Daily Market Analysis By FXOpen

US Consumers Spent Less Than Expected in December


The first two trading weeks of the new year are behind us, and investors have received and digested the last pieces of economic data for the just-concluded year. In the first trading week, the NFP (or non-farm payrolls) disappointed – the US economy added fewer jobs in December than the market expected.

The same can be said about the retail sales data for December released last Friday. Against the expectations of +0.2%, the core retail sales, the ones that exclude automobiles, fell by -2.3%.

In other words, the US consumer is cautious, and uncertainty is triggering a big pullback in spending. Inflation is eroding demand, and supply issues for goods remain persistent. Moreover, labor supply constraints and omicron fear are affecting consumer spending.

With only a week away ahead of the Fed’s January meeting, is the Fed going to hike into a slowing economy?


Fed signaled the start of a new tightening cycle

The monetary policy in the US is closely watched by the developed economies. It often acts as a benchmark for other central banks, which quickly follow in the Fed’s footsteps.

The Fed is currently engaged in tapering its asset purchases. Effectively, it means that it still eases the monetary policy, albeit at a slower pace, despite inflation running hot at four decades high.

As such, with interest rates at the lower boundary and inflation so high, many fear that the Fed is trapped. The tapering is supposed to end in March, and so the institution cannot raise the federal funds rate at its January meeting.

However, the January meeting is important as the forward guidance may change. So far, a 25 basis points rate hike is in the cards, but one should not be surprised if the Fed is more aggressive.

In order to regain credibility in the face of rising inflation, the Fed may decide to shock the market with a 50 basis points rate hike. In any case, the January meeting will bring more details regarding what the Fed might do in March.

As such, the US dollar should be supported on dips.

The problem comes from the economic slowdown. By March, the economic growth may weaken considerably, and so the Fed may be forced to hike while the economy cools.

FXOpen Blog

Australian Dollar falls in major move against Euro as consumer confidence hits 30 year low


After a week-long period of no movement, the Euro has suddenly leapt into life this morning against the Australian Dollar.

Suddenly, as the markets in Europe began their trading week, the Euro rose to 1.584 against the Australian Dollar in the pre-opening early hours of the morning, representing a considerable move given that major currencies are not known for their volatility. Indeed, some entire trading strategies have become based on low volatility as this has been the status quo for many years now.

At the beginning of this month, the EURAUD pair was trading at 1.558, therefore a rise to 1.584 is, by comparison to general movements among major currency pairs, absolutely massive.

Whilst the Euro's move against the Australian Dollar is the largest currency move of the day, it is worth noting that the British Pound made a similar gain over the Australian Dollar, for similar reasons.

It is possible that part of this lack of confidence in the Australian Dollar may come from the continual hectoring that the Australian government appears to be engaging in toward its businesses and citizens.

For example, yesterday it was reported that Australian citizens returning from overseas trips have been asked to hand their smartphones over to the Australian Border Force, with one particular report having stated that a man and his partner were instructed to write their phone passcodes on a piece of paper, before the border officials took their phones into another room.

This is the latest in a long line of draconian restrictions and surveillance efforts being carried out by the Australian government, which has become known as one of the most stringent on earth when it comes to enforcing curbs over Covid 19, and curbs, data security and privacy issues, and a seemingly illiberal position taken by government are not often viewed as favorable conditions for a thriving economy.

Such curbs have therefore dented confidence in the Australian economy, and cast doubts over its position as a liberal and poltically free country going forward.

It could be that as parts of Europe still have some restrictions whereas others have none, trade between Euro-denominated countries and other regions of the world is becoming a bit easier, whereas Australia, whose main trading partner is China and in which personal movement and what could have been considered the normal way of life before March 2020 has shown no sign of return.

The EURAUD pair has moved 0.54% since yesterday, which was already an upward turn over Friday's close at just over 1.57.

The real elephant in the room is that Australia's Consumer Confidence index, which is used to measure how buoyant the retail part of the economy is, is at a very low point.

