Daily Market Analysis By FXOpen
BTCUSD and XRPUSD Technical Analysis – 11th OCT 2022
BTCUSD: Triple Top Pattern Below $20441
Bitcoin was unable to sustain its bullish momentum and after touching a high of 20441 on 06th Oct, it started to decline touching a low of 18977 today in the early Asian trading session.
The prices of bitcoin continue to decline amid the selling pressure that is seen across the cryptocurrency markets globally.
We can see that the prices are ranging near a new record low of 1 month in the weekly time frame.
We can clearly see a triple top pattern below the $20441 handle which is a bearish reversal pattern because it signifies the end of an uptrend and a shift towards a downtrend.
Bitcoin touched an intraday high of 19282 and an intraday low of 18960 in the Asian trading session today.
Both the STOCH and STOCHRSI are indicating overbought levels which means that in the immediate short term, a decline in the prices is expected.
The relative strength index is at 43 indicating a WEAK demand for bitcoin, and the continuation of the selling pressure in the markets.
Bitcoin is now moving below its 100 hourly simple moving average and above its 200 hourly exponential moving averages.
Some of the major technical indicators are giving a SELL signal, which means that in the immediate short term, we are expecting targets of 18500 and 18000.
The average true range is indicating LESS market volatility with a mild bearish momentum.
[*] Bitcoin: bearish reversal seen below $20441
[*] The Williams percent range is indicating an overbought level
[*] The price is now trading just below its pivot level of $19107
[*] Some of the moving averages are giving a SELL market signal
Bitcoin: Bearish Reversal Seen Below $20441
The fall in the price of bitcoin is in line with the three failed attempts at breaching the $20500 resistance level. We are now heading towards the important support level of $19000 which if broken will pave the way towards $18000.
We can see the formation of a bearish harami and bearish harami cross pattern in the 15-minute time frame.
The commodity channel index is giving a neutral level and the relative strength index is approaching the 50 level.
The immediate short-term outlook for bitcoin is mildly bearish, the medium-term outlook has turned neutral, and the long-term outlook remains neutral under present market conditions.
Bitcoin’s support zone is located at $18656 and the prices need to remain above this level for a potential bullish reversal in the markets.
The price of BTCUSD is now facing its classic support level of 19028 and Fibonacci support level of 19087 after which the path towards 18500 will get cleared.
In the last 24hrs BTCUSD has decreased by 0.92% by 176$ and has a 24hr trading volume of USD 28.521 billion. We can see an increase of 45.40% in the trading volume compared to yesterday, due to increased selling pressure in the markets.
The Week Ahead
The price of bitcoin is moving in a mildly bearish zone below the $19500 level. Further downsides are projected at $18500 and $18000 as the immediate targets.
After the recent decline, bitcoin is staging for a recovery once it breaches down the important support level of $19000.
The average direction index and MA5, MA10 are indicating a bullish rebound in the price towards the $20000 level.
The daily RSI is printing at 43 which indicates a neutral level and a move towards the consolidation phase in the markets.
The price of BTCUSD will need to remain above the important support level of $18500 this week.
The weekly outlook is projected at $19000 with a consolidation zone of $18800.
Technical Indicators:
The moving averages convergence divergence (12,26): is at -75.50 indicating a SELL
The ultimate oscillator: is at 44.42 indicating a SELL
The rate of price change: is at -0.661 indicating a SELL
Bull/Bear power (13): is at -10.73 indicating a SELL
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AUD/USD and NZD/USD Gain Bearish Momentum Below Support
AUD/USD is moving lower and approaching the 0.6220 support. NZD/USD is also declining and showing bearish signs below 0.5600.
Important Takeaways for AUD/USD and NZD/USD
[*] There was a break below a connecting bullish trend line with support at 0.6265 on the hourly chart of AUD/USD.
[*] NZD/USD is gaining bearish momentum below the 0.5600 support zone.
[*] There was a break below a key bullish trend line with support at 0.5595 on the hourly chart of NZD/USD.
