What is the name of the instrument that was extremely popular at the end of 2017 and is now in the shadows? Yes, that’s right, it’s bitcoin. What can we say about this crypto now, slightly more than a year after the bubble burst? We are in a mid-term bullish correction, so I think that a good description would be: slowly but surely. Since the middle of December, BTC is, actually was, in a symmetrical triangle pattern (red lines). This formation has allowed the price to climb from roughly 3,000 to around 4,000 USD. A year ago, nobody would bat an eyelid at a rise like this, but now it is something!
The reason that we’re writing about bitcoin today is that the recent price movements allowed it to break a super important resistance. Two resistances, in fact. First one is the upper line of the aforementioned symmetrical triangle. The second one is the long-term downwards trend line (the one connecting lower highs since February 2018). Although I am not a fan of this instrument, I have to admit that the current price action is positive.
In theory, the most recent bullish breakout opens the way towards the long-term horizontal resistance at 6,000 USD. That would mean a 50% rise in value, which is quite good considering the latest volatility. That is the base scenario for now. The positive sentiment will be denied if the price comes back below the upper line of the triangle. That would mean a false breakout and would open the way towards the orange area, slightly below 3,000 USD.
The end of 2018 and the beginning of 2019 were excellent for gold, but something changed at the end of February. The precious metal is currently under heavy pressure and the outlook for the future is rather negative. There are various factors contributing to this negativity. Recently, the main factor has been the stronger USD. More recently; over the past two days, that pressure has subsided. There is a new element at play, though, and it comes from the market’s Risk On mode. This risk appetite can be clearly seen on stocks, which are pushing towards new mid-term highs, and that is a mood killer for gold buyers.
The technical situation does not look any better. The H4 chart gives us a very pessimistic view of the future. The price is forming a big head and shoulders pattern. We’re currently in the process of completing the right shoulder. The right shoulder itself is made up of a bearish flag (blue lines), which resulted in a breakout to the downside, increasing the bearish momentum. On Friday, buyers tried a small reversal, but they failed miserably, which in theory should scupper all mid-term bullish hopes. The most probable scenario at the moment is the price heading towards the blue horizontal neckline. What happens after that depends on the price action that occurs there. A bounce should mean a bullish correction and a breakout could provide a long-term sell signal.
It’s worth mentioning the fact that the neckline is slightly above the 38.2% Fibonacci. That line is usually pretty important and closing the day below that support could be lethal. As such, the bulls need to protect this area at all costs.
EURUSD is consolidating. According to the main scenario, the pair is expected to continue trading inside the downtrend and reach 1.1189. Later, the market may be corrected towards 1.1235 and then start a new decline with the short-term target at 1.1111.
GBPUSD, “Great Britain Pound vs US Dollar”
GBPUSD is consolidating near the lows. Possibly, today the pair may form a new descending structure to reach 1.2932 and then start another correction towards 1.3100. After that, the instrument may resume trading downwards with the target at 1.2850.
USDCHF, “US Dollar vs Swiss Franc”
USDCHF is consolidating around 0.9956. According to the main scenario, the pair is expected to continue trading upwards with the short-term target at 1.0008. Later, the market may be corrected to return to 0.9956 and then form one more ascending structure with the first target at 1.0016.
USDJPY, “US Dollar vs Japanese Yen”
USDJPY has broken 110.85 and may continue trading upwards to reach 111.43. Possibly, the pair may test 110.85 from above and then start a new growth towards 111.43. After that, the instrument may start another correction to return to 110.85.
AUDUSD, “Australian Dollar vs US Dollar”
AUDUSD has broken 0.7104 and may form a new consolidation range. Possibly, the pair may grow to reach 0.7140 and then form a new descending structure to break 0.7054. Later, the market may continue trading inside the downtrend with the short-term target at 0.6993.
USDRUB, “US Dollar vs Russian Ruble”
USDRUB has finished the fifth wave of the correction. Possibly, today the pair may consolidate near the highs. After breaking the range to the downside, the instrument may start a new descending wave with the short-term target at 62.77.
