Bitcoin price action over the last two months is reminiscent of the moves that occurred between January 20 and March 1. The repeating pattern is termed fractal and can be seen even in the Relative Strength Index (RSI) and Awesome Oscillator (AO) momentum indicators.

If history does repeat, then investors can first expect Bitcoin price to trigger a minor recovery rally to $28,051. This move is ‘scenario one’ and will push BTC to collect the buy-stop liquidity before, as seen in the chart below. After this liquidity run, sellers are likely to take control and catalyze a steep correction, trapping early and greedy bulls on the wrong side. 

This confidence suggests that investors are willing to hold on to their assets as potential recovery will bring about profits.

Although some bouts of selling have been observed in the market over the last few months, for the majority of the last 12 months, HODLing has been the primary market dynamic. This is visible in the decline in liveliness.

Bitcoin price is currently trading at $27,319, consolidating between $28,470 and $26,500 for more than ten days now. The decline noted on the charts since mid-April has dragged BTC down from $30,500 to its current price. Interestingly this did not trigger excessive selling among investors, which is a positive sign.

The RSI and AO indicators are perfectly positioned below their respective mean levels for a rejection followed by a pullback. The second leg of scenario one includes Bitcoin price sliding down to tag the support levels at $25,175 and $23,062.

The bullish thesis, or scenario 2 for Bitcoin price, will include BTC invalidating the fractal outlook and flipping the $28,051 hurdle into a support floor. Doing so will pave the way for BTC to tag $30,287.

BTCUSD

Expecting another corrective bearish leg before upside

EUR/USD maintains its bearish tone on Tuesday, seeing its decline accelerate to the 1.0760 area as the dollar continues to face upward pressure, while unease over the US debt ceiling continues to weigh on sentiment.

Meanwhile, talks over the US debt ceiling are expected to continue to drive sentiment in global markets in the near term, while speculation of further rate hikes by the ECB at its June and July meetings, and likely in September, continues to grow.

The EUR/USD pair trades near its daily low as the US Dollar advances against most major rivals. Technical readings in the daily chart favor a bearish extension. The pair is meeting sellers around a directionless 100 Simple Moving Average (SMA) for a third consecutive day, while the 20 SMA gains downward traction above it. At the same time, the Momentum indicator heads firmly south within negative levels and at fresh multi-week lows, while the Relative Strength Index (RSI) indicator also heads south at around 37.

The risk skews to the downside in the near term. The 4-hour chart shows EUR/USD finally fell below a bearish 20 SMA after seesawing around the level for two consecutive days. At the same time, the 100 SMA extends its slide below the 200 SMA, both over 100 pips above the current level. Finally, the Momentum indicator rotated south but stands within neutral levels, although the RSI heads lower almost vertically at around 36.

The pair has an immediate support level at 1.0745, the 61.8% retracement of the 2022 yearly decline. Large stops likely accumulate below the level and once triggered, the US Dollar can accelerate its advance. On the other hand, sellers will probably add on approaches to the 1.0800 threshold.

EURUSD

EURUSD has still hidden bearish cards on the line

The AUD/USD pair comes under heavy selling pressure on Tuesday and continues losing ground through the first half of the European session. Spot prices drop back closer to the monthly low touched last week, with bears now awaiting a sustained beak below the 0.6600 round-figure mark before placing fresh bets. The fundamental backdrop suggests that the path of least resistance for spot prices is to the downside. Some follow-through selling below the 0.6600 mark will reaffirm the negative bias and make the AUD/USD pair vulnerable to challenge the YTD low, around the 0.6565 region touched in March.

AUD/USD has formed an Inverted Head and Shoulder chart pattern on an hourly scale, which advocates a bullish reversal after a long consolidation. The Aussie asset is expected to witness a significant upside after a breakout of the neckline plotted from May 17 high at 0.6690.

The 20-period Exponential Moving Average (EMA) at 0.6650 is providing support to the Aussie bulls.

Also, the Relative Strength Index (RSI) (14) is making efforts for shifting into the bullish range of 60.00-80.00 after which a bullish momentum will get triggered.

A confident acceptance above the neckline plotted from May 17 high at 0.6690 will send the Aussie bulls firmly toward the round-level resistance at 0.6800 followed by February 06 low at 0.6855.

In an alternate scenario, US Dollar bulls will flex their muscles if the Aussie asset will drop below March 15 low at 0.6590. An occurrence of the same will expose the asset to March 08 low at 0.6568 followed by 02 November 2022 high around 0.6500.

AUDUSD

AUDUSD under selling pressure

Silver struggles to capitalize on Friday's goodish rebound from the 100-day Simple Moving Average (SMA) and meets with a fresh supply on the first day of a new week. The white metal remains on the defensive through the early European session and is currently trading around the $23.75 region, representing the 38.2% Fibonacci retracement level of the March-May rally.

