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Bitcoin near 29,000

"Bulls" return to crypto. The market is reacting to more moves by financial institutions

The cryptocurrency market has had some really good days. Fear over the Binance exchange and regulations has given way to positive sentiment due to the recent actions of investment funds. It's thanks to them that the market is reassured that cryptocurrencies 'won't disappear' from Western financial markets, and Bitcoin can finally count on interest from institutions. As a result, the largest cryptocurrency is struggling to break through $29,000 today.

1. Following news of a Bitcoin Trust ETF from BlackRock and a similar fund application from Fidelity Investments, investors were optimistic about Deutsche Bank's application to provide digital trust services.
2. In the evening, the market also reacted to news of the opening in the US of a new crypto exchange EDX Markets. For the moment, however, the entity will specialize in serving institutions and cannot be compared to Binance or Coinbase
3. EDX is backed by Citadel Securities and Virtu Financial, among others, some of the largest market makers in the world, as well as Charles Schwab , Fidelity Investments fund and other Wall Street institutions.
4. Today's reports from the US indicate that another institution, Invesco, has once again applied to the SEC for approval of a spot Bitcoin ETF
5. A Nomura survey indicated that 96% of professional institutional investors managing nearly $5 trillion (303 institutions) are willing to invest in cryptocurrencies, and 82% had a positive view of the long-term prospects of Bitcoin and Ethereum
6. As a result of Bitcoin's sudden rise in the market, the largest wave of short position liquidations since May 28 took place (Approx. $40 million liquidation in the last 24 h according to CoinGlass)

On-Chain data shows the fastest increase in Bitcoin flows to institutions with very little or even zero trading history in more than 6 months. This behavior of the network may indicate an accumulation trend on the part of long-term investors.

Bitcoin (BITCOIN) stock chart, W1 interval. The largest cryptocurrency has rebounded from the lower limit of the uptrend sustained since the beginning of this year and is currently heading towards the upper resistance barrier, set by the zone of local peaks from April this year.

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GBPCAD Technical + Signal

Looking at the daily chart, the GBPCHF pair consequently dropped value from 1.6917. We have the "upper long wick" candle in the daily time fram suggesting possible decrease in the price with SL above the wick.

Zooming to the 4H time frame, the price reacted to 1.67992 - 1.67921 support area. The market for this instrument is considered bullish as long as this level is intact, and another rise to 1.6917 would be possible.

Trigger chart is the 1H time frame. Entry price is 1.6806 with the first target at 1.6847 followed by 1.6917.



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USDJPY

The USDJPY is forming a double top pattern on the 1H chart, reacting to the resistance at 142.24. The pair couldn’t close above the aforementioned level.
By zooming out to the 4H chart, we see an "upper long wick" candle giving a signal with a risk of getting stopped above the last high and a 1 to 1 ratio reward around 141.27.

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EURUSD Confirms the Breach

EURUSD pair confirmed breaching 1.0966 after ending yesterday above it, starting today with more positivity to reach 1.1000 barrier, which supports the continuation of the expected bullish trend on the intraday and short term basis, and the way is open to achieve our next main target at 1.1072.

The positive effect of the inverted head and shoulders’ pattern still active, and supports the continuation of the bullish wave, which gets continuous support by the EMA 25 and EMA50, noting that the continuation of the bullish wave requires holding above 1.0940.

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UK100

Britain's main benchmark UK100 is the weakest European index today, losing more than 1%. The upcoming - likely hawkish - decision by the Bank of England by no means signals the end of tightening in the British economy. While it is uncertain whether rates will rise by 25 or 50 bps, the market will almost certainly have to swallow a higher 50 bps BoE hike - today or in August. Yesterday's reading indicated that UK inflation in May appears to have stabilized at excessively high levels. Core CPI was unchanged at 8.7% y/y - the market had expected 8.4% y/y. Also, the core CPI , which was expected to remain unchanged at 6.8% y/y, accelerated to 7.1% y/y - the highest level in 30 years.

The difficult situation could prompt the Bank of England to an extremely restrictive cycle if the BoE prioritizes the fight against inflation. In such a situation, the baseline scenario seems to be economic damage, which is generally not good for the performance of firms and consequently the stock market. With inflation anchored too high and a period of below-trend growth, a stagflationary scenario is a sizable threat to the British economy. As long as the labor market remains relatively strong, the market has no reason to be overly concerned, however, macro uncertainty has been reflected in the quotations of British indices recently.

