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Euro Under Pressure as COVID Cases Mount

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Winter has arrived in Europe and, with it, a new wave of COVID-19 infections. Despite Europe doing a relatively good job at vaccinating the population, the current vaccination rate is not substantial enough to curb the infection in some countries.

COVID-19 infections are mounting once again, thus putting pressure on economies. Austria, for example, announced a new three-week lockdown in a desperate attempt to stop the virus and also to save the ski season (that has just started), as the tourism industry contributes in no small measure to the Austrian GDP.

Moreover, the country announced that vaccination will become compulsory starting from February next year. The development has triggered a decline in euro pairs, with the EURUSD exchange rate trading below 1.13, and the EURJPY below 129.

Fed Turns Hawkish

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The Federal Reserve of the United States announced the tapering of its quantitative easing and a gradual phase-out of the bond-buying program. However, last week, some Fed members argued for a faster reduction to tapering and signaled at least one rate hike to come in 2022. As such, the divergence with other central banks will support the dollar in the period ahead.

On the other hand, the European Central Bank clearly has no intentions of hiking the interest rate next year. As such, from a monetary policy perspective, the euro has no reason to rise anytime soon.

All euro pairs have come under pressure, not only the EURUSD. The EURJPY, for instance, traded with a bid tone all year but failed at the 133 level. In a matter of just a few days, it declined below 129 despite the USDJPY holding above 114.

EURGBP is another pair reflecting the euro’s weakness. In addition, the Bank of England has voiced some concerns about the rising inflation rate, which could mean it following in the Fed’s footsteps sooner rather than later. Therefore, further declines in the cross pair should be expected.

All in all, the euro looks weak here ahead of Thanksgiving and at the start of the winter season. As COVID-19 puts pressure on the European economies again, traders have no incentives to buy the common currency.

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BTCUSD and XRPUSD Technical Analysis – 23rd NOV, 2021
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BTCUSD: Head and Shoulders Pattern Below $60,000

Bitcoin is moving in continuation of a strong bearish trend this week, and any attempts towards a bullish reversal failed. This is the reason we see BTCUSD trading below the $60,000 handle in the European trading session today.

We can clearly see a head-and-shoulders pattern below the $60,000 level which signifies that we are in a confirmed downtrend.

Yesterday, we saw yesterday BTCUSD touching an intraday high of $59,965 after which the prices started to decline and touched an intraday low of $55,676, with today’s intraday low of $55,864.

We can see a continuous downwards selling pressure in bitcoin today, and more losses are expected in the coming days.

The immediate short-term outlook for bitcoin turned bearish, and now we are looking at levels of $55,000 and $52,000.

Williams percent range is overbought which signifies that more selling is expected today in the US trading session which will push the prices of BTCUSD below the $55,000 handle.

Bitcoin is now moving below both the 100 hourly simple and exponential moving averages.

The average true range is indicating less market volatility which means that markets are due to enter a consolidation phase soon.

  • Bitcoin’s downtrend continues aiming for downsides below $55,000
  • Stoch is indicating OVERBOUGHT levels
  • The price is now trading just below its pivot level of $56,080
  • All moving averages are giving a STRONG SELL signal at current market levels of $56,278

Bitcoin: Strong Bearish Trend Towards $55,000
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BTCUSD has already broken its support level of $56,500 and is now about to break its important psychological support level of $55,000.

The price of BTCUSD is trading above its classic support level of $55,242 and Fibonacci support level of $55,874 in the European trading session.

In the last 24hrs, BTCUSD has gone DOWN by -2.21% with a price change of -1271$ and has a 24hr trading volume of USD 35.677 billion.

Bitcoin Bonds

El Salvador has become the first country to issue a $1 billion bitcoin bond with a 10-year maturity on the Liquid Network.

The new bitcoin-linked bond appears to be the highest-yielding fixed income instrument globally. This bond will yield a 6.5% rate of annual interest payments to its investors.

The credit rating for this bitcoin bond is negative due to the distressed-debt situation of El Salvador.

El Salvador adopted bitcoin as legal tender in  June 2021, after which Moody's Investors Service downgraded the long-term foreign-currency issuer and senior unsecured ratings to Caa1 from B3.

The Week Ahead

The downward selling pressure seen in Bitcoin is expected to push its prices to the $52,000 range, after which a fresh wave of consolidation and an uptrend move is expected.

The bearish trend formation continues and is expected to push the prices below the level of $54,000 this week. After touching a low of $52,000, a potential bullish trend reversal is expected for which we will have to wait until next week.

The prices will need to remain above the important support level of $52,682 for a bullish reversal of the markets.

Technical Indicators:

Relative strength index (14-day): at 35.28 indicating a SELL

Average directional change (14-day): at 40.639 indicating a SELL

Moving averages convergence divergence (12,26): at -442.90 indicating a SELL

Ultimate oscillator: at 40.127 indicating a SELL

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ETHUSD and LTCUSD Technical Analysis – 25th NOV, 2021
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ETHUSD: Double Bottom Pattern Above $4,000

On Nov 23rd, Ethereum touched a low of $4,030, after which the prices stabilized and, as of yesterday, entered into a consolidation phase.

In today’s Asian trading session, ETHUSD touched an intraday high of $4,334.

We can see a double bottom pattern above $4,000 which signifies a bullish reversal, end of a downtrend and a shift towards an uptrend.

In today’s European trading session, the price of Ethereum continues to rise slowly and is aiming for upsides of $4,400 and $4,500.

The fall in the levels of ETH seen last week occurred due to profit-taking; the bullish tone is back in the markets. The pair is gaining a bullish momentum and is also poised for a rally upwards of $4,500 that can happen any time now.

