More bearish below 0.7063.

My previous signal on 10^th August was not triggered as there was no bearish price action when the price first reached the resistance levels which I had identified.

Today’s AUD/USD Signals

Risk 0.75%

Trades must be entered before 5pm Tokyo time Tuesday.

• Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.7141.
• Place the stop loss 1 pip above the local swing high.
• Move the stop loss to break even once the trade is 20 pips in profit.
• Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.

Long Trade Ideas

• Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 0.7063, 0.7010, or 0.6951.
• Place the stop loss 1 pip below the local swing low.
• Move the stop loss to break even once the trade is 20 pips in profit.
• Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.

The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.

AUD/USD Analysis

I wrote in my previous forecast on 10^th August that the AUD/USD currency pair was moving within a new bearish price channel. I saw the upper trend line as quite confluent with a key resistance level which itself was confluent with a major round number at 0.7000.

I saw a short trade as the most likely set-up from 0.7000, but I was completely wrong: the lower than expected US inflation data sent risk sentiment soaring and the price of this currency pair rising strongly enough to easily break out of the bearish price channel and well beyond it.

We saw the price of this currency pair continue to rise for a while on the improved risk appetite, with the Australian Dollar acting as a barometer of risk sentiment. However, the resistance level at 0.7141 has been too strong for the price to exceed, and it has produced a bearish consolidation. We now see the price start to break down below the former support level at 0.7085 and begin to threaten the next support level at 0.7063.

If the price can make two consecutive lower hourly closes below 0.7063, that could be a good short trade entry signal, as the price would then have a lot of room to fall before reaching a support level – the next level is not until 0.7010.

There is quite a lot of activity in this currency pair right now, so it is not a bad time to be trading it. However, bear in mind that as today is a Monday, price movement might be a bit limited.

I would not take any long trades here today except from a bullish bounce at 0.7010 – if such a movement also rejected the round number at 0.7000, that would be even better.

Regarding the AUD, the Reserve Bank of Australia will release its Monetary Policy Meeting Minutes at 2:30am London time. There is nothing of high importance scheduled today concerning the USD.

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It’s likely that every time this market rallies, there will be plenty of sellers that are willing to jump in and start shorting.

The Euro has fallen during the trading session on Thursday as we continue to go back and forth, with the 1.05 level being a bit of a magnet for price. When you look at the Euro, it’s not difficult to imagine that we could go lower, because quite frankly there’s no real reason for the US dollar to sell off from a longer-term perspective. Granted, the European Central Bank has recently suggested that maybe they will have to do something to help with inflationary headwinds, but at the same time they have also had an “emergency meeting” to discuss bond rates in Italy.

With all of that noise, it’s not a huge surprise to see this. Going sideways as people try to figure out what the ECB is going to do. We already know that the Federal Reserve is going to tighten monetary policy, so that is part of the reason why the US dollar continues to look attractive. That being said, we also need to look at the global growth situation, and it’s very possible that the economy drops quite drastically, which would work against the value of the Euro as most people will be looking to get their hands on US dollars.

The market continues to be very noisy, and it is worth looking at the double bottom at the 1.04 level as a major level. If we were to break down below that level, then it’s likely that the Euro will drop to the 1.02 level, maybe down to the parity level over the longer term. Alternately, if we were to turn around and take out the 1.08 level to the upside, that could show that the Euro is trying to change the overall trend, and therefore I would have to reevaluate the entire situation. In that scenario, I think the 200 Day EMA would come into the picture.

However, it’s likely that every time this market rallies, there will be plenty of sellers that are willing to jump in and start shorting. As the market continues to fade exhaustion will be something worth paying attention to, and therefore think you will get choppy yet negative price action over the next several weeks. As the session will be on a Friday, it’s going to be interesting to see how it ends up, because it will tell you a lot about how people feel about this currency pair, because what you hold over the weekend says a lot.

I still look for signs of exhaustion to sell into at this point.

