Daily Market Analysis By FXOpen

BTC and XRP – Recovery shortly expected

BTC/USD



The price of Bitcoin has been on a decline since the 15th of June when it was trading at $41,151 at its highest point. From there we have seen a decrease of 24.5% measured to its lowest point today at around $31,240. Now the price is slightly higher but is currently testing the horizontal support level from the 23rd of May.

On the 4-hour chart, we can see that this is the third time the price has been trading on its lower level of the horizontal range that formed from the 23rd of May. But doing so it weakened the level which is why it potentially won’t hold for much longer. However, the wave structure implies that we might see a recovery shortly at least as the 2nd sub-wave of the next three-wave correction to the downside after which we could see a larger recovery.

From here a breakout to the downside isn’t so likely but rather the price could now find another support here and bounce but only for a lower high compared to the one on the 15th of June. Another possibility would be that from the 8th till the 15th of June we have seen the 3rd wave out of the higher degree correction with its first wave being the upward move from the 23rd till the 26th of May. In that case, the price could continue its downside trajectory but also in the near term a move to the upside would now be expected.

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EUR/USD Eyes Recovery, USD/CHF Remains Elevated



EUR/USD declined heavily below 1.2000 and it tested 1.1850. USD/CHF is rising and it could rally further if it clears the 0.9200 and 0.9220 resistance levels.

Important Takeaways for EUR/USD and USD/CHF

• The Euro started a fresh decline from well above the 1.2000 zone against the US Dollar.
• There was a break above a connecting bearish trend line with resistance near 1.1900 on the hourly chart of EUR/USD.
• USD/CHF gained bullish momentum above the 0.9050 and 0.9120 resistance levels.
• There is a key bearish trend line forming with resistance near 0.9200 on the hourly chart.

EUR/USD Technical Analysis

The Euro struggled to gain pace above the 1.2150 level and it started a major decline against the US Dollar. As a result, the EUR/USD pair broke the main 1.2000 support zone to move into a bearish zone.

The pair even declined below the 1.1920 support zone and settled below the 50 hourly simple moving average. A low was formed near 1.1846 on FXOpen and the pair is now correcting losses. It corrected above the 1.1880 and 1.1900 resistance levels.



There was a break below the 23.6% Fib retracement level of the recent decline from the 1.2147 high to 1.1846 low. There was also a break above a connecting bearish trend line with resistance near 1.1900 on the hourly chart of EUR/USD.

It is now trading nicely above the 1.1900 support zone and the 50 hourly SMA. On the upside, the pair is facing hurdles near the 1.1940 and 1.1950 levels. A clear upside break above 1.1950 could set the pace for a larger recovery.

The next major resistance is near the 1.2000 zone. On the downside, there is a major support forming near the 1.1900 zone. The next key support is near the 1.1880 level. A downside break below the 1.1880 support could restart decline. The next major support could be near the 1.1820 level.

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LTC and EOS – The start of a another recovery seen most likely



LTC/USD

The price of Litecoin has been on the rise since Tuesday when it came down to $104.9 at its lowest point. From there we have seen an increase of 27% as it reached $133.3 at its highest point today. Currently, it is trading slightly lower but is still in an upward trajectory.



On the hourly chart, we can see that the price fell into a lower low compared to the May 23rd one and spiked to the upside, reaching the broken downtrend support which is being now tested for resistance. If the price finds resistance here another move to the downside would be expected, but only as a pullback before further upside continuation. This is so because on the 22nd we have most likely seen the end of the corrective five-wave move from the 27th of May so now a move to the upside like it developed from the 23rd till the 27th would be expected.

The price could now increase as much as 35% but it would be expected to go lower than on the 27th when it came up to $209. This is because the price made a lower low which is why a lower high would be more likely. Another possibility could be that we have seen the start of a completely new impulse wave to the upside and that the 22nd of June’s low was the completion of the higher degree down move. But this is going to be validated from the type of descending move we see after this expected rise.