ETH is trading above its pivot level of $4,276 and moving in a bullish trend. The price of ETHUSD has already broken its classic resistance level of $4,298 and its Fibonacci resistance level of $4,290. In the US trading session, it is aiming towards the $4,400 handle.

All the major technical indicators are giving a STRONG BUY signal.

ETH is now trading above both the 100 hourly and 200 hourly simple moving averages.

  • Ethereum is in continuation of bullish channel
  • Short-term range appears to be bullish for ETHUSD
  • All the moving averages are giving a STRONG BUY signal
  • Average true range is indicating LESS market volatility

Ether: Bullish Trend Towards $4,500 Confirmed
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ETHUSD was moving in a consolidation channel in the early Asian trading session today after which a bullish momentum started pushing the price above the $4,300 handle.

We can see that last week’s heavy-selling pressure has exhausted, and now buyers are returning to the markets.

The relative strength index is NEUTRAL which signifies a potential trend reversal today.

It is best to enter into long positions in Ethereum at the present market level of $4,300 with targets of $5,000 the next month.

The average true range is indicating low market volatility as we can see a 12% drop in the trading volume as compared to yesterday. This is because the market was in a consolidation phase and the buyers were waiting for a bullish pattern which is clearly visible now.

ETH has gained +0.63% with a price change of +26.94$ in the past 24hrs and has a trading volume of 18.729 billion USD.

The Week Ahead

Ether is printing above $4,300 today, and we could see $4,500 this week.

The medium-to-long term outlook for Ether remains bullish, targeting $5,000 and above in the next month.

We can already see an increase in Ethereum’s market capitalization which currently stands at $510 billion.

The price of ETHUSD has already broken its key resistance level of $4,270 and is about to break its next resistance level of $4,335.

We could see Ether printing at above $4,500 next week and aim upsides towards the $5,000 handle.

At present, the market is offering a good buying opportunity for long-term traders who can hold till it reaches $10,000 in 2022.

Technical Indicators:

The commodity channel index (14-day): at 56.55 indicating a BUY

Moving averages convergence divergence (14-day): at 11.85 indicating a BUY

StochRSI (14-day): at 69.83 indicating a BUY

Rate of price change: at 2.121 indicating a BUY

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AUD/USD and NZD/USD Turn Red, Risk of More Losses
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AUD/USD started a fresh decline from well above 0.7250. NZD/USD is also declining, and it might accelerate lower below the 0.6800 level.

Important Takeaways for AUD/USD and NZD/USD

  • The Aussie Dollar started a major decline from the 0.7300 resistance against the US Dollar.
  • There was a break below a connecting support trend line at 0.7170 on the hourly chart of AUD/USD.
  • NZD/USD also started a major decline from well above the 0.7000 level.
  • There is a key bearish trend line forming with resistance near 0.6855 on the hourly chart of NZD/USD.

AUD/USD Technical Analysis

The Aussie Dollar started a major decline after it failed to clear 0.7300 against the US Dollar. The AUD/USD pair traded below the 0.7250 and 0.7200 support levels to move into a bearish zone.

The pair even broke the 0.7150 support and the 50 hourly simple moving average. Besides, there was a break below a connecting support trend line at 0.7170 on the hourly chart of AUD/USD. The pair is now accelerating lower below the 0.7150 level.

AUD/USD Hourly Chart
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An initial support on the downside is near the 0.7120 level. The next major support is near the 0.7100 level. If there is a downside break below the 0.7100 support, the pair could extend its decline towards the 0.7050 level.

On the upside, an immediate resistance is near the 0.7150 level. It is near the 23.6% Fib retracement level of the recent decline from the 0.7208 swing high (formed on FXOpen) to 0.7136 low.

The next major resistance is near the 0.7175 level. It is near the 50% Fib retracement level of the recent decline from the 0.7208 swing high to 0.7136 low. A close above the 0.7175 level could start a steady increase in the near term. The next major resistance could be 0.7250.

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GBP/USD Faces Hurdle, USD/CAD Remains In Uptrend
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GBP/USD is attempting a recovery wave from the 1.3280 zone. USD/CAD is rising and is showing positive signs above the 1.2700 support.

Important Takeaways for GBP/USD and USD/CAD

  • The British Pound found support near 1.3280 and started an upside correction.
  • There was a break above a key bearish trend line with resistance near 1.3330 on the hourly chart of GBP/USD.
  • USD/CAD started a major increase above the 1.2650 and 1.2700 resistance levels.
  • There is a crucial rising channel forming with support near 1.2685 on the hourly chart.

GBP/USD Technical Analysis

After a major decline, the British Pound found support above 1.3250 against the US Dollar. GBP/USD traded as low as 1.3278 on FXOpen and recently started an upside correction.

The pair broke the 1.3320 resistance to move into a short-term positive zone. There was a break above the 23.6% Fib retracement level of the downward move from the 1.3512 swing high to 1.3278 low. Besides, there a break above a key bearish trend line with resistance near 1.3330 on the hourly chart of GBP/USD.

GBP/USD Hourly Chart
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It is now trading above the 1.3330 level and the 50 hourly simple moving average. An immediate resistance is near the 1.3370 level.

The first major resistance is near the 1.3400 level. It is near the 50% Fib retracement level of the downward move from the 1.3512 swing high to 1.3278 low. If there is an upside break above the 1.3400 zone, the pair could rise towards 1.3500.

The next key resistance could be 1.3550, above which the pair could gain strength. On the downside, the first key support is near the 1.3320 area.

If there is a break below 1.3320, the pair could decline extend its decline. The next key support is near the 1.3280 level. Any more losses might call for a test of the 1.3200 support.

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