XAUUSD, “Gold vs US Dollar”
Gold is consolidating around 1292.25. Possibly, the pair may form one more ascending structure to reach 1300.37 and then start a new decline towards 1276.80. Later, the market may resume trading upwards to reach 1288.20 and then form a new descending structure with the short-term target at 1260.00.
BRENT
Brent is trading to break 67.97. Today, the pair may form one more ascending structure to reach 69.92 and then start another correction to return to 67.97. After that, the instrument may continue trading upwards with the target at 70.30.
Attention! Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
This was a video I did for members Friday and though many of you would also appreciate this analysis so you know where we stand in terms of our market forecasts and where each market is within its major cycles.
Bottom line, we can’t tell the markets where to go, all we can do is follow them and trade with the underlying trends. The big question being asked is what trend are each of the markets in?
Find out in this video! and remember we post a video like this EVERY MORNING before the opening bell for paid subscribers of our Wealth Trading Newsletter!
If you want to join a group of professional traders, researchers, and friends, take a look at our trading newsletter to learn how we can help you find and execute better trades each month. We believe 2019 and 2020 will be incredible years for skilled traders and we are executing at the highest level we can to assist our members. In fact, we are about to launch our newest technology solution to better assist our members in creating future success.
Our team has 53 years of experience in researching and trading makes analyzing the complex and ever-changing financial markets a natural process. We have a simple and highly effective way to provide our customers with the most convenient, accurate, and timely market forecasts available today. Our stock and ETF trading alerts are readily available through our exclusive membership service via email and SMS text. Our newsletter, Technical Trading Mastery book, and Trading Coursesare designed for both traders and investors. Also, some of our strategies have been fully automated for the ultimate trading experience.
As we can see in the H4 chart, XAUUSD is forming another descending impulse. The downside targets are the retracements of 50.0% and 61.8% at 1271.47 and 1253.83 respectively. The resistance level is at 1346.68.
In the H1 chart, the pair reversed and started a new correction. The possible targets may be the retracements of 38.2% and 50.0% at 1301.09 and 1305.70. If the price breaks the local low at 1286.73, the instrument may continue its decline.
USDCHF, “US Dollar vs Swiss Franc”
As we can see in the H4 chart, after reaching the retracement of 23.6%, USDCHF is moving sideways. The next downside target may be the retracement of 38.2% at 0.9782. The resistance level is high at 1.0149.
In the H1 chart, the pair is trading sideways and may reach the retracement of 38.2% and 50.0% at 0.9980 and 1.0006 respectively. The support level is the low at 0.9894.
Attention! Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
EUR stabilized after a long fall during the last two weeks. Right now the quotes are consolidating between 1.12100 and 1.12450. The EUR is under pressure due to weak economic releases. In March the Germany’s industrial PMI fell from 44.7 to 44.1. The investors are waiting for additional drivers. You should open positions from the key levels.
The Economic News Feed for 01.04.2019:
– Consumer Price Index (EU) – 12:00 (GMT+2:00);
– Retail Sales Report (US) – 15:30 (GMT+2:00);
– Industrial PMI by ISM (US) – 17:00 (GMT+2:00);
The indicators do not provide precise signals, the price has crossed 50 MA.
The MACD histogram is close to 0.
The Stochastic Oscillator started to leave the overbought zone, the %K line is below the %D line which points to the bearish mood.
Trading recommendations
Support levels: 1.12100, 1.11800, 1.11500
Resistance levels: 1.12450, 1.12800, 1.13250
If the price fixes below 1.12100, expect the quotes to fall toward 1.11800-1.11500.
Alternatively, the quotes can correct toward 1.12800-1.13000.
