Price has room to fall to the 0.6800 area.

My previous signal last Monday produced a profitable long trade from the bullish rejection of the support level at 0.6882, but it barely gave the minimum 20 pips of profit so would have broken even in practise.

Today’s AUD/USD Signals

Risk 0.75%

Trades must be entered prior to 5pm Tokyo time Tuesday.

Short Trade Idea

Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.6884 or 0.6953.

• 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 0.6797 or 0.6784.
• 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 22^nd August that although the AUD/USD currency pair was rising, the price would probably turn bearish again later, not being able to get established above 0.6964.

This was a relatively good call as the dominant price movement for the day was downwards and the price never even reached 0.6964.

The Aussie stood out last week as the only major currency which ended the week slightly higher than the strong US Dollar. However, this currency pair fell sharply in favour of the Dollar just like every other pair did Friday after Powell’s hawkish speech at Jackson Hole strongly boosted the greenback, which has continued to advance since this week’s open. Interestingly, the Aussie has falled during Monday’s Asian session just as strongly as most other currencies, which suggests that any residual strength in the Aussie is being wiped out.

We have bearish momentum and this may slow down or even reverse, however the odds have to be that nothing will change sentiment and we will see further gains by the US Dollar later. The price here has room to fall, with no obvious key support levels until the round number at 0.6800.

I see a short trade from a bearish reversal following a bullish retracement to at least 0.6875 as potentially the most attractive trade setup we might see here today.

There is nothing of high importance due today regarding either the AUD or the USD.

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The market is a situation that looks like trouble just waiting to happen, especially as we have seen so much negativity in the stock market after the Jerome Powell speech.

• The BTC/USD has fallen during the trading session on Friday as we continue to see negativity in the Bitcoin market.
• Jerome Powell has given his speech at Jackson Hole, leaving no doubt as to how the Federal Reserve is going to behave.
• As they continue to be hawkish, that will drive money away from riskier assets such as Bitcoin.

When I look at this chart, we had a massive selloff last week, and now we are getting ready to break down below the big candlestick from last week. If we break it down below the $20,000 level, it more likely than not will send Bitcoin much lower. If we break down below that level, then it’s likely that we go much lower. I do think that will end up being the trajectory going forward, as there are far too many things out there that could cause issues for Bitcoin not the least of which is that there is a lot of panic out there.

Selling Opportunities Ahead

Rallies at this point in time should be thought of as selling opportunities, especially the first signs of exhaustion. The 50 Day EMA sits below the $24,000 level and is starting to slope a little bit lower. That should be dynamic resistance, and I think a lot of people will continue to look at that as an area that is worth paying attention to. I think it is only a matter of time before the bearish traders come in and start taking advantage of rallies, but if we turn around and break above the $25,000 level that would change everything as far as momentum is concerned.

At the very least, I think we are going to see a lot of volatility, and of course choppiness. The only thing you can do is keep your position size reasonable because you need to understand that volatility could be quite wild at times. That being said, it certainly looks as if the sellers are starting to flexor muscles, and I do think that Bitcoin ends up falling again. There’s no real “risk appetite” out there, so I just don’t see how you have an argument for getting aggressive to the upside. The market is a situation that looks like trouble just waiting to happen, especially as we have seen so much negativity in the stock market after the Jerome Powell speech.

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The Dow Jones industrial index continued to decline in its recent trades,registering record losses for the third session in a row. The index fell by 0.47 percent, losing about 154.02 points and settling at the end of trading at the level of 32,909.60, after falling by 1.91 percent on Monday.

New home sales in the United States fell by 12.6 percent, settling at the seasonally adjusted rate of 511,000 homes in July,  after being at 585,000 homes in the previous month according to data released by the Commerce Department on Tuesday. Analysts polled by the Wall Street Journal expected new home sales to reach 574,000 homes in July.

The S&P Global US manufacturing PMI fell to 51.3 in August after being at  52.2 in July, a 25-month low, while the services PMI fell to 44.1 in August from 47.3 in July, well below the 49.8 that the analysts expected.

Stocks fell in the final sessions ahead of this week’s annual central bank meeting in Jackson Hole, where Federal Reserve Chairman Jerome Powell is expected to reinforce a strong commitment to ending an inflation that has hit four-decade highs.

Traders are now divided between expecting a 50 basis point interest rate hike and a 75 basis point hike by the central bank, after many policymakers recently disputed the bearish outlook and reaffirmed the Fed’s commitment to fighting inflation.

