Analytics

The bitcoin price has been trending slightly lower for the third consecutive session on Tuesday, holding around $24,000 after failure to regain the $25,000 figure seen for the first time since mid-June. After losing 0.85% at the start of the week, BTCUSD shed nearly 0.4% on Tuesday, threatening the $24,000 mark as the selling pressure persists. However, the downside potential looks limited at this stage, with volatility relatively low these days.

The largest cryptocurrency by market capitalization maintains a tight correlation to the S&P 500 Index. In the traditional financial markets, risk demand looks more measured today, capping the recovery potential in the crypto space. Investors express a cautious tone after weak economic data out of China reignited concerns over the outlook for the global economy.

Focus on Fed

Now, the market focus shifts to the FOMC meeting minutes due on Wednesday. Should the central bank express a less hawkish tone on its monetary policy, both stocks and cryptos will cheer the event. Given how BTC remains sensitive to news relating to inflation, interest rates and economy, the digital coin could turn more volatile later in the week.

Technically, bitcoin needs to break the descending trendline in order to advance towards the $28,000 figure for the first time in more than two months. In the immediate term, however, BTCUSD may lack the momentum to overcome the $25,000 level on a daily and weekly closing basis, especially as risk demand looks unstable these days, with recession risks persisting.

On the downside, a failure at $24,000 would pave the way towards the $23,600 intermediate support, followed by the $22,600 zone than capped the selling pressure last week. The $25,000 mark stays in the market focus while BTC holds above the mentioned support zone.

Dollar weakness pushed the euro higher this week, with EURUSD pair holding above 1.0300 ahead of the weekend. The shared currency was inspired by a slowdown in the US inflation that casts doubt for another 75-basis-point Federal Reserve rate hike.

However, as the euro fails to extend the ascent, lacking the bullish impetus, there is a scope for a pullback in the near term. Also, it remains to be seen if the central bank will adjust its hawkish tone at the next meeting in September as inflation is still elevated while the job market remains strong.

Furthermore, the European currency is expected to face a solid barrier in the 1.0400 area should the upside bias persist in the coming days or weeks. The pair is yet to confirm a break above 1.0300 on a daily and weekly closing basis, with bullish momentum looking too modest and indecisive to bet on a sustained and major rally.

Parity still in play

In the immediate term, EURUSD may trade within a defined range, facing the nearest resistance around 1.0370, followed by the 1.0400 mentioned hurdle. On the downside, the immediate support now arrives at 1.0275 while the key near-term barrier for euro bears appears to be represented by the ascending 20-DMA, today at 1.0215. A break of this moving average would indicate that the current buying pressure has eased.

In a wider picture, the pair may yet retest parity in the coming months, given a dire outlook for Europe facing recession risks and the energy crisis. The incoming data continue to indicate weakness in the region’s economy even as Eurozone GDP growth was stronger-than-expected in еру second quarter due to the lifting of Covid-related restrictions.

Following a rally in the aftermath of a strong US employment report, the US dollar eased, staying under pressure since the start of the week. The USD index failed to challenge the 107.00 mark last week and has been struggling since then. The buck derives support from the 106.00 figure that remains in the market focus ahead of the US inflation report due on Wednesday.

The rally in the financial markets has waned, but the overall risk sentiment remains neutral for the time being, capping potential recovery in the safe-haven US currency. Ahead of US inflationary data, investors expect the consumer price index is expected to have eased to 8.7% in July from 9.1% previously. Signs of slowing inflation pressures could boost stocks and riskier assets in general, thus pressuring the buck further.

Risks remain skewed to the upside

In a wider picture, the US dollar has been supported by a combination of solid US economic data releases and hawkish signals from the Federal Reserve officials. As such, the broader bullish trend surrounding the greenback remains intact and would persist even if the upcoming report reveals a slower inflation.

The USD index is expected to regain the 106.50 intermediate barrier in the near term and may continue the ascent towards the 107.00 mentioned target. On the downside, a failure to hold above 106.00 would pave the way to a deeper retreat towards the 105.70-105.50 zone, followed by the 105.00 mark that helped cap the selling pressure earlier this month. It looks like the buck could go in either direction in the immediate term, but risks remain skewed to the upside while above the 100.00 level last seen in April.

As the US dollar recovers modestly following another sell-off, the USDJPY pair is back in positive territory, treading water around the 1330.00 figure ahead of the weekend. Earlier in the week, the prices briefly plunged to two-month lows around 130.40 where the ascending 20-DMA capped the selling pressure and triggered a bounce.

As the 130.00 figure remains intact, the downside potential stays limited for the time being. On the other hand, the fact that the pair struggles to get back to multi-year highs seen above 139.00 in mid-July suggests the USD looks set to extend its bearish correction in the short term.