AUD/USD Technical Analysis
The Aussie Dollar failed to stay above the 0.6400 level and started a fresh decline against the US Dollar. The AUD/USD pair traded below the 0.6350 support zone to move into a bearish zone.
There was a clear move below the 0.6300 level and the 50 hourly simple moving average. During the decline, there was a break below a connecting bullish trend line with support at 0.6265 on the hourly chart of AUD/USD.
AUD/USD Hourly Chart
The pair traded as low as 0.6240 on FXOpen and is currently showing a lot of bearish signs. On the upside, the AUD/USD pair is facing resistance near the 0.6265 level. It is near the 23.6% Fib retracement level of the recent decline from the 0.6346 swing high to 0.62405 swing low.
The next major resistance is near the 0.6290 level and the 50 hourly simple moving average. It coincides with the 50% Fib retracement level of the recent decline from the 0.6346 swing high to 0.62405 swing low.
A close above the 0.6300 level could start a steady increase in the near term. The next major resistance could be 0.6350.
On the downside, an initial support is near the 0.6240 level. The next support could be the 0.6220 level. If there is a downside break below the 0.6220 support, the pair could extend its decline towards the 0.6165 level.
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Traders dump British Pound en masse as BoE pulls plug on pension support
Will there be a run on pension funds? It was inevitable that the Bank of England would curtail its support somewhere when 'support' means literally printing money in order to keep fueling a collapsing economy.
Just a few weeks ago, at the point during which the British Pound was in absolute freefall against the Euro and US Dollar, the Bank of England introduced a £65 billion bond buying program which was aimed at preventing a market rout, which was viewed as a money printing exercise and raised many fears among investors.
Now, as the Pound has continued its downward slide, the Bank of England yesterday hinted at potentially ending its support by exiting its emergency gilt support program to pension companies on Friday, as planned.
Speaking in Washington DC yesterday, Bank of England Governor Andrew Bailey stated publicly that "The rebalancing must be done and my message to the funds involved and all the firms involved managing those funds: you've got three days left now. You've got to get this done."
The result was a significant amount of fear among British investors and private pension contributors who began to raise concerns that their pension funds would become worthless, or that the companies responsible for managing them may face financial difficulties.
Commentary in mainstream news contained viewpoints such as people in their mid-fifties considering withdrawing their pension as a lump sum to protect it.
The market reacted as perhaps expected, with traders dumping the Pound and a further decline in value having taken place.
During the US trading session yesterday, the British Pound dropped to 1.09 against the Euro and further slid against the US Dollar.
This morning, however, messages have become mixed as Bank of England Governor Andrew Bailey stated during private conversations with bank executives that the Bank of England may look at extending its emergency bond-buying program past this Friday’s deadline, according to people briefed on the discussions which made its way into the Financial Times this morning, despite Mr Bailey having already told pension funds that they “have three days left” before the support ends.
Pension funds are now in the process of redefining their investment strategies as the support is set to end in just three days time, however with the British Pound in turmoil, the economy tanking and inflation rampaging, interest rates set to reach between 5% and 6% by January 2023, there is a pinch to be felt for borrowers as well as those who are saving for their retirement.
This double-edged sword has not gone down well with investors and the overall outlook for the Pound is bleak indeed, especially considering that the UK Gilt market is not in the best shape, and internal reports have shown that the pensions industry is in no way ready for the Bank of England to withdraw its support.
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ETHUSD and LTCUSD Technical Analysis – 13th OCT, 2022
ETHUSD: Evening Star Pattern Below $1337
Ethereum was unable to sustain its bullish momentum and after touching a high of 1381 on 06th Oct, the prices started to decline against the US dollar. The prices of Ethereum touched a low of 1267 on 11th Oct after which we can see a shift towards the consolidation phase in the markets.
We have seen a bearish opening of the markets which indicates the bearish trend.
We can clearly see an evening star pattern below the $1337 handle which is a bearish pattern and signifies the end of a bullish phase and the start of a bearish phase in the markets.