The NASDAQ 100 initially rallied on Wednesday but gave bank gains to show signs of weakness again. That being said, we are in a consolidation area that is well defined and will probably hold until we get the CPI figures on Friday. After all, the world is paying close attention to inflation in the United States and what the Federal Reserve will do as a reaction.

Looking at this chart, we have been in a massive downturn, with the 50-day EMA now sitting at the 13,000 level as well. Because of this, the market is likely to see any rallies rejected just as we have over the last week or so. Ultimately, if we cannot get above the 13,000 level, there’s no hope of a breakout rally coming. Even if we do get above there, I see a lot of resistance on the way to at least the 13,500 level. It is at that point where I might consider buying the NASDAQ 100 index, but I would also need to get the CPI numbers out of the way, and perhaps get a bit of a hint that the Federal Reserve is willing to step back on its tightening.

Pay attention to the bond market, because if the interest rate suddenly collapses, then it’s likely that we could see a significant amount of relief in the NASDAQ 100. After all, the market is likely to continue seeing the usual influence of rates on technology stocks. If rates fall, then it’s likely that we will see a lot of bullish pressure in this market, but keep in mind that the exact opposite can happen. Because of this, it is very important to keep the idea of correlation in mind. If we break down below the 4400 level, then it’s likely that we can look into the 12,000 level again, and then possibly the 11,500 level after that. Anything below that level will continue the overall negative attitude in this market.

Without some help from the Fed, I just don’t see how the NASDAQ 100 suddenly picks up. I do think that eventually, we could get a nice opportunity, but we are nowhere near it right now, so I still look for signs of exhaustion to sell into at this point. Inflation lis ikely to continue roaring, so that could be something worth paying attention to.

The attitude of the market is one that seems to be very skittish, so make sure that you keep your position size somewhat reasonable.

The German index initially fell on Tuesday but has recovered a bit later in the day. At this point, the market looks like we are just hanging about and trying to figure out where we are going to go next. Looking at the start does look like we are trying to pressure to the upside, but the 200 Day EMA sits above and is likely to see a lot of interest paid to it. Above there, the €15,000 level is the next major area. I think it’s going to be difficult to get above that, so it’ll be interesting to see whether or not we can do so. If we did, it would obviously be a very bullish situation.

If we were to break down below the bottom of the candlestick for the trading session on Tuesday, it could have the DAX looking to reach the 50 Day EMA below. The market looks as if it is simply chopping around and trying to find its next direction, which can be said for most markets at the moment. The DAX has a major influence on how the rest of the indices and the European Union is concerned, due to the fact that the German economy is by far the largest economy on the continent.

Keep in mind that the DAX is heavily sensitive the global demand, as so many of the major companies that make up the index are international exporters. The DAX is a market that will continue to see a lot of volatility regardless of what happens next, but you should keep in mind that the DAX is not operating in a vacuum, so if you pay close attention to other industries around the world, it could give you a bit of a “heads up” as to where we go next. In turn, then other indices such as the CAC and the MIB in the EU will follow the DAX.

The Euro is cheap, so that does help with exports a bit, but at this point, it is all a matter of time before risk appetite comes into the picture, and it takes so little these days to get the market to sell off. The attitude of the market is one that seems to be very skittish, so make sure that you keep your position size somewhat reasonable.

I’m going to assume more back-and-forth noise than anything else.

Gold markets continued to grind back and forth on Monday as yields in America continue to jump above 3% periodically in the 10-year note. Ultimately, this is a market that is also hanging around the 200-day EMA, which is relatively flat. In other words, it seems as if we will continue to just kill time in this general vicinity, while we are trying to figure out what to do with their selves. Gold is being thrown around by a multitude of factors.

The 50-day EMA has offered significant resistance near the $1875 level, showing that the market is going to continue to be noisy to say the least, as we have then sliced through the 200-day EMA without any issues. The market is trying to figure out where it wants to go next, and it’s a great place to lose money right now. In this type of trading environment, unless you are trading something like a 15-minute chart, there is not a whole lot to do.

