If we see Bitcoin and Ethereum start to sell off, then the rest of these markets will continue to fall as well. 

Litecoin fell a bit on Friday only to turn around and show signs of support. The market looks as if it is trying to form a bit of a hammer, which of course is a supportive-looking candlestick. Nonetheless, it is worth noting that the market continues to see sellers every time we rally, and Litecoin continues to show signs of downward momentum.

Furthermore, larger crypto markets are failing such as Bitcoin and Ethereum, and as long as that is going to be the case, it is very likely that these other crypto assets will continue to fall. The market breaking down below the bottom on the hammer could kick this market down to lower levels, perhaps down to the $80 level. We have been in a downtrend for quite some time, and I just do not see that changing anytime soon.

That being said, if we do rally from here, I think there are going to be a couple of areas that we need to pay close attention to. The $100 level would be the first barrier that we need to overcome, but if we can break above there then we will go looking towards the $106 level, an area where we have seen resistance earlier this week. Breaking above that opens up the possibility of a move to the 50-day EMA, currently sitting at the $111.65 level and falling.

It is not until we break above all of those areas that I would consider going long of Litecoin, because it continues to look very vulnerable, and it is worth noting that each successive high has gone lower, the very epitome of a downtrend. The question now is whether or not we are going to kick-off to the downside, essentially cementing the idea of a descending triangle. If we do, I anticipate that Litecoin will go much lower, perhaps down to the $75 level, maybe even lower than that.

If we see Bitcoin and Ethereum start to sell off, then the rest of these markets will continue to fall as well. After all, altcoin markets tend to be highly sensitive to the overall risk profile of traders, with crypto being far out of the spectrum, and the smaller markets are on the very end of the risk appetite spectrum.

I anticipate that given enough time, we break down even further.

The Euro has fallen a bit during the trading session on Thursday to Pierce below the 1.05 level. The 1.05 level of course attracts a certain amount of attention, and therefore it makes quite a bit of sense that we would see a little bit of a bounce. In fact, by the end of the day we did break back above the 1.05 level, perhaps helped in part by the fact that the GDP number was horrific in the United States.

The 1.05 level is an area that would attract a lot of attention regardless, and the fact that we have dropped that hard also suggests that we cannot simply slice through it. I think we get a short-term rally that will more than likely show a significant amount of resistance. That resistance will probably show up in the next couple of days, and therefore I think it offers a nice selling opportunity. Quite frankly, the US dollar has gotten a bit ahead of itself, so I think a little bit of profit-taking makes quite a bit of sense. This is especially true as we are heading into the weekend because nobody wants to be overly exposed while they cannot correct a position.

On the upside, the 1.08 level should be significant resistance, right along with the 50 Day EMA which is racing toward that level as well. Because of this, I think that we should get quite a bit of selling pressure if we come anywhere near the 1.08 level, something that I do not necessarily think that the market has in it. The interest rate differential between the United States and Europe continues to favor the United States, and with the Federal Reserve looking to fight massive inflation, is very likely that the US dollar will continue to attract inflows as bonds yield much more on the side of the ocean.

If the European Central Bank was able to get its attitude changed, it would start with the resolution to the natural gas problem. Quite frankly, an economy that has expensive or less natural gas than necessary is not an economy that is going to function healthily. There are far too many issues in the European Union right now to think that the currency will reflect strength. I anticipate that given enough time, we break down even further.

Expect choppy volatility, but that has been the way this pair has traded for several months now anyway, so it should not be a huge surprise at this point.

The euro fell rather hard on Wednesday to reach the 1.05 area. This is an area where we have seen a lot of action in previously, and it is a large, round, psychologically significant figure. The 1.05 level would cause a lot of headline noise, and we have bounced well over 60 pips from that area. Because of this, I think it is probably only a matter of time before we have to bounce after this massive selloff.

This being said, I do not want to buy the euro. In fact, I think that any significant rally you see at this point should end up being a nice opportunity to short this market yet again. The 1.08 level above should act as a bit of a ceiling in the market, and then we have the 50-day EMA which is rapidly approaching the 1.0933 level, an area where we had seen previous resistance as well.

