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Brent stuck below $65 Following a spectacular rise two days ago, Brent crude oil has slowed down its ascent and fluctuates below the $65 mark on Friday. Prices resumed the bullish bias against the backdrop of a weakening U.S. dollar, signs of increasing global demand and a high discipline within OPEC. However, the upside potential still looks limited amid further remarkable growth in US shale oil production. The OPEC members’ supportive comments this week have contributed significantly to the oil prices recovery, but it’s obviously not enough to provide a steady boost to the market, which is still focused on the negative signals from the American drillers and producers. Additionally, Libya’s crude production was said to increase from 1.05 million barrels a day to 1.1 million. Nigeria is also planning to ramp up its production, by 250 000 barrels a day by 2020. Therefore, as long as the American industry continues to signal a new wave of shale revolution, Brent’s bullish potential will likely remain limited. In the short-term, the price is unlikely to make a decisive break above the $65 level, especially as the market expects fresh Baker Hughes data. Should the report mark another increase in the number of oil rigs, Brent risks turning negative on the day below $64.
TVC:UKOIL
by HelenRush
March is a risk factor for EURUSD The EURUSD pair continues moving upwards on Thursday and reached 10-day highs above the 1.25 threshold recently, where the price met some supply on the back of a local USD demand. The euro has already recouped last week’s losses and looks set for further gains amid the persistent dollar weakness and growing expectations that higher euro area inflation will force the ECB to taper more aggressively. Meanwhile, the longer-term fate of the single currency will be determined by the political climate in Germany. In particular, early next month we will know whether the members of Social Democratic Party approved the coalition deal. The verdict is due to be announced on March 4. By the way this is the day of general election in Italy, which can bring additional nervousness for the euro bulls. The negative German scenario could significantly undermine the EUR’s positions on the back of political uncertainty, which will likely reduce the appeal of the single currency. In the short term the USD sentiment will continue to set the tone for EURUSD. In order not to lose its upside potential, the euro needs to stay above the 20-DMA in the 1.2360 area. Until the greenback receives a meaningful support from the US economic data, US Treasury yields, or another wave of a widespread risk aversion, the bullish risks for the pair will persist.
by HelenRush
Bitcoin: the bottom is in? As the cryptocurrency market is gradually returning to confidence, bitcoin is cautiously extending its recovery and now appears to be looking for further gains. The price is trading in striking distance of $9,000, where the $9,150 area is seen as key for the bulls - a break above could open the doors for a recovery to a major local psychological level $10,000. The crypto market volatility has significantly decreased in the past week, after bitcoin reached three-month lows below $6,000 and since is licking its wounds. A sort of stabilization may attract new buyers and send the digital currency higher on the back speculations among the crypto-enthusiasts on bullish longer-term prospects of bitcoin. However, following the recent spectacular roller-coaster ride and amid the continuing regulatory challenges, investors’ behavior will likely be more careful, suggesting the upside potential is limited in the short-term. Besides, any sign of another regulatory crackdown could prompt traders to sell the asset amid fears that the price may reach fresh lows. The short-term technical outlook will improve further, should bitcoin overcome the $9,150 level with the next target at $10,000.
BITFINEX:BTCUSD
by HelenRush
GBP is focused on 1.40 again The pound is among the best performers on Tuesday, trading around the 1.39 mark, up 0.5% on the day. The GBPUSD is extending its recovery from three-week lows hit on Friday below 1.38. The price made fresh daily highs at 1.3924 and now appears to be looking for further gains, targeting the 20-DMA around the 1.40 threshold. Following the last weeks’ depreciation, the British currency looks attractive for longs again. The latest trigger for GBP's stronger performance was the UK CPI report. Inflation remained at 3.0% in January, close to the six-year high and unchanged from the previous month against the expected fall to 2.9%. The strong figures have fueled expectations of rate hike in May. Now the market is pricing a 70% chance of this scenario. But at this stage we wouldn’t take the May hike for granted as the Central bank needs confirmation from other economic indicators that the UK economy will smoothly withstand a more aggressive monetary policy tightening, especially on the back of risks associated with Brexit. In the short-term, the pound looks bullish, but in needs to confirm the break above the 1.39 level in order to preserve the upside bias.