ETH is now trading just below its pivot level of 1277 and is moving in a mildly bearish channel. The price of ETHUSD is now testing its classic support level of 1268 and Fibonacci support level of 1275 after which the path towards 1200 will get cleared.
The relative strength index is at 36 indicating a weaker demand for Ether and a shift towards the consolidation phase in the markets.
We can see that the price is back under the pivot point in the daily time frame indicating a bearish trend.
Both the STOCHRSI and the Williams percent range are indicating an oversold market, which means that the prices are expected to correct upwards in the short-term range.
Most of the technical indicators are giving a STRONG SELL market signal.
All of the moving averages are giving a STRONG SELL signal and we are now looking at the levels of $12500 to $1200 in the short-term range.
ETH is now trading below both the 100 & 200 hourly simple and exponential moving averages.
[*] Ether: bearish reversal seen below the $1337 mark
[*] The short-term range appears to be mildly bearish
[*] ETH continues to remain below the $1300 level
[*] The average true range is indicating LESS market volatility
Ether: Bearish Reversal Seen Below $1337
ETHUSD is now moving in a mildly bearish channel with the price trading below the $1300 handle in the European trading session today.
ETH touched an intraday high of 1302 in the Asian trading session and an intraday low of 1272 in the European trading session today.
We can see the formation of a bearish harami pattern in the weekly time frame.
The moving average MA50 is giving a bearish trend reversal signal in the 1 hourly time frame.
We have seen that the support of the channel is broken in the 15-minute time frame indicating the bearish nature of the markets.
The daily RSI is printing at 38 indicating a weak demand in the long-term range.
The key support levels to watch are $1223 and $1227, and the price of ETHUSD needs to remain above these levels for any potential bullish reversal in the markets.
ETH has decreased by 2.20% with a price change of 28.61$ in the past 24hrs and has a trading volume of 8.806 billion USD.
We can see an increase of 8.11% in the total trading volume in the last 24 hrs which appears to be normal.
The Week Ahead
The price of Ethereum came under heavy selling pressure as it declined below the $1300 level.
Ethereum’s price has now entered a bearish zone against the US dollar and we are now moving towards the $1200 level.
We can see the formation of a major bearish trend line in place from $1337 towards $1265 levels.
The immediate short-term outlook for Ether has turned mildly bearish, the medium-term outlook has turned bearish, and the long-term outlook for Ether is neutral in present market conditions.
The prices of ETHUSD will need to remain above the important support level of $1223 this week.
The weekly outlook is projected at $1275 with a consolidation zone of $1250.
Technical Indicators:
The average directional index ADX (14): is at 26.30 indicating a SELL
The rate of price change: is at -1.61 indicating a SELL
Bull/Bear power (13): is at -16.20 indicating a SELL
The commodity channel index (14): is at -125.57 indicating a SELL
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EUR/USD Eyes Steady Recovery While USD/CHF Might Slide
EUR/USD started a recovery wave after a sharp decline post the US CPI release. USD/CHF is declining and might slide below the 0.9975 support.
[B]Important Takeaways for EUR/USD and USD/CHF[/B]
[*] The Euro is slowly moving higher above the 0.9750 resistance zone against the US Dollar.
[*] There was a break above a major bearish trend line with resistance near 0.9700 on the hourly chart of EUR/USD.
[*] USD/CHF started a fresh decline after it failed to clear the 1.0075 resistance.
[*] There is a major bullish trend line forming with support near 0.9985 on the hourly chart.
EUR/USD Technical Analysis
This week, the Euro saw a major decline below the 0.9750 support against the US Dollar. The EUR/USD pair declined below the 0.9700 support level to move further into a bearish zone.
The pair formed a base above the 0.9640 level and recently started an upside correction. There was a move above the 0.9680 and 0.9700 resistance levels. There was a break above a major bearish trend line with resistance near 0.9700 on the hourly chart of EUR/USD.