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GBP/USD and EUR/GBP: British Pound Could Continue To Struggle



GBP/USD failed to clear the key 1.4000 resistance zone and corrected lower. EUR/GBP is rising and it might gain pace if it clears the 0.8600 barrier.

Important Takeaways for GBP/USD and EUR/GBP

• The British Pound failed to gain pace above the main 1.4000 resistance zone.
• There is a major bearish trend line forming with resistance near 1.3920 on the hourly chart of GBP/USD.
• EUR/GBP started a fresh increase after it found a strong support near the 0.8530 zone.
• There is a short-term contracting triangle forming with resistance near 0.8595 on the hourly chart.

GBP/USD Technical Analysis

The British Pound failed to reclaim the 1.4000 handle and it started a fresh decline against the US Dollar. The GBP/USD pair broke the 1.3900 support zone and the 50 hourly simple moving average.

The pair even spiked below 1.3800 before it found support near 1.3785. A low was formed near 1.3786 and the pair recently started an upside correction. There was a break above the 1.3850 and 1.3900 resistance levels.



The pair even moved above 1.3950, but it failed to clear the 1.4000 resistance zone. A high was formed near 1.4000 and the pair is now moving lower.

It broke the 50% Fib retracement level of the upward move from the 1.3786 swing low to 1.4000 high. It is now trading below 1.3900 and the 50 hourly simple moving average. There is also a major bearish trend line forming with resistance near 1.3920 on the hourly chart of GBP/USD.

An immediate support on the downside is near the 1.3865 level. It is near the 61.8% Fib retracement level of the upward move from the 1.3786 swing low to 1.4000 high.

A downside break below the 1.3865 level might call for a fresh decline towards the 1.3800 level. On the upside, an immediate resistance is near the 1.3920 level. The next major resistance is near the 1.4000 level.

A successful close above 1.3920 and a follow up move above 1.4000 could open the doors for a move towards the 1.4120 resistance.

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Financial Markets Turn Their Attention to Jobs Data



Financial markets reversed their initial reaction after the latest FOMC Statement and press conference. In the two days that followed the June Fed meeting, the US dollar gained ground significantly against its peers in the developed world.

As such, the EURUSD fell from above 1.22 to 1.1850, the AUDUSD dropped a couple of hundred of pips, while the GBPUSD was strongly rejected at the 1.42. Also, stocks dropped in the United States and triggered a sharp decline in other equity markets too.

But it all lasted only two days. The week that just ended has seen the market participants changing their minds. Stocks reversed sharply, the US dollar weakness resumed, and overall risk-on outperformed.

What changed in the meantime? The answer comes from the Fed. Last Tuesday, Fed’s Chair Jerome Powell testified in front of the House Select Subcommittee on the Coronavirus Crisis, and he downplayed the hawkish statement. Moreover, Fed members held speeches the entire week, reassuring markets that the accommodative measures will remain in place for quite some time despite the hawkish dot plot.

Furthermore, the Fed still sees inflation as transitory. Food and energy prices are expected to come down past 2021, even though right now inflation exceeds the Fed’s target.



Focus Turns to Job Creation

Now that the inflation has reached the Fed’s target, the only chance the US dollar bulls have is for the job market to show significant improvements. While the strong economic growth and improvements in the labor market should bode well for the currency and the stock market indices, further developments in the labor market will bring the Fed closer to its job creation mandate.

Therefore, the Fed’s hawkish message will have greater credibility if the US economy is able to create more jobs. We will find out as soon as next week the current state of the labor market as the Non-Farm Payrolls report for the month of May is due.

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EUR/USD Eyes Fresh Increase, USD/JPY Could Extend Losses



EUR/USD is likely to start a steady increase if it clears the 1.1920 resistance zone. USD/JPY could extend its decline below the 110.40 support zone in the near term.

Important Takeaways for EUR/USD and USD/JPY

• The Euro is consolidating losses above the 1.1880 support zone.
• There is a key bearish trend line forming with resistance near 1.1915 on the hourly chart of EUR/USD.
• USD/JPY declined below the 110.00 and 110.60 support levels.
• There is a major declining channel forming with resistance near 110.85 on the hourly chart.