Figures were revealed for January 2022 this morning and it shows that many Australians are avoiding spending. In fact, confidence is at its lowest point since 1992, and just last week alone, Australian consumer confidence fell by 7.6%, sinking to its lowest rate since October 2020.

Data for all of Australia's states fell below the neutral confidence level of 10o, and to accompany this negativity, all of the subindices were also down, including current financial conditions having declined by 11.3%. The number of respondents to the confidence index survey who stated that now was “the time to buy a major household item” also reduced by 11.4%.

Things are very different in today's Australia compared to how they were at the beginning of 2020, and the terse relationship with China combined with the ongoing government position on Covid are weighing heavily on the minds of investors looking at the immediate future.

FXOpen Blog

BTCUSD and XRPUSD Technical Analysis – 18th JAN 2022


BTCUSD: Double Top Pattern Below $44,000

Bitcoin was unable to carry the bullish momentum seen last week and touched a high of $44,432 on 13th January, after which the decline started which continues to push its prices lower in the European trading session today.

Today, BTCUSD touched an intraday low of $41,458 and continues to remain under heavy selling pressure by the global investors.

We can clearly see a double top pattern below the $44,000 handle which signifies the end of an uptrend and a shift towards a downtrend.

Stoch and StochRSI is indicating an OVERBOUGHT level which means that in the immediate short-term, a decline in the prices is expected.

The relative strength index is at 42, indicating a WEAKER demand for bitcoin and selling pressure in the markets.

Bitcoin is now moving below its 100 hourly simple moving average and below its 200 hourly exponential moving average.

The average true range is indicating high market volatility with a bearish zone formation.

• Bitcoin trend reversal is seen below $44,000
• Williams percent range is indicating an OVERBOUGHT level
• The price is now trading just above its pivot levels of $41,829
• All of the moving averages are giving a STRONG SELL market signal

Bitcoin: Bearish Reversal Below $44,000 Confirmed


Bitcoin is forming a bearish reversal pattern as the prices continue to decline in the European trading session today.

The immediate short-term outlook for bitcoin is bearish, medium-term outlook is neutral, and the long-term outlook remains bullish.

All the major technical indicators are giving a STRONG SELL signal, which means that in the immediate short-term we should expect targets of $41,000 and $40,000.

The price of BTCUSD is now facing its classic support level of $41,205 and Fibonacci support level of $41,683, after which the path towards $40,000 will get cleared.

In the last 24hrs, BTCUSD has gone DOWN by 2.28% with a price change of 977$, and has a 24hr trading volume of USD 23.214 billion. We can see an increase of 16.29% in the trading volume as compared to yesterday. This increase can be attributed to the increased selling pressure seen in the cryptocurrency exchanges globally.

The Week Ahead

The price of Bitcoin continues to slide without any visible upside correction. This is also due to the bearish trend which started below the $44,000 handle.

At these levels many of the new and long-term investors are also expected to enter into the markets for long-term gains.

If the prices continue to remain above the important support level of $40,000, we could see an upside correction towards the $44,000 handle in the next week.

The ON-chain metrics are also suggesting that the price of bitcoin is expected to touch the $40,000 handle after which could see a bullish pattern with a rally towards $45,000.

Technical Indicators:

Commodity channel index (14-day): at -63.44 indicating a SELL

Average directional change (14-day): at 33.49 indicating a SELL

Rate of price change: at -0.268 indicating a SELL

Moving averages convergence divergence (12,26): at -183.30 indicating a SELL

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EUR/USD and EUR/JPY Show Bearish Signs


EUR/USD started a fresh decline below the 1.1420 support. EUR/JPY is declining and could accelerate lower below 129.70.

Important Takeaways for EUR/USD and EUR/JPY

• The Euro started a fresh decline after it faced sellers near the 1.1480 level.
• There was a break below a key bullish trend line with support near 1.1405 on the hourly chart.
• EUR/JPY gained bearish momentum below the 130.50 and 130.20 support levels.
• There is a major bearish trend line forming with resistance near 130.90 on the hourly chart.