The GBP/USD currency pair
Technical indicators of the currency pair:
Prev Open: 1.30477
Open: 1.30395
% chg. over the last day: -0.08
Day’s range: 1.30095 – 1.30839
52 wk range: 1.2438 – 1.4378
GBP/USD has an ambiguous technical picture. The trading instrument is moving sideways. The GBP remains under pressure as investors are waiting for the relevant info regarding Brexit. Last week The British Parliament refused Theresa May’s deal for the third time. If the solution isn’t found soon, the UK will leave the EU without a deal on April 12. The local support and resistance levels are 1.30300 and 1.30800. You should open positions from these levels.
At 11:30 (GMT+3:00) the UK will publish the industrial PMI.
The indicators do not provide precise signals, the price has crossed 50 MA.
The MACD histogram is close to 0.
The Stochastic Oscillator is near the overbought zone, the %K line is crossing the %D line. There are no signals at the moment.
Trading recommendations
Support levels: 1.30300, 1.29850
Resistance levels: 1.30800, 1.31200, 1.31500
If the price fixes below 1.30300, expect the quotes to fall toward 1.29800-1.29600.
Alternatively, the qutoes can grow toward 1.31200-1.31500.
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.
USD/CAD is in the middle of an agressive sell-off. The CAD fell by more than 80 points. The CAD is supported by the positive GDP reports. Right now the quotes are consolidating around 1.33400 and 1.33750. The trading instrument has a tendency to descend, you should open positions from the key levels.
Keep an eye on the US economic reports.
The price fixed below 200 MA which points to the power of the buyers.
The MACD histogram is in the negative zone but above the signal line which gives a weak signal to sell USD/CAD.
The Stochastic Oscillator is in the neutral zone, the %K line is crossing the %D line. There are no signals at the moment.
Trading recommendations
Support levels: 1.33400, 1.33100, 1.32900
Resistance levels: 1.33750, 1.34000, 1.34400
If the price fixes below 1.33400, expect the quotes to fall toward 1.33100-1.32900.
Alternatively, the quotes can grow toward 1.34000.
The USD/JPY currency pair
Technical indicators of the currency pair:
Prev Open: 110.457
Open: 110.630
% chg. over the last day: +0.10
Day’s range: 110.533 – 110.929
52 wk range: 104.56 – 114.56
The USD/JPY technical picture remains ambiguous. The trading instrument is consolidating. Right now the key support and resistance levels are 110.500 and 110.900. The financial market participants are waiting for additional drivers. Keep an eye on the US Treasury bonds. You should open positions from the key levels.
The Economic News Feed for 01.04.2019 is calm.
The indicators do not provide precise signals, the 50 MA is crossing 50 MA.
The MACD histogram is in the positive zone but below the signal line which gives a weak signal to buy USD/JPY.
The Stochastic Oscillator is in the neutral zone, the %K line is above the %D line which points to the bullish mood.
Trading recommendations
Support levels: 110.500, 110.100, 109.800
Resistance levels: 110.900, 111.200
If the price fixes above 110.900, expect the quotes to grow toward 111.200-111.500.
Alternatively, the quotes can fall toward 110.100-109.800.
Think of this research post as an early warning that June and July 2019 are likely to be a very critical price inflection point based on our proprietary price cycle analysis tools. Back in October 2018, we predicted the downside price rotation almost perfectly going forward 4 to 5 months. We predicted nearly every move that occurred in the US stock market all the way to and through the ultimate low that occurred on December 24, 2018. You can read that post here.
Now, our predictive modeling systems and cycle systems are predicting a June/July 2019 cycle inflection date that will likely coincide with, possibly, new market highs as well as increased bullish price activity throughout the global stock markets until we get nearer to this date. This June/July 2019 date becomes even more critical as we begin to understand our other predictive modeling systems are suggesting that precious metals will begin an upside price advance near late April or early May 2019. When we combine this analysis and start to consider the broader conclusion, it leads us to believe the global stock markets could be poised for a bit of rotation after May or June of 2019 – possibly setting up a bigger price sell-off throughout the end of 2019. Only time will tell.
