If Wall Street finally listens to the Federal Reserve and believes what they are saying when it comes to monetary policy, we will more likely than not see this pair go much higher.

• The USD rallied a bit against the Japanese yen on Tuesday as we see quite a bit of upward pressure longer-term.
• Ultimately, it’s worth noting that the ¥131 level has been massive support from before, and the fact that the USD/JPY currency pair has bounced from there recently suggests that the uptrend is very much intact.

Watch the 10-Year Yield

You should always keep an eye on the 10-year yield in the United States, as it could give you a bit of a “heads up” as to where we are going next. This is because the Bank of Japan continues to buy unlimited bonds, essentially printing unlimited yen. In that situation, traders are likely to continue seeing reasons to push this market higher. The yield differential between the 2 currencies is astronomical and more likely than not going to continue to push this pair higher.

However, if we start to see yields drop in general, then it’s likely that we will see the Japanese yen strengthen a bit, due to the fact that they will not have to print as much currency. At this point, it’s difficult to imagine a scenario where we break away from this correlation, especially as there are so many people paying close attention to the situation with central banks around the world and whether or not the Federal Reserve is going to have to tighten much further than Wall Street is willing to admit.

That being said, if Wall Street finally listens to the Federal Reserve and believes what they are saying when it comes to monetary policy, we will more likely than not see this pair go much higher. Granted, some people are already calling this a bearish black, but I think we have a way to go before you can make that argument. If we were to break down below the ¥131 level, we could go looking to the ¥127 level. The ¥127 level is where I defined the trend as changing, so if we were to break it down below there, then we may have to reevaluate the entire trend. Until then, I suspect that this is a market that continues to be a “buy on the dips” situation, just as it has been for several months. The €140 level above is the price, so we will see whether or not this market can get there.

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I think we will have a situation where shorter-term traders will be jumping out, while longer-term traders may be picking it up.

• The BTC/USD currency pair initially tried to rally Friday but gave back quite a bit of the gain showing exhaustion.
• This is a market that I think will be very noisy as we have seen a lot of questions asked about the crypto markets in general.
• We still have a lot of concerns out there when it comes to the global markets, and Bitcoin is not going to escape that.

Bitcoin Likely to Fluctuate

The $24,000 level has been important a couple of times now, so it does make a certain amount of sense that we would see the markets pull back from here. However, that does not necessarily mean that we have to break down from here. More likely than not, we will see a situation where we go back and forth until we can sort things out. I do not believe Bitcoin has seen the bottom yet, but it is at least making a significant argument for stabilization.

If we break above the $25,000 level, that could open up the possibility of a move to the $28,000 level, but that’s an area that is resistant as well. It extends all the way to the $32,000 level, so I believe it would be difficult to break above there. If we did, that would change the entire trend, perhaps sending Bitcoin to extreme highs.

Looking at this chart, it’s obvious that we have been in a downtrend for quite some time, so it’s going to be difficult to be bullish at this point. I think that rallies will continue to get sold into, as the US dollar is still strong, despite the fact that the US dollar has pulled back just a bit. Ultimately, this is a market that will continue to see a lot of selling pressure given half a chance, as there is a lot of negativity out there, and I think it will not take much to scare traders. That being said, some of the longer-term holders have been using this recent area to pick up a little bit of value, but have a longer-term perspective than most traders. Because of this, I think we will have a situation where shorter-term traders will be jumping out, while longer-term traders may be picking it up.

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The pair will likely continue falling as sellers target the second support at 1.1770.

Bearish View

• Sell the GBP/USD pair and set a take-profit at 1.1770.
• Add a stop-loss at 1.2020.
• Timeline: 1 day.

Bullish View

• Set a buy-stop at 1.2010 and a take-profit at 1.2110.
• Add a stop-loss at 1.1830.

