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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
Bitcoin can’t withstand the Asian pressure Bitcoin plummeted 25% overnight and was testing the key $10,000 mark in Asia today. The attempts to break the psychological level attracted some buyers, but the momentum is too sluggish to expect a more robust recovery. The digital currency remains under the regulators’ thumb. Asian governments are committed to widening their crackdown on cryptocurrency trading. The Chinese authorities are going to block its citizens from trading bitcoin on foreign exchanges, while South Korean regulators are considering a crypto trading ban in the country. Due to a large share of global crypto trading volume in these countries, the aggressive steps from local regulators may well cause further bitcoin freefall. Due to the scale of a threat, the digital currency will hardly attract buyers on dips in the foreseeable future, unless the Asian authorities take a somewhat more flexible position. A break above $12,000 is still needed in order to somehow ease the short-term bearish pressure. However, out of fear of fresh aggressive statements from China and South Korea, the market participants will likely continue to exit longs at bitcoin’s attempts to regain bullish momentum.
BITSTAMP:BTCUSD
by HelenRush
USD’s rebound lacks credibility The greenback is attempting to stage a recovery on Tuesday, but after the Asian demand, momentum has faltered. The current widespread strengthening doesn’t look convincing and will likely attract a new wave of selloff in the short term. The potential US government shutdown this Friday is in favor of such developments. The risk of a shutdown has increased recently, after Republicans supposed they won’t be able to pass the spending bill by the deadline (on Friday). Democrats refuse to support a deal that does not protect young illegal immigrants. These disagreements may yet make the UD dollar nervous, though the authorities will likely avoid the shutdown at the last minute. As for EURUSD, despite the local retreat, the bullish trend remains intact and the upside risks persist as long as the currency pair is trading above the 1.2030 area. Doubts over the German coalition deal have undermined the recent euro’s rally, but the correction is rather another buying opportunity than a bearish signal. EURUSD may resume its ascent on Wednesday, if the euro area inflation data point to consumer prices growth. In this scenario, the initial upside target is 1.2270. The break above this level will introduce scope for the 1.23 threshold.
by HelenRush
Bitcoin: bears in full control Bitcoin is trying to stage a recovery early this week, but struggles to gain momentum as bears are still in control of the virtual currency. Today’s gains are so far capped by the $13,770 mark. The cryptocurrency is up 2.2% on the day. Despite the downside pressure has marginally eased lately, and the price doesn’t leave attempts to regain the local resistance in the $15,000 area, the bearish risks still persist on the back of government crackdown around the world. It looks like the Chinese authorities are set for escalating the crackdown on cryptocurrency trading, targeting online platforms and mobile apps that offer exchange-like services. Moreover, the government is said to also target individuals and companies providing settlement, clearing as well as market-making services for centralized trading. Meanwhile, the South Korean authorities have somehow allayed market concerns after emphasizing that the plan to ban cryptocurrency exchanges is just under discussion, and the final decision is yet to be taken. The overall background in the industry stays gloomy on the back of regulator’s signals around the world that continue to scrutinize digital currencies. In such circumstances, the bullish potential is still limited, and further attempts to overcome the $15,000 mark will likely continue to attract sellers. In the short-term, bitcoin needs to regain the $14,000 level.
BITFINEX:BTCUSD
by HelenRush
Lackluster USD fuels demand for gold Gold prices are rising for a third straight session on Friday. Spot price reached the mid-September high of $1,333.08, up 0.7% on the day and is set for a fifth straight week of gains. Since December 1 the metal has climbed almost 4%. A widespread weakness in dollar is the key driver behind the current bullish rally in gold. Judging by the persistent USD selloff, the precious metal has the potential for further gains, though there is a risk of local corrections due to some overbought signals. The greenback is under substantial pressure against most major currencies, and the bearish mood intensified after yesterday’s data showed the U.S. producer prices fell for the first time since August 2016. The report added to concerns that the Fed won’t hike three times this year while other major central banks are set to tighten this year. If gold manages to hold its gains, spot prices will focus on the immediate resistance level at $1,334.30, while the next bullish hurdle is expected at $1,340. This barrier may dent the buyers’ enthusiasm and sent the precious metal in the correction mode.
