If you are a longer term trader, look at pullbacks as a potential way to start picking up a bit of value.

• The ETH/USD currency pair rallied slightly Friday as we continue to see the Ethereum market recover.
• The Ethereum market is a bit different than other crypto markets, due to the fact that the market is looking at an upgrade later this year, something that has been waited for over the last several years.
• Ultimately, this is a market that I think continues to pay close attention to the outcome of that merge, but at this point in time, it looks as if everything is still on track to get done by the end of fall.

Technical Analysis

From a technical analysis standpoint, it’s obvious that there is a range of resistance from the $1800 level that extends up to the $2000 level. In this area, I would anticipate that resistance comes into the picture, but it’s worth noting that even though we formed a shooting star for the Thursday session, so far it appears that Friday is willing to look beyond it.

The market is likely to continue seeing a lot of noisy behavior, but if we get a daily close above the $2000 level, it would be a major breach of resistance, and it’s likely that the market would continue to go higher. However, if we take out the Wednesday candlestick, at that point I think we probably have a deeper correction ahead. It certainly looks as if the Ethereum market is resilient, and maybe a bit of an outlier when it comes to crypto, due to the fact that there are network-specific reasons to think that it could strengthen.

Nonetheless, there are a lot of economic headwinds out there, so it’s difficult to imagine that the market will simply take off easily. If we get a major “risk off” type of scenario, that could greatly influence the Ethereum market, making it sell off quickly. Nonetheless, out of all the crypto markets right now, Ethereum is by far the strongest, so I continue to look at it through the prism of the “best case scenario for a bad case market.” Ultimately, this is a market that continues to see noise more than anything else, so if you are a longer term trader, look at pullbacks as a potential way to start picking up a bit of value.

Ready to trade Ethereum? Here are the best MT4 crypto brokers to choose from.

Volatility is the only thing you can count on, but I do believe that it is more likely than not going to be a situation where selling is going to be easier.

If you ever wanted to fall asleep trading, you can do so by watching the euro. This of course is being said half tongue-in-cheek, but the reality is that we have nowhere to be at the moment. The market continues to hang about between the 1.01 level underneath, and the 1.03 level above. This is a market that is probably better traded from the short term than anything else.

Pay Attention to Support and Resistance

If you are a short-term trader, you can probably go back and forth on a 15 minute chart until we finally break out. Even if we break out, I think at this point you need to pay attention to some areas just above and below the market right now as well. After all, the 1.04 level is massive resistance, as it was previous support. The 50-day EMA sits in the same area as well. On the other hand, if the market were to break down from here, it could open up the possibility of retesting the 1.00 level.

The 1.00 level is obviously an area that a lot of people will pay close attention to, as it has a lot of psychology attached to it. If we were to break down below the parity level, then a lot of money will flow into this market, sending a massive amount of money into this market, especially if we get a daily close below the parity level. At that point, I anticipate that the market could go down to the 0.98 level, possibly even the 0.96 level.

It’s not until we break above the 1.06 level that I would consider that we could have a little bit of momentum, opening up the possibility of the market rally into the 200-day EMA. Ultimately, this is a market that I think is going to be noisier than anything else, especially as the European Union has a major issue when it comes to energy and its economy in general. Quite frankly, I think the euro is in serious trouble, and it is probably only a matter of time before we break down. Volatility is the only thing you can count on, but I do believe that it is more likely than not going to be a situation where selling is going to be easier.

Ready to trade our Forex daily analysis and predictions? Here are the best Forex brokers to choose from.

The Gold market has to decide what it wants to do over the longer term, and Friday might be the day that we figure it out.

• Gold markets have rallied rather significantly during the day, as we have gone back and forth during the trading session before shooting straight up in the air.
• That the market is likely to continue being driven by the bond markets, and whatever is happening with the yield in the United States.
• As yields fall, it makes gold much more attractive.

As we have rallied rather significantly from that point, the market is likely to continue to see the $1800 level as important, as it is not only a large, round, psychologically significant figure, but it is also an area that has seen quite a bit of action in the past. The 50 Day EMA is in this area as well, so that makes quite a bit of sense that we would see a little bit of dynamic resistance here as well. Ultimately, this is a market that I think given enough time will have to decide what it wants to do over the longer term, and Friday might be the day that we figure it out.

