DIFX DIVE: This Week in Markets

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This week, we have the Fed’s Interest Rate decision on Wednesday, with the Fed widely expected to hike 25 bps.

As this is priced in quite heavily, we don’t expect this data release to move the markets, however, we do expect the FOMC Press conference where Jerome Powell will address the media to have a major impact on volatility as he gives the market an indication on how he will navigate the next few months.

In Asia, Japanese Government Bonds are trading at 1-month lows as BoJ kept stimulus unchanged with no signs of bringing in a more hawkish policy any time soon.

First Republic has been seized and JP Morgan has agreed to purchase assets and assume deposits. This is the 3rd bank failure in just 2 months.

In today’s DIFX Analytics, we’re going to look into the following assets:

Bitcoin/US Dollar (BTC/USD)

The Dollar Index (DXY)

Ether/US Dollar (ETH/USD)

Gold/US Dollar (XAU/USD)

US Dollar/Japanese Yen (USD/JPY)

Euro/US Dollar (EUR/USD)

Bitcoin/US Dollar (BTC/USD)

Bitcoin is consolidating between $27,000 and $30,000 as the price action was boosted by the slide in price from First Republic Bank last week.

Bitcoin is trading above the 50-day EMA which is a bullish indicator. Traders are still unclear on whether to determine this as the start of the bull run as the price hovers near the $30k resistance.


The Dollar Index (DXY)

The Dollar Index is trading upwards with some bullish intent. RSI is gaining momentum and we may see the price hit $102.436 before any change in direction.

This week is data-heavy for the Dollar with the FOMC meeting on Wednesday and jobs data on Friday.

Interest rates are expected to be hiked but the key element to this week’s sentiment will be Jerome Powell’s speech and if he alludes to a certain timeline or factor which will contribute to when we can see rate cuts.

Ether/US Dollar (ETH/USD)

Ethereum is hovering near the 50-day EMA at the time of writing. There is a clear uptrend since the start of 2023, however, there was a massive rejection of the resistance at $2130.

Price has found support near $1850 in the past couple of weeks so we can expect this level to hold and Ether to continue trading upwards.

Gold/US Dollar (XAU/USD)

Gold broke the trend line to the downside last week and has traded below this trend line ever since closing beneath it on the daily chart. The next near-term target is the support line at $1924.

We can expect $1952 to be tested initially. RSI is reading at the 50 range which indicates a slide in price momentum for the asset.


US Dollar/Japanese Yen (USD/JPY)

USD/JPY is bullish as it pushes towards the resistance area at $137 and RSI is reading near 70 levels as a signal for recent bullish momentum.

Dollar gains have contributed to this upside move on Monday. With Governor Ueda expected to keep BoJ’s policy ultra-dovish and the Fed expected to pivot on a hawkish stance, we could expect both the Dollar and Yen weakness towards the end of Q2.


Euro/US Dollar (EUR/USD)

EUR/USD has hit resistance at $1.1065 and we are starting to see signs that some bearish momentum is picking up.

As the Dollar strengthens, we could see EUR/USD fall to $1.07210 as the first key support on our Fib Retracement levels.

With Interest Rates out of the Fed this week, we can expect some volatility in all Dollar pairs with a 92% probability of 25 basis points projected by Reuters.


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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.

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