break below a key bullish trend line with support near 1.3620 on the hourly chart of GBP/USD.

GBP/USD Hourly Chart

A low is formed near 1.3545 on FXOpen and the pair is now consolidating losses. On the upside, an initial resistance is near the 1.3575 level. It is near the 23.6% Fib retracement level of the downward move from the 1.3661 swing high to 1.3545 low.

The next main resistance is near the 1.3600 zone. It is near the 50% Fib retracement level of the downward move from the 1.3661 swing high to 1.3545 low.

If there is an upside break above the 1.3600 resistance, the price could surpass 1.3625 or even 1.3650. If there is no upside break, the pair could start a fresh decline below 1.3540. An immediate support is near the 1.3520 level.

The first key support is near the 1.3500 level. Any more losses could lead the pair towards the 1.3450 support zone. The next major support sits near the 1.3420 level.

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Australian and Canadian Dollars fall against Pound as China's policy costs dear

As this week begins, yet another strengthening is very apparent for the British Pound against two major currencies, those being the Canadian Dollar and the Australian Dollar.

The Pound has been doing very well against all of its peers recently, largely because of the inability of the British government to do what the public and investing community expected it to do this winter, and lock down the nation again.

There is a theory among many people across Europe that Britain would have followed the actions of its mainland European neighbours and inflicted a lockdown on its population and that it was possibly already being planned for months in advance, however the wheels came off when the revelations about a number of government officials having had one or more informal gatherings during the period in which they were insisting on compliance with lockdowns.

This has angered a large proportion of citizens and business owners who had not been allowed to operate during that particular period, whereas the government officials having the alleged parties were not afraid of anything, nor were abiding by the strict rules they doled out.

As a result, it would have been impossible to implement any further restrictions on anyone in Britain, therefore the pleasant surprise came when Prime Minister Boris Johnson announced that there would be a complete removal of all remaining restrictions, and Britain is now open and free.

The same cannot be said for many other parts of the world, and whilst the British Pound continues to climb against all other major currencies, it is the Canadian Dollar and Australian Dollar that are falling against the currency of the most free nation in the West at the moment.

This is because not only do restrictions still exist in Canada and are in full swing in Australia, but the two currencies are commodity-reliant, whereas the British Pound is not.

Why is that important?

It is important because the already heavily restricted nations of Canada and Australia are dependent on the large commodity trading centers of Toronto and Sydney, and both of those commodity centers are part of a massive trade union with China.

China at the moment is instigating a 'zero-Covid' policy across its mainland, which is a media-friendly term for total control over every activity and draconian restrictions on movement and business.

In Canada, the analysts are stating their case for the reason why the Canadian Dollar has dipped, with Bank of Montreal Capital Markets' European Head of FX Strategy Stephen Gallo having told CNBC that ripple effects from China could be feeding into the performance of developed market commodity-based currencies.

Yes, consumable commodities such as oil and gas have risen in price during recent months, but there are other areas of the commodity market that have had an effect on commodity-dependent currencies.

The very same bank's Head of FX Strategy Greg Anderson stated that the two-year swap rates for Australian and New Zealand dollars had underperformed the U.S. dollar, which would perhaps indicate toward a theory that central bank policy divergence is a factor.

However, the Canadian swap rate has performed very similarly to the U.S., so this does not explain why CAD has not rallied alongside oil, according to the analyst.

In China, there were closures of factories along with electricity power cuts last year as part of the strict restrictions on people's movement in China, and it is known that the country is operating a 'zero-Covid' policy and such a policy is likely to have severe implications for both supply and demand and in particular it could conceivably be affecting China's demand for certain raw materials.

By contrast, the British economy is more reliant on international investment, its own diversified industry base and the financial markets center in London which also has a vast equities trading contingent on the London Stock Exchange and is not so dependent on raw materials or commodities.