EUR/USD Technical Analysis



After a close below 1.2000, the Euro saw bearish moves against the US Dollar. The EUR/USD pair even tested the 1.1850 support zone before starting a decent upward move.

The pair climbed above the 1.1900 resistance zone. It even broke 1.1950 and the 50 hourly simple moving average. However, the pair failed to clear the 1.2000 zone. A high was formed near 1.1974 on FXOpen and the pair corrected gains.

It tested the 1.1880 zone and it is now rising. There was a break above the 23.6% Fib retracement level of the recent decline from the 1.1974 high to 1.1877 low.

It is now facing resistance near the 1.1915 zone and the 50 hourly simple moving average. There is also a key bearish trend line forming with resistance near 1.1915 on the hourly chart of EUR/USD. The next key resistance is near the 1.1925 level.

The 50% Fib retracement level of the recent decline from the 1.1974 high to 1.1877 low is also near 1.1925. A close above 1.1915 and 1.1925 could open the doors for a steady increase.

An intermediate support is near the 1.1880 level. The next major support is near the 1.1850 level, below which the pair could drop towards the 1.1800 support.

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Gold Price and Crude Oil Price Aim Higher



Gold price started a decent recovery wave from the $1,750 support. Crude oil price is rising and it is now trading nicely above the $74.00 level.

Important Takeaways for Gold and Oil

• Gold price started a fresh recovery wave after forming a base above $1,750 against the US Dollar.
• There is a key bearish trend line forming with resistance near $1,780 on the hourly chart of gold.
• Crude oil price climbed higher and it even surged above the $75.00 resistance.
• There was a break above a major contracting triangle with resistance near $73.65 on the hourly chart of XTI/USD.

Gold Price Technical Analysis


This week, gold price formed a decent support base above the $1,750 zone against the US Dollar. The price started a fresh upward move and it surpassed the $1,760 resistance zone.

The price even settled above the $1,765 level and the 50 hourly simple moving average. However, the price seems to be facing a strong resistance near the $1,780 zone. There is also a key bearish trend line forming with resistance near $1,780 on the hourly chart of gold.

A high is formed near $1,782 on FXOpen and the price is now consolidating gains. An upside break above the trend line could spark more gains above $1,782.

An immediate resistance on the upside is near the $1,795 level. The first major resistance is near the $1,800 level. If the price breaks the $1,800 level, it could accelerate higher. In the stated case, the price could rise towards the $1,840 zone.

Conversely, the price might resume its decline below $1,775. An initial support is near the $1,765 level. It is near the 50% Fib retracement level of the recent increase from the $1,750 low to $,1782 high.

The first major support is near the $1,760 level. The next key support is near the $1,750 level, below which the price might continue to move down towards the $1,720 level in the near term.

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GBP/USD and GBP/JPY: British Pound Eyes Strong Recovery



GBP/USD is slowly recovering, but it must break 1.3850 for more upsides. Similarly, GBP/JPY could gain pace if it clears the 1.3850 resistance zone in the near term.

Important Takeaways for GBP/USD and GBP/JPY

• The British Pound is attempting a decent recovery wave above the 1.3800 zone against the US Dollar.
• There is a key bearish trend line forming with resistance near 1.3835 on the hourly chart of GBP/USD.
• GBP/JPY seems to be forming a base above the 153.00 support zone.
• There was a break above a major bearish trend line with resistance near 153.40 on the hourly chart.

GBP/USD Technical Analysis



In the past few sessions, the British Pound saw bearish moves below the 1.4000 zone against the US Dollar. The GBP/USD pair traded below many supports near 1.3900 and 1.3850 to move into a bearish zone.

The pair even traded below the 1.3800 level and the 50 hourly simple moving average. A low is formed near 1.3731 on FXOpen and the pair is currently correcting losses. There was a break above the 1.3780 resistance zone.