Whether or not we can break down below the 1.05 level is a completely different question, but it certainly would not be surprising at this point. A rally at this juncture will more than likely continue to attract sellers given enough time due to the fact that the overall momentum of the market has been so negative. The Federal Reserve continues to be very hawkish with its statements, and as a result, the market will have to deal with the idea of higher interest rates in the United States. On the other side of the Atlantic Ocean, we have the European Central Bank which is stuck in a situation where they cannot raise interest rates very rapidly because although there is inflation and there are energy concerns. An economy that does not have energy is not an economy that is going to grow very much.

Currently, I believe this pair is oversold and a bounce is almost certain. The bounce should be a nice opportunity so I am going to step out of the way and perhaps try to pick up “cheap dollars” at higher levels. Expect choppy volatility, but that has been the way this pair has traded for several months now anyway, so it should not be a huge surprise at this point. The fact that we bounced as hard as we did does suggest that we are ready to turn around for the short term.

I think you have plenty of time to build a position in Ethereum, and you will probably get an opportunity to buy it at lower levels.

Ethereum markets were very quiet on Friday, which is not a huge surprise considering that it was a holiday. With good Friday coming and going, a lot of traders would not have been that interested. The $3000 level is a large, round, psychologically significant figure that would attract a lot of attention, not to mention the fact that we have the 50-day EMA and the 200-day EMA just above.

If we were to break down below the $2900 level, then it is possible that we could break down rather significantly. After that, we could go looking towards the $2750 level, maybe even the $2500 level. The $2500 level is an area that has seen plenty of support previously, so I think it will be a place where we have a lot of buyers in that general vicinity. If we were to break down below the $2500 level, then it is possible that we could go to the $2000 level given enough time.

If for some reason we were to break down below the $2000 level, it would open up the possibility of a “crypto winter”, as it would be a major breach of support. Furthermore, you should keep in mind that it was just announced that the June merge seems to be pushed back indefinitely, as Ethereum continues to drag its feet moving forward. This is not a good look, and one has to wonder how long it will be before people start to lose faith? I do not necessarily think that will end up being the longer-term trajectory of Ethereum, because I do think that the Ethereum project is going to fail, just that it is taking longer than anticipated. I still have a lot of faith in Ethereum longer term, but right now it still looks as if the project is going to stall a bit, and that is certainly not a good look considering that Bitcoin is struggling to rally as well. With this, I think you have plenty of time to build a position in Ethereum, and you will probably get an opportunity to buy it at lower levels. Ultimately, if we were to turn around and break above the highs of the candlestick earlier this week, then we could open up a move to the $3500 level, possibly even the $4000 given enough time.

It certainly looks as if we are trying to form some type of reversal pattern, or perhaps even a topping pattern.

The NASDAQ 100 fell a bit on Tuesday to reach the bottom of the overall consolidation area. The 200-day EMA sits just below underneath the bottom of the hammer, and as a result, it is likely that the area could offer a significant amount of support. Ultimately, this is a market that is trying to figure out whether or not we are going to continue going higher, or if we are ready to pull back. Higher interest rates certainly will not help the overall attitude of the NASDAQ 100, so if we break down below that 200-day EMA, the market is likely to see a significant selloff. After all, the $15,000 level is an area that will attract a lot of attention.

If we were to break above the 15,250 level, it is possible that we could go higher, perhaps reaching the 15,500 level, maybe even the 16,000 level over the next several weeks. We certainly look as if we are trying to find out whether or not we are going to break above this area to confirm the bullish flag. On the other hand, if we were to break it down below here, it would show a complete rejection near the 50% Fibonacci retracement level, suggesting that we could make a run towards the bottom again over the longer term.

Keep in mind that stock markets, in general, continue to cause quite a few headaches, as the volatility has been somewhat out of control. At this point, we are trying to figure out whether or not the Federal Reserve is going to tighten drastically, because if they do it is likely that the stock markets around the world will continue to get sold off, especially these highflying technological stocks that make up the majority of the volume for the NASDAQ 100. Because of this, we are going to have to watch a handful of stocks even more significantly than most times. It certainly looks as if we are trying to form some type of reversal pattern, or perhaps even a topping pattern. Pay close attention to the rectangle we are forming it could give us a clue as to where we go next once we finally break out above it, especially if it is a long candlestick.