The British Pound starts the trading week at a five-day high against the Australian Dollar, at a value of 1.89 Australian Dollars to the Pound, and it had held a high point against the Canadian Dollar during the off-market hours at the weekend at 1.7 Canadian Dollars to the Pound, before dropping slightly this morning.

There is a crossroads in the currency market at the moment, that being the buoyancy of the majors that are sovereign currencies of nations with no lockdowns or restrictions and a diversified local industry base, compared to the flagging values of those reliant on trade with China, have high commodities dependency and have a myriad of restrictions still in force.

It's certainly a different world this January to that of even one year ago.

FXOpen Blog

 

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BTCUSD and XRPUSD Technical Analysis – 25th JAN 2022

BTCUSD – Double Bottom Pattern Above $32000

Bitcoin had a major bearish correction after touching a high of 43296 on 20th January, the prices continued to decline touching a low of 33053 yesterday.

This sharp drop in the levels of Bitcoin was due to heavy selling in the markets coupled with the fears of a Russian attack on Ukraine.

Today BTCUSD has entered into a mild bullish momentum and continues to remain above the $36000 handle in the European Trading session.

We can clearly see a Double Bottom Pattern above the $32000 handle which is a Bullish reversal pattern because it signifies the end of a downtrend and a shift towards an Uptrend.

STOCH and Williams Percent Range are indicating OVERBOUGHT levels which means that in the immediate short term a decline in the prices is expected.

Relative Strength Index is at 55 indicating a STRONG demand for the Bitcoin at the current market levels.

Bitcoin is now moving Above its 100 hourly Simple Moving average and below its 200 hourly Exponential Moving averages.

Average True Range is indicating Less Market Volatility with a Bullish zone formation.

• Bitcoin Trend Reversal is seen Above $32000.
• STOCHRSI is Indicating OVERSOLD Levels.
• The price is now trading just Above its Pivot Levels of $36246.
• Most of the Moving Averages are giving a BUY market signal.

Bitcoin Bullish Reversal Above $32000 Confirmed

Bitcoin is forming a Bullish Reversal pattern as the prices continue to Uptick in the European Trading session today.

The immediate short-term outlook for Bitcoin is Bullish, Medium-term outlook is Neutral, and the long-term outlook remains Strong Bullish.

All of the Major Technical Indicators are giving a BUY Signal, which means that in the immediate short term we are expecting targets of 38000 and 40000.

The price of BTCUSD is now facing its Classic resistance levels of 36426 and Fibonacci resistance levels of 36735 after which the path towards 38000 will get cleared.

In the last 24hrs BTCUSD is UP by 4.67% by 1619$ and has a 24hr trading volume of USD 41.650 Billion. We can see an Increase of 61.22% in the Trading volume as compared to yesterday.

This increase in the Trading volume of BTC is due to the increased Buying pressure after the recent decline, which saw many new investors coming into the markets.

The Week Ahead

The prices of Bitcoin entered into the consolidation phase after touching the $33000 handle and is now moving into a Mild Bullish momentum towards the $37000 levels.

We can expect more Upsides in the range of $38000 to $40000 in this week. The most important factor that is facing the Global investors is the news of a Russian attack on the Ukraine and its effects on the Crypto markets.

Since the liquidity fear is the most in the Cryptocurrencies, we saw a major drop in the levels of Bitcoin, which now appears to have stabilized.

The Crypto Winter

The prices of Bitcoin have declined from its November 2021 highs of $69000 by more than 50% which has resulted in the mass erosion of the investors wealth globally.

At present the Total market capitalization of Bitcoin stands at 685 Billion USD.

Many of the analysts have coined this Major decline as the Crypto Winter, which appears to be a difficult and challenging time for the Crypto Investors.


Technical Indicators:

Relative Strength Index (14days): It is at 55.72 indicating a BUY.

Average Directional Change (14days): It is at 22.27 indicating a BUY.

Rate of Price Change: It is at 0.432 indicating a BUY.

Moving Averages Convergence Divergence (12,26): It is at 161.80 indicating a BUY.

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