EUR/USD Hourly Chart
The pair even broke the 50% Fib retracement level of the downward move from the 0.9926 swing high to 0.9631 low. The pair climbed above the 0.9750 level and the 50 hourly simple moving average.
An immediate resistance is near the 0.9815 level. It is near the 61.8% Fib retracement level of the downward move from the 0.9926 swing high to 0.9631 low. The next major resistance is near the 0.9850 level.
A clear move above the 0.9850 resistance zone could set the pace for a larger increase towards 1.0000. The next major resistance is near the 1.0050 zone.
On the downside, an immediate support is near the 0.9750 level. The next major support is near the 0.9720 level and the 50 hourly simple moving average. A downside break below the 0.9720 support could start another decline.
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Watch FXOpen's October 10-14 Weekly Digest Video
In this video, FXOpen UK COO Gary Thomson sums up the week’s happenings and discusses the most significant news reports.
[*] GBP/USD faces key hurdle, USD/CAD could rise further
[*] Professional traders go all out for FX market volatility as volumes soar
[*] Traders dump British pound en masse as BoE pulls plug on pension support
[*] Yen tests 1998 lows
Watch our short and informative video, and stay updated with FXOpen.
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Disclaimer: CFDs are complex instruments and come with a high risk of losing your money.
GBP/USD and GBP/JPY Eye Additional Gains
GBP/USD started a decent recovery wave above the 1.1200 resistance. GBP/JPY is also rising and might climb further higher above the 167.25 zone.
Important Takeaways for GBP/USD and GBP/JPY
[*] The British Pound started a fresh upward move above the 1.1200 resistance against the US Dollar.
[*] There is a key bullish trend line forming with support near 1.1210 on the hourly chart of GBP/USD.
[*] GBP/JPY gained pace after it was able to clear the 164.00 resistance zone.
[*] There is a major bullish trend line forming with support at 166.85 on the hourly chart.
GBP/USD Technical Analysis
This past week, the British Pound found support near the 1.0950 zone against the US Dollar. The GBP/USD pair formed a base and started a steady recovery wave above the 1.1120 level.
There was a clear move above the 1.1200 resistance and the 50 hourly simple moving average. The pair even traded above the 1.1320 level. A high was formed near 1.1380 and recently started a downside correction.
GBP/USD Hourly Chart
There was a move below the 1.1320 support zone. The pair declined below the 1.1250, but the bulls were active near 1.1150. A low is formed near 1.1152 and the pair is now rising.
There was a move above the 1.1200 level. The pair climbed above the 23.6% Fib retracement level of the recent decline from the 1.1380 swing high to 1.1150 level. An immediate resistance on the upside is near the 1.1265 level.
It is near the 50% Fib retracement level of the recent decline from the 1.1380 swing high to 1.1150 level. The next major resistance is near the 1.1320 level, above which the pair could start a steady increase towards 1.1380.
An upside break above 1.1380 might start a fresh increase towards 1.1450. Any more gains might call for a move towards 1.1500 or even 1.1550.
An immediate support is near the 1.1220. There is also a key bullish trend line forming with support near 1.1210 on the hourly chart of GBP/USD. The next major support is near the 1.1150 level. If there is a break below the 1.1150 support, the pair could test the 1.0050 support. Any more losses might send GBP/USD towards 1.0000.
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SO much volatility! UK Government to tear up budget in emergency move
The currency and stock markets have been in a remarkable state of turmoil for many weeks now, and perhaps one of the most exaggerated differentials in price has been between the Western major currencies and the British Pound.
Traders and investors have been turning their back on the Pound Sterling, which has been struggling to retain its long-held status as the world's most valuable currency, and the charts have been displaying a continued downward direction for the British Pound for many weeks, a direction which has only begun to slow over the past few days.
Today, however, the Pound has begun to soar! It is now at 1.13 against the US Dollar, a position it has not visited for many weeks.