Dow Jones Technical Outlook

The index continues its decline along a main downward trend line in the medium term, as shown in the attached chart for a period of time (daily). The continuation of the negative signals in the relative strength indicators causes the index to stabilize in its recent trades below the main resistance level of 33,000. We observe the continuation of the positive pressure for its trades above the simple moving average for the previous 50-day period.

Our expectations point to the continued bleeding of losses for the index during its next trades, especially as long as it remains stable below the 33,000 level, to target the pivotal support level of 32,272.65.

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• The gold markets have fallen a bit during the day on Monday to drop about two-thirds of a percent in the spot market.
• The market now looks as if it is paying close attention to the $1725 level, an area that was previous resistance.
• This is a market that is going to move counter to the US dollar and interest rates, as is the longer-term trend.

When you see this chart, you can also see that we have been in a long-term downtrend, and it’s worth noting that the US dollar itself is strengthening based on tightening concerns. With the Jackson Hole Symposium going on this week, it does make a certain amount of sense that traders are focusing on the speeches of central bankers. If they are going to continue to tighten monetary policy, that works against gold, due to the fact that the interest rates will be higher, and therefore it’s easier to make a return holding paper than it is storing gold.

See where Gold is headed next

The candlestick for the trading session on Monday is relatively negative, but it’s not necessarily something that I’m overly concerned about. I believe that the market is going to not only pay attention to the $1725 level, and then again at the $1690 level. That’s an area that needs a hold in order for gold to perhaps keep its head above water. If we were to break down below that level, then the market is likely to go looking to much lower levels, with perhaps an eye on the $1500 level.

If we can try to break above the $1770 level, we may make a run toward the $1800 level above, which is a large, round, psychologically significant figure, and an area that we have seen the market pullback from as well. All things being equal, this is a market that has been in a downtrend for a while, and even though we had a nice rally recently, it did not change much. In fact, it’s not until we break above the 200 Day EMA, which is currently hanging around the $1820 level, that I would consider this market to be changing over into a longer-term bullish trend. This is a market that I think will remain noisy, as there are a lot of crosscurrents going on at the same time.

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The BTC/USD pair will likely keep falling as bears target the support at 17,000.

Bearish View

• Sell the BTC/USD pair and set a take-profit at 17,000.
• Add a stop-loss at 22,000.
• Timeline: 1-2 days.

Bullish View

• Set a buy-stop at 20,500 and a take-profit at 22,000.
• Add a stop-loss at 18,000.

The BTC/USD pair remained solidly below the important support of 20,000 during the weekend as sentiment waned. Demand for Bitcoin and other risky assets has also struggled as investors price in a more hawkish Federal Reserve. It is trading at $19,100, which is about 41% below the highest point in June this year.

Bitcoin Demand Wanes

The BTC/USD pair has declined sharply as investors worry about the cryptocurrencies industry. There have been important news from the sector. For example, in June, Celsius, a leading cryptocurrency bank announced that it was suspending deposits and withdrawals. The company attributed this situation to the significant pullback of all cryptocurrencies.

Last week, Three Arrows Capital announced that it was filing for bankruptcy. This happened as the company faced significant margin calls from leading exchanges. As a result, this made it the biggest crypto-focused hedge fund to go under. The company lost most of its money when Terra and its ecosystem crashed.

Meanwhile, in a statement, Voyager Digital, a major cryptocurrency exchange, announced that it was suspending withdrawals and deposits. The company is now raising capital to save its business.

Another major news was that BlockFi, once valued at over $4 billion was being acquired by FTX for about $25 million. Without the bailout, the company would have probably gone bankrupt.

Therefore, the BTC/USD pair has dropped sharply as investors continue worrying about their holdings. Most of them are worried about whether their exchanges will be next to suspend withdrawals and deposits.

At the same time, there have been significantly low buyers of cryptocurrencies. Recent data shows that the number of people creating accounts with exchanges has been in a strong downward trend. Volume of Bitcoins traded has also fallen recently. All this happened while the US dollar has maintained a bullish trend.

BTC/USD Forecast

The four-hour chart shows that the BTC/USD price dropped sharply in June. Shortly afterwards, the pair bounced back and retested the key resistance at 21,888, where it struggled to move above. It has now been retreating and is trading at 19,110, which is slightly above last month’s low of 17,623.

