BITCOIN Analysis for March 6, 2018

Bitcoin has been quite impulsive with the bearish gains recently which is expected to push the much lower towards $10,000 in the coming days. The price area of $12,000 has been quite near to the price from where it had a drastic fall below $11,000 price level as a result. The market is currently expected to push much lower inside the range of $10,000 to $12,000. The market seemed quite indecisive even today having no strong fundamental reason to break above or below the range and expected to reside inside it for a while now. But the bullish bias is still quite strong according to the market sentiment analysis. As for the current scenario, the price is expected to proceed lower towards $10,000 as it remains below $12,000 with a daily close and the consolidation inside the range is likely to continue further. A breakout is most desirable situation for the Bitcoin for further market participation now.

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Brent looks at other markets

In the absence of fresh drivers of growth, oil switched to signals from other markets. Thus, the weakness of the US dollar and the growth of stock indices allowed the quotations of Brent to storm an important level of $ 65 per barrel. The factors of supply disruptions from Libya and the growth of political uncertainty in Venezuela, where the Presidential elections scheduled for April 22 were postponed for a month, are extremely shaky "bullish" drivers for black gold. At the same time, the report of the International Energy Agency does not allow buyers to properly develop.

According to the IEA, the USA will become the world's No. 1 producer by 2023, increasing production from 10.6 million b / s in 2017 to 12.1 million b / s. About 60% of the cumulative increase in the supply of black gold to the world market in the period from 2017 to 2023 will be linked to the United States. Americans will cover up to 80% of the increase in global demand until 2020, and OPEC will have to expand its cooperation with Russia and other countries in order to achieve a balanced market against such a background.

The dynamics of WTI and American oil production

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Source: Bloomberg.

However, there is good news for the bulls too. The International Energy Agency expects that despite the slowdown in global demand growth, it will increase by an average of 1.1 million b / s to 2023. And reaching a maximum is not yet foreseen. According to BMI Research, the acceleration of the rebalancing process in the oil market, strong global demand and lags behind it make it possible to expect that the average price for Brent this year will be $ 67 per barrel.

Thus, the process of tug-of-war between OPEC and the States in the oil market continues, the strategies of the opponents are clear, so the further dynamics of Brent and WTI, in my opinion, will depend on the global demand and the positions of the US dollar. The fact that in the first quarter of the world economy begins to slow down, as evidenced by the indices of business activity in the leading countries of the world, does not add optimism to the "bulls" for black gold. On the other hand, there is no need to panic about this. For the States, for example, January-March in the past few years is an extremely unfavorable period that many Bloomberg experts associate with bad weather. In addition, the constant rapid growth of the world economy increases the risks of its overheating and recession. I think in the second quarter, the situation will change for the better.

As for the US dollar, its medium-term prospects are drawn in gray paints, while retreat into the shadow of the risks of the global trade war and the return of investors' interest to the divergence theme in the monetary policy of the Fed and other central banks allows us to expect a short-term growth in the USD index.

Technically, Brent continues the transformation of the pattern "Shark" at 5-0. The further fate of the North Sea variety will depend on the ability of the "bulls" to storm the resistance by $ 66.45. If it turns out, we will see oil at $ 69.35, no correction, most likely, will continue.

Brent, daily chart

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Daily analysis of EUR/JPY for March 6, 2018

EUR/JPY

There is recently an upwards bounce in the market – in the context of a downtrend. The upwards bounce is yet to nullify the downtrend, but it would do so as soon as price goes above the supply zone at 132.50, which would require a strong buying pressure. The demand zone at 129.50 was tested this week, and it has thus become a formidable barrier to any bearish propensity.

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There is still a Bearish Confirmation Pattern in the market, but the recent rally has become a threat to the extant bearish outlook. Nonetheless, a strong rally is in the offing, as the outlook on EUR pairs is bullish for this week.

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Daily analysis of USD/JPY for March 6, 2018

USD/JPY

The USD/JPY did nothing significant on Monday and it is trying to go upwards right now. Price is currently below the supply level at 106.50 and the demand level at 105.50. Price might oscillate between the supply and demand levels and then breach either of them as a directional movement resumes.