Many market commentators and analysts have been highlighting what appears at first glance to be a 'turnaround' for the British Pound, but the reality is that it is far from a turnaround - it is just a minor step up from the days before, as the Pound still languishes at a low value after weeks of decline, punctuated by an array of government U-turns, a mini-budget which was not well received at all, and the most short-lived Chancellor of the Exchequer (Finance Minister) in British history, Kwasi Kwarteng who was shown the door after just a few weeks in his position.
Today, Jeremy Hunt, the replacement for Kwasi Kwarteng, is set to make an emergency statement relating to the outcome of the mini-budget, in which it is anticipated that he will tear it up and start again.
Mr Hunt, the most recent senior government minister to be installed without a single free vote having been cast, is the subject of high expectations from the British public who are weary at the floundering government's effect on the economic situation of the country.
Mr Hunt's reason for issuing a statement today is to attempt to calm the markets. One of the items on the agenda today is a statement to the House of Commons at 3.30pm, bringing forward measures from the Medium-Term Fiscal Plan, which is due on October 31.
Some critics have stated this morning that these statements are aimed at buying the government time, and there are even speculators who have aired their view that newly installed Prime Minister Liz Truss may be ousted by her own political party very shortly, which is perhaps one reason why a relatively cautious view is being taken by investors with regard to the British Pound and stocks listed on the London Stock Exchange's FTSE 100 index.
As an undertone to all of the high profile government chaos and economic pandemonium, the Bank of England has been raising interest rates since the beginning of this year and speculation is currently abound that they may well reach 5% in January 2023, and has been buying bonds to the tune of £65 billion which is in effect a way of printing money to bolster a flagging economy.
Many banks pulled mortgage products off the shelves in the concern that interest rates may rocket, and this has been yet another indicator to traders and investors to be cautious.
It would therefore be prudent to assume that many people will be looking out for the results of today's announcement at 3.30pm UK time.
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Housebuilder stocks take a hard hit as UK market slows down
The FTSE 100 index is once again below 7000 points today, and although it has risen from its low point of yesterday, it is still languishing at 6,975 as the trading day in London progresses.
This is a 1.3% increase over the previous day, but represents a 2.9% drop over the past 30 days of trading.
One of the main factors in bringing down the value of the FTSE 100 index is the impact that Britain's beleaguered economy is having on housebuilders, and many large British house building companies are listed on the London Stock Exchange and are part of the FTSE 100 index.
For example, Barratt Developments, one of Britain's largest residential construction companies, reported a 12% slowdown in weekly reservations in the period from August 1 to October 1, compared with the same period in 2021 due to what it politely calls ‘the backdrop of rising interest rates and wider economic uncertainty’ - ultimately referring to the rising interest rates putting people off buying houses, and many British banks having withdrawn mortgage products from sale, preventing people from accessing finance in order to buy homes.
Another large, publicly listed house building company, Bellway, recently reduced its its forecast for volume sales this year from 14,000 in its August trading update to ‘a similar level to the prior year’ or around 11,200 homes, which echoes the anticipated slowdown in house purchasing due to the flagging economy and rising interest rates.
Investor behavior has reflected this pessimism as Bellway shares dropped in value yesterday by 1% to £18.07 while Redrow Homes shares also decreased in value by 1.5% to 410p, with shares in Vistry falling 3.6% to 545p.
This has been a pattern that has made itself noticed for quite a few weeks, and the raw materials and mining companies which are included in the FTSE 100 index have been holding their value due to ongoing supply chain problems contributing to high demand for imported minerals and products used for manufacturing, whilst companies whose product relies on the strength of the economy and the ability for consumers to acquire credit have been struggling to maintain any form of growth.
Today, Bellway Homes announced that it has scrapped its plan to build 1,000 more homes this year, demonstrating that a large company which knows its market well is not prepared to invest in building homes that may not be able to be sold, or which would have a limited audience due to the unfavorable conditions toward mortgages at the moment.