Dollar resists the pressure

The greenback itself feels a bit depressed these days as recession fears coupled with a less hawkish tone from Powell during the latest meeting hit the appeal of the US currency across the market. However, the bullish trend remains intact so far, with the USD index holding well above the 100.00 psychological level. Recovery above the 106.00 mark on a daily and weekly closing basis would somehow improve the near-term technical picture.

The Japanese still holds not far from 24-year lows amid a big divergence in the monetary policy stance adopted by the Federal Reserve and the Bank of Japan. Also, a positive risk tone that prevails in the financial markets these days weighs on the safe-haven Japanese yen.

Still, the dollar is yet to regain the 20-DMA in order to retarget the mentioned tops on the way towards the 140.00 figure. The buck is unlikely to see a straightforward rally any time soon. Furthermore, should the Fed refrain from aggressive rate hikes in the coming months, USDJPY may stage a reversal eventually. But so far, this is not base case scenario.

The bitcoin price keeps sliding gradually these days, losing ground for the sixth session in a row on Wednesday. The largest cryptocurrency by market capitalization has been struggling since reaching mid-June highs around $24,600 last week. As traders were spooked by the $25,000 figure, profit-taking has brought the coin back below $23,000.

Still, the downside momentum looks modest and careful at this stage, suggesting bitcoin may avoid aggressive selling pressure during the ongoing correction from the mentioned highs, with familiar trading range persisting so far. As the post-Fed rally faded, BTCUSD could retarget the $20,000 support zone should risk sentiment deteriorate substantially in the days to come.

Risk trends look tentative on Wednesday after yesterday’s sell-off triggered by Speaker Nancy Pelosi’s visit to Taiwan. However, as Beijing preferred not to announce major penalties in response to this step, investors refrained from pushing the panic button. As such, stocks along with other risky assets, including bitcoin, witnessed limited losses.

$20,000 remains in focus

In a wider picture, however, the upside potential for the digital currency remains limited as many risks continues to persist globally. Central banks keep hiking rates aggressively to fight elevated inflation, further clouding the already worsening outlook for the global economy. Geopolitical tensions along with the Energy crisis in Europe add to investor concerns.

Technically, the path of least resistance for bitcoin remains to the downside, with the $20,000 mark staying in the market focus. In the immediate term, BTC needs to cling to $23,000 in order to avoid a deeper sell-off. Should feel more comfortable with riskier assets, the coin could stay afloat and even regain the upside bias before facing renewed selling pressure. In a wider picture, escalating global conflicts could send crypto prices to new cyclical lows.

As the dollar stays under pressure, extending its correction from long-term peaks, the common currency enjoys a bounce from below the parity level seen around 0.9950 earlier in the month. EURUSD would finish higher the second week in a row should the prices manage to hold above the 1.0200 figure on a daily closing basis.

Earlier this week, the Federal Reserve surprised USD bulls to the downside by a less hawkish tone that accompanied another 0.75% rate hike. The central bank signaled a more measured pace of tightening down the road depending on the incoming data. As the economic signals continue to deteriorate, the Fed is likely to hike by just 50 basis points in September.

Of note, fresh data showed on Thursday that US economic growth fell 0.9% in the second quarter versus the expected gain of 0.3%. As such, the economy has officially entered a so-called technical recession. The number is telling investors there is a reason for the FOMC to proceed to a more measured tightening cycle.

Hawkish bets on ECB recede as well

In Europe, hawkish bets on the European Central Bank’s 50 basis points rate hike in September recede amid the broad fears of recession coupled with the worsening energy crisis in the region. According to Eurozone money markets, the chance 50 bps ECB September rate hike is now less than 45% versus 50% earlier in the week.

As such, the shared currency is unlikely to see a more sustained ascent in the coming weeks, with the broader bearish trend remaining intact even as the dollar weakens at this stage. The fact that the European regulator has no plans to accelerate its policy normalization suggests the monetary policy divergence between the Fed and the ECB will continue to play into dollar’s hands this year.

Crude oil prices switched into recovery mode after yesterday’s dip towards mid-July lows around $96.75 a barrel. Brent crude is back above the $100 handle on Tuesday, flirting with $102 a barrel in early European deals.

Oil is rallying nearly 2% since the start of the day, climbing along with natural gas prices amid reports that Gazprom said supplies through the Nord Stream 1 pipeline to Germany would drop to just 20% of capacity. Against this backdrop, further reduction in natural gas supply to Europe could encourage a switch to crude, suggesting oil demand could rise in the months to come.

On the other hand, concerns over weakening fuel demand globally continue to persist, capping gains in the oil market, while an expected increase in US interest rates adds to factors limiting gains. The Federal Reserve is widely expected to raise interest rates by 75 basis points on Wednesday. Also, worries about a sharp economic slowdown that would undercut demand for oil.

Volatility to persist

As such, crude oil prices are going to remain volatile in the coming days and weeks. Technically, the $100 mark remains in the market focus, with the futures oscillating around the psychological figure this month. In the near term, a decisive break above $102 a barrel would pave the way towards the $104.30 intermediate barrier on the way towards last week’s highs around $107.60.