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There is currently a Bearish Confirmation Pattern in the 4-hour chart, which pinpoints further southwards movement. On the other hand, a strong reversal could occur, which would result in a threat to the current bearish bias.

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Daily analysis of USD/CHF for March 6, 2018

USD/CHF

This currency trading instrument is bearish in the long-term, neutral in the short-term, and it is quite choppy at the present. Price oscillates between the resistance level at 0.9450 and the support level at 0.9300. Price is thus expected to breach any of these boundaries before the end of this week.

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There is a Bearish Confirmation Pattern in the market. A breach of the support levels at 0.9350, 0.9300 and finally, 0.9250, would bring about a bearish outlook on the market. The market is currently trying to go downwards.

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Global macro overview for 06/03/2018

The beginning of this week brought a deterioration in the US Dollar prices across the board. The market participants cannot really blame the poor data releases because yesterday's final PMI reading for services in February was slightly higher than expected and amounted to 55.9 points. On the other hand, the ISM index for services slightly decreased to the level of 59.5 points from 59.9 points in January. Today, the focus will be on data about orders for durable goods as well as industrial orders. Markets will also be sensitive to monetary policy issues presented by Fed members - both William Dudley and Lael Brainard will take grab the investors attention later toady. Nevertheless, the market seems to be waiting for the end of the week data releases in form of the US labor market data, but those should not change the market expectations for the Fed interest rate hike in March.

Let's now take a look at EUR/USD technical picture at the H4 time frame. The pair has managed to erase most of yesterday's down movement caused by a reaction to the result of parliamentary elections in Italy. Currently, the rate fluctuates around the level of 1.2340 in anticipation of new impulses that may become a stimulus to break out of the wider range. So far the first step wad made ant the technical resistance at the level of 1.2366 had been violated, so the next target for bulls is at the level of 1.2537 (last swing high).

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Global macro overview for 06/03/2018

Investors are beginning to forget about the Italian elections and are focusing their attention on global trade and problems caused by Trump's recent proposals regarding import duties. Some people think that criticism from abroad and also from their own staff will induce the US president to change his mind, which helps to slightly weaken the risk aversion in the markets. In the meantime, you can count on retaliatory actions of the rest of the world. This morning we hear that the European Commission is considering introducing tariffs on US goods, including for steel, jeans, and bourbon.

If we return to uncertainty about the future of the global recovery (which may be inhibited by trade wars), then we are coming back to strengthening JPY. The EUR should also perform well when the overrun of the political risk premium has disappeared. USD will give way to safe currencies, at least in the short term. In the medium term, the prospect of higher prices for imported goods or domestic substitutes gives the field an aggressive Fed policy. The lost assets are risky assets, commodity currencies and emerging markets. The main pain is related to AUD and CAD. In the last case, we could see how Trump's words could hurt yesterday. The US president has made an ultimatum that new duties may not cover Mexico and Canada, but only on condition that the new version of the Nafta agreement will be more "fair" to the US. In any scenario, this is bad news for US neighbors, and therefore their currencies.

Let's now take a look at USD/CAD technical picture at the H4 time frame. The market has broken out above the important technical resistance zone between the levels of 1.2919 - 1.3000 and now is slowly testing the level of 1.2919 from above. The upward momentum remains strong, so the there is still a chance of a further rally towards the next technical resistance at the level of 1.3166.

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Technical analysis of USD/CHF for March 06, 2018

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Overview:

  • The USD/CHF pair will continue rising from the level of 0.9342 in the long term. It should be noted that the support is established at the level of 0.9438 which represents the daily pivot point on the H4 chart. The bias remains bullish in nearest term testing 0.9594 or higher. Accordingly, the USD/CHF pair is showing signs of strength following a breakout of the highest level of 0.9438. So, buy above the level of 0.9438 with the first target at 0.9516 in order to test the daily resistance 1. The level of 0.9594 is a good place to take profits. Moreover, the RSI is still signaling that the trend is upward as it remains strong above the moving average (100). This suggests that the pair will probably go up in coming hours. If the trend is able to break the level of 0.9516, then the market will call for a strong bullish market towards the objective of 0.9704. The price is likely to form a double botttop m in the same time frame On the other hand, in case a reversal takes place and the USD/CHF pair breaks through the support level of 0.9342, a further decline to 0.9187 can occur. It would indicate a bearish market.
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Technical analysis of NZD/USD for March 06, 2018