The GBP/USD pair declined sharply in the overnight session as investors rushed to the safety of the US dollar. The price declined to a multi-month low of 1.1892, which was substantially lower than last week’s high of 1.2331.

USD as Safe Haven

The GBP/USD pair declined sharply as the US dollar strength continued. The US dollar index rose to a multi-decade high of $106.40 as demand for the greenback continued. This rally happened as concerns about the health of the global economy continued.

For example, on Tuesday, Andrew Bailey, the head of the Bank of England (BOE) warned that the country’s economy was deteriorating at a faster pace than expected. He noted that the wage growth was still slow even as inflation jumped to the highest level in four decades. This explains why consumer confidence has tumbled in the past few months.

Therefore, the BOE is under intense pressure as the country goes through its first stagflation in decades. The bank has opted to continue with the aggressive rate hike policy while risking a recession.

Indeed, data published on Tuesday showed that the country’s business output declined in June. Services PMI dropped to 54.3 while the composite PMI fell to 53.7. While these numbers are above 50, they signal that activity is slowing. Other recent data from the UK like retail sales and house prices ave been disappointing.

The next key catalyst for the GBP/USD pair will be the upcoming minutes by the FOMC. During that meeting, the members voted to hike interest rates by 0.75% in a bid to fight inflation. Therefore, these minutes will provide more color about the deliberations during the committee.

The Bureau of Labor Statistics will publish the latest job openings data. Analysts expect the numbers to reveal that the country’s openings rose fell to 11 million.

GBP/USD Forecast

The four-hour chart shows that the GBP/USD pair made a strong bearish breakout in the overnight session. It dropped and tested the first support of Woodies pivot point. The pair then moved below the 25-day moving average while the Relative Strength Index has pointed downwards. It also declined below the important support level at 1.1943, which was the lowest point on June 14th.

Therefore, the pair will likely continue falling as sellers target the second support at 1.1770. A move above the resistance at 1.200 will invalidate the bearish view.

The pair will likely keep rising in the near time.

Bullish View

• Buy the USD/INR and set a take-profit at 81.
• Add a stop-loss at 78.
• Timeline: 1-2 days.

Bearish View

• Set a sell-stop at 79 and a take-profit at 78.
• Add a stop-loss at 81.

The USD/INR pair continued its bullish trend and is hovering near its all-time high. It is trading at 79.20, which is about 7.5% above the lowest level this year. The Indian rupee has crashed by over 25% from its lowest point in 2018.

Indian Rupee Crash Continues

The USD/INR pair has been in a strong bullish trend in the past few months as the dollar strength continues. The dollar has gained against most developed and emerging market currencies. For example, the euro crashed to a 20-year low against the US dollar. Similarly, the Japanese yen has fallen to a 24-year low.

The Indian rupee has crashed even as the economy has done better than other countries. Data published in June showed that the country’s economy expanded to over $3 trillion and is about to become the fifth-biggest economy in the world.

Data published on Monday showed that India’s exports rose to over $37.94 billion in May while imports rose to $63.5 billion. As a result, its trade deficit widened to over $25 billion. Still, exports have jumped on an annual basis.

Additional data showed that India’s services PMI rose from 58.9 to 59.2, which was better than the median estimate of 58.7. The manufacturing sector has also continued doing well in the past few months. This performance is partly because India has benefited from the crisis in Ukraine since it is getting cheaper oil and gas from Russia.

The USD/INR is rising as the actions of the Federal Reserve and the Reserve Bank of India (RBI) converge. The Fed has hiked interest rates three times this year and analysts expect that it will hike in all the remaining meetings. The RBI has also turned hawkish and is expected to hike rates several times this year.

USD/INR Forecast

The four-hour chart shows that the USD/INR pair rose to a high of 79.35. This price is significantly above the important support at 78.28, which was the highest point on June 13th. The pair has moved above the 25-day and 50-day moving averages. The Relative Strength Index (RSI) and the MACD have continued rising.