TVC:GOLD
by HelenRush
USD struggles to gain momentum ahead of CPI Following the yesterdays’ selloff, the US dollar is trying to stage a comeback on Thursday, after Chinese government officials played down the reports that China is going to reduce its US Treasury holdings. However, the momentum looks limited as the bulls are taking a wait-and-see approach ahead of tomorrow’s key US economic data. The market will analyze CPI figures with respect to the prospect of another Fed rate hike, though the regulator prefers to monitor the PCE index due at the end of January. The December inflation is expected to ease to 0.2% m/m following a jump by 0.4% in the previous month. If so, it will be another blow for the greenback, while dismal retail sales figures may add to the downward pressure. In the longer term, the key risk for the USD in 2018 is Trump’s domestic and foreign policy. The latest events signal a background for a trade war between China and the United States, which may pose a threat to the global economy. Increase of tensions on this front will further undermine USDJPY’s positions. The pair slipped to the 111.25 end of November lows and is now trying to stage a recovery which is capped by the 112.00 hurdle. Failure to regain this level will introduce scope for 111.00 area and lower.
by HelenRush
Bitcoin traders are getting more cautious Bitcoin is falling for a fourth-straight day to trade at one-week lows in the $13,150 area. Following a brief breach of the $17,000 mark, the price failed to preserve its gains and have surrendered to the bears again. Over the last three weeks, the digital currency plummeted 30%. The recent retreat is due to growing concerns over the regulatory and government crackdown on bitcoin, notably in China and South Korea. The market fears that these two countries’ aggressive steps will have major widespread consequences for the industry due to their large share in the global cryptocurrency trade. In particular, China, which previously banned ICOs, is going to clamp down on the local miners as they are consuming huge amounts of resources in the country. Meanwhile, South Korean authorities are inspecting six large local banks offering virtual accounts to institutions. Moreover, the South Korean government has called for financial regulators of other countries to cooperate in curbing virtual currency trading. In such circumstances, it’s difficult to bet on bitcoin recovery in the short term. Due to bearish drivers mentioned above, bitcoin traders are getting more cautious and will likely stay away from buying, so the downside pressure will persist so far. The immediate support is now at $13,150. Failure to hold above the $13,000 level may allow for weakness back to the $11,550 area.
BITSTAMP:BTCUSD
by HelenRush
It’s too early to bet on BoJ normalization The Japanese yen jumped higher overnight as the BoJ announced trimming longer-dated JGB purchases. This decision was viewed by the market as the first small step towards the monetary policy normalization in the country at a time when other major central banks are about to start reducing stimulus. In a knee-jerk reaction, the USDJPY pair dropped 0.5% and touched the low at 112.50, bouncing back from a two-week high of 113.40 reached yesterday. The local rally was like a rehearsal for more significant steps from the local monetary authorities. However, the BoJ decision should be interpreted as a prelude to a policy change. In our view, such expectations are premature as inflation in Japan is still low. So the JPY’s bullish potential looks limited. It may take quite a lot of time before the regulator even starts to seriously think about normalization. Another hurdle for the Japanese currency is the widespread “risk-on” mood on the back of global economic growth and amid signs of reduction in tensions on the Korean peninsula. In the short-term, the pair needs to regain the 113.00 hurdle which is now the immediate major resistance. A break above 113.20 will alleviate the downside pressure and introduce scope to the 113.40 two-week high.
by HelenRush
CAD’s rally warrants cautionThe loonie was the star of the day on Friday, fuelled by a spectacular Canadian jobs report for December. Following November's 79,500 increase, jobs rose by 78,600, beating the modest market estimate of +2,000. It was the thirteenth consecutive month of employment growth. Moreover, the unemployment rate dropped by 0.2% to a record low of 5.7%. The impressive figures sent USDCAD to new 3-month lows at 1.2354. The unexpectedly strong report made the market convulsively review the BoC rate hike expectations 2018. The market is now pricing around a 70% chance of a hike on Jan. 17, while before the release the odds were roughly 30%. In this respect, there is a room for the loonie to continue its bullish move, especially on the back of USD’s general weakness. However, the current rally warrants some caution, as traders may be overestimating the BoC’s ambitions. The risks are the uncertainty around NAFTA and the potential impact of tighter domestic mortgage rules. These factors may prevent the central bank from hiking during the next meeting, which will be a disappointment for the CAD. So far, the pair USDCAD struggles to make a meaningful recovery. The price is stuck around the 1.24 mark. In the short-term it needs to recover above 1.2480 area in order to alleviate immediate bearish pressure and regain the 1.25 hurdle.
