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.

USD

• The Fed left interest rates unchanged as
  expected at the last meeting and dropped the tightening bias in the statement.
• The US CPI and
  the US PPI beat
  expectations for the second consecutive month.
• The NFP report beat
  expectations on the headline number, but the unemployment rate and the average
  hourly earnings missed notably. Moreover, the US Jobless Claims beat
  expectations across the board with a big positive revision to Continuing
  Claims.
• The latest US ISM
  Manufacturing PMI missed expectations by a big margin
  remaining in contraction with the US ISM Services
  PMI
  following suit but holding on in expansion.
• The US Retail Sales missed
  expectations across the board although the data improved from the prior month.
• The market sees basically a 50/50 chance of a hike
  in June now.

CAD

• The BoC left interest rates unchanged at
  5.00% as expected stating that further easing in underlying inflation is needed.
• The latest Canadian CPI missed expectations across the
  board with the underlying inflation measures falling.
• On the labour market side, the latest report beat
  expectations but we saw a fall in wage growth which is something that the BoC
  is watching closely.
• The Canadian PMIs improved in
  January although they remain both in contractionary territory.
• The market expects the first rate
  cut in June.

USDCAD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that USDCAD broke
through the key resistance level at
1.3540 and extended the rally into new highs. The buyers piled in on the
breakout and will now target the 1.3620 level. That’s where we can expect to
find the sellers to step in with a defined risk above the level to position for
a drop into the 1.3359 level.

USDCAD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the price
recently consolidated around the 1.3540 level before moving up as the buyers
piled in around the red 21 moving average. From a
risk management perspective, the buyers will have a much better risk to reward
setup around the trendline,
although this looks like a story for another time as the current bullish
momentum seems strong enough to reach the 1.3620 level first. The sellers, on
the other hand, will want to see the price breaking below the trendline to
invalidate the bullish setup and increase the bearish bets into the 1.3359
level.

USDCAD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
latest leg higher is diverging with
the MACD, which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, it might be a signal for a pullback into the minor
black trendline where we will also find the 4-hour 21 moving average for confluence. This
is where we can expect the buyers to step in with a defined risk below the
trendline to position for a rally into the 1.3620 level with a better risk to
reward setup. The sellers, on the other hand, will want to see the price
breaking lower to pile in for a drop into the major trendline around the 1.35
handle.

Upcoming Events

Today we get the Canadian CPI figures. Tomorrow, we
have the FOMC rate decision on the agenda where the central bank is expected to
keep rates unchanged. On Thursday, we get the latest US PMIs and Jobless Claims
figures. Finally, on Friday, we conclude the week with the Canadian Retail
Sales data.

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

As for the hourly labour costs in total, that increased by 3.4% in the euro area as compared to the same quarter last year.

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

• Prior -81.7
• Expectations 31.7 vs 20.5 expected
• Prior 19.9

German investor morale improved as economic expectations pick up ahead of the ECB’s anticipated first rate cut. Current conditions also got better but the overall economic situation remains at a very low level, notes ZEW.

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

Headlines:

• The central bank bonanza returns to town this week
• US futures move higher as tech leads the way
• JP Morgan now sees the Fed delivering 75 bps worth of rate cuts for 2024
• Eurozone February final CPI +2.6% vs +2.6% y/y prelim
• Eurozone January trade balance €11.4 billion vs €16.8 billion prior
• SNB total sight deposits w.e. 15 March CHF 469.2 bn vs CHF 477.4 bn prior
• China president Xi congratulations Putin on election win, reaffirms continued partnership

Markets:

• NZD leads, JPY lags on the day
• European equities higher; S&P 500 futures up 0.7%
• US 10-year yields down 0.4 bps to 4.300%
• Gold up 0.2% to $2,160.95
• WTI crude up 0.5% to $80.98
• Bitcoin up 0.5% to $68,237

It was a quiet session as market tones were mostly muted, awaiting key central bank decisions later this week.

Major currencies did not get up to much whatsoever, with the dollar holding steady amid more muted action. The ranges for the day are leaving a lot to be desired, so there isn’t much to really scrutinise in the FX space.

EUR/USD is holding near 1.0900 with large option expiries in play at the figure level while USD/JPY is flat just above the 149.00 mark, not finding much appetite before the BOJ tomorrow.

The lack of meaningful action in Treasuries is also keeping currencies less enthused so far on the day.

The only notable mover is in equities as tech shares are soaring ahead of the US open later. Nvidia is holding its annual GTC Conference today and that will be one to watch. S&P 500 futures are now up 0.7% as investors are putting behind last week’s drop quite quickly.

But for the rest of the week, it’s all about the major central bank decisions to set the mood in broader markets.