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Overview:

  • The pair is still trading around the pivot point (0.7200). The NZD/USD pair continues to move downwards from the level of 0.7336. This week, the pair fell from the level of 0.7336 to the bottom around 0.7200. Today, the first resistance level is seen at 0.7256 followed by 0.7336, while daily support 1 is found at 0.7200. Also, the level of 0.7200 represents a weekly pivot point for that it is acting as major resistance/support this week. Amid the previous events, the pair is still in a downtrend, because the NZD/USD pair is trading in a bearish trend from the new resistance line of 0.7256 towards the first support level at 0.7200 in order to test it. If the pair succeeds to pass through the level of 0.7200, the market will indicate a bearish opportunity below the level of 0.7200. Then, the pair will move downwards continuing the bearish trend development to the level 0.7145 in order to test the daily support1. On the other hand, if a breakout happens at the resistance level of 0.7340, then this scenario may be invalidated.
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Analysis of Gold for March 06, 2018

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Recently, Gold has been trading sideways at the price of $1,312.00. According to the 30M time – frame, I found a successful rejection of the pivot level ($1,321.00), which is a sign that selling looks risky. I also found bullish breakout of 2-hour balance, whch is another sign that buyers are in control. My advice is to watch for potential buying opportunities. The upward targets are set at the price of $1,326.18 and at the price of $1,331.95.

Resistance levels:

R1: $1,326.18

R2: $1.331.95

R3: $1.336.40

Support levels:

S1: $1,315.97

S2: $1,311.65

S3: $1,305.75

Trading recommendations for today: watch for potential buying opportunities.

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GBP/USD analysis for March 06, 2018

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Recently, the GBP/USD has been trading sideways at the price of 1.3850. According to the 30M time – frame, I found a successful rejection of the pivot level (1.3830), which is sign that selling looks risky. I also found bullish breakout of 1 -hour balance, which is another sign that buyers are in control. My advice is to watch for potential buying opportunities. The upward targets are set at the price of 1.3895 and at the price of 1.3940.

Resistance levels:

R1: 1.3895

R2: 1.3940

R3: 1.4006

Support levels:

S1: 1.3785

S2: 1.3720

S3: 1.3673

Trading recommendations for today: watch for potential buying opportunities.

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Bitcoin analysis for March 06, 2018

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Bitcoin (BTC) has been trading downwards. As I expected, the price tested the level of $11.112 and reached yesterday's target. A new initial coin offering (ICO) called Miroskii hopes to build a 'decentralized bank' by utilizing blockchain technology. Looking at the white paper and the website, it appears to have solid ideas and even a nice-looking team behind the project. However, looking a bit closer at the team shows the ICO's 'graphic designer' just happens to be a stock image of the Hollywood actor Ryan Gosling. In fact, after inspecting further, the entire team seems to be phoney and randomly chosen business types who have nothing to do with this technology. The technical picture on Bitcoin looks bearish.

Trading recommendations:

According to the 30M time - frame, I found that price broke a strong upward channel, which is a sign that sellers are in control. I also found a hidden bearish divergence on the RSI oscillator, which is another sign of weakness. My advice is to watch for potential selling opportunities. The downward target is set at the price of $10.755.