by HelenRush
Brent: it’s time to take profit Brent is relatively stable around its fresh mid-2015 highs above $68, though on Friday it started to signal a bearish correction and has briefly slipped under the psychological mark, which may trigger profit taking at very attractive levels. The recent rally was fueled by a number of bullish factors, including further drop in the US crude oil inventories, civil unrest in Iran, militant attacks in Libya, high compliance rate among OPEC+ members, and weak USD across the board. Brent crude is now up by more than 10% from its December lows mainly due to political tensions in Iran. But the unrest hasn’t so far affected oil production itself in the country, so this optimism may be overestimated. For now, the barrel looks overbought, and this is another argument for a local correction in prices which are a step away from the next major barrier at $70. The proximity to this level may scare off some bulls as well. Nevertheless, as long as the US stockpiles continue to drop, and there is a threat of supply disruptions, the potential bearish moves will be limited, and the overall sentiment will remain upbeat.
TVC:UKOIL
by HelenRush
Bitcoin has bullish potential After a two-day rise, bitcoin is under pressure again. The price struggles to regain bullish momentum and overcome the $15,000 barrier, though the current pressure is limited. Earlier BTC fell to an intraday low of $14,091.95, while the intraday high was set at $15,400. The largest cryptocurrency is deprived of fundamental drivers for now, especially amid widening talks about the speculative bubble and its imminent burst. The short-term positive momentum the price received yesterday is lost already. On Wednesday, BTC appreciated following the reports that a large Founders Fund bought around $15-$20 million of the cryptocurrency. Overall, bitcoin has recovered only partially after the recent aggressive correction. It needs to regain the $15,500 resistance in order to target its record highs again. The short-term bullish sign is that the price has established higher lows – it is signaling scope for an upside move. As long as bitcoin stays above the $12,600 level, the outlook is positive. The immediate resistance is at $15,000.
BITSTAMP:BTCUSD
by HelenRush
USD will stay on the sidelines The US dollar will likely face new challenges this year after a dismal 2017, when the currency suffered losses against all of its G10 peers. The EURUSD pair hit a four-month high of $1.2080 overnight and bounced a bit on Wednesday amid local profit taking. However, the general tone around USD remains bearish. A number of global central banks are expected to signal a shift in their monetary policy this year. This is negative for the greenback which enjoyed an advantage before, when the Fed was the only regulator taking steps in the process of monetary policy normalization. The ECB member Ewald Nowotny said the central bank may end its stimulus program this year if the euro zone economy continues to grow strongly. As the prospects of policy tightening depend on the economic numbers, the markets will be closely watching the euro area macro data in the coming month. And if the figures stay decent, the euro will likely appreciate further in the longer term. Considering the overall bullish outlook for EUR, which cemented as the pair broke above the 1.1960 and 1.2000 resistance levels, local retracements will further provide opportunities for opening new longs, especially on the back of market skepticism around further Trump’s legislative victories.
by HelenRush
Bitcoin struggles to regain bullish traction Bitcoin tried to stage a recovery but faced another major hurdle. In particular, South Korea signaled a possibility of a shutdown of local cryptocurrency exchanges. The government is planning to introduce new regulation which may include the prohibition of anonymous trading accounts operating in the country. Considering that South Korea accounts for nearly one-fifth trading volume in bitcoin, a crackdown on the local industry, if implemented, may dampen the sentiment around the cryptocurrency quite severely. Moreover, the UK adds fuel to the fire. CEO of London Block Exchange said that cryptocurrency shouldn’t be exempt from tax liability. If the country really imposes taxes on bitcoin profits similar to the ones that stock investors pay, it will be another blow the digital asset as this step will curb the appeal of bitcoin which is now often uses as a tool for tax evasion. These are the risks for the digital currency in the longer term. The price failed to accelerate higher and regain the $15,000 mark overnight. In the short-term, the currency needs to recover above the $15,700 area in order to alleviate the immediate bearish pressure. The key local resistance is the $16,500 mark, where the price was rejected two days ago. The initial bullish target is now the $14,000 level.
BITSTAMP:BTCUSD
by HelenRush