by HelenRush
EURUSD needs to regain 1.23 The EURUSD pair is trying to stage a recovery after a major sell-off over the last week. However, the bounce lacks momentum as the greenback is striving to stay afloat amid investors’ cautiousness in the global stock markets. The price can’t regain the 1.23 mark since last Thursday signaling the single currency so far fails to shake off its recent weakness. Despite the mainly offered tone around the US dollar, the euro will hardly be able to resume its rally in the short term. The market focus is now shifting to the US inflation numbers due on Wednesday. The report will set further tone for the greenback across the board, and should the figures exceed expectations, the USD will resume its recovery from three-year highs, aided by another sell-off in the stock market, as strong CPI could reinforce investors' concerns over a more aggressive monetary policy tightening across the globe. In the short-term, the euro needs to regain the psychological 1.23 threshold in order to avoid a more significant slide. The immediate upside goal is the 20-DMA in the 1.2330 area. However, should the USD attract buyers again, the pair risks to give up its modest gains and edge down to January 18 lows around the 1.22 level which will be broken if the US CPI numbers point to a rise in consumer prices.
by HelenRush
The greenback profits on investor panic Despite currency markets have been calmly observing the global stocks rout, the greenback managed to gain some support amid a widespread risk aversion this week. As a result, the euro is on the way to registers its worst weekly performance since October. Following a seven-week rally, EURUSD has retreated from highs above 1.25 hitting levels last seen back in mid-January around 1.22. The overall sentiment around the USD remains bearish, and the currency’s positions are still fragile. For now, demand for the greenback is fuelled on the back of global equities plunge, as well as rising 10-year Treasury yields which may soon reach the 3% threshold. These are the key local factors preventing EURUSD from resuming the steady ascend, while the euro area fundamentals continue to support the EUR’s underlying bullish trend. Therefore, as soon as panic in the world stock exchanges fades away, the pair will focus on the prospect for a more aggressive ECB tightening and will resume the dominant upside bias as Fed’s three hikes this year are already fully priced in. But the problem is that the global sell-off could continue for some time, may be until late this month, before a steady recovery takes place. So in the short-term, the EURUSD pair will likely continue to feel pressure from the greenback. At this stage, the price needs to hold above the 1.22 mark in order to avoid another sell-off.
by HelenRush
Oil market is starving for bullish signals The downside correction in the oil market is gaining momentum, with Brent crude prices came close to the $65 mark in Asia and hit a 2018 low on lingering concerns over surging U.S. output. The key question now is if prices stage a recovery from here, or dive under the psychological level and extend losses. The recent bearish driver for another sell-off was the U.S. data. According to EIA, production climbed to 10.25 million bpd, and crude inventories also rose last week. The report added to the negative sentiment in the market which fears that the U.S. shale oil producers that are ramping up volumes at an amazing pace, could once again flood the market with oil and offset OPEC’s efforts to balance the market. By the way, investors also start to worry about the cartel’s strategy due to a risk of an early exit from the deal on the back of healthy demand which is going to be robust this year, judging by a healthy economic activity globally. Earlier this week, Iran's oil minister said his country could raise its oil production within a few days should OPEC scrap the deal at the June meeting. This statement added to the negative pressure on prices and sparked fresh fears in the market. In the current nervous and unstable background, Brent needs bullish signals to stage a recovery and escape further losses. Prices reached a key technical level $65, as a break below could attract more bears. Therefore, it is very important for the asset to kick off this mark and climb back above $66. But to do that, Brent needs positive signs from the USD, OPEC or the U.S.