The market continues to see a lot of noisy behavior, but ultimately it looks as if we are trying to build up enough momentum to finally break out of this short-term range

The New Zealand dollar has rallied a bit during the trading session on Monday again, as we continue to consolidate below the 0.70 level to show signs of building pressure, but not quite enough momentum to continue going higher. Because of this, it looks as if the New Zealand dollar is currently “stuck” between the crucial big figure, and the 200 Day EMA, currently sitting at the 0.6875 level.

The New Zealand dollar is especially interesting, due to the fact that the market has a high correlation to certain agricultural items. Anybody who has been watching the futures markets understand that grains have done quite well, and this has had a bit of a “knock-on effect” on the New Zealand dollar. As agricultural commodities continue to find plenty of momentum, the New Zealand dollar could do so as well. However, we need to break above the 0.70 level to get any real momentum going, as it is a psychological and structural barrier.

If we were to break down below the 200 Day EMA, it is possible that we could break down even further, but it is worth noting that the 50 Day EMA is at the 0.6827 handle and moving higher. If we were to break through all of that, then I anticipate that the next move would be to reach down to the 0.6750 level.

On the upside, if we were to break above the 0.70 level, it opens up fresh buying, perhaps sending the market to the 0.71 handle, perhaps even the 0.7250 level above there, as we have seen in the past. The market continues to see a lot of noisy behavior, but ultimately it looks as if we are trying to build up enough momentum to finally break out of this short-term range that we are currently stuck in. The market breaking out of this area is ready to make a bigger move, but at this point we are killing time, perhaps trying to figure out who will win. I think this is a market that is most certainly worth paying attention to, because we are about to see a huge move in one direction or the other, depending on where the next impulsive candlestick points us. It looks as if we are building the inertia necessary for the next leg higher, or a pullback.

LUNA/USD created new highs over the weekend and the cryptocurrency continues to maintain its optimistic speculative stance.

LUNA/USD has created new record highs in the past day, and of this morning is showing that it has the ability to remain in sight of apex values. Yesterday’s trading took LUNA/USD above the 118.00000000 juncture, before reversing slightly on apparent profit taking as Terra went to a low of nearly 111.00000000. However after stumbling lower during Sunday’s flurry of activity, LUNA/USD did not sink below lows seen on Saturday.

Incrementally, LUNA/USD continues to hammer away at record highs, and as of this writing the cryptocurrency is near the 114.0000000 level.  Terra does move rather fast and has shown it has the capability to have price velocity that can be interpreted as speculatively strong. On the 1^st of April, LUNA/USD was trading near the 98.75000000 price. This after LUNA/USD penetrated the 100.00000000 mark on the 28^th of March and began to challenge highs seen on the 10^th of the month.

A high above 111.000000000 was achieved on the 30^th of March, before LUNA/USD sank to lows in the next two days. This is pointed out to showcase that LUNA/USD does in fact reverse lower and its moves can be substantial, so traders should not expect one way trading avenues upward exclusively. Stop losses and the perception regarding the potential of support levels being tested, and even punctured lower must be considered.

However, LUNA/USD does continue to show it is bullish.  If current support levels can hold, there seems to be a genuine case technically via mid-term charts that Terra can push upwards. The broad cryptocurrency market has continued to also show signs of optimistic life; many of the major cryptocurrencies are challenging important resistance levels and have not suffered volatile moves lower.

Cautious LUNA/USD traders may want to use moves lower to ignite their buying positions. If the 114.00000000 level is maintained by LUNA/USD this would be a positive indicator. Traders may have to be patient. Having touched new highs yesterday, there is the possibility some consolidation should be expected in the short term. Yet the trend in LUNA/USD does look positive, and there seems to be plenty of logical speculative perspective which points to a buying wager. Traders should remain realistic with their price targets when aiming for higher values. As pointed out LUNA/USD is not a one way street. Cashing out profits should they develop, is a solid idea for day traders.

Terra Short-Term Outlook

Current Resistance: 116.19000000

Current Support: 112.58000000

High Target: 119.2500000

Low Target: 110.01000000