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

S&P 500 futures are now up 0.5% on the day with Nasdaq futures seen up 1.0% ahead of US trading later. Tech shares are the ones on the move as Dow futures are still seen rather flattish at the moment. Meanwhile, European indices are still just slightly higher so far on the session.

Nvidia remains the focus as it is set to open above $900 as indicated in pre-market trading. The company will be hosting its first in-person conference this week since the pandemic. And plenty of watchful eyes will be on that.

The move here is the standout as there hasn’t been much else happening during the session. Major currencies remain largely muted and little changed while Treasury yields are also not giving much to work with for now.

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

Last week, the Dow Jones couldn’t extend the rally
into a new all-time high as the stronger than expected inflation data and the
quick rise in Treasury yields weighed on the stock market. There’s been also
some profit-taking as we approach the FOMC rate decision on Wednesday with the
risk of a hawkish surprise. Overall, the market is likely to remain supported
as long as the Fed does not restart to hike rates, or the economy does not
falter.

Dow Jones Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Dow Jones broke
out of the rising wedge recently
and started to consolidate just beneath the bottom trendline. The
breakout opened the door for a bigger correction into the 38043 level, but the
strong battle between buyers and sellers led to a rangebound price action ahead
of the FOMC rate decision. There are no catalysts now trading into the event,
so the technicals will likely lead the price action.

Dow Jones Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that
the price managed to break above the downward trendline but got smacked back
down following some strong US data that raised the risk of a hawkish Fed on Wednesday.
We now have a range between the 38461 support and
the 39119 resistance, so the market participants will likely “play the range”
by buying at support and selling at resistance until we get a breakout.

Dow Jones Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see more
closely the recent rangebound price action. If the dip-buyers come into the
market strongly, then a break above the recent swing high at 38930 could lead
to a break above the 39119 resistance, although it might be better to wait for
the FOMC before taking new trades.

Upcoming Events

This week we have the FOMC rate decision on Wednesday
where the Fed is expected to keep rates unchanged. The market will be on the
lookout for hawkish surprises though following the stronger than expected
inflation data. On Thursday, we conclude with the latest US PMIs and Jobless
Claims figures.

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

After having dropped from 150.00 to 146.00 levels in early March, it looked like the BOJ finally got the ball rolling in USD/JPY. But amid a combination of more cautious trades and higher Treasury yields, the pair failed to muster much strength in chasing any major downside momentum. Today, the pair is trading at 149.20 now as we look towards the BOJ policy decision tomorrow. So, what’s next?

The writing is in the sand already that the BOJ is set to put an end to negative rates tomorrow. Adding to that, it is likely that they will also scrap its yield curve control (YCC) policy. However, they are still to retain bond buying operations and one can expect the statement to also lean more dovishly. That considering the central bank will not want to spook investors with a drastic and major change of narrative at the central bank.

In short, the moves tomorrow can be seen as baby steps for the BOJ to start moving in the other direction. But are these small steps enough to trigger a much stronger rally in the yen currency? There is potential but personally, I’d like to see other market forces corroborate to this story as well.

The thing about USD/JPY shorts or any other shorts in yen pairs is that they are producing a negative carry. And right now, 10-year Treasury yields are still up by some 45 bps so far this year, sitting around 4.30% presently. That’s not quite something that will get investors to thinking that they should move their money away from the dollar so quickly.

And if the BOJ is taking just small and prolonged measures in tightening policy, it will take some time for rate differentials to narrow. That is not something that will benefit the yen all too much.

For the yen to crack the code, I reckon it also needs much softer US economic data to follow. That will likely prompt the Fed to cut sooner and that will also show up in the rates market. So, unless we do see Treasury yields start to drop more meaningfully, it may be tough to argue for any steep downside in USD/JPY even as the BOJ looks to act tomorrow.

That being said, the yen does have some good news to work with as we approach the latter stages of March. This is the time when we do see a repatriation of funds back to Japan as the fiscal year-end looks to wrap up. Most of the time, the flows are staggered but it could be a supportive factor for the currency in the final two weeks.

As for the technical perspective, there is also plenty of work for USD/JPY sellers to do. The confluence of the 100 and 200-hour moving averages at 148.01-16 currently is the first area that needs to be broken. That will then establish a more bearish near-term bias.

Following which, the 100-day moving average at 147.59 currently is the next key level to get past. Only then can we start talking about a chase towards its 200-day moving average at around 146.41 at the moment.

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

The euro area trade surplus narrowed in January on a non-seasonally adjusted basis. But after accounting for seasonal adjustments, the total trade surplus grew from €14.3 billion in December to €28.1 billion in January. This comes as exports grew by 2.1% on the month while imports fell by 4.0% on the month.

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