This Monthly DOW Industrial chart highlights our cycle inflection points/dates in vertical lines. The next, pending, cycle inflection point is June/July 2019 on this chart. We believe continued upside price bias will prevail over the next few months resulting in lower Gold and Silver prices. As we near these June/July dates though, we could see an increase in volatility as well as a decrease in US Dollar valuation. This would align with a “risk on” transition away from equities and into protection assets like Gold and Silver.
Our Adaptive Dynamic Learning (ADL) predictive price modeling system is suggesting that an upside price bias will continue over the next 2~3 months headed into this June/July cycle trigger. The ADL is also suggesting that the US stock market may reach near all-time highs just before the cycle inflection date hits. We do believe that some moderate price rotation is likely over the next 60 to 90+ days as price rotation is a key element of price advance or decline. We are suggesting that, for right now, traders should continue to expect moderate upside price bias, with some expectation of price zig-zagging its way up, over the next 2~4 months.
Should our cycle inflection date prompt a market reversal, we will likely know more about the risk factors that could prompt this move at least 20~30 days before the event begins to unfold. We are posting this research post to alert you to a cycle trigger/inflection point that is 3~4 months away that could become a major event in our future. As we’ve suggested in this article, we don’t believe this inflection point will change the way we trade next week or the week after that, but we do expect the closer we get to this critical inflection point – the more important it will become for skilled traders.
If you want to join a group of professional traders, researchers, and friends, take a look at our trading newsletter to learn how we can help you find and execute better trades each month. We believe 2019 and 2020 will be incredible years for skilled traders and we are executing at the highest level we can to assist our members. In fact, we are about to launch our newest technology solution to better assist our members in creating future success.
Our team has 53 years of experience in researching and trading makes analyzing the complex and ever-changing financial markets a natural process. We have a simple and highly effective way to provide our customers with the most convenient, accurate, and timely market forecasts available today. Our stock and ETF trading alerts are readily available through our exclusive membership service via email and SMS text. Our newsletter, Technical Trading Mastery book, and Trading Coursesare designed for both traders and investors. Also, some of our strategies have been fully automated for the ultimate trading experience.
On Friday, the US dollar strengthened against a basket of major currencies amid optimistic data. New home sales rose to 667K in February instead of the forecasted value of 620K. Previous data has also been revised upwards from 697K to 636K. At the moment, the dollar index (#DX) is maintaining local highs. Currency majors are consolidating. This week, trade negotiations between the US and China will be in the focus of attention. Vice Premier of the People’s Republic of China, Liu He, will meet with US Trade Representative, Robert Lighthizer, and US Treasury Secretary, Steven Mnuchin, in Washington.
Investors are still focused on the uncertainty concerning Brexit. On Friday, March 29, British lawmakers rejected Prime Minister Theresa May’s deal for the third time. Financial market participants fear that they will not be able to conclude an agreement on the Brexit terms by April 12. At the same time, the European Commission is ready for such a course of events and considers non-deal Brexit to be the most probable option.
Today, during the Asian trading session, economic data from Japan and China has been published. Thus, Tankan large manufacturers index slowed down in Q1 and counted to 12 instead of 13. Tankan large non-manufacturers index also decreased to 21 instead of 22. Chinese Caixin manufacturing PMI rose to 50,8 in March, while investors expected 50.1. These statistics support the Australian dollar. German manufacturing PMI slowed down in March and counted to 44.1 instead of 44.7.
The “black gold” prices are growing. At the moment, futures for the WTI crude oil are testing the mark of $60.70 per barrel.
Market Indicators
On Friday, the bullish sentiment was observed in the US stock market: #SPY (+0.63%), #DIA (+0.80%), #QQQ (+0.76%).
The 10-year US government bonds yield is recovering. At the moment, the indicator is at the level of 2.43-2.44%.
The news feed on 01.04.2019:
– Consumer price index in the Eurozone at 12:00 (GMT+3:00); – Retail sales in the US at 15:30 (GMT+3:00); – ISM manufacturing PMI at 17:00 (GMT+3:00).