From a technical perspective, the recent breakdown through the $24.60-$24.50 horizontal support, coinciding with the 23.6% Fibo. level, favours bearish traders. Moreover, oscillators on the daily chart are holding deep in the negative territory and are still far from being in the oversold zone. This, along with Friday's failure near the $24.00 mark, suggests that the path of least resistance for the XAG/USD is to the downside.

That said, it will be prudent to wait for acceptance below the 100-day SMA, currently pegged near the $23.35-$23.30 area, also marking the lowest level since late March touched last Thursday, before placing fresh bearish bets. The XAG/USD might then accelerate the fall towards 50% Fibo. level, around the $23.00 mark before eventually dropping to the $22.65-$22.60 support en route to the $22.30-$22.25 region, or the 61.8% Fibo. level.

On the flip side, momentum back above the $24.00 round figure might attract fresh sellers near the $24.25 supply zone. Any subsequent strength is more likely to remain capped near the $25.00 psychological mark. This is followed by the $25.30-$25.40 hurdle, which if cleared decisively should allow bulls to make a fresh attempt to conquer the $26.00 mark and challenge the YTD peak, around the $26.10-$26.15 area touched earlier this month.

XAGUSD

Silver has provided some serious bearish breakouts on 4H

West Texas Intermediate (WTI), futures on NYMEX, are displaying back-and-forth action below $72.00 in the Asian session. The oil price is expected to remain sideways as investors are awaiting the outcome of the US debt-ceiling negotiations. US President Joe Biden and House of Speaker Kevin McCarthy are scheduled to make further negotiations on Monday. Earlier, US Biden called partisan terms from Republicans unacceptable as the latter demanded an 8% cut on big wrath.

The oil price is auctioning in a Symmetrical Triangle chart pattern on a four-hour scale, which indicates volatility contraction. The upward-sloping trendline of the chart pattern is placed from May 15 low at $69.39 while the downward-sloping trendline is plotted from May 10 high at $73.81. Earlier, the oil price rebounded firmly after forming a Double Bottom chart pattern around March 20 low at $64.38.

The 20-period Exponential Moving Average (EMA) at $72.00 is stick to the oil price, indicating a lackluster performance.

Also, the Relative Strength Index (RSI) (14) is oscillating in the 40.00-60.00, which signals that investors await a trigger for decisive action.

Going forward, a breakdown of May 15 low at $69.39 will strengthen the downside bias and will send the oil price to May 04 low at $67.47. A breakdown of the latter will further send the asset price toward 17-month low at $64.31.

In an alternate scenario, a solid recovery above May 10 high at $73.80 will allow the asset for further upside towards May 02 high at $76.06. A breach of the latter will expose the asset to April 26 high around $78.00.

USWTI

The Double Bottom can trigger a bullish breakout

EUR/USD has lost its traction and retreated toward 1.0800 in the second half of the day on Monday. As investors await headlines surrounding debt-limit talks, the cautious market stance helps the US Dollar hold its ground and limits the pair's upside. Last week’s bearish close marked the second consecutive week in red and weighs on near-term action, supporting scenario of limited correction before bears regain control.

The EUR/USD pair holds on to modest intraday gains with limited upward strength. Technical indicators in the daily chart remain within negative levels, having pared their recoveries and currently lacking directional strength. At the same time, the 20 Simple Moving Average (SMA) extends its slide far above the current level while the pair seesaws around a flat 100 SMA. The pair can gain downward traction once below 1.0790, and test a critical long-term support level at 1.0745, the 61.8% Fibonacci retracement of the 2022 yearly slump.

While initially supported by the 1.0760 region, occasional bullish attempts could see the pair confront the interim resistance area at the 55-day SMA at 1.0868 prior to the psychological 1.1000 mark.

Extra losses are not ruled out, however, in the current context, although a sustained retracement to the March bottom of 1.0516 (March 15) is not favoured for the time being.

In the near term, the pair is technically neutral. EUR/USD recovered above a still bearish 20 SMA while it remains below the longer ones. The 100 SMA has crossed below the 200 SMA and gains downward traction, usually a sign of increasing selling interest. Finally, technical indicators approach their midlines from below but without enough strength to anticipate a bullish continuation in the upcoming hours.

EURUSD to fall below 4HEMA200

Gold not only lost the $2,000 level during the week, but it also broke through the key support area at $1,970. After declining by over $60 in three days, it stabilized and found support above $1,950. The move lower was driven by a rally in the US Dollar and higher government bond yields. As a result, the yellow metal reached its lowest level in six weeks, extending the correction from its record high level struck in May.

The sharp decline in Gold has sent the price below key technical support areas. The current configuration suggests that the decline may not be over, and the correction from record high levels has more room to go.

