EURGBP SCENARIOThe price movement is uptrend, we expect bullish rallies from previous touch on the trendline to target the next resistance zone, scenario will be invalid if the price break and close below the trendline.
Forexpeacearmy
Potential downside reversal 26-26.4KMorning folks,
Last time we've discussed big 4H H&S pattern, with potential Head top around 26K. This week is supposed to be tough - Biden speech, Putin speech, PCE, Fed Minutes, multiple PMI's etc etc. Our fundamental analysis tells to not believe in "easing of regulation". In reality, regulation is becoming tougher, as world is coming to introducing of CBDC. Now not only crypto companies start getting business problems but related banks, persons, funds involved in this business.
Second is - we have clear signals that Institutional investors are leaving stock market gradually and replaced by households with 1.5Bln/week pace approximately. Fed will not stop tightening, and we treat current upside action as temporal, until slogan "Fed will ease" is working.
For now, we consider downside reversal in 26-26.4K area with downside target around 20K. This 1H butterfly could become the one that will trigger it.
Potential downside reversalMorning folks,
Once we've wondered what could push BTC to 25K area - answer has come suddenly. Without intruding of external factor - overall background as technical as fundamental has not suggested and still doesn't suggest upside rally. So we treat this performance as not reliable.
With strong daily resistance around 26-27K area and current overbought on daily chart, we consider potential downside reversal now, starting from 26K area and consider no long positions.
20.3-20.8K is a next targetMorning everybody,
BTC performance looks bearish. It was not able to complete our upside AB-CD retracement on 1H chart and collapsed. Maybe coming CPI/PPI and other stuff could change the situation, but for now we do not consider any long positions. Daily trend stands bearish, and we have DiNapoli DRPO "Sell" pattern in progress, with nearest target of 20.30-20.80K area.
Thus, those who have sold could keep positions, just do not forget to manage it. Those who would like to sell could think about 22.25 nearest resistance level. And let's see what we get on Thu, after CPI and Retail Sales releases...
23-23.1KMorning everybody,
So, as we are watching for pullback on EUR, GBP, Gold and other assets, we do not see any reasons to step aside from our scenario here. Our Monday's setup was completed well, as BTC once again has shown upside AB-CD retracement. That's why we consider another one, somewhere to 23-23.1K resistance area
19.5-20K is a moment of truthMorning everybody,
We have hoped that BTC completes 25K butterfly on daily chart, but it seems that situation turns different. Still, this is not vital, but technically it would be perfect, if this would happen. Anyway, as we expect that downside action continues on other assets, as we do on BTC. In nearest term we expect minor upside bounce (as on EUR, Gold as well), but then downside action should continue by our view.
On daily chart (not shown here) we have DiNapoli DRPO "Sell" pattern. Here, on 2H chart, performance takes the shape of round top with multiple upside AB-CD's. So, hopefully this sequence continues, and once pullback will be done, we get another downside extension.
All in all, we're mostly watching for 19.5-20K downside target, because this is potential bottom of the reverse H&S right arm on weekly chart. This is the level where the major perspective will be determined...
Now it is just tactical fluctuations...
Oh, yes - now we do not consider any bullish positions. Daily trend is bearish...
Still watching for 25KMorning folks,
So, it seems that markets have heard only "disinflation" word from JP and missed everything else. We think that recent Fed comments were hawkish enough and euphoria will exhaust soon, when mispricing becomes obvious.
Meantime nothing has changed in our mid term view - we're watching for reverse H&S on weekly chart and upside butterfly on daily chart with 25K destination point. Currently we do not consider long positions on daily and above time frames.
Still, on intraday charts it is possible to consider. For example, on 1H chart we have another butterfly that leads to the same target. If NFP brings no negative effect, market could keep going to it. We have no resistance levels until this target. Thus, minor bounce to 22.25-22.30K area could be used to think about long position. Now short positions by far as well
23.3-23.5 is a control levelMorning everybody,
BTC now has no technical barriers for upward action to our major 25-25.5K destination point. Its not at overbought and has no Fib resistance levels ahead. Still, we have tough week with multi central banks decision, NFP and other stuff. And some external factor intruding could hurt bullish tendency.
In nearest term, we think we have to keep an eye on 23.3-23.5K area. BTC should not break it down, if upside context is valid. Scalp traders could consider long entry around it and 5/8 level of 22.5K. But for daily traders I would wait for major pullback out from 25 K resistance but not consider long entry right now.
Better to sit on the handsMorning everybody,
So, overall tendency and sentiment is positive on BTC market (although we're skeptic on major reversal idea due to fundamental reasons). Technically market should not have any big problems to reach 25.5K area - next solid resistance.
But, there few moments that make it tricky. First is, as EUR as Gold now stand at strong resistance areas. EUR is at 1.0942 weekly 50% Fib level, while gold is at 1950 monthly overbought. Second - today we get GDP and PCE numbers. If they will be poor, investors will be scared of recession that will trigger demand for US Dollar, at least in short term.
