Yesterday, the Fed left interest rates unchanged as
expected with basically no change to the statement. The market was fearing some
hawkish stuff, but we didn’t get any. In fact, the Dot Plot showed still three
rate cuts for this year and the economic projections were all upgraded with
growth and inflation higher and the unemployment rate lower. Moreover, during
the press conference, Fed Chair Powell didn’t
sound hawkish, on the contrary, he was fairly neutral. This gave the Dow Jones
the green light for a rally as the risk sentiment turned very bullish.

Dow Jones Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Dow Jones surged
to a new all-time high following the Fed decision. This is a buyers’ market, so
the sellers should refrain from taking new positions until we get a change in
the risk sentiment and some key breakouts on the lower timeframes. We can also
notice that the price continues to diverge with the
MACD which is
generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, it should be telling that the buyers should buy the
higher lows instead of FOMOing at higher highs.

Dow Jones Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that
the price broke through the 39119 resistance and
triggered a strong bullish reaction as the buyers piled in aggressively for a
new all-time high. From a risk management perspective, the buyers will have a
much better risk to reward setup around the resistance now
turned support where there’s also the 38.2% Fibonacci
retracement level for confluence. The
sellers, on the other hand, will want to see the price breaking lower to
position for a drop into the 38464 level.

Dow Jones Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we
also have a minor trendline around the support zone where the buyers will
likely lean onto to position for new highs with a better risk to reward setup.
The sellers, on the other hand, will want to see the price breaking lower to
position for a drop into the 39464 level.

Upcoming Events

Today we will get some key economic data as we will
see the latest US Jobless Claims figures and the US PMIs.

This article was written by FL Contributors at www.forexlive.com.

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This article was written by FL Contributors at www.forexlive.com.

After nearing the highs for the year earlier this week, 10-year Treasury yields have come down a fair bit. The move lower was helped by a more dovish Fed yesterday, with the rebound last week now resembling a double-top pattern. But as yields retreat, they are nearing a key technical juncture on the chart as well.

Yields are now at 4.229% and are nearing the confluence of its 100-day (purple line) and 200-day (green line) moving averages at 4.204% to 4.220%.

A fall below that will see bond buyers seize back control with yields potentially slipping back to the March lows near 4.09%. But if yields hold above the key technical region, that might keep dollar selling more limited for the time being.

So far today, the drop in yields isn’t weighing on the dollar all too much. The greenback was softer in Asia trading but has recovered some decent ground so far in Europe.

USD/JPY is a good example of that, now trading near 151.00 after having hit a low of 150.26 earlier in the day. It is off earlier highs just a few hours ago at 151.45 though as yields start to retreat further now.

This article was written by Justin Low at www.forexlive.com.

Headlines:

• Welcome to Fed day
• USD/JPY eyes potential major breakout going into the Fed later
• UK February CPI +3.4% vs +3.5% y/y expected
• What’s priced in for the BOE now after the UK CPI data?
• ECB’s Lagarde says cannot commit to rate path even after first cut
• Germany February PPI -0.4% vs -0.1% m/m expected

Markets:

• USD leads, JPY lags on the day
• European equities mixed; S&P 500 futures up 0.1%
• US 10-year yields down 0.9 bps to 4.288%
• Gold down 0.2% to $2,154.03
• WTI crude down 0.9% to $82.02
• Bitcoin down 0.8% to $63,199

It was a slower session after a busy Tuesday yesterday, as markets are waiting on the FOMC meeting later today.

The dollar is keeping firmer across the board with traders seemingly positioning for more of a hawkish hold perhaps. 10-year Treasury yields holding near 4.30% still is also a factor underpinning the greenback since last week. Besides that, softer UK and Canada inflation, a sell the fact play on the BOJ, and a dovish RBA makes for a couple of reasons why traders are still favouring the dollar this week.

USD/JPY continued to race higher to 151.80 as it eyes its 2022 and 2023 highs of 151.90-94 ahead of the Fed. Meanwhile, EUR/USD is contesting its 200-day moving average again as it is down 0.2% to 1.0840. GBP/USD is also marked down by 0.2% to just under 1.2700 currently.

Looking at the commodity currencies, USD/CAD is retesting the 1.3600 mark once again after offers resisted a break of the figure level yesterday. And AUD/USD is down 0.2% to 0.6515 and closes in on a potential test of the 0.6500 mark.