Support/Resistance

$11.278 – Intraday resistance

$11.112– Intraday support

$10.755 – Objective target

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Fundamental Analysis of GBP/USD for March 6, 2018

GBP/USD has been quite impulsive with the bullish gains leading to retracement towards 1.3850 price area before showing bearish pressure in the pair. The price is currently struggling to push lower towards 1.36 support area due to indecision in the market flow. Ahead of the high impact economic reports on the USD side this week and the looming rate hike in the US, the market sentiment is currently biased on the USD gains which is reflected in the market movement. Today, UK BRC Retail Sales monitor report was published with an unchanged figure of 0.6% which did not quite help the currency to gain strong momentum over USD to break higher. Moreover, today MPC Member Haldane is scheduled to speak. On the other hand, today US Factory Orders report is going to be published which is expected to decrease to -0.4% from the previous value of 1.7% and IBD/TIPP Economic Optimism report is expected to show an increase to 58.2 from the previous figure of 56.7. Later this week, Average Hourly Earnings and Unemployment Rate report are due in the US which are forecasted to be quite positive in nature ahead of the upcoming rate hike in this month. At present, USD is expected to gain further momentum over GBP in the coming days.

Now let us look at the technical view. The price is currently residing below 1.3850 resistance area from where the price is currently showing some bearish pressure as well. The dynamic level of 20 EMA is having a downward sloping shape which is currently working as confluences for the overall bearish structure. As the price remains below 1.3850-1.3950 resistance area, the bearish bias is expected to continue further.

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Bitcoin analysis for 06/03/2018

In his speech at the inaugural Scottish Economic Conference in Edinburgh, Bank of England Governor Mark Carney called on the authorities to regulate the cryptocurrency market, instead of banning them directly. According to Carney, cryptocurrencies do not currently threaten financial stability, but they can, after the involvement of more consumers. Carney believes that the time has come to integrate the cryptocurrency ecosystem with the rest of the financial system, applying the same regulatory approach and the same stringent standards. Carney believes that this would not only minimize the risk of money laundering but also helped to adapt the technology to wider public use. After a recent speech at London's Regent's University, where Carney argued that Bitcoin had failed as a currency, the CEO of the Central Bank reiterated his opinion that digital currencies such as Bitcoin should actually be considered assets. He also noted the tremendous volatility of these assets, stressing that cryptocurrencies show the classic characteristics of bubbles because their prices are based on beliefs regarding their future supply and demand and have no internal value or external support.

The British electoral commission announced that it would initiate an investigation into the cryptocurrencies and their effects on British investors and enterprises. The purpose of this study is to examine the risks and benefits of digital currencies and Blockchain technologies.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The market is very close to testing the recent local swing high at the level of $11,714 and the price behavior at this level will be crucial to establishing the future market behavior. In a case of an impulsive breakout, there is a high possibility of wave 3 development. On the other hand, in a case of a sudden price reversal, there is a high possibility of a corrective wave 2 development to the downside. It is worth to keep an eye on the market behavior at the mentioned levels.

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Trading plan for 06/03/2018

There is hope in the financial markets that President Trump will rethink his recent proposals for steel and aluminum import duties, which might encourage a bounce of the stock market indices and other risky assets. RBA left the interest rate without changes, and the message did not cause much reaction to AUD / USD. Relatively good trading sentiment emabled USD / JPY to bounce almost to 106.50. EUR/USD remained close to 1.2350. Stronger currencies are NZD and SEK.

On Tuesday, 6th of March, the event calendar is light in important news releases, but market participants should keep an eye on Consumer Price Index data from Switzerland, Retail Sales data form Italy and Ivey Purchasing Managers Index data from Canada. Ther are some speeches scheduled for today as well, and the main speakers will be FOMC Member William Dudley, MPC Member Andy Haldane and RBA Governor Philip Lowe.

AUD/USD analysis for 06/03/2018:

The Reserve Bank of Australia kept the cash rate at 1.5% in, line with expectations. In the statement, the bank did not address the recent market turmoil. On the positive side, it can be noted that the rate of wage growth is already well behind, but the language describing the future economic growth has been eased (the phrase that the increase will be "slightly above 3%" has been removed). Sometime earlier, the Australian retail sales data release in January disappointed by an increase of 0.1% m/m, while the forecast was set at the level of 0.4%.The data suggest a weak rebound after the December declines. The result may have been affected by sell-offs, but in any case it draws a pale picture of the economy - either consumer sentiment is weakening or inflationary pressure is not progressing. Other weak data from Australia were Current Account data, which revealed that balance after the fourth quarter was -14 billion AUD vs. expected AUD 12.2 billion.