That's why, by these reasons, and also because here, on 4H chart we also have some signs of weakness, we prefer to wait for some pullback.
25.2-25.9KMorning guys,
We have big doubts on long-term upside reversal due fundamental reasons. Meantime, short-term context is bullish. Now we consider 25.2-25.9K resistance as nearest destination point. 22.22K and 21.30-21.50K supports could be considered for position taking. Be aware of statistics this week- Durable orders, GDP, PCE.
Pullback to 19-19.45K area Morning folks,
So, BTC rally has been triggered by FTX news, that they have recovered $5Bln for clients and later was supported by common euphoria around CPI numbers. In our weekly FX report we've explained why it is temporal and soon everything returns back to its own. But, market likes to follow wishful thinking. Anyway, we have bullish context. Last time we've agreed to watch for 19.1K area resistance, were waiting for some response. It has not happened, and this makes us to switch to next, XOP target that market has hit recently.
Now price stands at 1.618 AB-CD extension, at overbought and near 21.6K Fib resistance. Definitely it is not the moment for position taking and we need to wait for pullback. Now we consider 19-19.45K levels, as most probable destination of retracement. Still, we also do not exclude possible reverse H&S pattern. In this case pullback could reach 18.3-18.5K level.
For the bears it is nothing to do by far, unless you're trading on intraday charts.
19.2-19.6 is next beacon for the bearsMorning guys,
Last time we've postponed bearish position taking as market strongly has passed through 1704-17080 resistance area and we've agree to watch for next upside target around 17.6K. Additionally we've said, that with stronger upside performance we could have to increase the scale and take a look at larger AB-CD pattern on daily chart. Now the time has come. As FTX was able to recover 5 Bln in cash, market lifts in spirits. Now we think that bears should keep hands in pockets and bulls get chances to see BTC around 19.2-19.6 K level. This level is rather strong. Additionally we get "222" Sell pattern here. Long term bearish context is still valid.
If you intend to take long position - you could consider 17.6 and 17.8K intraday support levels (not showing here), but be aware of today's CPI report. Besides, you have to control upside breakout of 18.4 local top (B point) here.
Downside reversal and erasing of recent rally should keep you aside from taking the long position.
Downside reversal is not cancelled, it just postpones, giving market to show larger scale pullback.
Postpone bearish scenario until 17.6KMorning folks,
As you could see BTC has reached the level that we've discussed last week - 17040-17080 resistance, and did it relatively easy. Since we consider upside continuation on other markets as well - EUR, Gold, on BTC we also postpone bearish scenario and now do not consider entry. Price stands above the K-resistance area and above OP target that we've discussed last time.
At the same time, the bearish context is not broken and around 17.6K we could get the same "222" Sell. 17.6K is a next Agreement resistance area - 5/8 major Fib level and upside XOP (1.618) AB-CD target. Bulls probably could consider long entry on minor pullback. The retracement right now should not be deep. Otherwise, it could mean that BTC still reacts on 17.1K area.
The core still stands the sameMorning folks,
Just minor update here, as picture mostly stands the same as on Monday. Last time we said that if BTC will be lucky enough and could show upside AB-CD pattern - it might be good combination for short entry. Upside AB-CD target perfectly agrees with strong 17040-17080 resistance area and also we get "222" Sell in this case.
BTC despite all the weakness slowly but stubbornly is creeping higher. So, if ADP or NFP will not intrude into process, we intend to consider short entry around 17-17.10K area. We do not consider any longs by far
17040-17080 as a best caseMorning everybody,
So, we could see across the board that markets are going against the dollar, at least in short-term. While Dollar Index shows signs of weakness. We do not suggest that this lasts for too long, but still, this action is not over yet, and our analysis as of EUR as of Gold market also suggests further upside continuation.
Meantime, BTC has no participation with this move. It shows how weak and heavy it is. That's why we're skeptic a bit concerning its performance and suggest that forming of upside AB-CD pattern with the target that agrees with 17040-17080 Confluence resistance area will be the best case.
Besides, if it happens, we get "222" Sell around strong support and could consider it for short entry. Our mid/long term view on BTC remains bearish.
On 4th of January we get FOMC minutes publication that could bring some disclosure as J.Powell was relatively hawkish on his recent speech.
16.27 daily lows will be brokenMorning everybody,
So, market is so weak that was not able to show even minor 0.618 AB-CD action back to 17-17.10K resistance area that we've discussed last time. Now we're getting more and more bearish signs on FX market, DXY. Thus, it seems that BTC will take out daily 16.27K lows very soon.
Despite that we have here "222" Buy pattern - we do not consider any long position, but use any upside bounce for short entry instead.