Looking at the chart of FTSE (UK100) contracts, however, we see that the upward trend line is maintained although the index has dropped below the SMA200 (red line) indicating a possible further weakening of momentum. In addition, looking at the index's quotations since February, this year, we can juxtapose them with the technical formation of a rising wedge from which a breakout usually takes place at the bottom. RSI indicators near oversold and MACD confirm considerable weakness in the bulls - further decline without an upward correction would therefore have to be outright 'capitulation'. The market's reaction to the BoE minutes and decision may prove crucial.

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DE30

Release of flash PMIs for June from France and Germany turned out to be a disappointment. French data showed a slump in service gauge from 52.0 to 48.0, meaning that the sector was contracting. Meanwhile, German data showed a plunge in the manufacturing index from 43.2 to 41.0 - the lowest level since May 2020 when sentiment in the industry was slumping amid Covid-19 pandemic and resulting lockdowns. While DE30 saw a positive reaction to French data and moved slightly higher, the index took a hit following release of German data as it hinted at continued struggles of the German economy's main motor - manufacturing.

Taking a look at the DE30 chart at the H4 interval, we can see that the index is currently trading near a psychological 16,000 pts level. A point to note is that the index plunged back into the recently broken 15,810-16,085 trading range. Nevertheless, the ongoing pullback has not yet exceeded the range of the correction that occurred in the second half of May 2023 and, according to the Overbalance methodology, remains in an uptrend. Should declines deepen traders should watch the 15,850 pts area, where the lower limit of the Overbalance structure can be found.

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Oil - Morning Wrap

1. Feud between Russian Ministry of Defense and PMC Wagner escalated into a rebellion over the weekend with the latter taking control of a few Russian cities and marching an armored convoy towards Moscow
2. However, a deal between Kremlin and PMC Wagner was brokered by Belarusian president Lukashenko and the short-lived rebellion was ended
3. Given lack of any significant resistance from the Russian army against Wagner's advance on Moscow, war analysts wonder whether the uprising was staged
4. As Wagner's mutiny started and ended before the opening of markets, we do not see any major reaction to the events. Oil and precious metals opened slightly higher
5. Indices from Asia-Pacific traded mixed during the first session of a new week. Nikkei dropped 0.1%, S&P/ASX 200 declined 0.4%, Kospi gained 0.4% and Nifty 50 gained 0.1%. Indices from China traded 0.3-1.5% lower
6. European index futures point to a more or less flat opening of the cash session on the Old Continent
7. SNB Chairman Jordan said that recent rate hikes were likely not enough to bring inflation down
8. Chinese travel activity has still not recovered after a pandemic. Data for recent Dragon Boat Festival holiday (June 22-24) showed travel was 22.8% below pre-pandemic 2019
9. Summary of Opinions from BoJ June meeting showed that CPI inflation is not expected to drop below target towards the end of the year. On top of that, one member saw it as appropriate to make changes to yield curve control mechanism
10. OPEC expects global oil demand to reach 110 million barrels per day by 2045
11. Saudi Aramco head said that China and India account for over 2 million barrels of oil demand growth
12. S&P Global lowered its Chinese GDP growth forecast for 2023 from 5.5 to 5.2%
13. Cryptocurrencies are trading lower - Bitcoin drops 0.6%, Ethereum trades 0.9% lower and Dogecoin slumps 1.6%
14. Energy commodities gain - oil trades 0.2% higher while US natural gas prices jump 2%
15. Precious metals advance - gold trades 0.4% higher, silver jumps 1.6% and platinum adds 1.4%
16. GBP and NZD are the best performing major currencies while USD and CHF lag the most

OIL.WTI opened higher following a short-lived Russian coup but all of the gains have been erased already.

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GBPUSD

GBPUSD pair’s decline halted at the 1.2675 level, where it found solid support. It then began to rise and attempt to recover on an intraday basis, which suggests that it is heading towards building a new bullish wave. The targets of this wave begin with testing the broken support of the main bullish channel that has now turned into resistance at 1.2815. It is worth noting that breaching this level will push the price back to the mentioned channel and achieve additional gains that reach 1.2900 areas.