TVC:UKOIL
by HelenRush
Will GBP benefit from “Super Thursday”? GBPUSD has entered a consolidation phase, hovering around the 1.39 level following the recent retreat from highs around 1.4150 early in the week. The recent pullback was triggered by a number of factors, including stronger US dollar, unimpressive UK economic data, negative signals from the Brexit process, and a more cautious tone ahead of Bank of England’s “Super Thursday”. The key question now is if the central bank hints about a possibility of a rate hike in May and thus bring back demand for the pound. The overall economic background in the country remains solid, and inflation is overshooting the 2% target. But the regulator may opt not to rush on as there are still uncertainties around the transition period that should be agreed by end-March. Besides, the recent UK economic figures, including the service PMI, are underwhelming, which may also make the Governor Mark Carney refrain from a straightly “hawkish” rhetoric. Nevertheless, the pound still may gain some support tomorrow, even if the regulator prefers a more neutral stance. GBPUSD will resume the dominant bullish bias, should the central bank hint that it will tackle the rising UK inflation further and give positive comments on economy. It could be enough to push the currency above the 20-DMA around the 1.40 mark and send the pair to weekly highs above 1.4150.
by HelenRush
Bitcoin heading towards $5,000Cryptocurrency market remains under a heavy pressure facing strong headwinds from global regulators and authorities that are taking a tougher stance against the “volatile and dangerous” market day by day. Bitcoin price briefly slipped below the $6,000 mark on Tuesday, down to fresh mid-November lows in the $5,810 area, -14% on the day. The current fallout in cryptocurrencies is exacerbated by a widespread panic in the global stock markets amid rising bond yields and inflation expectations. This risk-off environment discourages the risky digital assets even more, especially now, when the market is so vulnerable under the regulators’ pressure. By the way, it looks like the Chinese authorities are intended to eliminate cryptocurrency trading in the country completely. In particular, the Central bank decided to block access to all domestic and foreign cryptocurrency exchanges and ICO websites, on top of that the China has already banned bitcoin exchanges and ICOs in late 2017. In such conditions, further signs of furious crypto crackdown will likely make bitcoin and other digital currencies extend their losses before they find a bottom. Now bitcoin is in a striking distance of the $5,000 support which could temper the bears a bit and open the way for a short-term consolidation. A slide below this level will open the way to $3,500. On the other hand, the current low levels may attract some buyers in the $6,000 region and ease the immediate bearish pressure on prices.
BITFINEX:BTCUSD
by HelenRush
Bitcoin: another stab in the back Cryptocurrencies continue to retreat at the start of a new trading week following sharp losses on Friday, with bitcoin is trading dangerously close to fresh November 24th lows below the $8,000 threshold. Any attempts to regain the upside potential face strong headwinds amid the never-ending woes in the volatile market. In another blow for bitcoin, major US credit card companies have banned cryptocurrency purchases with credit cards in an effort to decrease legal and financial risk. These banks are JP Morgan Chase, Bank of America and Citigroup. Citing the same reasons and crypto market volatility, the UK banking giant Lloyds Bank has also banned its credit card customers from buying cryptocurrency. Many institutions threatened to restrict some operations with digital assets before, but the real steps by the leading banks with a huge customer base can’t but further reduce the appeal of bitcoin which is particularly vulnerable lately. From the technical point of view, the key on the upside in the $8,000 mark as its loss triggered even a more aggressive sell-off on Friday, and now this level is the immediate local resistance. Should the price regain this barrier, the trader focus will turn to $10,000 again. However, in the short-term, the downside risks continue to prevail, and failed recovery attempts signal that investors are not ready to buy bitcoin yet. Therefore, the next bearish target is the $7,500-$7,200 zone.
BITFINEX:BTCUSD
by HelenRush
Bitcoin: $8,000 is the next target Following the recent consolidation phase, bitcoin has suffered huge losses this week. Amid a growing list of factors weighing on the cryptocurrency, the price dipped below the key $10,000 support which triggered a more aggressive sell-off. As a result, the asset has cracked below $9,000 for the first time since November and moved to the lowest levels since November 25th around $8,300. The digital currency has sunk into the mire of negative news lately. Traders perceive every regulatory blow quite painfully and don’t see any bullish drivers in the market. In addition to the recent news on Facebook that is going to ban ads for ICOs, the lingering “bubble” concerns, fraud fears and signs of heavier regulation in South Korean, India is said to be mulling increasing regulation, while in China, bitcoin ads has disappeared from social media. At this stage, the policy makers’ and regulators’ stance, which is getting more and more aggressive, is consistently taken by investors as a sell signal. But in the longer term, the current regulatory crackdown looks necessary for this messy market to survive. Since bitcoin has breached two psychological barriers, there is a high risk of testing the next “round” $8,000 level. Moreover, the digital asset may go even lower, before finding a bottom.