EUR/USD Technical Analysis

The Euro gained pace above the 1.1400 and 1.1450 resistance levels against the US Dollar. However, the EUR/USD pair struggled to gain pace above 1.1480 and started a fresh decline.

The pair traded below the 1.1420 support and settled below the 50 hourly simple moving average. There was a clear break below the 50% Fib retracement level of the upward move from the 1.1284 swing low to 1.1482 high (formed on FXOpen).

EUR/USD Hourly Chart


Besides, there was a break below a key bullish trend line with support near 1.1405 on the hourly chart. The pair is now trading below the 1.1350 level and the 50 hourly simple moving average.

It is now trading near the 76.4% Fib retracement level of the upward move from the 1.1284 swing low to 1.1482 high. Any more losses might send the pair towards the 1.1280 support zone. On the upside, the pair is facing resistance near the 1.1350 level.

The next major resistance is near the 1.1380 level. The main resistance is forming near the 1.1400 level. A clear break above the 1.1400 resistance could push EUR/USD towards 1.1450. If the bulls remain in action, the pair could rise above the 1.1480 resistance zone in the near term.

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ETHUSD and LTCUSD Technical Analysis – 20th JAN, 2022


ETHUSD: Double Bottom Pattern Above $3,000

Ethereum was unable to sustain its bullish momentum this week, and after touching a high of $3,409 on 12th January, started declining against the US dollar.

ETHUSD touched an intraday low of $3,080 in the Asian trading session today, after which we can see some consolidation in its prices above the $3,000 handle.

We can clearly see a double-bottom pattern above the $3,000 handle which is a bullish reversal pattern and signifies the end of a downtrend and a shift towards an uptrend.

ETH is now trading just below its pivot levels of $3,131 and is moving in a consolidation channel. The price of ETHUSD is now testing its classic resistance levels of $3,138 and Fibonacci resistance level of $3,146, after which the path towards $3,300 will get cleared.

The relative strength index is at 49, indicating a NEUTRAL market and a move towards the consolidation phase after the decline.

We have detected an MA 20 crossover pattern above the $3,124 level which signifies a bullish trend reversal in the short-term.

Some of the technical indicators are giving a BUY signal.

ETH is now trading below the 100 hourly and 200 hourly simple moving averages.

• Ethereum consolidation is seen above the $3,000 mark
• Short-term range appears to be NEUTRAL
• Ultimate oscillator is indicating a NEUTRAL market
• Average true range is indicating LESSER market volatility

Ether Consolidation Channel Seen Above $3,000


ETHUSD continues to move into a consolidation channel above the $3l000 handle in the European trading session today.

Most of investors are not entering the markets and are waiting for a bullish momentum.

The commodity channel index is indicating a NEUTRAL market, and the overall sentiment is also neutral at these levels.

We are also due for a major upwards correction in the ETHUSD which could manifest in the form of a rally taking its prices close to the $4,000 handle.

We can see a mildly bullish channel in progression today which is expected to push the prices of ETHUSD towards the $3,300 level.

ETH has gained 1.47% with a price change of 45.44$ in the past 24hrs, and has a trading volume of 11.474 billion USD.

We can see a decrease of 16.90% in the total trading volume in the last 24 hrs., which appears to be normal.

The Week Ahead

Ethereum is now approaching its important support level of $3,000 which will decide whether we will see a bullish reversal in the markets.

If the price of ETHUSD continues to remain above the $3,000 handle, as we can see today, it will signify a bullish reversal with an upside target of $3,300 to $3,500 in the next week.

The immediate short-term outlook for Ether has turned NEUTRAL, the medium-term outlook is MILDLY BULLISH, and the long-term outlook for Ether is BULLISH with a RALLY formation towards $4,000.

MACD has indicated a bullish crossover which is also giving a BUY signal at the current market levels.

This week, we can expect to see $3,300 to $3,400, and in the next week Ether is expected to trade at levels above $3,500.

Technical Indicators:

Williams percent range: at -37.39 indicating a BUY

Stoch (9,6): at 71.39 indicating a BUY

Moving averages convergence divergence (12,26): at 1.75 indicating a BUY

StochRSI (14): at 58.95 indicating a BUY

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AUD/USD and NZD/USD Remain At Risk


AUD/USD started a fresh decline from the 0.7275 zone. NZD/USD is also declining and there is a risk of a move below the 0.6720 support.