Let's now take a look at the AUD/USD technical picture at the H4 time frame. The market is trying to bounce higher after the violation of the important technical support zone between the levels of 0.7729 - 0.7758. The price has managed to make a local high at the level of 0.7794, which is a 38% Fibo of the previous leg down. Nevertheless, if bulls want to regain control over this market, they must break out above the level of 0.7897. Otherwise, the downtrend will continue lower towards the levels of 0.7693 and 0.7645.

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NZD/USD Intraday technical levels and trading recommendations for for March 6, 2018

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Daily Outlook

In July 2017, an atypical Head and Shoulders pattern was expressed on the depicted chart which indicated upcoming bearish reversal.

As expected, the price level of 0.7050 failed to offer enough bullish support for the NZD/USD pair. That's why, further bearish decline was expected towards 0.6800 (Reversal pattern bearish target).

Evident signs of bullish recovery was expressed around the depicted low (0.6780). An inverted Head and Shoulders pattern was expressed around these price levels.

The price zone of 0.7140-0.7250 (prominent Supply-Zone) failed to pause the ongoing bullish momentum. Instead, a bullish breakout above 0.7250 was expressed on January 11.

That's why, a quick bullish movement was expected towards the depicted supply zone (0.7320-0.7390) where evident bearish rejection and a valid SELL entry were expected.

On February 2, a bearish engulfing daily candlestick was expressed off the price level of 0.7390. Moreover, a double-top reversal pattern was expressed around the price zone (0.7320-0.7390).

As expected, the price zone (0.7320-0.7390) stood as a significant supply zone for the NZD/USD pair. This allowed the current bearish decline to occur towards the price zone of 0.7230 - 0.7165 (neckline of the reversal pattern).

A bearish breakdown of 0.7300 (neckline) is needed to confirm the depicted reversal pattern. A bearish projected target would be located around 0.7050 and 0.7000.

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Intraday technical levels and trading recommendations for EUR/USD for March 6, 2018

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Monthly Outlook

In January 2015, the EUR/USD pair moved below the major demand levels near 1.2100-1.2200 (multiple previous bottoms set in July 2012 and June 2010). Hence, a long-term bearish target was projected toward 0.9450.

In March 2015, EUR/USD bears challenged the monthly demand level around 1.0500, which had been previously reached in August 1997.

In the longer term, the level of 0.9450 remains a projected target if any monthly candlestick achieves bearish closure below the depicted monthly demand level of 1.0500.

However, the EUR/USD pair has been trapped within the depicted consolidation range (1.0500-1.1450) until the current bullish breakout was executed above 1.1450 and recently above 1.2075.

Another bullish breakout above 1.2075 was expressed on the chart. This hinders the bearish momentum allowing bullish advancement to occur towards 1.2750 provided that the bullish breakout above the price level of 1.2075 remains defended by the bulls.

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Daily Outlook

In September, bearish target for the depicted Head and Shoulders pattern was projected towards 1.1350. However, the market failed to apply significant bearish pressure against the mentioned zone (1.1415-1.1520).

Instead, In November, evident bullish recovery was manifested around the price zone of 1.1520-1.1415.

This hindered further bearish decline which allowed the current bullish momentum to occur towards the price level of 1.2100 which failed to pause the ongoing bullish momentum as well.

Daily persistence above 1.2470-1.2500 was needed to confirm a recent bullish flag continuation pattern with projected targets around the price level of 1.2750. However, the EUR/USD bulls failed to fixate above 1.2470.

That's why, a recent bearish pullback is being expressed below the price level of 1.2450 thus expressing a double-top reversal pattern with projected target around 1.1990.

The current bearish pullback will probably extend towards 1.2070-1.1990 (reversal pattern projection targets) if bearish breakdown of the level of 1.2200 (the depicted uptrend line) is achieved on a daily basis.

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Ichimoku cloud indicator analysis of USDX for March 6, 2018

The Dollar index remains under pressure. Price remains below the important resistance of 90.50 but still respects the 4-hour cloud support.