Should the Fed meeting outcome disappoint USD bulls, Brent crude could see a more decisive ascent in the days to come. However, as recession concerns continue to weigh high-yielding assets, oil prices are unlikely to see a straightforward rally towards the $125 zone even if natural gas prices keep rising amid the ongoing energy wars in Europe.

The US dollar keeps trading in volatile manner these days, finishing the week lower for the first time in four weeks. The USD index came off two-decade highs seen above 109.00 earlier this month, struggling to regain sustained upside momentum since then. After forming a triple bottom around 106.40 this week, the prices have settled slightly above 107.00, looking indecisive on Friday.

The recent weakness surrounding the US currency was triggered by a shift in the Fed rate hike bets. Market participants who had been leaning toward a 1% rise in interest rates, shifted their bets in favor of a 0.75% increase at the upcoming meeting. This was due to a less hawkish tone from the Federal Reserve officials in combination with weak economic data. Meanwhile, some rebound in investors’ appetite for riskier assets helped dent demand for the safe-haven buck as well.

Fed intrigue tortures USD

Still, the dollar remains bullish in a wider picture and could see another rally next week should the Fed raise rates by 1% instead of 0.75%, citing persisting inflation pressures. On the other hand, the central bank could refrain from a more aggressive step amid worrying economic signals. Of note, the recent report showed that the leading economic index in the United States fell 0.8% in June to mark the fourth straight monthly decline.

As for risk trends, high-yielding assets look unlikely to see any sustained and straightforward rally aby time soon, with risk demand waning already ahead of the weekend. The recent optimism in equity markets was due to upbeat quarterly financial results by major US companies, with tech stocks leading the gains. However, as recession worries keep rising, investors will continue to sell the rallies, with the overall trend in the markets staying bearish. this in turn suggests the USD would at least stay afloat for the time being.

The bitcoin price has been rallying these days, extending last week’s pullback from local lows seen below $19,000. On Wednesday, the largest cryptocurrency by market capitalization is challenging the $23,800 region for the first time since mid-June, adding 0.85% on the day after a jump by more than 4% yesterday.

The latest rally in the cryptocurrency market was fueled by a broader rally in stocks. Equity markets have been retaining solid bullish tone these days amid upbeat corporate earnings that helped somehow ease recession fears. By the way, the S&P 500 index had the best session since June 9 overnight. In other words, high correlation to stocks played into bitcoin’s hands this time.

Also, according to many market participants, bitcoin’s price fell far below what would have been considered fair value, so the current upside correction looks quite appropriate after a drop towards $17,600 last month. Of note, the BTCUSD attracted more robust buying interest after some consolidation around the $20,000 mark which has turned into support again.

What’s next after relief rally

The question now is whether the coin will be able to preserve the recent gains and avoid another sell-off after a spectacular relief rally. If sentiment in the traditional financial markets deteriorates in the near term, some profit-taking could push bitcoin lower from the current levels. After the latest ascent, many crypto enthusiasts started to predict a climb above $30,000 while more cautious players warn that it could be just another fakeout pump.

It looks like it’s too early to call a bottom just yet anyway, as the macroeconomic backdrop remains highly uncertain, with recession risks persisting. The stock market rally could wane soon, suggesting BTC may struggle to extend the ascent. On the downside, the immediate support now arrives at $22,400, followed by $21,600 and the $20,000 figure. On the upside, bullish continuation could pave the way towards $26,500. But even if the bullish slope persists for some time more, the way up is unlikely to be straightforward and easy.

Gold prices keep struggling amid the rallying dollar these days. The greenback climbed to fresh twenty-year highs on Tuesday, staying buoyed despite the overbought conditions. The US currency continues to outperform its rivals due to its safe-haven status in combination with Fed’s aggressive tightening. Also, the weakening Japanese yen and euro add to the bullish momentum surrounding the buck.

Against this backdrop, the non-yielding precious metal continues to bleed, refreshing multi-month lows. The XAUUSD pair fell to $1,723 on Tuesday for the first time since late-September before bouncing marginally in recent trading. The downside momentum intensified after failure to hold above the $1,800 mark last week, thus opening the way towards the $1,700 next psychological support last seen nearly one year ago.

Yellow metal needs a pullback

Given the stubbornly strong dollar, any upside in the gold market is likely to be just a retracement, at best, especially as bets for aggressive interest rate hikes gain traction after strong US jobs data and ahead of fresh inflation report which is expected to show further rise in consumer prices.

In the immediate term, gold prices could see a minor pullback amid oversold conditions. However, unless there is a sustained break above the $1,750 zone, the bullish interest is not expected to return. Furthermore, should the metal proceed to some recovery, this region may kick off a bullish reversal and bring the prices back under pressure.

Of note, a halt in Russian gas supplies through Nordstorm 1 pipeline added to a downbeat tone surrounding the bullion through rising inflation expectations and euro weakness that fueled USD demand further.