On the weekly chart, the Relative Strength Index (RSI) has turned south, moving away from 70, and Momentum is also heading south. The immediate support for Gold is at the $1,950 area. A break below this level could trigger more losses, exposing a strong support range delimited by an uptrend line and the 20-week Simple Moving Average (SMA) between $1,920 and $1,930. A weekly close below that area would indicate more weakness ahead. However, if Gold holds above that level, it could set the stage for a rebound.

Recovery above $1,975 would alleviate the bearish pressure in the short term. A daily close above $2,005 is needed to strengthen the outlook for the yellow metal, while a weekly close surpassing $2,020 will lay the ground for new record highs.

The possibilities on the chart are slightly bearish bias in the short term with the one-week target aligning just below $1,950. The majority of polled experts see a rebound later in Gold, and retaking $2,000 by July.

XAUUSD

Fall on gold can be considered as last leg of bearish correction

The AUD/USD pair gained strong positive traction on the last day of the week and moved away from a nearly three-week low, around the 0.6600 round-figure mark touched on Friday. The pair stick to its intraday gains through the early North American session and is currently placed around the 0.6655-0.6660 region, just a few pips below the daily high. 

The US Dollar (USD) pulls back from its highest level since March 20 and turns out to be a key factor lending support to the AUD/USD pair. A generally positive tone around the equity markets prompts some profit-taking around the safe-haven buck and benefits the risk-sensitive Aussie. The downside for the USD, however, seems limited amid growing acceptance that the Federal Reserve (Fed) will keep interest rates higher for longer and the latest optimism over the potential lifting of the US debt ceiling.

Adding strength to the corrective bounce could be the below-50 levels of the RSI (14) line.

However, a clear upside break of a seven-day-long descending resistance line, around 0.6635 by the press time, becomes necessary to recall the AUD/USD buyers.

Even so, the weekly high of around 0.6710 and convergence of the 100-DMA and 38.2% Fibonacci retracement of the pair’s run-up from October 2022 to February 2023, near 0.6785, can challenge the AUD/USD bulls.

Alternatively, a daily closing below the stated channel’s bottom line, close to the 0.6600 round figure, could quickly fetch the Aussie bears to the 61.8% Fibonacci retracement level of near 0.6550.

Nevertheless, the aforementioned fundamental backdrop suggests that the path of least resistance for spot prices is to the downside and any subsequent move up might get sold into.

Short Term Buying on AUDUSD

The NZD/USD pair has sensed selling pressure above 0.6240 in the Tokyo session. The Kiwi asset has attracted significant offers as the US Dollar Index (DXY) has rebounded firmly ahead of the speech from Federal Reserve (Fed) chair Jerome Powell.

the Kiwi pair stays within a bearish chart formation called a rising wedge comprising multiple levels marked since the last Friday.

However, the gradual uplift of the RSI (14) line, not overbought, keeps the NZD/USD buyers hopeful of defying the stated bearish chart formation by crossing the 0.6275 upside hurdle.

Even so, the 200-DEMA and a fortnight-old horizontal resistance area, respectively near 0.6285 and 0.6315, can prod the NZD/USD bulls before directing them to the monthly peak of 0.6385.

It’s worth noting that tops marked in February and April highlight the 0.6385-90 area as a short-term key hurdle for the pair to cross. Also acting as an important upside barrier is the 0.6400 round figure.

On the contrary, a downside break of the 0.6240 mark comprising the stated wedge’s lower line can confirm the bearish chart pattern, which theoretically suggests a fall towards the monthly of near 0.6160.

However, the latest swing low and the previous monthly bottom, close to 0.6180 and 0.6110, act as additional downside filters for the NZD/USD pair traders to watch during the quote’s further declines.

Overall, NZD/USD is likely to grind higher but the bearish chart formation and the key Hourly Moving Average (HMA) prod the bulls. We will further observe and monitor the Kiwi in accordance to its performance above the aforementioned DEMAs.

NZDUSD

Kiwi struggling for sustenance above the DEMA200

The EUR/USD pair plummeted during the European session to a fresh one-month low of 1.0813, holding nearby as American traders arrive at their desks. The US Dollar appreciated as the risk-off mood persists, despite encouraging news from the United States (US) about the debt ceiling extension. Late on Tuesday, President Joe Biden and top lawmakers met to discuss an agreement and said a deal could be reached by the end of the week.

The EUR/USD pair trades near the aforementioned low, and the daily chart hints at further slides ahead. The pair moved further below a bearish 20 Simple Moving Average (SMA), which stands at around 1.0970. At the same time, the pair approaches a mildly bullish 100 SMA at 1.0805. A break below the latter should exacerbate selling interest. Finally, technical indicators head firmly south within negative levels, anticipating another leg lower. The 1.0800 area appears supported by the temporary 100-day Simple Moving Average (SMA) at 1.0804 and the loss of this level could trigger a deeper drop to, initially, the April 3 low at 1.0788. Further south emerges the March 15 bottom of 1.0516.