BITFINEX:BTCUSD
by HelenRush
Aussie set for further correction The AUDUSD pair extended its slide and touched a one-week low at 0.7987 on Thursday. Aussie is trading in bearish mode for the fourth consecutive day, sticking to the key 0.80 psychological support. The economic data from Australia is not supportive for the currency these days – weak CPI report has disappointed the bulls and triggered a more aggressive technical correction from highs above 1.81. Meanwhile, the bearish pressure on US dollar has eased a bit on the back of FOMC’s “hawkish” tone yesterday. The Central bank highlighted solid economic growth and recent pickup in inflation. Renewed rise in the US Treasury bond yields provided an additional negative boost to aussie as a higher-yielding currency. In the short-term, AUDUSD may fail to preserve the 0.80 mark if the greenback manages to stage a local recovery. Tomorrow’s release of January Non-Farm Payrolls is likely to be the next catalyst for dollar pairs, including aussie. The ADP numbers were impressive: private-sector employment increased by 234,000, well above expectations for 185,000. Should the key figures on Friday also reflect strong job creation and wage growth, the greenback may partially retrace its losses across the market and send the Australian counterpart more decisively under 0.80, with the immediate support at 0.7965.
by HelenRush
Bitcoin fights for $10,000 Bitcoin remains under pressure and struggles to find demand amid further negative developments in the cryptocurrency market. The price briefly slipped below the $10,000 handle on Tuesday and tried to test this key support earlier today. The digital currency reached fresh two-week lows at $9,698 where attracted some demand and is trying to move back into positive territory. Bitcoin faced another blow yesterday, when the tech giant Facebook announced a ban on advertisements for cryptocurrency and ICO citing the fact that such products "are frequently associated with misleading or deceptive promotional practices." Besides, CFTC subpoenaed cryptocurrency platforms Bitfinex and Tether as part of its increasing scrutiny of digital assets over the past few months. Among other bad news was SEC’s decision to halt AriseBank’s “illegal” ICO. The regulator also warned celebrities about endorsing ICOs. It is very hard for bitcoin to attract sustainable demand amid such a negative background and pressure on the international level. Nevertheless, considering the scale and frequency of such bad news, the price feels relatively steady yet. It may signal attempts to find a bottom, as buyers emerge every time the digital currency sets up for a leg down under the $10,000 mark, which is still key on the downside. A decisive break under this barrier could trigger a more aggressive sell-off.
BITFINEX:BTCUSD
by HelenRush
Oil market is nervousBrent futures fall for a second day on Tuesday amid growing fears of US stockpiles rising for the first time in 11 weeks. Recent buoyant tone in the market was also undermined by USD recovery, though the bearish pressure is already back today. Brent touched a low of $68.50, its weakest since January 22, and struggles to regain the $69 mark. The market expects the American crude inventories increased by around 1 million barrels last week. Moreover, the risk of further rise in production is also high, especially amid recent signs of growing drilling activity in the country. According to Baker Hughes, the U.S. energy companies added 12 oil rigs last week, the biggest weekly increase since March. The additional negative factor for prices now is that the American refiners gear up for seasonal maintenance which increases the risk of growing inventories in the weeks ahead. All these signals are a source of concern for oil traders, at least for now. And further signs of expanding the producers’ activity may well derail the rally at this stage. However, the fundamentals, including OPEC’s efforts, continue to support the overall bullish trend in the market. Therefore, the current correction which may send Brent to $68 or lower, is still an opportunity for reentering the market. The uptrend will be threatened if OPEC countries start signaling an early withdrawal from the deal, which is unlikely.