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Black rectangle - resistance

Price remains above the Ichimoku cloud in the 4-hour chart. Price needs to break the 90.50 resistance for more upside to be expected towards 91.50-92. Support at 89.80 is very important. If price breaks inside the cloud trend will change to neutral.

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Blue line - resistance

On a daily basis the Dollar index remains in a bearish trend below the daily cloud. Support is at 89.60 and resistance at 90.40-90.50. If price manages to break above 90.50 daily trend will change to neutral. This will have longer-term bullish implications for the index.

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Ichimoku cloud indicator analysis of gold for March 6, 2018

Gold price tried to move towards the resistance of $1,330 but bulls were unable to hold the price above the tenkan-sen at $1,321-23. Trend remains bearish. Price is still below the 4hour cloud.

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Kijun-sen support is at $1,315. A break below it will push the price towards $1,300. Resistance remains at $1,326 where the lower boundary of the cloud resistance is found. Any bounce so far is a selling opportunity as long as we trade below the cloud.

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Magenta line -resistance

In the daily chart the price got rejected at the upper cloud boundary and is challenging the tenkan-sen support at $1,320. A daily close below it will push the price again towards the lower boundary towards $1,300. A break below $1,300 will push the price towards $1,280. This is my preferred scenario so far.

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The yen loves trading wars

Rumors about the normalization of the BOJ's monetary policy, the threat of a global trade war and the growth of political risks in the euro area against the backdrop of the Eurosceptic during the parliamentary elections in Italy allowed the "bears" to bring USD/JPY quotes closer to 16-month lows. Safe haven assets are bought as hot pies, and the forecast of £80 per dollar in 2019 no longer looks like science fiction.

The strengthening of the yen was facilitated by Haruhiko Kuroda's statement about withdrawing from the ultra-soft monetary policy in case of inflation targeting 2% in the 2019/2020 fiscal year. If this happens, then "there is no doubt" that the members of the Governing Council will discuss the issues of normalization. At first glance, everything is logical: the economy of the Land of the Rising Sun has the second longest economic expansion since the beginning of the century, unemployment drops to 2.4%, the lowest level since 1993, and the number of open vacancies (159 jobs for 100 people looking for work) has skyrocketed up to a 44-year peak. Nevertheless, given the aging of the population, life-long contracts and the reluctance of corporations to spend money on raising wages, it is difficult to expect the growth of the last indicator by 3%.

Societe Generale wonders how such a rhetoric can be combated with the appreciation of the yen. In fact, the markets misinterpreted it. Even at the end of last year, Haruhiko Kuroda mentioned a normalization of monetary policy, given that the BoJ has confidence in the growth of inflation towards the target. Now the rhetoric has turned out to be more "dovish", but investors are very sensitive to any words about the course change, sincerely hoping that the yen will repeat the last year's path of the euro.

Why not? Moreover, the currency of the Land of the Rising Sun has a favorable external background in its arsenal. The exchange of barbs between the US and the EU over import duties increased the risks of a global trade war and also made us remember the events of the 1990s. Afterwards, the USD/JPY pair fell to the mark of 80 against the backdrop of worsening relations between Washington and Tokyo.

Dynamics of USD/JPY

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Source: Bloomberg.

Theoretically, trade wars will lead to a slowdown in global GDP, which is a "bearish" factor for the monetary units of developing countries. The exit from the carry trade and the return of investors to the funding currencies allows the USD/JPY pair to continue the downward campaign.

Another driver of strengthening the yen is the political situation in Italy. Preliminary counting of votes signals the victory of Eurosceptics ("Five Star" - 32%, Northern League - 18%). If they manage to create a coalition, then along with the issues of restructuring the national debt, the idea of the country's exit from the eurozone may be revived. Uncertainty forces foreign investors to think three times before taking money to the markets of the eurozone.

Technically, a breakthrough of support at 105.2 will allow the "bears" to expect the continuation of the USD/JPY peak in the direction of the targets by 161.8% and 224% on the "Crab" and AB = CD patterns. They form a convergence zone just below the 103 yen mark for the dollar. The nearest resistance levels should be sought near 106.25 and 107.25.

USD/JPY, daily chart

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