BTCUSD - Monetary factors support the growth of "digital gold"
The main support for the entire cryptocurrency sector was provided by monetary factors. After the release on Thursday of the December data on US consumer inflation, which recorded a new slowdown in its growth rate from 7.1% to 6.5% on an annualized basis, investors became stronger in the opinion that the US Fed will also adjust the rate of interest rate hike to 25.0 percentage points, putting pressure on the quotes of the national currency. As a result, the positions of alternative assets, including digital ones, have strengthened. It should be noted that the current trend is in line with the forecasts of the well-known crypto enthusiast, the head of Galaxy Digital, Michael Novogratz, who at the beginning of last year said that the digital asset market would restore positive dynamics after the American regulator retreats from the policy of sharp monetary tightening. Further positive for the sector was the news that the FTX bankruptcy team was able to restore access to the company's assets of about 5.0B dollars, which could provide investors with a significant part of the losses.
However, despite a number of positive factors, the further recovery of BTC positions does not look sustainable, as the position of the cryptocurrency industry as a whole remains difficult. The decline in trading volumes on the leading centralized exchanges continues, in December alone, the number of spot trading decreased by 42.8% at once, and of futures – by 47.6% compared to November. The difficult financial situation caused by a protracted fall in prices last year is forcing companies to optimize costs and reduce staff. Thus, the Coinbase platform announced plans to lay off 950 employees, which is about 20.0% of the staff. Cryptocurrency company ConsenSys intends to lay off about 100 employees, and cryptocurrency wallet operator Blockchain.com – 110. In addition, additional problems for the industry may be created by a new lawsuit by the US Securities and Exchange Commission (SEC) against the Gemini site and the Genesis credit service, which, according to the regulator, are guilty of unregistered sale of securities to investors.
Technically, the price is testing the resistance zone of 21000 - 21250 (Murray level [+1/8], Fibo retracement 61.8%), consolidation above it will give the prospect of further growth to the levels of 22500 (Murray level [+2/8]) and 25000 (Murray level [0/8] for W1). If the level of 20000 (Murray level [8/8], Fibo retracement 50.0%) is broken down, the decline will be able to resume to the area of 19100 (Fibo retracement 38.2%) and 17830 (Fibo retracement 23.6%).
The price left the sideways range of 1325 – 1090, where it had been trading for about two months, and reached 1566.40. Further growth of quotations is possible around November highs to 1650, the breakdown of which may cause an increase around 1875 (Murrey level [3/8] for W1). If 1500 (Murrey level [8/8]) is broken down, the decline may resume to 1375 (Murrey level [6/8], Fibonacci retracement 50.0%) and 1312.5 (Murrey level [5/8], Fibonacci retracement 38 .2%, the middle line of Bollinger bands).
Resistance levels: 1650, 1875 | Support levels: 1500, 1375, 1312.5
Crude Oil - OPEC expects growth in global oil production
According to OPEC estimates, the trend for the recovery of quotations of "black gold" can be continued against the background of an increase in production. According to preliminary data, by the end of 2022, production will increase by 1.9M barrels per day by countries outside the cartel, and the forecast for 2023 suggests that the indicator will add another 1.5M barrels per day, reaching 67.2M barrels. It is expected that the USA, Canada and Brazil will remain the leaders in the production of "black gold", while in Norway and Thailand it will decrease slightly.
According to Bloomberg, despite the restrictions, Russian oil supplies by sea last week reached a maximum since April 2022 of 3.8M barrels per day. China, India and Turkey stand out among the main destinations, while Bulgaria remains the only port of shipment to the EU.
On the daily chart, the price is trading in a narrow sideways range, moving away from the lows of the year at the level of 70.5. The technical indicators confirm the high probability of continued corrective growth, strengthening the buy signal.
Support levels: 78.44, 70.5 | Resistance levels: 83.28, 92.2
On the daily chart, the price is trying to consolidate within the corrective trend, trading within the corridor with dynamic boundaries of 139 – 126. On the four-hour chart, the upside potential is relatively small, despite holding above the 23.6% Fibonacci initial retracement at 125.