TVC:UKOIL
by HelenRush
USD struggles to make a decisive recovery The US Dollar is trying to stage a widespread recovery on Monday as bears decided to take a breath after an aggressive sell-off over the last week. There are no any fundamental drivers behind the local rebound, which rather has to do with technical factors including the oversold conditions. Thy key events for the greenback this week are the two-day FOMC meeting and Friday’s NFP report. The American currency won’t be able to attract a more sustainable demand unless these two events are bullish. As for the Fed, the meeting will likely be a non-event, as Janet Yellen is leaving the Central bank early February. Therefore, she will unlikely send the markets any strong signals during her last meeting, though her overall tone may have some effect on USD-pairs. If Yellen sticks to a cautious and mostly neutral rhetoric, it won’t add to the USD recovery. The US Nonfarm Payrolls report is expected to show that employment increased 183K in January, while Average Hourly Earnings are projected to pick up from 2.5% to 2.6% YoY over the same period. If salaries really increase, the market will take it as a background for rise in inflation. But should the numbers disappoint, the sellers will make a sharp come back and may send USD index to fresh three-year lows.
AMEX:USD
by HelenRush
Bitcoin: recovery attempts attract sellers After tentative recovery attempts, bitcoin is falling again. Today, the price dropped from $11,584 to a low of $10,228. Though the volatility has declined lately, and the cryptocurrency reacts to negative news not so emotionally as before, the market stays depressed overall, on the back of increasing pressure from regulators around the world. As the latest sign of further crackdowns, Britain’s Prime Minister Theresa May has threatened to take drastic measures on bitcoin trading due to concerns that the virtual currency is being used by criminals. Moreover, the International Monetary Fund chief Christine Lagarde said action is needed on this front, citing bitcoin’s links to crime, while French President Macron called for regulating cryptocurrencies at the international level. The governments’ and regulators’ tough stance on the digital currency market implies that the overall sentiment will remain subdued in the medium term. Therefore, any attempts to recover above the $13,000 threshold will likely further attract sellers in the nearest future. At the same time, the short-term bearish risk is limited as long as bitcion is trading above the $9,150 area.
BITSTAMP:BTCUSD
by HelenRush
The defeated USD sends gold to fresh highs Gold prices continue to get support from weaker U.S. dollar which hit fresh three-year lows overnight. A new selling wave that gripped the greenback was on the back of comments from US Treasury Secretary Steven Mnuchin who welcomed a weaker national currency. Another USD’s plunge has strengthened demand for gold. Besides, the positive tone of the precious metal was supported by President Donald Trump, who approved imposing import tariffs on washing machines and solar panels. This step has resumed market concerns over the Washington’s protectionist policy stance and triggered an even bolder demand for gold as a safe haven. As a result, the prices are trading at the highest levels since August 2016. Earlier today, the metal touched $1.366,01 where faced a selling interest on the back of profit-taking at very attractive levels. Despite the local correction, the bullish potential is not yet exhausted, considering there are so far no factors on the horizon that could support the dollar’s rebound. So, the current retreat in gold prices may open interesting opportunities for reentering the bullish market in the medium term.
TVC:GOLD
by HelenRush
Will Draghi talk down the euro? The single currency continues to appreciate aggressively and reached new four-year highs at 1.2355 during the European session. The key driver behind euro’s rally since the start of the year is the increasing bearish pressure around the greenback. But the December ECB meeting minutes, which were more “hawkish”, has contributed to the upbeat mood around the European currency. Ahead of tomorrow’s ECB meeting, the markets don’t expect any changes in the current monetary policy program, so the focus will be on Draghi’s rhetoric, potential changes to the forward guidance and possible comments on the currency’s strength. The latter is going to be the key issue for euro bulls, as any sign of Draghi’s verbal interventions may drag EURUSD down. However, even in such circumstances, the overall bullish trend will stay intact, and the potential bearish correction will open new opportunities for reentering the market with new EUR longs. At that, the scale of a retreat will depend on the regulator’s tone on other issues including the prospects of adapting its forward guidance in the coming month. The healthy euro area economic fundamentals don’t apply any “dovish comments” on this front, therefore, the downside risk for the pair is limited anyway. A pullback under the 1.23 mark, which is now the immediate support, will open the way to the 1.2180 area, where buyers may emerge.