BTC 17050-17080 Morning everybody and Merry Christmas,
So, holidays intrude a bit to BTC performance as well, delaying pattern's appearing that we've discussed last time. When activity returns, BTC could keep going to 17.35-17.4K target and area of the right arm's top of our 4H H&S pattern.
But, at the same time, we think that bulls have to worry about 17045-17080 area, which is a strong resistance of Fib levels K-area and COP (0.618 extension) target. Potentially BTC could turn down earlier. Besides, if it happens, we will get daily bearish grabber pattern that suggests even deeper action.
17.40-17.5KMorning folks,
Everything were going with our trading plan, but unexpected collapse on Japanese Bonds market and BoJ rate action to 0.5% has changed normal price behavior. Still, we treat it as temporal intruding, and soon effect of this event should fade.
Thus, current action we treat as a chance to Sell at better price. Particularly speaking, 17.40-17.50K area seems attractive, if BTC completes upside AB-CD and we get "222" Sell" pattern. By the way, this also will form the top of H&S right arm, that we've discussed last time.
Despite our view, we do not intend to take the long position, although it is not forbidden. Our primary target is to get good short entry point.
17.15-17.25K for short entryMorning folks,
So, downside action was even sharper than we thought, BTC collapsed without any H&S shape. Now it stands at local support area. We do not consider any long positions by far. For short entry 17.15-17.25 K-resistance area (and former trend line) looks interesting.
Alternatively, if, still, it will be the H&S of a bit larger scale, BTC could climb to 17.40-17.45K to form the right arm, but it doesn't break the context. So, whatever scenario you will choose and if you want to sell - it would be better to place initial stop above 17.5K for some case, or even slightly higher...
17.9K seems interesting for short entryGood morning,
So, the bullish "Wild card" discussed last time has worked and BTC has completed 17.8-18.2K targets that we've discussed. Does it change something? No. Overall context remains bearish. Recent Fed statement, although has matched to expectations but still was slightly hawkish as just two members voted for the terminal rate below 5%. Market now stands at solid resistance area and we do not see any attractive decisions for bulls by far.
Bears have two options, either try to go with this minor H&S pattern on 1H chart, and take position around Fib levels with stop above the high. Or - watch for the same H&S pattern but of larger scale on 4H chart. If ECB fails to provide hawkish statement today EUR turns down sharp and major downside action could start across the board, like on Gold market right now.
Bullish wild card Morning folks,
Well, technical picture, no doubts, stands bearish. We've warned you about it within recent few weeks, and since the beginning of 2022 in a scale of monthly and weekly time frames. Now, if we wouldn't have CPI and Fed I would call for short entry. But, due coming important data we need to wait and get more confirmation.
At the same time, CPI and Fed could provide the "wild card" if CPI will be weak and Fed will be dovish. In this case all markets across the board could show short-term action, and it could be more or less strong. That's why we show you all scenarios that potentially you could follow, depending on your view.
First is a bullish "wild card' Scenario. You could consider this butterfly with placing stop just under its lows. Target might be either 17.7, or even XOP target around 18.2K. Features of this trade are - low chances on success, but low potential loss and huge reward if "wild card" will be given.
Second is bears - you need to keep an eye on 16.5-16.6K support and its downside break. Once it will happen, it is possible to consider short entry. Theoretically you could use Stop "Sell" entry order somewhere under 16.5K.
Finally, you could combine both scenarios.... if you brave enough ;)
16.5-16.6K area is vitalMorning folks,
BTC looks weak. Maybe coming PPI numbers tomorrow and CPI + Fed on Tue could support market in short-term, but data release can't change the fundamental background that is vitally hurt by FTX tragedy. Confidence in crypto market is lost now.
Speaking about our technical setup - market has failed to stay above 17060 level that was crucial for the bulls, we've discussed it last time. Now we see signs of weakness and think that there are few chances on upside continuation. In fact, if 16.5-16.6K level will be broken - price starts action back to 15.5K lows first and even lower in longer perspective.
So, if you would like to take the short position - watch for downside breakout of this level. We do not see good context for long entry now.
17.6-17.7 K seems the ceil nowMorning folks,
So, let's keep going with our reverse H&S and its targets. As we've said, the first one was hit last week. Once OP is done, BTC has formed minor triangle consolidation which is broken up now. Next H&S target is XOP around 18.15K. But the problem is 17.5-17.7K strong resistance area, that includes Fib level and previous daily lows.
As you know we're skeptic on any upside action on BTC and have not taken longs since the beginning of 2022. And we're not going to do it now, although it could climb a bit more. Mostly we're considering 17.6-18.15K area as potential for selling. Before major reversal happens, all markets could climb a bit higher - EUR (to 1.0595-1.0610), Gold (to ~1825) but everywhere, the background for reversal is growing. So the same on BTC.
If you still would like to buy - you could consider 17.15K Fib support and keep an eye on 16.95K area - market should not break it down. If it will - the bullish party probably is over.