Soon, an attempt to break this level and reduce quotes may follow. Otherwise, a scenario with local growth and achieving the base correction level of 38.2% by Fibonacci around 139 is possible.
The ADA/USD pair has been growing since the beginning of this year within the framework of a general market trend: last week the price rose to the three-month highs to the level of 0.3662 (Murray level [7/8], Fibo retracement 38.2%), after which it corrected to the area of 0.3300, where it is now trading.
A breakdown of the level of 0.3173 (Murray level [5/8], Fibo retracement 23.6%) may lead to the development of a decline to the level of 0.2929 (Murray level [4/8]), supported by the middle line of the Bollinger Bands. If the level of 0.3418 (Murray level [6/8]) is broken out, a correction to the area of 0.3662 (Murray level [7/8]), 0.3906 (Murray level [8/8]), 0.4150 (Murray level [+1/8]) is possible.
In general, the resumption of the growth of quotations in the near future seems to be a more likely scenario, since the upward trend in the pair persists, which is confirmed by the upward reversal of the Bollinger Bands. At the same time, the development of a downward correction to the area of 0.2929 is also not excluded, but the price is unlikely to go lower, since the Stochastic is close to the oversold zone, which indicates a possible upward reversal. Resistance levels: 0.3418, 0.3662, 0.3906, 0.415 | Support levels: 0.3173, 0.2929, 0.2685
Nasdaq 100 - the US stock market is preparing to continue its growth
One of the leading US indices, the Nasdaq 100, is correcting at 11400.0 after rising at the beginning of the week. The restrained financial reporting of the components hinders the strengthening of the instrument's positions: the banking sector records neutral indicators close to positive, while manufacturers and technology companies have negative dynamics.
So, yesterday financial results were published by the leading aluminum producer, Alcoa Inc., whose quarterly revenue of 2.70B dollars exceeded the projected 2.66B dollars, yielding 2.85B dollars a quarter earlier, and the loss per share was 0.70 dollars, which is much worse than 0.33 dollars a quarter earlier. Thus, the company is rapidly approaching the minimum indicators of the period of the beginning of the coronavirus pandemic in 2020.
Today, financial data will be presented by one of the leaders of the global consumer goods market, The Procter & Gamble Co., whose revenue is projected at 20.67B dollars, as well as streaming service Netflix Inc., whose profit may decrease to 0.59 dollars per share compared to 3.1 dollars in the previous quarter. The company's revenue may also decrease and amount to 7.84B dollars against 7.93 dollars earlier.
On the daily chart, the index quotes continue to correct within the framework of the global Broadening Formation pattern, and the technical indicators keep a stable buy signal.
Support levels: 11177, 10634 | Resistance levels: 11700, 12220
Positive sentiment associated with monetary factors still prevails. Investors are confident that against the backdrop of declining inflationary pressures, the US regulator will start raising interest rates less rapidly, reducing the increment to 25 basis points from 50 basis points. These actions should lead to a decrease in support for the US currency and at the same time reduce the likelihood of the US economy going into recession, which increases the risk appetite of investors.
The price corrected to the level of 22500 (Murrey level [6/8]), a breakdown of which will give the prospect of developing a decline to the levels of 21250 (Murrey level [5/8], Fibonacci retracement 61.8%) and 20000 (Murrey level [4/8], Fibonacci retracement 38.2%). The key level for the "bulls" remains the level of 23400, consolidation above which will ensure growth to the levels of 25000 (Murrey level [8/8]) and 26250 (Murrey level [+1/8]).
Silver - The price is in a correction and may grow.
On the daily chart, a downward correction of the higher level ended as the second wave (2), and the third wave (3) forms, within which the entry first wave of the lower level 1 of (3) develops. Now, the wave iii of 1 has formed, and a local correction is ending to develop as the wave iv of 1, within which the wave (c) of iv is developing.