Important Takeaways for AUD/USD and NZD/USD

• The Aussie Dollar started another decline from well above the 0.7250 level against the US Dollar.
• There was a break below a key bullish trend line with support near 0.7200 on the hourly chart of AUD/USD.
• NZD/USD also declined sharply below the 0.6750 support zone.
• There is a connecting bearish trend line forming with resistance near 0.6790 on the hourly chart of NZD/USD.

AUD/USD Technical Analysis

The Aussie Dollar struggled to clear the 0.7275 level against the US Dollar. The AUD/USD pair started a fresh decline below the 0.7250 support level to move into a bearish zone.

The bears were able to push the pair below the 50% Fib retracement level of the upward move from the 0.7170 swing low to 0.7275 high (formed on FXOpen). Besides, there was a break below a key bullish trend line with support near 0.7200 on the hourly chart of AUD/USD.

AUD/USD Hourly Chart


The pair settled below the 0.7220 support level and the 50 hourly simple moving average. It is now consolidating near the 0.7185 level.

The 76.4% Fib retracement level of the upward move from the 0.7170 swing low to 0.7275 high is also protecting losses. On the downside, an initial support is near the 0.7170 level. If there is a downside break below the 0.7170 support, the pair could extend its decline towards the 0.7125 level.

Any more downsides might send the pair toward the 0.7100 level. On the upside, the pair is facing resistance near the 0.7210 level.

The next major resistance is near the 0.7240 level. A close above the 0.7240 level could start a steady increase in the near term. The next major resistance could be 0.7300.

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GBP/USD Starts Fresh Decline, EUR/GBP Remains Supported


GBP/USD started a fresh decline from well above the 1.3700 level. EUR/GBP is showing positive signs, with a strong support near the 0.8340 level.

Important Takeaways for GBP/USD and EUR/GBP

• The British Pound started a fresh decline from well above 1.3700 against the US Dollar.
• There was a break below a key bullish trend line with support near 1.3620 on the hourly chart of GBP/USD.
• EUR/GBP found support near 0.8300 and started a fresh increase.
• There was a break above a major bearish trend line with resistance near 0.8330 on the hourly chart.

GBP/USD Technical Analysis

The British Pound struggled to settle above the 1.3750 resistance zone against the US Dollar. The GBP/USD pair started a fresh decline below the 1.3620 support zone.

There was a clear move below the 1.3600 level and the 50 hourly simple moving average. Besides, there was a break below a key bullish trend line with support near 1.3620 on the hourly chart of GBP/USD.

GBP/USD Hourly Chart


A low is formed near 1.3545 on FXOpen and the pair is now consolidating losses. On the upside, an initial resistance is near the 1.3575 level. It is near the 23.6% Fib retracement level of the downward move from the 1.3661 swing high to 1.3545 low.

The next main resistance is near the 1.3600 zone. It is near the 50% Fib retracement level of the downward move from the 1.3661 swing high to 1.3545 low.

If there is an upside break above the 1.3600 resistance, the price could surpass 1.3625 or even 1.3650. If there is no upside break, the pair could start a fresh decline below 1.3540. An immediate support is near the 1.3520 level.

The first key support is near the 1.3500 level. Any more losses could lead the pair towards the 1.3450 support zone. The next major support sits near the 1.3420 level.

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Australian and Canadian Dollars fall against Pound as China's policy costs dear


As this week begins, yet another strengthening is very apparent for the British Pound against two major currencies, those being the Canadian Dollar and the Australian Dollar.

The Pound has been doing very well against all of its peers recently, largely because of the inability of the British government to do what the public and investing community expected it to do this winter, and lock down the nation again.

There is a theory among many people across Europe that Britain would have followed the actions of its mainland European neighbours and inflicted a lockdown on its population and that it was possibly already being planned for months in advance, however the wheels came off when the revelations about a number of government officials having had one or more informal gatherings during the period in which they were insisting on compliance with lockdowns.