We also recommend paying attention to the speech by the Bank of Canada Governor Poloz.
On Friday the 29th of March, trading on the EURUSD pair closed slightly down. Market volatility was high throughout the day. The pair dropped to the 1.1212 mark before rebounding to 1.1247 (+35 pips). On the hourly timeframe, the low and high appeared on the chart a few hours after they did on the British pound. This lag was due to the dynamics of the EURGBP cross, which made a swing in the wake of news from the UK that parliament had once again voted down Theresa May’s Brexit deal. This was the 3rd time lawmakers rejected the deal, this time with 344 votes for and 286 against. On the back of this result, the EURUSD pair slid to 1.1213.
Day’s news (GMT+3):
09:50 France: Markit manufacturing PMI (Mar).
10:00 Germany: Markit manufacturing PMI (Mar).
10:00 Eurozone: Markit manufacturing PMI (Mar).
10:30 Switzerland: SVME – PMI (Mar).
11:30 UK: Markit manufacturing PMI (Mar).
12:00 Eurozone: CPI (Mar).
15:30 US: retail sales (Feb).
16:45 US: Markit manufacturing PMI (Mar).
17:00 US: ISM manufacturing PMI (Mar), business inventories (Jan), construction spending (Feb).
21:55 Canada: BoC governor Poloz speech.
Current situation:
In Friday’s European session, the pair dipped as it did on Thursday to surpass the 1.1214 low by 4 pips before shooting back upwards. Although the fluctuations were caused by developments in the news, the trajectory panned out the same way.
Trading on the euro has opened up against the dollar today. Chinese data released over the weekend has provided support to risky currencies. The services and manufacturing PMIs came out better than expected.
In Asia, the pair jumped to 1.1242. The EURUSD and GBPUSD pairs rose in tandem. As the upper boundary of the channel was reached, the euro reversed downwards. As the stochastic is in the sell zone, I expect to see a downwards correction to the growth seen in Asia ahead of the US session.
If we don’t get any negative news about Brexit or the trade talks between the US and China, we’re likely to see a test of 1.1258/65. If the rate starts to drop, keep an eye on 1.1220 as well as the dynamics of the yen. This level has to hold up for there to be any further growth prospects, and the yen has to drop against all the majors.
Looking at three distinctly different trades currently – the EUR and its struggles, EM currencies against the USD and the AUD’s carry trade headwind.
EUR
EUR/USD is chasing the March 8 low, the EUR had been rallying off the back of the FOMC U-turn around rate and its general outlook. However there appears to be three key reasons for the EUR’s current declines:
Brexit uncertainty has clearly flared up again, which does impact the EUR due to the economic impacts.
EUR-funded carry trades (considering German Bunds are negative) are clearly very attractive for investors and traders alike.
Cannot escape how poor the March flash PMIs were. The Eurozone growth renaissance is ‘dead’.
Chart is clearly suggesting that $1.115-$1.120 is a very likely move.
EM FX
Clearly there are strong capital outflows from EM the most likely scenario here is asset repatriating on fears there is a future down turn coming. Under normal trading theory, what is currently transpiring in bond markets should be an attraction for high yield environments. However, this has not been the case and trading shows that DM bonds have actually outperformed EM bonds in the past month.
This is supports the idea of USD repatriation thus looking at small longs in USD/MYR, USD/INR and USD/KRW.
AUD
The Aussie 10-year yield hit a new record low last week and that trend looks like continuing. The Australian bonds have always had an attraction for carry traders, particularly JPY traders this tend puts that under pressure.
Couple this with the Australian economic outlook continuing to slide (see the latest PMIs and consumer confidence data points) there is growing pressure on the RBA to cut the cash rate which would send yields lower still. All this is a negative for carry traders looking for maximum returns. This provides a short AUD/JPY opportunity on JPY repatriation.
The risk would be near-term data that would positively impact the AUD thus am mindful of possible US-China movements or better than expected commodity pricing. But as it stands and the markets the way it is we are short AUD/JPY.