Therefore, the pair will likely keep rising in the near time. The next key resistance level to watch will be the psychological level at 81.

The euro was not very happy with the rebound gains last week after steps and comments by the monetary policy officials of the European Central Bank

The exchange rate of the euro currency pair against the dollar EUR/USD rebounded to the level of 1.0600 and then returned to decline in its broader path to the downside to the support level 1.0444. It settled around the level 1.0485 at the beginning of this week’s trading. She confirmed with the recovery of the euro that the clear contrast for the future of monetary policy tightening between the European Central Bank and the US Federal Reserve is still in favor of the strength of the US dollar.

Last week, the US Federal Reserve raised its key short-term interest rate by three times the usual amount for the largest increase since 1994. It could consider another massive increase at its next meeting in July, but Fed Chairman Jerome Powell said increases by three Quarters of a percentage point would not be common. The Fed has also just started letting some trillions of dollars in bonds it bought during the pandemic off its balance sheet. This should put upward pressure on long-term interest rates which is another way for global central banks to pool previously backed support under the markets to prop up the economy.

The Fed’s moves occur as some disappointing signs are emerging about the economy, even if the labor market remains strong. The latest report released on Friday showed that US industrial production was weaker last month than expected. Other disappointing data, including falling retail spending and declining consumer confidence, have raised concerns that the Fed’s actions could be too aggressive. Jerome Powell will testify before Congress this week about monetary policy, and what he says will surely guide trading. Testimony is scheduled for Wednesday and Thursday, which could mean more sharp volatility in global financial markets.

In addition to the policy of the European Central, there is the Russian-Ukrainian war and its negative repercussions on the future of economic recovery. As the crisis dragged on, Russia slashed natural gas back to Europe as countries worked to reduce their dependence on Russian supplies amid the war in Ukraine. Friday marks the third day of deep cuts to fuels that support industry and generate electricity in Europe, which also hit Germany and Austria.

This has pushed up already high energy prices and led to record inflation in the European Union. The Russian side informed the state-controlled gas company of Slovakia that it would reduce the flow of gas to the country by 50%. Russian energy giant Gazprom also told Italian gas company Eni that it would supply only 50% of the gas needed on Friday. France no longer receives any natural gas from Russia.

According to the technical analysis of the pair: The return of stability in the price of the euro currency pair EUR/USD below the support level of 1.0500 will support the bears to move further downwards. The support levels at 1.0420, 1.0375 and 1.0290 may be the most important for the bears in the general trend of the bearish currency pair. On the daily chart below, the EUR/USD needs more strong and continuous momentum to get out of this trend and there may be signs of that if it moves towards the 1.0645 and 1.0775 resistance levels, respectively.

Today is an American holiday, and it will affect market liquidity and investors’ desire for adventure. On the same day, there will be statements by European Central Bank Governor Lagarde.

Bitcoin: First signs of a potential temporary bottom near $20k.

Previous BTC/USD Signal

My last signal on 2^nd June was not triggered, as there was no suitable price action when any of the key levels were first reached that day.

Today’s BTC/USD Signals

Risk 0.50% per trade.

Trades may only be entered before 5pm Tokyo time Wednesday.

Long Trade Ideas

• Go long after a bullish price action reversal on the H1 timeframe following the next touch of $20,910, $19,977, or $19,578.
• Put the stop loss $100 below the local swing low.
• Move the stop loss to break even once the trade is $100 in profit by price.
• Remove 50% of the position as profit when the trade is $100 in profit by price and leave the remainder of the position to ride.

Short Trade Ideas

• Go short after a bearish price action reversal on the H1 timeframe following the next touch of $24,016, $25,000, or $26,012.
• Put the stop loss $100 above the local swing high.
• Move the stop loss to break even once the trade is $100 in profit by price.
• Remove 50% of the position as profit when the trade is $100 in profit by price 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.