Therefore, we expect to witness more bullish bias in the upcoming sessions, supported by the technical indicators’ positivity. It is important to consider that breaking 1.2675 will stop the bullish wave and push the price to achieve bearish correction on an intraday and short-term basis.

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USDJPY

Summary of Opinions from Bank of Japan's June meeting was released overnight and while the document is often overlooked by investors, this time it deserves some attention. The document noted that while the Bank expects CPI inflation to moderate towards the middle of the current fiscal year (Q4 2023), it does not expect it to slow below 2% target. Bank of Japan said that inflationary pressures in the economy increased as employment and income situations improved and tourism demand recovered. Moreover, it was noted that one BoJ member called for an early revision of the yield curve control programme. While it is still a minority, it hints that a change in attitude may be taking place and it may be more evident at BoJ's next meeting (27-28 July, 2023).

Japanese yen gained on those news and is the best performing G10 currency now. Taking a look at USDJPY chart at D1 interval, we can see that a recent rally on the pair slowed after reaching the upper limit of the upward channel. Recent gains on the pair have been quite quick and steep therefore one cannot rule out some profit taking. However, should pullback deepen and the pair break back below 142.00 price zone, it may hint that a larger correction is underway. In such a scenario, 138.25 support zone will be on watch. On the other hand, should it turn out to be just a brief pause in the upward move and bulls regain control, a 144.00 swing level should be seen as the first potential resistance.

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EURUSD

EURUSD pair has been hovering around the EMA50 since morning. As long as the price remains above 1.0860, our bullish overview will remain valid for today. We are waiting to test 1.0940 initially. It is worth noting that breaching this level will push the price to 1.1075 as the next main station. However, breaking 1.0860 will stop the bullish trend and push the price to turn to decline.

The expected trading range for today is between 1.0850 support and 1.1000 resistance.

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USDCHF

USDCHF pair returns to test the key resistance 0.8959 (fibo 0.236) after the decline that it witnessed yesterday, noticing that AO loses its positive momentum clearly, waiting to motivate the price to resume the expected bearish trend for the upcoming period, which targets 0.8909 followed by 0.8820 levels mainly.

The EMA50 supports the suggested bearish wave, which will remain valid conditioned by the price stability below 0.8965 – 0.8980 levels.

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NZDUSD

The NZDUSD currency pair is currently exhibiting positive trading patterns and is attempting to surpass the 50-day exponential moving average (EMA50), which has been providing significant resistance against price movements. We anticipate further upward movement in order to achieve our positive targets, which begin at 0.6220 and extend to 0.6290. Notably, we have observed two bullish engulfing candlestick patterns on the 4-hour time frame, which serve to confirm the strength of the current bullish trend.

Overall, we expect the bullish trend scenario to remain valid and active, provided that the price does not break below 0.6140 and hold with a daily close below this level.

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EURUSD

During her inaugural speech at the ongoing central banking conference in Sintra, Portugal, President Lagarde announced that the ECB will raise interest rates at its next meeting in July. The banker indicated that inflationary pressures in the services sector would be a key theme for further rate hikes (a drop in sentiment in this sector/services inflationary pressures could encourage the ECB to ease monetary decisions).

Inflation in EMU remains high all the time, and the second inflationary wave is only now starting to materialize. The banker also sees a growing impact of higher wages on inflation.

The EURUSD pair has rallied during today's session and is approaching the resistance levels marked last week.

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DE30

Risk-on moods can be spotted on the markets today. Equities in Europe and China traded higher earlier today and now solid gains can be spotted on Wall Street as well. Upbeat comments from the Chinese Prime Minister on additional stimulus measures being implemented starting from July as well as solid US data earlier today are supporting upbeat sentiment on the markets.

German DAX futures (DE30) found their way back above the 16,000 pts mark this afternoon. Index tested 15,850 pts support zone yesterday but failed to break below. Bulls managed to hold the index above the upper limit of the upward channel. Bullish candlestick patterns suggest that a recovery move may be on the cards now. In such a scenario, 16,090 pts area will be the first near-term resistance to watch.

US indices are trading higher today with S&P 500 futures (US500) breaking above 4,400 pts area. Taking a look at the index at H1 interval, we can see that price broke above the upper limit of the bearish channel and 50-period moving average (green line). Advance continued and bulls managed to break above the 4,400 pts resistance zone, where the upper limit of market geometry was located, flashing another sign that a short-term bullish trend reversal occurred. The next resistance zone to watch can be found in the 4,427 pts area and is marked with previous price reactions.