If the assumption is correct, the XAGUSD pair will grow to the area of 26 – 27. In this scenario, critical stop loss level is 21.80.
Since the beginning of this year, the ETHUSD pair has been growing within the framework of a general market uptrend: last week, for the first time since September, the quotes rose to the area of 1678.7, but now they have lost some of the positions they won, dropping to the level of 1625 (Murray level [5/8]).
The key for the "bulls" is currently the level of 1650 (Fibo retracement 23.6%), consolidation above it will give the prospect of further growth to the levels of 1750 (Murray level [6/8]) and 1875 (Murray level [7/8]). In general, the upward trend in the market remains, as evidenced by the upward reversal of the Bollinger Bands and the increase in the MACD histogram in the positive zone. The Stochastic's exit from the overbought zone does not exclude a corrective decline, but its potential is seen as limited by the 1500 mark (Murray level [4/8], the middle line of the Bollinger Bands). If the price consolidates below this level, the decline will be able to continue to the area of 1375 (Murray level [3/8]) and 1250 (Murray level [2/8]), but so far this scenario seems less likely.
Soyabeans is trading in the upward channel, noting the AO indicator shows negative signals waiting to motivate the bears to confrim the break of the main bullish trend 1477.45 support (Fibo retracement 38.2) which extends to 1465.42 - 1456.05 (Fibo retracement 50).
We see a hammer candle in 12 hours chart which can indicate trend reversal. Breaching MA 50 would push the price to continue the bullish trend that its targets begin by testing 1511.8 - 1520.16.
The XRPUSD pair has been growing within the general market trend since the beginning of this month, and this week has reached 0.4290 for the first time since November.
Currently, the quotes have corrected to the 0.4000 area, but the current short-term uptrend will be reversed only after the breakdown of the middle line of Bollinger bands in the 0.3780 area, and then the asset will be able to return to 0.3418 (Murrey level [6/8]) and 0.3174 (Murrey level [5/8]). The key "bullish" level is the resistance zone 0.4330–0.4395 (Fibonacci correction 23.6%, Murrey level [+2/8]), the breakout of which allows growth to 0.4750 and 0.5219 (Fibonacci correction 38.2%).
Investors are in no hurry to open new positions in anticipation of the publication of key US Q4 gross domestic product (GDP) data: experts expect a decline from 3.2% to 2.6%, which will confirm further softening of the "hawkish" rhetoric of the US Federal Reserve. On Wednesday, February 1, the regulator may announce an increase in interest rates by only 25.0 basis points, and analysts do not exclude another correction of the value by a similar amount in the first half of the year, after which a pause is expected to assess the effectiveness of the measures taken. The European Central Bank (ECB) and the Bank of England are more resolute so far that silver remains dependent on possible increases in interest rates. Also, the Bank of Japan, which has long adhered to the "dovish" monetary policy, may soon begin to tighten it.
According to the latest report from the US Commodity Futures Trading Commission (CFTC), last week, the number of net speculative positions in silver amounted to 31.5K versus 29.0K a week earlier: "bears" are in the lead in the number of contracts at swap dealers, and the gap is held regardless of the decrease in the interest of this group of investors in the asset, amounting to 45.728K against 34.865K for the "bulls." This week, sellers have reduced their positions by 98 trades and buyers by 699.
The trading instrument is supported by hopes for further activity recovery in China, where the government has been gradually lifting quarantine restrictions since December. The China Gold Association reported a 10.63% decrease in metal consumption last year to 1,001.74 tons. In comparison, jewelry lost 8.01% to 654.32 tons, and investment in gold bars and coins fell by 17.23%, amounting to 258.94 tons. Still, experts expect that the opening of the economy can dramatically improve the situation.