While it is more likely than not that we will see a volatile session, the real question is going to be whether or not the Federal Reserve will have to remain extraordinarily tight with their monetary policy, and if we get a very strong jobs number, it’s possible that we could see the interest rates rise again in the United States, as it will almost certainly mean that the Federal Reserve will have to step on the gas when it comes to tightening. On the other hand, if we were to see a less strong job number, then the idea might be that the economy is slowing down and the Federal Reserve will have to abandon plans to tighten as quickly as they say they will.

It really doesn’t matter because the market will do whatever it wants to do. Looking at this general vicinity, I think it’s likely that we continue to see a lot of noise in the $1800 level, and therefore it will come down to where we close on Friday at the end of the day. This not only tells you what the reaction would be to the announcement but whether or not people are comfortable holding gold through the weekend.

Ready to trade today’s Gold forecast? Here are the best Gold brokers to choose from.

It’s interesting that we are lining up for a fight just as we are running into a bit of significant resistance.

• The S&P 500 Index initially pulled back Friday but then turned around to show signs of bullish pressure late in the day.
• It does make sense that the market rallied on Friday, mainly due to the fact that money managers will try to mark up into the end of the month.
• This is a market that has a little further to go before it hits massive resistance, but it is worth noting that the market has been relentless.

Eyeing the 4200 Level

I do believe that we will out of momentum sooner or later, with the 4200 level above being important. It’s worth noting that the area has been resistant before, so if we get some type of exhaustion candlestick in the general vicinity, I am willing to start shorting. This makes sense, due to the fact that even though interest rates have dropped in the United States, the reality is that the Federal Reserve has not suggested that it was ready to pivot. True, they said something about being near the neutral rate, but they also suggested that there are still hikes coming.

If we do break above the 4200 level, then it’s possible that the market could go looking to the 200-day EMA. That obviously would be a very bullish turn of events, and at that point, I think the market would have just about proven its uptrend. This has been a market that has been overdone on multiple time frames. Because of this, I think at the very least we can probably count on some type of pullback, but the fundamental information out there that we have right now does not suggest that we are ready to take up to the upside.

The 4000 level underneath would probably be important as well, as it is a large, round, psychologically significant figure. After that, then we have the 3950 level which would be rather important as well. The market is most clearly bullish in the short term, and momentum is most certainly on the side of the buyers. However, it’s interesting that we are lining up for a fight just as we are running into a bit of significant resistance. Whether or not we can continue this move is a completely different question, but I do think Monday is going to be interesting to say the least.

Ready to trade our S&P 500 daily forecast? Here are the best CFD brokers to choose from.

I think this is a market that will continue to see significant choppiness, so we need to be cautious with our position size.

The gold markets fell initially on Friday only to turn around and show signs of life. That being said, the market is going to continue to be noisy overall, as the gold market is being thrown around by the bond markets and interest rates coming out of the United States.

Looking at this chart, the $1800 level is crucial, and an area where the market has been imported multiple times. If you were to break down below there, then I think the gold market has much further to go, perhaps opening up the possibility of a move to the $1750 level. You will notice that I have marked on the chart where we had a bit of a double bottom form in that area, so I think it’s important to pay close attention to it.

If we were to break above the top of the candlestick from Friday, that could open up a move toward the highest from Wednesday and Thursday which is just shy of the $1850 level. That is an area of importance that sellers will pay close attention to, but if we were to break above there, then we could go to the $1800 level. The $1880 level it’s an area that has been at the top of the larger consolidation area.

If we did break above there, then it’s likely that we could go to the $1920 level, possibly even the $2000 level after that. That obviously would go along with the idea of lowering rates, or perhaps even extreme inflation. Ultimately, I think this is a market that will continue to see significant choppiness, so we need to be cautious with our position size, but once we finally do get some type of impulsive candlestick that breaks out of the range, then we are more likely than not set up for a fairly big move. At that point, I would become much more aggressive with my position sizing, but until then the fact is that you will probably be stuck trading short-term charts, and with relatively small position sizing until we can get some type of clarity. I suspect that as traders continue to guess as to what the Federal Reserve is going to do, they will continue to guess what gold markets are going to do.