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EURUSD

The EURUSD rate reached the zone where very strong supply has been triggered in recent months. We can also see that each time as we approached 1.10 the bears eventually took control. The key support on the Eurodollar is at 1.073 where we see the SMA200 on the D1 interval and the 23.6 Fibonacci retracement of the upward wave from the autumn, last year. A drop below the SMA100 (black line) at 1.084 could indicate an imminent test of these levels. Another key level set by the Fibo and price reactions is 1.05 where we see the 38.2 abolition. If sellers take control, we may see an RGR-like formation on the chart - a downward scenario, could reverse the medium-term trend.

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USDCHF Under the Negative Pressure

The USDCHF currency pair has recently experienced a significant amount of negative pressure. This has resulted in the pair breaking through the 0.8965 level and settling below it. This downward movement suggests that the pair may continue to decline, with potential targets being the 0.8900 and 0.8800 levels, which are considered to be key negative stations.

As a result of these developments, a bearish bias is suggested for the USDCHF pair in today’s trading. However, it is important to note that if the pair breaches the 0.8980 level, this could halt the expected decline and instead push the price towards a new bullish correction. In this scenario, the next target for the pair would be the 0.9055 level.

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EURUSD Faces Solid Support

The EURUSD currency pair has recently experienced a clear upward bounce after it attacked the neckline of the double top pattern. This has resulted in the pair now testing the EMA50 level.

As a result, our overall outlook for the EURUSD pair remains bearish. Our targets for the pair begin with breaking through the 1.0860 – 1.0840 levels, which would open the way for further declines towards the 1.0795 and 1.0730 levels, which are considered to be key negative stations. However, it is important to keep in mind that if the pair breaches the 1.0940 level, this could halt the expected decline and instead lead to a rise in price.

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USDJPY

The Japanese Yen remains in a strong downtrend. The USDJPY currency pair is rising to a level of 144.6 points, despite open statements from Japanese policymakers about the possibility of currency intervention in the event of excessive currency depreciation. The last intervention by the Bank of Japan (BoJ) took place at the end of last year when USDJPY rose to a level above 150 points.


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Oil

1. Saudi Arabia and Russia's supply cut announcement fails to offset concerns over manufacturing activity slowdown worldwide
2. Deceleration in China, Eurozone, and the US manufacturing PMI data contribute to the downward pressure on WTI prices

Despite the supply cut efforts by Saudi Arabia and Russia, WTI crude oil prices continue to face downward pressure due to concerns about a global economic slowdown. The slowdown in manufacturing activity worldwide, as evident from PMI data, has overshadowed the impact of the supply cuts. China's manufacturing PMI indicates a modest expansion but a continued deceleration, while the Eurozone and Germany are experiencing deceleration and a technical recession. The US manufacturing PMI suggests a slowing economy, which could have implications for the rate hike decisions of the US Federal Reserve. Additionally, Russia's plan to reduce exports to boost oil prices is overshadowed by China's slow reopening.

Amidst the deteriorating global manufacturing sector, the bearish sentiment for crude oil persists. Despite OPEC+ cuts and monetary stimulus from China, oil prices remain range-bound. The resistance at $73 has led to repeated rejections, maintaining a bearish bias. There is a possibility of testing the support level at $67.44 or further at $64, and a break below this level could trigger a significant downward movement towards the $57 level. Currently, the price is likely to test the $67.44 support, where buyers might enter the market. Otherwise, if buyers step in, the price may find support and potentially rally towards the $73 resistance zone.

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AUDUSD

Excluding April and the current July decision, the RBA has implemented 12 consecutive rate hikes since it commenced its monetary policy tightening in May 2022. However, the recent pause in rate increases is believed to be temporary, as both economists and markets anticipate that the central bank will raise rates further by at least 0.25 percentage points to 4.35% in the upcoming months before reaching the peak.

Following the announcement, the AUDUSD experienced a notable decline, reaching a key support level at 0.664. However, the price subsequently rebounded, returning to its previous level around 0.667. Currently, the AUDUSD is trading around this level. The next level of resistance is anticipated to be around 0.670.

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