In the equities space, French luxury stocks are the ones lagging in Europe after Kering warned of a 10% revenue slide in Q1. Other regional indices are more mixed with US futures also just marginally higher as equities keep little changed in general.

Bitcoin was a decent mover as the volatile swings continue in the last one week. It fell to a low of $60,780 before recovering back to just above $63,000 now on the day.

Over to the Fed now.

This article was written by Justin Low at www.forexlive.com.

• Prior +7.1%
• Market index 198.2 vs 201.5 prior
• Purchase index 146.0 vs 147.7 prior
• Refinance index 468.4 vs 480.3 prior
• 30-year mortgage rate 6.97% vs 6.84% prior

The average rate of the most popular US home loan surges higher by 13 bps in the past week, nearing the 7% mark again. That put a bit of a drag on mortgage applications, with both purchases and refinancing activity slipping lower.

This article was written by Justin Low at www.forexlive.com.

Copper extended the rally
into new highs following some positive Chinese data. Moreover, the PBoC Governor Pan recently signalled more monetary
policy support to come which should be a tailwind for the market as long as the
global growth impulse of the last few months remains intact. The central banks
continue to support rate cuts this year although the timing got pushed back a
little after a series of higher-than-expected inflation prints. That could
raise the risk of a recession, so it will be something to watch out for in the
next few months.

Copper Technical Analysis –
Daily Timeframe

On the daily chart, we can see that Copper had an
incredible rally and it’s now pulling back. In fact, the price was very
overstretched at some point as depicted by the distance from the blue 8 moving average. In such
instances, we can generally see a pullback into the moving average or some
consolidation before the next move.

Copper Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that we have a key support around
the 4.03 level where we can also find the 38.2% Fibonacci retracement level
for confluence. This is
where we can expect the buyers to step in with a defined risk below the level
to position for a rally into new highs. The sellers, on the other hand, will
want to see the price breaking lower to invalidate the bullish setup and
position for a drop into the trendline.

Copper Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
latest move higher has been diverging with
the MACD, which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, we are getting a pullback into the base of the
divergent formation around the 4.03 level where the buyers will look for a
bounce and another rally. The sellers, on the other hand, will want to see the
price breaking lower to confirm the reversal and position for a drop into the
trendline.

Upcoming Events

Today we have the FOMC rate decision where the Fed
is expected to keep rates unchanged. Tomorrow, we conclude with the latest US
PMIs and Jobless Claims figures. Weak data is likely to weigh on Copper, while
strong figures should give it a boost.

This article was written by FL Contributors at www.forexlive.com.

A triple-top formation or a breakout to fresh highs since 1990? That is what awaits USD/JPY as we look towards the FOMC meeting decision later in the day.

The dollar is trading firmer across the board in European morning trade, as it seems like traders are positioning for a more hawkish hold by the Fed later. Are we that confident of a shift in the dot plots from 75 bps to 50 bps? And will that even matter at the end of the day? I shared some food for thoughts on that earlier here, alongside a list of previews.

But for now, the dollar continues to trade with more poise backed by the run higher in Treasury yields over the past week or so.

Going back to USD/JPY, we have to circle back to the first question. That’s the only thing that really matters now for the pair. The post-BOJ reaction hasn’t gone so well for yen bulls but if they are to step in, the top around 151.90-94 will be no better time to prove their mettle.

Otherwise, a break to the highest levels since 1990 will see little technical resistance on the way up. The April 1990 high stalled just above the 160.00 mark and that is plenty of breathing room from here up until there.

That being said, there is the prospect of intervention by Tokyo if we do see a major breakout to the topside. So, just be wary of that. However, it’s been surprising to see how quiet they have been over the last two days since the BOJ policy decision. Are Japanese officials perhaps weighing the prospects of imported inflation benefitting their agenda shift? That might be something to consider as well.

This article was written by Justin Low at www.forexlive.com.

• We need to move further along the disinflationary path
• Average wage growth in 2024 fell from 4.4% from January meeting to 4.2% in March meeting
• Latest data suggests wages are growing in a way that is compatible with inflation reaching the ECB’s target
• Will get a clearer picture in the coming months
• Expect to have two important pieces of evidence to raise confidence level sufficiently for first policy move
• If the data shows sufficient alignment between inflation path and ECB projections, then can dial back on current policy cycle

It is what we already know for the most part. The negotiated wages data for Q1, which will be released in late May, is going to be a key one to watch in this regard. You can refer to the Q4 data here. The headline remark might be one that not just applies to the ECB, but for all major central banks at the moment.