That being said, if we break down below the hammer that was printed on Wednesday of last week, that could open up and move down to the $1800 level, which is a large, round, psychologically significant figure. Needless to say, there will probably be a certain amount of interest in the area, so it’ll be interesting to see how that plays out. I think given enough time, we will probably have a further downside if we do test the $1800 level and fail. It’s worth noting that there is a two-year trend line that hangs around that area as well, so that would be a big development.

On the upside, if we were to take out the $1875 level, it could open up a move to the $1900 level, and then possibly even the $2000 level if we can maintain some type of momentum. However, as yields spike the way they have during the day, it will almost certainly continue to cause problems for those who wish to see gold go higher. We have been forming a bit of a rising wedge, but I think it’s so messy at this point it’s difficult to give much credence to that technical pattern. With this in mind, I’m going to assume more back-and-forth noise than anything else.

There is a likelihood that it will soon have a bearish breakout.

Bearish View

• Sell the BTC/USD pair and set a take-profit at 28,000.
• Add a stop-loss at 31,000.
• Timeline: 1-2 days.

Bullish View

• Set a buy-stop at 31,000 and a take-profit at 32,500.
• Add a stop-loss at 28,000.

The BTC/USD price is still going horizontal after it was criticized by one of the most influential people in finance. Bitcoin is trading at 30,000, where it has been stuck in for almost three weeks.

Scott Minerd Bearish on Bitcoin

Scott Minerd is one of the most respected people in the finance industry. He has been the Chief Investment Officer (CIO) of Guggenheim Partners, a company with over $325 billion in assets under management. It is also one of the best-performing firms in the US.

Speaking at a conference in Davos, Mined warned that the coin could drop to about $8,000. He noted that Bitcoin had not established itself as a credible institutional investment because of its volatility. He also noted that the company had bought Bitcoin at $20,000 and exited when it surged to $40,000. In previous statements, Minerd said that he believed that Bitcoin could rise to over $400,000 in the coming years.

In reality, most institutional investors have not invested in Bitcoin. They include giant companies like Blackrock, Vanguard, and T.Rowe Price among others. Some of the big companies that have allocated cash to BTC are companies like MassMutual and Fidelity.

The BTC/USD pair moved sideways as data in the options market showed that the put to call ratio has started falling recently. The ratio has dropped to about 0.63, which is lower than this month’s high of almost 0.70. Ideally, a lower figure is often interpreted as being a bullish catalyst for Bitcoin prices.

Another notable thing is that Bitcoin’s correlation with American stocks has been a bit muted this week. While stocks have dropped sharply following weak earnings and forward guidance, Bitcoin has continued moving sideways.

BTC/USD Forecast

The BTC/USD pair has moved sideways in the past few days. On the four-hour chart, the coin has flattened along the 25-day and 50-day moving averages while the two lines of the MACD are along the neutral line.

Further, the pair has formed what looks like a bearish flag pattern, which is usually a bearish sign. Therefore, with this pennant nearing its confluence level, there is a likelihood that it will soon have a bearish breakout. If this happens, the next key support level to watch will be at 28,000. A move above the resistance level at 31,000 will invalidate the bearish view.

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.

Keep in mind that this pair is slow-moving at times, so a little bit of patience will probably go a long way in this market.

The US dollar went back and forth on Monday as we are hanging about the area just above the 1.39 level. Ultimately, this is a market that I do think will go higher but the 1.40 level above is offering a little bit of psychological resistance. The market has been very bullish for quite some time, and it certainly looks as if it is only a matter of time before value hunters come back into this market and try to pick this market up.

If we were to break down below the 1.39 level, then we could go looking at the 1.38 handle. Ultimately, this is a market that continues to favor the greenback as most markets do, especially with Asia being a bit of a mess right now due to the supply chain issues out there. The Singaporean economy itself is levered to a lot of Asian business activity as it is essentially a banking hub for that part of the world. Having said that, anything that is not labeled “USD” is going to continue to look a little bit soft in this type of environment.