BTC/USD Analysis

I wrote in my last analysis on 2^nd June that the best strategy for now was to stand aside until the price tests the $28k area again, and to watch what happens. If Bitcoin recovered and gets established above $32k / $33k, that would be a bullish sign.

This was a good call, as the price never got established above $32k / $33k since then, but it did finally break down below $28k, which has triggered a sharp fall over recent days, as I had expected.

There is a great deal of fear in crypto markets now, with prices beginning to force institutional liquidations. Technically, the long-term price charts suggest that the strong bearish movement could drive the price of Bitcoin all the way to $13k quite soon.

There is strong risk-off sentiment in the market, which is punishing the crypto sector, but crypto also has its own problems, so Bitcoin is suffering a double whammy.

Despite the very bearish situation, over the past few hours there have been initial signs that the price may be making a bottom just above $20k. We see quite a strong bounce from this area, but it is far from clear that this can hold up.

I think a short trade from a bearish reversal at the nearest key resistance level, which is situated at $24,016, will be a very attractive trade if it sets up today. This is likely to be the day’s pivotal point. If the price can get established above that level, it would be a bullish sign suggesting that $20k will hold for some days or even weeks.Regarding the US Dollar, there will be a release of PPI data at 1:15pm London time.

The pound fell against the dollar GBP/USD after US inflation outpaced the Fed’s view of the market. Accordingly, the price of the GBP/USD pair declined significantly, reaching the support level of 1.2301 near its lowest level during 2022. As mentioned before,  expectations will increase in strength to move towards psychological support 1.2000 in the event that the bears move in the currency pair towards the 1.2152 support level. The US dollar against the other major currencies gained strong momentum after official data showed that US inflation rose further during the month of May in defiance of market expectations of easing and with potential implications for Federal Reserve policy (Fed). The Bureau of Labor Statistics reported that US inflation rose to 8.6% last month.

This was after the pace of inflation rose on a monthly basis from 0.3% to 1% in May, which led the annual rate to rise further instead of stopping at 8.3% in April, which is what the markets were looking to see. In addition, and most important of all, the most significant rate of core inflation remained unchanged at 0.6% m/m when it was expected to fall to 0.5%, preventing the annual rate of core inflation from falling.

While that left annual core inflation slower at 6.0% (versus 5.9% expected), the slowdown was driven by underlying effects. All in all, this adds upside risk to our current fed funds rate target.

This comes after several Fed policymakers said they would like to see something along the lines of “clear and convincing evidence” that US inflation is not only declining, but also falling squarely toward the bank’s 2% target level.

Separately, and then on Friday, the University of Michigan’s US Consumer Confidence Index fell to an all-time low while the University of Michigan’s survey of inflation expectations for next year rose from 5.3% to 5.4%. The university said that consumer sentiment fell by 14% from May and continued its downward trend over the past year and reached its lowest value on record, compared to the low reached in the middle of the recession of 1980. All components of the sentiment index declined. In summarizing the results of the survey.

The latest US inflation data is the most bullish for the dollar and problematic for the likes of GBP/USD as it feeds into the ongoing upside risks to the previous market’s expectations for Fed interest rates, which were already revised higher after Friday’s announcement. While month-on-month US inflation gauges have looked on the verge of reversing over the previous months, it is likely that any of those hopes were dashed by Friday’s data, which could only mean permanent risks to a steeper trajectory for US interest rates in months. coming.

According to the technical analysis of the currency pair: The bearish performance of the GBP/USD currency pair this week will important, as the US Federal Reserve will announce a half point hike and the Bank of England will announce a quarter point hike. The hawkish signals from one of the two banks will be supportive of one of the two currencies so far. The downside momentum will remain the strongest, and the GBP/USD gains will be subject to selling again. The closest targets for bears are currently 1.2245, 1.2150 and 1.2000, respectively.

On the upside, the bulls will move towards the resistance levels 1.2540 and 1.2660 respectively to cause a change in the current bearish outlook.