Looking at the longer run, the constructive view remains unchanged while above the 200-day SMA, today at 1.0460.

In the near term, and according to the 4-hour chart, the risk also skews to the downside. A bearish 20 SMA rejects recovery attempts while accelerating its decline well below the longer ones. The Momentum indicator heads lower within negative levels, while the Relative Strength Index (RSI) partially lost its downward strength but holds at around 28. The main bearish target on further declines is 1.0745, the 61.8% Fibonacci retracement of the 2022 yearly slump.

EURUSD has turned favors to bearish trend

USDCHF has seen a strong decline since October 2022 peak with shallow bounces in-between. In today’s blog, we will take a look at the Elliott wave structure of the decline from October 21, 2022 peak, market sequence and next extreme areas which should be potential entry areas for both sellers and buyers. We will also present a details Elliott wave count of the decline from 03.02.2023 peak and also look at the structure of the corrective bounce since 05.04.2023 low.

USDCHF forex pair showing an incomplete bearish sequence down from 10.21.2022 peak with 03.02.2023 being the connector. So we expect the bounces to fail below 03.02.2023 peak for continuation lower. 100% Fibonacci extension from 10.21.2022 peak comes at 0.83422 which is below January 2021 low which will create an incomplete bearish sequence down from December 2016 peak with 100% Fibonacci extension coming at 0.8563. So while below 03.02.2023 peak, expect the pair to continue lower toward a double extreme area from December 2016 peak and from October 2022 peak and it should act as a power reversal area. This area should produce a reaction higher in USDCHF and US Dollar in general for a minimum of 3 waves and should be a very good area for buyers once reached. 

Chart above shows USDCHF cycle from 03.02.2023 ended as an impulse and pair is now bouncing to correct the decline from 03.02.2023 peak at 0.94404. Pair is showing 5 swings up from the low and we expect another swing higher to complete double there Elliott wave structure. 0.90238 – 0.92104 is the ideal area to complete 7 swings and this is where we expect sellers to appear to resume the decline toward the double extreme area shown on the weekly chart above or produce a reaction lower in three waves at least to allow sellers to get into a risk free position.

USDCHF

USDCHF to complete its correction before next fall

The USD/CAD pair is looking to reclaim the psychological resistance of 1.3500 in the early London session. The Loonie asset has rebounded after a mild correction to near 1.3463 amid the recovery move by the US Dollar Index (DXY). The USD Index has refreshed its day’s high at 102.68 as US debt-ceiling issues have deepened further.

There are prospects of a run to test the 1.3500 resistance, considering the price is now on the back side of the prior bearish micro trend. However, if the bears commit to resistance, there will be prospects of a move to restest the now counter-trendline support and the 1.3450s.

On the daily chart, below, such a move would tally with a 50% mean reversion support and below there, a 61.8% Fibonacci area around the 1.3420 and trendline support.

If the bulls commit, then there will be prospects of a move through the daily trendline resistance.

The oil price has dropped sharply as investors are worried about deepening fears of a US recession. Going forward, the oil inventory data by the US Energy Information Administration (EIA) will be keenly watched. It is worth noting that Canada is the leading exporter of oil to the US and lower oil prices impact the Canadian Dollar. 

The USD/CAD is falling sharply for the second day in a row and is approaching the 1.3400 level but we will maintain our hawkish stance above the SL area. A break below this level could expose the next support area seen around 1.3360/70. A daily close below this area could open the door for a test of the monthly low at 1.3310/15.

The immediate resistance for the pair is the 1.3500 area. If the it rallies above this level, it would alleviate the current bearish pressure.

farhan fazal

farhan fazal

May 23 2023

Expecting another corrective bearish leg before upside

farhan fazal

May 23 2023

EURUSD has still hidden bearish cards on the line

farhan fazal

May 23 2023

AUDUSD under selling pressure

farhan fazal

May 22 2023

Silver has provided some serious bearish breakouts on 4H

farhan fazal

May 22 2023

The Double Bottom can trigger a bullish breakout

farhan fazal

May 22 2023

EURUSD to fall below 4HEMA200

farhan fazal

May 21 2023

Fall on gold can be considered as last leg of bearish correction

farhan fazal

May 21 2023

Short Term Buying on AUDUSD

farhan fazal

May 21 2023

Kiwi struggling for sustenance above the DEMA200

farhan fazal

May 17 2023

EURUSD has turned favors to bearish trend

farhan fazal

May 17 2023

USDCHF to complete its correction before next fall

farhan fazal

May 17 2023

USDCAD seems to be getting ready for bullish run