Dow Jones - The US stock market is preparing to continue its growth
Tesla Inc., an electric car maker, released financial results yesterday, with fourth-quarter revenue of 24.32 billion dollars, lower than forecast of 24.68 billion dollars, and with earnings per share of 1.19 dollars, higher than the previous quarter's figure of 1.05 dollars. In turn, technology giant IBM Corp. posted revenue of 16.70 billion dollars against a forecast of 16.13 billion dollars and earnings per share of 3.60 dollars, well above 1.81 dollars a quarter earlier.
Among the negative publications, one can single out yesterday's report of the manufacturer of aviation, space and military equipment, Boeing Co., whose quarterly revenue amounted to 19.98 billion dollars, an increase of 35.0% compared to the previous quarter. The company's recovery still failed to turn it into profit, with a loss per share of 1.75 dollars after -6.18 dollars per share in the previous quarter.
On the daily chart, the index quotes continue corrective dynamics, again trying to overcome the channel's resistance line at 34160, and the technical indicators are in a state of uncertainty.
Support levels: 33300, 32500 | Resistance levels: 34160, 35300
Precious metals are underperforming today as the US dollar strengthened. USD has erased some of the gains, allowing precious metals to trim part of the losses. Nevertheless, precious metals continue to trade lower with gold dropping 0.2% while silver and platinum are dropping 0.8%. Release of US data pack for December at 1:30 pm GMT, including core PCE inflation, is likely to trigger some USD volatility, and it should also lead to more action on the precious metals market.
Taking a look at the PLATINUM chart at D1 interval, we can see that the price of this precious metal has dropped below the $1,030 support zone yesterday and is now trading back within a recent range. Bulls managed to recover some gains and push the price off daily lows today but, unless a break back above $1,030 zone is delivered, the next move from a technical point of view could be a pullback towards the lower limit of the range ($970 area). A potential higher-than-expected US PCE reading may benefit the US dollar and this, in turn, should exert pressure on precious metals.
In general, investors remain optimistic, and demand for digital assets is growing ahead of the US Fed meeting, which will be held this week. It is expected that the regulator will reduce the rate of interest rate increase from 50.0 to 25.0 percentage points and, possibly, hint at the timing of the end of the monetary policy tightening cycle.
In addition, a number of factors indicate a further increase in the prices of cryptocurrencies. Thus, the total market capitalization recently again exceeded 1.0T dollars and continues to grow, and the activity of miners began to recover after a significant drop resulting from the bankruptcy of the FTX exchange. Institutional investors remain interested in digital assets, despite the problems of the industry, and, according to the latest research by Matrixport, they account for 85.0% of BTC purchases currently made. The company's calculations are based on the condition that retail investors dominate the market during the Asian session, and institutional investors dominate during the American session. Yet the first cryptocurrency reaches the greatest growth during the American trading session.
In general, the positive mood in the cryptocurrency market is likely to continue during the week, but much will depend on the decisions and rhetoric of US Fed officials.
Technically, the price is testing the mark of 23750.00 (Murray level [7/8]), consolidation above which will give the prospect of further growth to the level of 25000.00 (Murray level [8/8]). With a breakdown of the level of 22500.00 (Murray level [6/8]) and the middle line of the Bollinger Bands, the decline will be able to resume to the area of 21250.00 (Murray level [5/8], Fibo retracement 61.8%) and 20000.00 (Murray level [4/8], Fibo retracement 50.0%).
The ETHUSD pair has been growing since the beginning of the year, but for the second week in a row, it cannot consolidate above the key “bullish” level of 1650 (Fibonacci correction 23.6%), the breakout of which will allow it to rise to 1750 (Murrey level [8/8]), 1812.50 (Murrey level [+1/8]) and 1875 (Murrey level [+2/8]). At present, the prospects for further positive dynamics look uncertain, as the cryptocurrency quotes have corrected below the middle line of Bollinger bands, which does not exclude movement to the key “bearish” level of 1500 (Murrey level [4/8]), consolidation below which will allow the instrument to test the level of 1375 (Murrey level [2/8]) and 1250 (Murrey level [0/8]).