If we did break down below the 1.38 level, then it is possible we could go down to the 1.37 level, an area that had previously been resistant, and also where we have the 50-day EMA crossing at the moment. This is a situation where there are plenty of reasons to believe that the buyers are going to get involved. If we break it down below the 1.37 handle, it is possible that the market could break down, but that would take a Herculean shift in attitude. The Federal Reserve is likely to continue on its hawkish behavior, so it makes sense that the US dollar would strengthen. The market will continue to see a lot of volatility, and that is going to be the case in almost everything, but as long as we have a lot of “risk-off behavior” out there, the US dollar is typically favored over the Singaporean dollar. Keep in mind that this pair is slow-moving at times, so a little bit of patience will probably go a long way in this market. We have been in an uptrend for quite a while, but as you can see, a lot of candlesticks are small in range.

In general, I believe that the next couple of days could be very noisy, but eventually we will get clarity.

The gold markets initially fell on Friday but then turned around to show signs of life. The jobs number has obviously moved the markets back and forth, but at the end of the day we did not change much. The 200-day EMA underneath is sitting just above the $1850 level. Just above, we have the 50-day EMA near the $1913 level and curling lower. The $1900 level seems to be a bit of a magnet at this point in time.

The market dancing around between these two moving averages does make a certain amount of inertia appear, and it is only a matter of time before we have an even bigger move. Once we break out of this area, it is likely that we would see a substantial move. If we were to break down below the 200-day EMA on a daily close, then it is very possible that we could go down to the $1800 level. The $1800 level is an area that has seen a lot of support, so I would anticipate that there would be a certain amount of buying in that area if we do break down.

On the upside, if we were to break above the 50-day EMA, then it is likely that the market would go reaching to the $1970 level, possibly even the $2000 level. Obviously, there is a lot of noise between here and there so I do not think it would necessarily be a straight shot. Because of this, the market is likely to zigzag all the way higher, but anything is possible at this point.

Pay close attention to the interest rates in the United States, specifically the yield on the 10-year bond. As it continues to rise, it does work against the value of gold at times, as does a strengthening US dollar. (Quite often these two are the same thing.) Nonetheless, this is a market that I think will continue to see a lot of volatility, but once we break out of this range, it will probably become quite a bit more aggressive in either buying or selling the gold market. In general, I believe that the next couple of days could be very noisy, but eventually we will get clarity.

The market is more likely than not going to continue to see buyers on dips, as we have seen for quite some time.

The West Texas Intermediate Crude Oil market pulled back just a bit on Tuesday as we continue to see a lot of consolidation in this market. Regardless, there does seem to be a lot of buying pressure underneath, and it does suggest that every time we pull back there will more than likely be buyers willing to step in and push this market higher. The 50-day EMA sits just above the $100 level, and I think a lot of people will look at that as a potential support level.

If we were to break down below there, then it is possible that the uptrend line from the massive triangle could offer plenty of support. In general, if we break above the shooting star from the Friday session, it opens up the possibility of a much bigger move to the upside. At that point, we would break above the $110 level, and go looking to reach the $115 level.

If we were to do the upward movement, then the market could continue the overall uptrend, which could therefore bring in even more momentum. Keep in mind that there are a lot of concerns about Russian oil, and that will be reflected in the market. The market breaking above the $115 level could send the market much higher, perhaps reaching as high as the $130 level.

If we were to turn around and break down below the uptrend line from the bottom of the triangle, then we could see this market break down to the $90 level. That being said, the market is more likely than not going to continue to see buyers on dips, as we have seen for quite some time. The “measured move” of the triangle could be back to the highs at $130, but I do not think it will make it there easily. It certainly looks as if we have seen a lot of upward pressure in the short term, so I think it is probably only a matter of time before the buyers overwhelm the entire situation. The US dollar strengthening could cause a little bit of downward pressure, but at the end of the day it is only a sideshow, so I think both could rise at the same time over the longer term.