Markets are now pricing in the probability of the Federal Reserve hiking rates by a quarter point in May to 61%, up from 48% on Friday.
Additionally, the Personal Consumption Expenditures (PCE) price index in the US rose 5.0% in February from a year earlier, which is lower than January’s 5.3% increase. US consumer sentiment decreased for the first time in four months in February, reflecting concerns over a possible recession.
In today’s DIFX Analytics, we’re going to look into the following assets:
Bitcoin is experiencing a clear bearish RSI divergence as technicals weaken on the daily chart.
Traders can expect a slip in price toward the support level at $25,400.
The ease off of fears from the banking crisis may contribute to this retracement.
The Dollar Index (DXY)
The Dollar Index seems to have found a range between $101.871 – $105.6.
We saw PCE data slightly cool off last week, however, inflation still remains high.
According to FEDWATCH on Reuters, the markets are pricing in a 68% probability of a 25 bp rate hike in May.
Ether traded lower at the start of the week with another rejection near the $1827 area.
RSI failed to set a new high and is trending lower.
In the near term, we can expect the price to touch $1700 as a pullback seems the most likely.
Price has been consolidating for the past 2 weeks which indicates momentum to the upside is slowing down.
Gold/US Dollar (XAU/USD)
Gold has broken below the bullish trend, signaling a reversal in the metal.
With a declining RSI and price action, we can forecast bearish momentum with the initial target being $1928 as the first key support.
As contagion fears cool off and a May rate hike is priced in, the attraction for non-yielding bullion should simmer.
US Dollar/Japanese Yen (USD/JPY)
USD/JPY may see some gains, with traders taking profits from the Yen safe haven trade.
The dollar has begun the week on a strong foot and RSI has pushed above the 50 region.
If price action breaks above the 200-day EMA, we can expect further bullish moves toward $136.63 in the asset.
Euro/US Dollar (EUR/USD)
Dollar Index fell to a recent low of $101.8.
The Dollar is trading below the 200-day EMA, signaling a bearish trend.
RSI is sitting under 50 which further indicates bears in the market.
Major currencies have gained against the Dollar since the crisis.
Crypto products are unregulated and could be highly volatile. Please be aware of the risks before investing.
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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.