During 2021, the FTSE 100 was the darling of investors. It rose above 7,000 and remained at such lofty heights for over a year. During that period, stamp duty (property purchase tax) had been postponed for properties up to a certain value, causing house building company stocks to rise, and big pharma was making a lot of revenues on the back of mandatory vaccines in many countries.
Only now has it begun to dip below the 7,000 mark and the companies causing this to take place are a telling sign of the situation of the overall economy.
Therefore, the pound's lamentable performance recently appears to be intrinsically linked to the performance of the FTSE 100 index.
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BTCUSD and XRPUSD Technical Analysis – 18th OCT 2022
BTCUSD: Bullish Engulfing Pattern Above $18237
Bitcoin was unable to sustain its bearish momentum and after touching a low of 18280 on 13th Oct, it started to correct upwards touching a high of 19893 on 14th Oct.
The price of bitcoin has bounced back from its lows due to heavy buying pressure seen below the $19000 levels.
We can see the formation of an ascending channel pattern above the support level of $19000 on the hourly chart of BTCUSD.
We can clearly see a bullish engulfing pattern above the $18237 handle which is a bullish reversal pattern because it signifies the end of a downtrend and a shift towards an uptrend.
Bitcoin touched an intraday low of 19475 in the Asian trading session and an intraday high of 19694 in the European trading session today.
Both the STOCH and Williams percent range are indicating overbought levels which means that in the immediate short term, a decline in the prices is expected.
The relative strength index is at 56 indicating a STRONG demand for bitcoin, and the continuation of the buying pressure in the markets.
Bitcoin is now moving above its 100 hourly simple moving average and above its 200 hourly exponential moving averages.
Some of the major technical indicators are giving a STRONG BUY signal, which means that in the immediate short term, we are expecting targets of 20500 and 21000.
The average true range is indicating LESS market volatility with a strong bullish momentum.
[*] Bitcoin: bullish reversal seen above $18237
[*] The STOCHRSI is indicating an oversold level
[*] The price is now trading just below its pivot level of $19651
[*] Some of the moving averages are giving a BUY market signal
Bitcoin: Bullish Reversal seen Above $18237
The long-term bullish phase has now resumed and the price of bitcoin is expected to become super bullish above the $20000 level.
We can see that any dips below the $19000 level remain well supported. We are now heading towards the important resistance level of $20000 which if broken will pave the way towards $22000.
We can see the formation of a bullish harami pattern in the 30-minute time frame.
The Adaptive Moving Average AMA20 is giving a Bullish signal in the daily timeframe.
The immediate short-term outlook for bitcoin is strongly Bullish, the medium-term outlook has turned bullish, and the long-term outlook remains neutral under present market conditions.
Bitcoin’s support zone is located at $19326 the ichimoku baseline, and the prices need to remain above this level for continuation of bullish reversal in the markets.
The price of BTCUSD is now facing its classic resistance level of 19731 and Fibonacci resistance level of 19785 after which the path towards 20500 will get cleared.
In the last 24hrs, BTCUSD has decreased by 1.36% by 262$ and has a 24hr trading volume of USD 29.008 billion. We can see an increase of 42.42% in the trading volume compared to yesterday, due to increased buying seen in the global crypto markets.
The Week Ahead
The price of bitcoin is moving in a strongly bullish zone above the $19000 level. Further upsides are projected at $20500 and $21000 as the immediate targets.
We can see the formation of bullish engulfing lines in the weekly time frame. The price of bitcoin is back over the pivot point which indicates a bullish scenario in the weekly time frame.
The daily RSI is printing at 50 which indicates a neutral level and a move towards the consolidation phase in the markets.
The prices of BTCUSD will need to remain above the important support level of $19000 this week.
The weekly outlook is projected at $21000 with a consolidation zone of $20500.
Technical Indicators:
The MACD (12,26): is at 96.10 indicating a BUY
The ultimate oscillator: is at 51.65 indicating a BUY
The rate of price change: is at 2.053 indicating a BUY
The bull/bear power (13): is at 366.28 indicating a BUY
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