This has angered a large proportion of citizens and business owners who had not been allowed to operate during that particular period, whereas the government officials having the alleged parties were not afraid of anything, nor were abiding by the strict rules they doled out.

As a result, it would have been impossible to implement any further restrictions on anyone in Britain, therefore the pleasant surprise came when Prime Minister Boris Johnson announced that there would be a complete removal of all remaining restrictions, and Britain is now open and free.

The same cannot be said for many other parts of the world, and whilst the British Pound continues to climb against all other major currencies, it is the Canadian Dollar and Australian Dollar that are falling against the currency of the most free nation in the West at the moment.

This is because not only do restrictions still exist in Canada and are in full swing in Australia, but the two currencies are commodity-reliant, whereas the British Pound is not.

Why is that important?

It is important because the already heavily restricted nations of Canada and Australia are dependent on the large commodity trading centers of Toronto and Sydney, and both of those commodity centers are part of a massive trade union with China.

China at the moment is instigating a 'zero-Covid' policy across its mainland, which is a media-friendly term for total control over every activity and draconian restrictions on movement and business.

In Canada, the analysts are stating their case for the reason why the Canadian Dollar has dipped, with Bank of Montreal Capital Markets' European Head of FX Strategy Stephen Gallo having told CNBC that ripple effects from China could be feeding into the performance of developed market commodity-based currencies.

Yes, consumable commodities such as oil and gas have risen in price during recent months, but there are other areas of the commodity market that have had an effect on commodity-dependent currencies.

The very same bank's Head of FX Strategy Greg Anderson stated that the two-year swap rates for Australian and New Zealand dollars had underperformed the U.S. dollar, which would perhaps indicate toward a theory that central bank policy divergence is a factor.

However, the Canadian swap rate has performed very similarly to the U.S., so this does not explain why CAD has not rallied alongside oil, according to the analyst.

In China, there were closures of factories along with electricity power cuts last year as part of the strict restrictions on people's movement in China, and it is known that the country is operating a 'zero-Covid' policy and such a policy is likely to have severe implications for both supply and demand and in particular it could conceivably be affecting China’s demand for certain raw materials.

By contrast, the British economy is more reliant on international investment, its own diversified industry base and the financial markets center in London which also has a vast equities trading contingent on the London Stock Exchange and is not so dependent on raw materials or commodities.

The British Pound starts the trading week at a five-day high against the Australian Dollar, at a value of 1.89 Australian Dollars to the Pound, and it had held a high point against the Canadian Dollar during the off-market hours at the weekend at 1.7 Canadian Dollars to the Pound, before dropping slightly this morning.

There is a crossroads in the currency market at the moment, that being the buoyancy of the majors that are sovereign currencies of nations with no lockdowns or restrictions and a diversified local industry base, compared to the flagging values of those reliant on trade with China, have high commodities dependency and have a myriad of restrictions still in force.

It's certainly a different world this January to that of even one year ago.

FXOpen Blog

BTCUSD and XRPUSD Technical Analysis – 25th JAN 2022


BTCUSD – Double Bottom Pattern Above $32000

Bitcoin had a major bearish correction after touching a high of 43296 on 20th January, the prices continued to decline touching a low of 33053 yesterday.

This sharp drop in the levels of Bitcoin was due to heavy selling in the markets coupled with the fears of a Russian attack on Ukraine.

Today BTCUSD has entered into a mild bullish momentum and continues to remain above the $36000 handle in the European Trading session.

We can clearly see a Double Bottom Pattern above the $32000 handle which is a Bullish reversal pattern because it signifies the end of a downtrend and a shift towards an Uptrend.

STOCH and Williams Percent Range are indicating OVERBOUGHT levels which means that in the immediate short term a decline in the prices is expected.

Relative Strength Index is at 55 indicating a STRONG demand for the Bitcoin at the current market levels.

Bitcoin is now moving Above its 100 hourly Simple Moving average and below its 200 hourly Exponential Moving averages.