The pair has also moved below the 25-day and 50-day moving averages. It has also moved between the first and second support levels of the standard pivot points. Therefore, the BTC/USD pair will likely keep falling as bears target the support at 17,000.

The Dow Jones Industrial Average slipped during its recent trading at the intraday levels, to record losses for the fourth consecutive day, by -2.79%, to lose the index towards -876.05 points. It settled at the end of trading at the level of 30,516.75, after its decline during Friday’s trading by – 2.73%.

The stock market has now fallen to new lows for the year, which is in bear market territory, with a bear market defined as a drop of more than 20% away from the index’s highest peak.

This comes as markets anticipate more Fed rate hikes in the future, and the Fed was expected to raise rates by half a percentage point at each of its summer meetings. However, it is now expected to raise interest rates in September after the Central Bank’s meeting minutes indicated that slowing economic growth may force the Fed to slow the pace of rate hikes. Barclays economists now expect the Fed to raise the federal funds rate by three-quarters of a point at its next meeting.

The index incurred those losses after Friday’s inflation reading showed that the consumer price index rose 8.6% on an annual basis in May, higher than the previous reading of 8.3%. Contributing to this was the rise in the prices of services such as hotel and airline prices, as well as oil and food. Now it seems that the Fed has no choice but to remain firm in raising interest rates.

Technically, the index faces a number of negative pressures, which led it to deepen its losses at the beginning of the week’s trading. The dominant trend is the short-term bearish corrective trend along a slope line, with the continuation of the negative pressure for its trading below the simple moving average for the previous 50 days. Negative signs on the relative strength indicators, as the index crossed in its last sessions the main support level 31,000.

Therefore, our expectations indicate that the index will continue to decline during its upcoming trading, especially throughout its stability below the 31,000 level, to target the important support level 29,500.

The next couple of months could determine where the next couple of years ago.

Cardano fell again on Friday to reach the $0.43 level. This is an area that was visited just a couple of weeks ago, and when you look at the chart there’s almost nothing that suggests you should be a buyer of Cardano anytime soon. In fact, it’s starting to look like Cardano may be one of those projects that is a serious threat of falling apart. While I do like Cardano in general, the reality is that this is a lot like the technology sector in the late 1990s; there are going to be players in the space that are going to disappear. At this point, we have asked that same question of Cardano.

From a technical analysis standpoint, if you are short of Cardano, this is a beautiful downtrend. The 50-day EMA is currently sitting near the $0.72 level and is dropping at a nice sustainable pace. It should also be noted that it has separated quite nicely from the 200-day EMA, showing that the market most certainly should drop given enough time. That being said, if the market were to rally a bit from here, I believe that the $0.60 level is going to continue to offer resistance, and even if we break above there, the 50-day EMA will be a major problem.

I don’t like the idea of buying at this point, but I do recognize that eventually, Cardano could be a nice longer-term investment, assuming that it holds together. We are getting close to a point in time where a lot of these alternative coins are going to disappear, but there may be a few winners. Cardano certainly has a reasonable chance of being one of those winners, as there are some governmental cooperation factors to include, primarily in Africa.

That being said, this is a market that looks absolutely miserable, so if you are going to be a buyer, you have all the time in the world to get involved. If you are a trader, anytime this market pops just a bit, and especially near the $0.60 level, you have to get short. Furthermore, I would do so with leverage because this is about as bad of a chart as I have ever seen on a consistent basis. The next couple of months could determine where the next couple of years ago.

Today’s recommendation on the lira against the dollar

Risk 0.50%.

The sell trade on the recommendation was activated yesterday, and it reached the stop loss point

Best entry points buy

• Entering a long position with a pending order from 16.00 . levels
• Set a stop-loss point to close the lowest support levels 15.85.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.
• Close half of the contracts with a profit equal to 75 pips and leave the rest of the contracts until the strong resistance levels at 16.85.

Best selling entry points

• Entering a short position with a pending order from levels 15.00
• The best points for setting stop-loss are closing the highest levels of 15.11.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.
• Close half of the contracts with a profit equal to 75 pips and leave the rest of the contracts until the support levels 14.58

The Turkish lira’s trading collapsed against the US dollar after a report issued by the Central Bank of Turkey, which showed poor expectations for inflation and the price of the lira by the end of this year. Updates issued by the Central Bank of Turkey showed a decline in inflation from the current rate of 70 percent, to record levels of 57.92 percent. The bank also revised its previous forecast for the price of the lira against the dollar, as it showed a greater decline for the lira by the end of the year, to record 17.57, compared to previous expectations that showed the lira’s stability at 16.85 levels. The new expectations seem more realistic for what is happening in the market, especially with the Turkish Central Bank’s adherence to a stimulus monetary policy while refusing to raise interest rates. The Turkish Central Bank also faces an obstacle represented in the exhaustion of available solutions to control the falling lira rate, especially with the return of the real cash reserve with the bank.