This article was written by Justin Low at www.forexlive.com.

10-year yields may be down slightly on the day but at 4.31%, they are over 25 bps higher from the lows seen on Monday last week. Traders are more wary amid the slew of US data in the week before, as the rates market also no longer prices in a full Fed rate cut for June. The odds of that have dropped to ~63% currently.

But what stands out more on the chart above is that we are seeing 10-year yields push past its 100-day moving average (purple line). There was a bit of a struggle in February for yields to move beyond that. But now, bond sellers are starting to take charge and they could do with some help from the Fed to confirm that break.

For now, the February high near 4.35% is likely to keep yields at bay until we get to the FOMC meeting tomorrow. Is June still on the table or has last week’s data changed that view somewhat? That is going to be the key question.

And amid the dot plots and Fed chair Powell’s speech, we might be in for a bit of a ride during the main event. The former is going to be heavily scrutinised to see if there are any changes to the 75 bps worth of rate cuts penciled in for this year. But if Powell keeps the door open for June, it is best to hold the Fed to that until the next set of key data releases at the very least.

This article was written by Justin Low at www.forexlive.com.

Bitcoin technical analysis: I’m eyeing a possible bounce up at $61k-$62k double support

In the dynamic landscape of cryptocurrency, observing and interpreting market trends is paramount for anyone engaged in trading or investing. In my latest analysis of Bitcoin (BTC/USD), I’ve captured a pivotal movement indicating a potential shift in its market trajectory. This analysis leverages the most current data and technical indicators to shed light on what might be on the horizon for Bitcoin.

Recent performance and observations for BTCUSD on the 4 hourly chart 📉

Bitcoin has recently undergone a significant downturn, with a decrease of approximately 6.23% from its previous highs. This trend is noteworthy, especially considering my earlier forecast, which anticipated a range between $65k to $69k. Bitcoin almost reached the upper echelon of this prediction, peaking at $68,933 on Coinbase.

However, the scenario has since shifted, marking an 8.68% decline from the $69k threshold. This movement has resulted in Bitcoin breaching below an intermediate support level, an essential observation for those tracking the BTC/USD pair closely.

Anticipating the next critical phase 🧐

1. Technical analysis insights… see video above: The analysis suggests a critical juncture lies ahead within the $61k to $62k range. This prediction isn’t solely based on the recent candlestick patterns but also encompasses a thorough examination of 4-hourly candles and supplementary technical charts. This zone is identified as a pivotal support area that could significantly influence Bitcoin’s immediate market behavior.

2. Bear flag formation: A bear flag pattern has been identified, indicating a bearish outlook as Bitcoin exited downwards from this configuration. This development signals a potential approach towards the lows at the double support area, marking the inception of the current bearish channel.

The importance of the $61k-$62k support 🛡️

The support level between $61k and $62k is meticulously chosen based on a consolidation period that previously catalyzed a bullish momentum. This area is poised to be a vital watchpoint for traders, potentially acting as a robust double support influencing Bitcoin’s forthcoming movements.

Bitcoin price forecast

• Looking ahead for bitcoin: The $61k-$62k support level stands out as a significant potential turning point for Bitcoin. It emanates from a period of consolidation that had earlier served as a bullish springboard.

• Forecasting bitcoin price: Given the current patterns and the bear flag breakout, my analysis leans towards a revisit to this double support zone. It represents a critical area of interest that could dictate the short-term direction of Bitcoin.

Conclusion and trading guidance ⚠️

While my analysis offers a speculative glimpse into Bitcoin’s potential trajectory, it’s crucial for traders and investors to tread carefully. The volatile nature of the cryptocurrency market demands informed decision-making and robust risk management strategies.

For continuous updates, comprehensive analyses, and diverse perspectives on Bitcoin and other cryptocurrencies, ensure to check back on my platform. Trading involves inherent risks, and it’s imperative to conduct thorough research and consider various viewpoints before engaging in investment activities.

Thank you for engaging with my analysis. Stay tuned for more insights and updates at www.ForexLive.com in the cryptocurrency market.

This article was written by Itai Levitan at www.forexlive.com.