The pair will likely keep rising as bulls target the next key resistance point at 26,000.

Bullish View

• Buy the BTC/USD pair and set a take-profit at 26,000.
• Add a stop-loss at 22,500.
• Timeline: 2 days.

Bearish View

• Set a sell-stop at 23,800 and a take-profit at 22,000.
• Add a stop-loss at 25,000.

The BTC/USD price made a bullish breakout as demand for cryptocurrencies rose. The pair crossed the important resistance point at 24,000, which was the highest point since July 30th of this year. Bitcoin has recovered by more than 36% from its lowest level this year.

Cryptocurrency Recovery Continues

Bitcoin has had a relatively difficult year as worries of high-interest rates rose. It dropped from last year’s high of almost $70,000 to about $18,000. Recently, however, bitcoin and other cryptocurrencies have staged a strong recovery, bringing their total market cap to over $1.1 trillion.

This recovery has happened at a time when the Federal Reserve has ramped up its rate hikes. The bank hiked interest rate hike by 0.75%, bringing the total year-to-date increase to 225 basis points. Analysts expect that the bank will continue hiking rates this year, especially after the strong US jobs data.

Data by the Bureau of Labor Statistics (BLS) showed that the American economy added over 528k jobs in July. The unemployment rate dropped from 3.6% to 3.5% while wages continued rising. As a result, some Fed officials, including Mary Daly hinted that the bank will hike rates by 0.50% in September.

The next key economic data to watch will be the upcoming US consumer price index (CPI) data. Economists expect the data to reveal that the country’s inflation slipped slightly in July as gasoline prices retreated.

The BTC/USD price also bounced back because of the strong correlation between technology stocks and cryptocurrencies. The Nasdaq 100 index, which is made up of the biggest tech companies, has risen by about 20% from the lowest level this year. This means that the index is exiting the bear market.

BTC/USD Forecast

The four-hour chart shows that the BTC/USD price has been in a strong bullish trend in the past few weeks. The pair has moved above the 25-day and 50-day moving averages. At the same time, the MACD has moved above the neutral point.

Notably, the pair has formed an ascending triangle pattern that is shown in green. In price action analysis, this pattern is usually a bullish sign. It has moved to between the 50% and 38.2% Fibonacci Retracement level.

Therefore, the pair will likely keep rising as bulls target the next key resistance point at 26,000. A drop below the support at 23,000 will invalidate the bullish view.

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There is a possibility that the pair will drop to the key support at 1.0540 as the triangle pattern nears its confluence.

Bullish View

• Set a buy-stop at 1.0615 and a take-profit at 1.0700.
• Add a stop-loss at 1.0550.
• Timeline: 1-2 days.

Bearish View

• Sell the EUR/USD and set a take-profit at 1.0500.
• Add a stop-loss at 1.0650.

The EUR/USD pair rose to an important resistance level after a hawkish statement by Christine Lagarde. The pair rose to a high of 1.0615, which was the highest level since June 10th of this year. It has risen by more than 2.2% above the lowest level this month.

Christine Lagarde Points to Rate Hike

The EUR/USD pair rose as Christine Lagarde of the European Central Bank made a statement during the American session.

In it, she reiterated that the bank was focused on fighting inflation. It has already reduced its bond market activity and is now set to deliver its first interest rate hike in years in July. She signaled that the rate hike will be 0.25%. Most importantly, she will pull the ECB out of negative interest rates in September. Lagarde will deliver more remarks on Tuesday.

The EUR/USD also reacted to the latest strong numbers from the United States. Data by the Commerce Department showed that durable goods orders rose from 0.4% to 0.7%, which was higher than the expected 0.1%. Core durable orders rose from 0.2% to 0.7% in May as demand continued rising.

Meanwhile, after two weeks of weak housing data, the US published surprising pending home sales data. According to the National Association of Realtors, pending home sales rose by 0.7% in May compared with April. This was a surprise since pending home sales dropped in the previous six straight months.

Pending home sales rose even as the 30-year fixed mortgage rate rose to 5.64%. At the same time, the supply of homes has started rising, according to Realtor.com.

The next key data to watch will be the upcoming US consumer confidence number by the Conference Board. Analysts expect the data to show that consumer confidence dropped to 100 in June as inflation surged.

EUR/USD Forecast

The EUR/USD pair has formed an ascending triangle pattern on the four-hour chart. It moved to the upper side of this triangle and it remains slightly above the 25-day and 50-day moving averages. The Stochastic Oscillator has moved slightly below the overbought level.

The pair formed an evening star pattern, which is usually a bearish sign. Therefore, there is a possibility that the pair will drop to the key support at 1.0540 as the triangle pattern nears its confluence. In the coming days, it will likely have a bullish breakout as bulls target the key resistance at 1.0700.

The Japanese central bank and the US Federal Reserve continue to raise the pace of US interest rates sharply this year, supporting the bulls’ control over the direction of the USD/JPY currency pair. It is stable around its highest in 24 years. As for the closing last week, the dollar-yen pair has been stabilizing since the start of the week’s trading around the 135.50 resistance. This may remain until interaction with the content of the testimony of US Central Bank Governor Jerome Powell this week.

Coinciding with the start of trading this week, the Japanese Prime Minister and BoJ chief reiterated on the united front on foreign exchange matters after a meeting that followed the Japanese yen’s plunge last week to a 24-year low against the dollar. Japanese Prime Minister Fumio Kishida said Bank of Japan Governor Haruhiko Kuroda expressed concern about the Japanese currency’s movements during the meeting, a comment that briefly boosted the yen. For his part, Kuroda said that the government and the BoJ will continue to monitor the performance of the forex market closely and cooperate to act appropriately.

The governor added that Kishida did not make any specific comments during the talks, a remark indicating tacit government approval of the BoJ’s decision last week to maintain ultra-low interest rates, even if it was contributing to the currency’s weakness. The meeting is the latest expression of concern about moves in the forex markets by policy makers in Japan as they seek to limit the pace of the yen’s slide through verbal warnings rather than direct action.

Commenting on what was reported, Marie Iwashita, chief market economist at Daiwa Securities, said, “The government and the Bank of Japan should have shown their cooperation again” ahead of next month’s elections. “The fact that they said they would work together and act appropriately” means there is room left for policy responses, she added.

Weekend polls have shown a further drop in popular support for the Japanese prime minister as public concern mounts over price hikes ahead of the July 10 upper house elections. Kishida is almost certain to win the vote given the divided nature of the opposition but will want to do well to bolster his leadership of the ruling party. Overall, the BoJ’s insistence on maintaining easing to support the Japanese economy and fuel stable inflation contrasts with the wave of interest rate hikes sweeping the world’s central banks as they try to tackle the accelerating rates. The BoJ’s dovish policy stance compared to the hawkish Federal Reserve was contributing to the currency’s decline.

According to the technical analysis of the pair: the stronger bulls dominate the general trend of the USD/JPY currency pair, and stability around the top in 24 years confirms this. So far, investors will not care about the arrival of technical indicators towards overbought levels after the recent gains. There is much interest in the path of tightening the global central bank policy led by the US Federal Reserve, which supports the US dollar continuously. Jerome Powell will determine the path for this week. The closest targets for the bulls are currently 135.75, 136.20 and 137.00, respectively.

According to the performance on the daily chart, there will not be a break in the general trend of the dollar / yen pair without breaching the 130 support level again.