It is worth noting that the market is rather neutral, which is interesting considering just how bullish it was the previous three days.

The S&P 500 has been rather messy as of late, as Jerome Powell has been summoned by Joe Biden for a conversation. At this point, the reading of the market is that “Uncle Jerome” is going to come and save everybody. That being said, it is more likely that Pres. Biden will tell Powell to become increasingly hawkish, as inflation is going to decimate the Democratic lead in all seats of government.

That being said, hope burns eternal on Wall Street and there is always a narrative to push the markets around. I think that’s most of what’s going on, and of course a bit of short covering. That being said, the 50-day EMA sits at the 4200 level and should offer a bit of resistance. The market breaking down below the bottom of the candlestick for the trading session would be a negative turn of events, as it would show just how negative this market is, and how resistive this area continues to be.

Even if we break above the 4200 level, it’s not really into would break above the 4300 level that it would show a significant amount of momentum to make people pile in this market, as it has been so beaten up, and there are plenty of economic reasons to think that stocks should be lower. In fact, the Federal Reserve has even had several members explicitly say that they need stock prices lower. We need wealth destruction in order to fight inflation because it destroys demand. I do believe that it’s only a matter of time before stock traders get hugely disappointed, but right now it looks like the latest rumor and speculation have fueled a little bit of a recovery.

It is worth noting that the market is rather neutral, which is interesting considering just how bullish it was the previous three days. This is exactly where you would expect to run into trouble, so that is worth noting as well. The area below current trading is very noisy, so I don’t necessarily think that we will slice right through it and go to the 3900 level easily, but I do recognize that it’s a very real possibility given enough time. All things being equal, I remain rather bearish of this market as I think nothing has truly changed.

 

The only way I see Bitcoin rallying for a significant amount of time as if the Federal Reserve steps away.

The Bitcoin market dropped a bit on Thursday as we continue to hang around the $30,000 level. The $30,000 level is an area where we have seen a lot of noise, as there have been both buyers and sellers trying to settle whether or not we are going to continue going lower, or if we can get some type of short-term bounce.

$30,000 is a large, round, psychologically significant figure that could attract a certain amount of attention, as it has been important previously. The market had formed a bit of a hammer last week, so if we were to break below that level, the $25,000 level would be targeted, and then perhaps open up the possibility of even further selling. Bitcoin is pretty far out on the risk spectrum, so we need to have a lot of risk appetite out there to see Bitcoin really take off. As there is a lot of fear around the world, it makes sense that Bitcoin will get hammered.

On the other side of the equation, you have the US dollar which has strengthened and continues to do so. Because of this, the market will more than likely continue to fade short-term rallies, and if we do break down below that hammer, the momentum is going to continue to strengthen, and I think at that point we could see Bitcoin go falling to the $20,000 level. The market breaking out above the $32,000 level would be bullish, but even then I think that there would be even more resistance near the $35,000 level, perhaps even the 50-day EMA. That being said, I would anticipate sellers coming into the picture somewhere around there, so I do not necessarily think this is a scenario where we would find ourselves. However, if we do it is likely that we would see a significant selloff unless the Federal Reserve decides to change its overall attitude. As the Federal Reserve continues to see a reason to tighten monetary policy, we will continue to see all risk assets get hammered, including this one. If we break down below the $20,000 level, things could get rather ugly as we drift into “crypto winter.” The only way I see Bitcoin rallying for a significant amount of time as if the Federal Reserve steps away.

We need to be cognizant of the fact that there is a very real possibility of a “crypto winter” coming, which is when crypto markets do almost nothing but make people nauseous. 

The Litecoin market fell to test the bottom of the hammer from the Monday session and threaten the $100 support level. The $100 support level is an area that should continue to be important, and I think it is also best thought of as a “zone of support” that extends down to the $95 level, so we need to break through all of that in order to get aggressive to the downside. If we do break through all of that, it would be a very negative turn of events and could send this market racing lower.

