Bargain hunting after last week’s losses caused slight gains in U.S. stocks on Monday. The main stock indexes climbed more than 1% shortly after the opening bell, but all three closed well off their session highs.
Jitters about the coming interest rate hikes to tame stubbornly high inflation persisted, causing uncertainty and selling, which led to volatility in the market.
The possibility of a half-point hike in interest rates by the Fed in March is increasing expectations of the central bank becoming more aggressive in raising interest rates. Fed funds futures show traders are pricing in a third 25-bps hike this year and expect the rates to peak at 5.4% by September.
Bitcoin/US Dollar (BTC/USD)
Bitcoin is trading flat at the moment.
The bullish momentum has cooled off over the past week.
There was a Golden Cross in the Exponential Moving Averages, but not much reaction yet in terms of price action.
In the short term, the support at $22,460 is the first target before we see more substantial upward moves in Bitcoin.
The Dollar Index (DXY)
The Dollar Index rose to a weekly high of $103.359 last week.
This resistance was met with a rejection downward.
We may see the Dollar trade sideways with not many major data points being released this week.
Dollar pairs have been heavily reliant on Data so we may have to wait for Nonfarm Payrolls next week for an increase in directional moves.
ETH/US Dollar (ETH/USD)
ETH/USD is going through a consolidation phase.
RSI is neutral on the daily and we can assume some retracement down to $1550 levels before more bullish price action.
The resistance at $1728 has proven tough to crack but with more long positions entering the market we may see this level broken in the near term.
Gold/US Dollar (XAU/USD)
Gold is bearish as Dollar bulls prevail with expectations of more rate hikes to come this year.
The terminal rate is now at 5.4% which means a minimum of 3 more 25-bp rate hikes.
RSI is near the oversold level at 26 on the daily.
Price action could begin to trade flat before the reversal but if it continues to slide, we can consider $1788 as the next support.
US Dollar/Japanese Yen (USD/JPY)
USD/JPY is bullish as Fed hawkishness provides gains for the Dollar.
The next resistance at $137.731 is the next target for the pair.
RSI is approaching the 70 level and once broken, we could see significant upside moves in the pair.
Euro/US Dollar (EUR/USD)
EUR/USD is currently trading between the 50 and 200-day EMAs.
This is a consolidation of the downtrend.
We should see a slight retracement upwards after consecutive bears last week.
We can expect the price to touch $1.0661 before continuing downside moves in the pair.
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DIFX shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained. The contents of this publication should not be construed as an express or implied promise, guarantee, or implication by DIFX that the forecast information will eventuate, that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. Trades in accordance with the recommendations in an analysis, especially leveraged investments such as foreign exchange trading and investment in derivatives, can be very speculative and may result in losses in particular if the conditions or assumptions used for the forecast or mentioned in the analysis do not eventuate as anticipated and the forecast is not realized.