by HelenRush
Oil is tired of range-bound trading Crude oil prices have been range-bound over the last few days due to a relative balance of bearish and bullish factors. Despite the current consolidation, there is a downside slope in Brent which may be a sign of buyers’ fatigue and a prelude to a local bearish correction. Since peak of $70.35 in mid-January, Brent started a smooth retreat and slipped to the $68.02 low yesterday. Prices lack momentum to regain the $69 mark that prevents it from recovery above the key $70 handle. Among the bullish drivers are raising hopes of increasing global oil demand on the back of a rosy economic picture, a weak greenback, high discipline among OPEC+ members, as well as an expected another weekly drawdown in U.S. stockpiles. On the other hand, investors are wary of increasing crude oil production in the U.S. as higher prices may, at some point, trigger a new wave of shale revolution. These fears will hardly allow prices to rise significantly from current levels. And the longer prices stays under $69, the higher the downside risk is.
TVC:UKOIL
by HelenRush
USDJPY: What to expect from BoJ? The Bank of Japan two-day meeting ending on Tuesday is not expected to bring any changes in the monetary policy, but it doesn’t mean it will be an uneventful one. Earlier this month, the regulator trimmed the QQE purchases slightly. Despite the action is assessed by the market as a purely technical measure, investors took it as a sign the Japanese monetary authorities may soon join their global counterparts in their tightening cycle. The Central bank is widely expected to raise its GDP growth forecast for 2018 due to the recent global growth acceleration. Besides, some news agencies reported last week the BoJ is considering to upgrade its economic outlook. Moreover, its recent Sakura report was the most upbeat in 11 years. As for the core inflation forecast, it will likely to stay unchanged due to yen strengthening. A more “hawkish” Kuroda’s tone on the QQE coupled with raising economic forecasts may increase the downside pressure on USDJPY, on top of the fact that the greenback is facing domestic political issues and can’t stage a decisive recovery despite the US Treasury yields growth. In such circumstances, following the failed attempts to regain 111.00, the pair may get back to lows in the 110.20 area and threaten the 110.00 threshold.
by HelenRush
GBP longs are getting dangerous The British pound jumped to a fresh post-Brexit vote high of 1.3945 against the US dollar. However, the pair wasn’t able to sustain gains above the 1.39 threshold and has retreated after the disappointing UK economic data. According to the official figures from ONS, retail sales fell 1.5% month on month in December, which was a much stronger decline than analysts forecasted. Ironically, this was the biggest month-on-month fall since June 2016, when the referendum took place. Annual growth was 1.9% and marked the weakest figure since 2013. While the overall picture remains bullish, and for many the pair still looks good to buy on dips, GBP longs are getting dangerous at this stage. The key drivers behind the pound’s rally are weak dollar and positive comments on Brexit progress. Therefore, as soon as demand for the greenback is back, the British currency may lose its allure and fall the victim of a major correction, while any sign of new challenges in Brexit negotiations will only add fuel to the fire. Meanwhile, in the short-term, GBPUSD may still attract buyers, as the dollar still can’t shrug off the downside pressure. At least, this factor will limit further GBP’s potential weakening. Bulls should be cautious now, as a break below 1.3850 will open the way to the 1.38 area.
by HelenRush
USD bears are losing their grip The greenback remains under pressure against major rivals. However, the currency started to signal the potential recovery lately. The recent example of this was yesterdays’ reaction to the Fed’s Beige Book. The report was fairly “hawkish” as the central bank has confirmed its intention to hike rates three times this year. The release triggered renewed dollar demand. Despite the USD’s bullish impetus stalled quickly, the latest market behavior shows some signs of selling fatigue. Moreover, the currency is deeply oversold, and the aggressive sell off that continued this month in fact doesn't look to be reinforced by meaningful fundamentals. Therefore, in the nearest future, fresh recovery signals should be expected. In the EURUSD, pair this implies the increasing downside risks, especially after the recent verbal interventions from the ECB officials that expressed concern over euro strength which poses a threat to the euro area inflation growth. The pair recovered above 1.22 and focused on the next psychological hurdle again, which may be tougher to overcome this time. In the longer term, however, there is so far no threat to the major EURUSD bullish trend. The immediate significant support is now at 1.2180.
by HelenRush