Average True Range is indicating Less Market Volatility with a Bullish zone formation.

• Bitcoin Trend Reversal is seen Above $32000.
• STOCHRSI is Indicating OVERSOLD Levels.
• The price is now trading just Above its Pivot Levels of $36246.
• Most of the Moving Averages are giving a BUY market signal.

Bitcoin Bullish Reversal Above $32000 Confirmed


Bitcoin is forming a Bullish Reversal pattern as the prices continue to Uptick in the European Trading session today.

The immediate short-term outlook for Bitcoin is Bullish, Medium-term outlook is Neutral, and the long-term outlook remains Strong Bullish.

All of the Major Technical Indicators are giving a BUY Signal, which means that in the immediate short term we are expecting targets of 38000 and 40000.

The price of BTCUSD is now facing its Classic resistance levels of 36426 and Fibonacci resistance levels of 36735 after which the path towards 38000 will get cleared.

In the last 24hrs BTCUSD is UP by 4.67% by 1619$ and has a 24hr trading volume of USD 41.650 Billion. We can see an Increase of 61.22% in the Trading volume as compared to yesterday.

This increase in the Trading volume of BTC is due to the increased Buying pressure after the recent decline, which saw many new investors coming into the markets.

The Week Ahead

The prices of Bitcoin entered into the consolidation phase after touching the $33000 handle and is now moving into a Mild Bullish momentum towards the $37000 levels.

We can expect more Upsides in the range of $38000 to $40000 in this week. The most important factor that is facing the Global investors is the news of a Russian attack on the Ukraine and its effects on the Crypto markets.

Since the liquidity fear is the most in the Cryptocurrencies, we saw a major drop in the levels of Bitcoin, which now appears to have stabilized.

The Crypto Winter

The prices of Bitcoin have declined from its November 2021 highs of $69000 by more than 50% which has resulted in the mass erosion of the investors wealth globally.

At present the Total market capitalization of Bitcoin stands at 685 Billion USD.

Many of the analysts have coined this Major decline as the Crypto Winter, which appears to be a difficult and challenging time for the Crypto Investors.


Technical Indicators:

Relative Strength Index (14days): It is at 55.72 indicating a BUY.

Average Directional Change (14days): It is at 22.27 indicating a BUY.

Rate of Price Change: It is at 0.432 indicating a BUY.

Moving Averages Convergence Divergence (12,26): It is at 161.80 indicating a BUY.

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EUR/USD Faces Hurdles, USD/JPY Could Recover


EUR/USD started a fresh decline from well above 1.1380. USD/JPY remained in a bearish zone and settled below the 114.50 pivot level.

Important Takeaways for EUR/USD and USD/JPY

• The Euro started a fresh decline after there was no close above the 1.1420 level.
• There is a key bearish trend line forming with resistance near 1.1308 on the hourly chart of EUR/USD.
• USD/JPY started a fresh decline from well above the 114.50 pivot zone.
• There is a short-term rising channel forming with resistance near 114.20 on the hourly chart.

EUR/USD Technical Analysis


Recently, the Euro failed to clear the 1.1420 zone against the US Dollar. The EUR/USD pair started a fresh decline and traded below the 1.1350 support zone.

The pair even broke the 1.1320 level and settled below the 50 hourly simple moving average. A low was formed near 1.1263 on FXOpen and the pair is now correcting higher. There was a move above the 50% Fib retracement level of the recent decline from the 1.1334 swing high to 1.1263 low.

EUR/USD Hourly Chart

An immediate resistance on the upside is near the 1.1305 level. There is also a key bearish trend line forming with resistance near 1.1308 on the hourly chart of EUR/USD.

The trend line is near the 61.8% Fib retracement level of the recent decline from the 1.1334 swing high to 1.1263 low. The next major resistance is near the 1.1320 level. The main resistance is near the 1.1350 level and the 50 hourly simple moving average.

If there is no break above 1.1308, the pair might start a fresh decline. An immediate support is near the 1.1288. The next major support is near 1.1265, below which the pair could drop to 1.1220 in the near term.

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