On the technical front, the Turkish lira continues to decline strongly against the dollar, as the lira prices breached the levels of psychological resistance that is concentrated at 16.00 levels. The pair is also trading above the moving averages 50, 100 and 200, respectively, on the four-hour time frame as well as on the 60-minute time frame. At the same time, the pair is trading above the support levels that are concentrated at 16.00 and 15.85 levels, respectively. On the other hand, the lira is trading below the resistance levels at 16.40 and 17.00. As the pair’s upward momentum continues, the way seems open for the lira to reach 16.63 levels, which it recorded at the end of last year, as it is the first major resistance level before continuing to rise. Please adhere to the numbers in the recommendation with the need to maintain capital management.

All things been equal, I think we pullback and then find buyers at a slightly higher level than we did last time.

Gold markets rallied quite significantly during the trading session on Thursday as yields in America fell. That being said, they were due for a bit of a pullback so it does make sense that gold gets a bit of a boost. Whether or not this has legs is a completely different question, because we are in an area where we have seen quite a bit of noisy behavior previously. The 200 day EMA sits just above, so that of course will attract quite a bit of attention in and of itself.

If we were to break above the 200 day EMA, then I might be convinced that we could continue to rally, but I think we are more likely than not to see a lot of back and forth momentum, thereby trying to build a longer-term base. Building a base takes a while, so you should keep in the back of your mind that even if this does end up being very bullish for gold, it may take a while for it to really take off. After all, there has been a lot of selling as of late, and therefore there is quite a bit of work to do by those who would be bullish.

Underneath, the $1800 level looks to be offering support, and thereby gives the market a bit of a reference point. As long as we can stay above $1800, we still have the possibility of a “buy the dips mentality”, but that would be on short-term charts until the market proved itself. The 10 year yield continues to be something you need to watch quite closely, because it has an inverse correlation to this market. As yields go up, gold goes down and vice versa.

If we do clear the 200 day EMA, then it is likely that a lot of buyers will jump in and try to drive gold to the $2000 level over the longer term. It obviously would have a lot of work to do to get there, and in the environment that we find ourselves in currently, it would not be surprising at all to see nothing but chop being back and forth, which is the market’s way of punishing everyone at the same time. All things been equal, I think we pullback and then find buyers at a slightly higher level than we did last time.

If we do break down below the 1.20 handle, it will almost certainly bring in a new wave of extreme bearishness and fear trading around the world.

The British pound has fallen hard during the trading session on Thursday to show signs of weakness. We have broken through the 1.22 level, which is a very negative sign indeed. Ultimately, this suggests that we are going to continue to see downward pressure, and now it looks as if the market could even drop all the way down to the 1.20 handle.

The Bank of England has already suggested that a recession is coming to the United Kingdom, and at this point in time, it looks as if the Federal Reserve is going to do everything it can to cause a recession as it has to tighten monetary policy in order to drive down demand. Interest rates are going much higher in the United States, right along with inflation. At this point, it is going to be difficult to bet against the greenback, as we have seen so much in the way of massive momentum.

Any rally at this point in time should be thought of as an opportunity to short the market because it has so much directionality to it. The 1.25 level above is a significant round number that a lot of people will pay close attention to. I think that any time we rally anywhere near there, the first signs of exhaustion will be jumped upon. It is difficult to imagine a scenario where the US dollar suddenly sells off, unless of course some type of short squeeze, but that is about it. Ultimately, I think that this market will find one way or another to break down, especially as the Bank of England has already made a slight pivot to dovish in its, as it suggested that it was going to keep its balance sheet rather large.

The Federal Reserve has given absolutely no indication that they are willing to change course, and therefore it makes quite a bit of sense that we would see the downward pressure continue to overwhelm the market. Yes, we have fallen apart quite drastically, and we are probably due for some type of relief rally, but that will be an opportunity to pick up “cheap dollars.” If we do break down below the 1.20 handle, it will almost certainly bring in a new wave of extreme bearishness and fear trading around the world.