Looking at this chart, it looks as if we are getting pretty close to breaking down, and with the strengthening of the US dollar, it does make a lot of sense that we would perhaps see Litecoin get crushed. Furthermore, Bitcoin has struggled in general, so I do think it also makes sense that we would see negativity in this market anyway, and I think at this point you cannot be a buyer of Litecoin. If you have the ability to short this market, then below $90 could offer a massive opportunity. That being said, I would not get aggressive at this point, and I do think that it is more likely than not that we wlll get a lot of choppy behavior in the short term more than anything else. Ultimately, given enough time I do anticipate that this is a market that will probably continue to look anemic, so I am not overly excited about being involved in it at the moment. This market will continue to be very noisy, but it may give us an opportunity to pick up Litecoin at extraordinarily low levels.

We need to be cognizant of the fact that there is a very real possibility of a “crypto winter” coming, which is when crypto markets do almost nothing but make people nauseous. If that is the case, then you need to start thinking along the lines of investing, and a lot less about trading. If we break down below $95, I anticipate that Litecoin will drop to the $75 level rather rapidly. The market struggling in the way it has does not give me enough confidence to be a buyer of Litecoin anytime soon. Because of this, I do not have a scenario in which I am a buyer.

The size of the candlestick is bullish as well, but short-term at best.

The British pound rallied during the trading session on Wednesday as the 1.30 level continues to be a major support level. By doing so, the market continues to show this area to be important, but it is also worth noting that every time we rally it is a situation that we have not been able to continue going higher. Signs of exhaustion will continue to be jumped upon, as this is a market that has been very negative for quite some time, so it is also worth pointing out that we have seen a lot of “lower highs” recently. In fact, you can even make an argument that this is a descending triangle that is forming.

Underneath, there is a significant amount of support that extends all the way down to the 1.28 handle, which means that if we do break down below here, it is going to be difficult to continue the momentum, and I think a lot of what we are seeing here is a market that is going to continue to show signs of buying pressure, but whether or not that can overcome all of the selling pressure is a completely different question.

The 50 Day EMA sits at the 1.32 handle and is drifting lower. Ultimately, this is a market that I think continues to see a lot of momentum chasing to the downside as well. If we did break above the 50 Day EMA, then it is possible that we could see this market go higher, but really at the end of the day, I think this is a situation where we are going to show plenty of downward pressure until we can break above the 50 Day EMA at the very least, if not the 1.32 level. At that point, you could start to make an argument for a “W pattern”, but we are a long way from making that happen, and of course, we would need to see a daily candlestick close all the way up there. I think it is probably going to be easier to simply short this market on signs of exhaustion using a short-term chart, as I would not expect big moves at this juncture, at least not without some type of fundamental or headline announcement that gets people involved. The size of the candlestick is bullish as well, but short-term at best.

Ultimately, this is a market that has had a nice run higher, a 50% pullback from the last rally, and now looks as if it is trying to continue that overall move.

The Ethereum market rallied during the trading session on Tuesday to show signs of life, as the $3000 level has been significant support. The hammer during the trading session on Monday has been a nice marker for support, and the fact that we have turned around and recovered the $3000 level is a very good sign. The 50 Day EMA and the 200 Day EMA are both slicing through the candlestick and going flat. Ultimately, this is a market that I think will continue to see a lot of noisy behavior, but if we can hang on to this $3000 level, it would be a very bullish sign.

If we break above the highs of the trading session on Tuesday, then it is likely that the market could go to reach the $3250 level, which is where we had sold off previously. Breaking above there then will allow the market to go looking to reach the $3500 level. The $3500 level is an area that has been massive resistance previously, and for that matter had been supported before then. Ultimately, this is a market that has had a nice run higher, a 50% pullback from the last rally, and now looks as if it is trying to continue that overall move.

The market breaking down below the bottom of the hammer on the Monday session would be negative, opening up the possibility of a drop to the $2750 level, maybe even the $2500 level. The $2500 level has been massive support multiple times, and therefore it makes sense that we would see that area offer a significant support barrier if we drop down to that region. If we were to break down below the $2500 level, then it is very likely that Ethereum could drop down to the $2000 level. The $2000 level of course has a certain amount of psychology attached to it, but I think if we start to press that issue, it is very likely we will have entered “crypto winter.”

In general, this is a market that I think will continue to be very choppy and noisy but is trying to do everything it can to recover. As things stand right now, I do think we have a good chance, but one long negative candlestick could change things rather rapidly.