The pair recovered above the 23.6% Fib retracement level of the key decline from the 1.3999 high to 1.3731 low. The pair is now trading above the 1.3800 zone and the 50 hourly simple moving average.

On the upside, an initial resistance on the is near the 1.3835 level. There is also a key bearish trend line forming with resistance near 1.3835 on the hourly chart of GBP/USD. The next major resistance is near the 1.3850 level.

The main resistance is near 1.3865 level. It is close to the 50% Fib retracement level of the key decline from the 1.3999 high to 1.3731 low. The next key resistance is near the 1.3900 level, above which the pair could rise towards the main 1.4000 resistance.

On the downside, an initial support is near the 1.3800 level and the 50 hourly SMA. If there is a break below the 1.3800 support, the pair could test the 1.3750 support. If there are additional losses, the pair could decline towards the 1.3640 level.

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Crude Oil Price Diverges from US Dollar Strength



One of the most interesting divergences in financial markets formed recently. The price of oil remains stubbornly elevated, closing the previous week above $75 per one barrel, despite ongoing dollar strength.

Since April 2020, the price of oil has come a long way. It dipped below the zero level for the first time ever, as the futures market settled close to -$40 twelve months ago. But from that moment on, it ripped higher, recovering all the pandemic losses and some more.

Because oil remains a big chunk of energy consumption in the United States and the rest of the world, higher oil prices fuel higher inflation. Higher inflation, on the other hand, pressures central banks to act and raise the interest rates, as most of them have a price stability mandate given by an inflation-targeting framework.



Commodities vs. Interest Rates

A classic correlation in financial markets tells us that commodities tend to underperform when interest rates are rising. It is not the case this time.

While the interest rates are not off their lows, the Federal Reserve of the United States started to talk hawkish. At its last meeting, the Fed signaled more rate hikes in the near future than the market expected, triggering a move higher in the US dollar.

As such, the EURUSD pair fell from above 1.22 to 1.18, the GBPUSD from 1.42 to 1.38, and the AUDUSD from 0.78 to below 0.75. But the strength in the US dollar did not bring a correction in the price of oil. Just the opposite.

A couple of things may help explain the divergence. On the one hand, the recent Iranian presidential elections have postponed the likelihood for Iranian oil to hit the market anytime soon. On the other hand, the OPEC+ recent meetings failed to commit new supplies for the second half of the year, despite the fact that demand is forecast to rise by 3 million barrels/day in the second half of the year.

Hence, the imbalances in supply and demand point to further upside in the price of oil, despite the Fed’s hawkishness. Many voices in the market suggest that the Fed will signal the tapering of its asset purchases at the upcoming Jackson Hole Symposium in August.

Therefore, until August, the US dollar’s strength will likely persist in expectations of the Fed’s message. Yet, as long as it remains above $70, the price of oil remains bid too, threatening with a move above $80 and beyond.

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BTC and XRP – Breakout from the range will dictate the next trend



BTC/USD

The price of Bitcoin has been on the rise since the 26th of Jun and made it back to the $36,000 area on the 29th. From there we have seen a descending move with the price moving sideways after. Currently, it is being traded at $$33,893 and made a lower high today compared to yesterday’s one and is moving to the downside.



Looking at the hourly chart, you can see that a triangle is being formed which could be the 2nd sub-wave of the higher degree descending move. Considering that the prior move ended most likely as the ABC correction to the upside with the price falling back inside the territory of the lower range of the 1st wave from the 22nd. this is currently more likely. In this case, the price is to form the 3rd wave from the descending move that started on the 16th of Jun when another three-wave ABC to the upside completed.

If this is true, then we will see a breakout to the downside below the $31,000 mark, which served as a strong horizontal support level. However, this sideways movement that formed a triangle could be a consolidation range before another move to the upside that is set to break the $36,183 horizontal resistance. This is why the validation will come as a breakout direction from the mentioned triangle and will dictate the next dominant trend.

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