The pair will likely keep falling as bears target the key support at 1.055.

Bearish View

• Sell the EUR/USD and set a take-profit at 1.0550.
• Add a stop-loss at 1.0725.
• Timeline: 1-2 days.

Bullish View

• Set a buy-stop at 1.0680 and a take-profit at 1.0790.
• Add a stop-loss at 1.0600.

The EUR/USD pair retreated after the Federal Reserve prepares to start its quantitative tightening policy. It also declined as investors wait for the upcoming jobs numbers from the United States. It is trading at 1.0643, which is slightly below this week’s high of 1.0786.

Fed Prepares for QT

The EUR/USD made a strong pullback on Wednesday after the Fed made plans to start shrinking its $8.9 trillion balance sheet. The bank is expected to reduce its assets at a pace that is twice as fast as the last financial crisis. The current size of quantitative tightening is about $47.5 billion per month. It will then double to $95 billion in September.

The Fed hopes that a combination of balance sheet reduction and high-interest rates will slow the economy and inflation without causing a recession. It has hinted that it will hike interest rates by 0.50% in the next three meetings and then shift to 0.25%.

However, some analysts believe that the Fed could pause rate hikes in September as it reflects on the impact. Notably, many investors believe that inflation growth may have peaked in April.

The next key catalyst for the EUR/USD pair will be the upcoming US jobs numbers. On Wednesday, data by the Bureau of Labor Statistics showed that the number of job openings slowed in April. The country had about 11.4 million openings, down from the previous 11.85 million.

On Thursday, ADP will publish its estimates for private payroll data. Economists expect the data to show that the private sector added 300k jobs in May from the previous 247k. The BLS will also publish the closely watched initial jobless claims.

And on Friday, the BLS will release the non-farm payroll data. The expectation is that the unemployment rate declined in May while wage growth continued.

EUR/USD Forecast

The four-hour chart shows that the EUR/USD pair declined to a low of 1.0627 in the overnight session. This was the lowest it has been since May 23rd. Also, the price was slightly below the 38.2% Fibonacci retracement level. At the same time, it has moved below the 50-period moving average while the MACD has crossed the neutral point.

Therefore, it seems like the recent rally may have peaked. As such, the pair will likely keep falling as bears target the key support at 1.055.

Bitcoin is seeing unpredictable price movement.

Previous BTC/USD Signal

My last signal on 25^th May was not triggered, as there was no bullish price action when the price reached the support level which I had identified at $29,559.

Today’s BTC/USD Signals

Risk 0.50% per trade.

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

Long Trade Ideas

• Long entry after a bullish price action reversal on the H1 timeframe following the next touch of $29,559, $29,092, or $27,981.
• Place the stop loss $100 below the local swing low.
• Adjust the stop loss to break even once the trade is $100 in profit by price.
• Take off 50% of the position as profit when the trade is $100 in profit by price and leave the remainder of the position to run.

Short Trade Ideas

• Short entry after a bearish price action reversal on the H1 timeframe following the next touch of $29,995 or $30,917.
• Place the stop loss $100 above the local swing high.
• Adjust the stop loss to break even once the trade is $100 in profit by price.
• Take off 50% of the position as profit when the trade is $100 in profit by price and leave the remainder of the position to run.

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.

BTC/USD Analysis

I wrote in my last analysis on 25^th May that $28,607 was the level to watch. A daily close below that level, and preferably below $28,000, could trigger a very strong downwards move all the way to $10k or below. However, it was starting to look as if this level would hold, so I also saw it as offering a great risk reward ratio on a long trade entry.

This was a good call as $28k continued to hold, and it eventually produced, some days later, a bullish move up to the $32k area, where the bullish momentum ran out of steam and the price topped out.

The technical picture is looking more bearish now, with the price falling quite strongly a few hours ago, printing new lower resistance just below $30k. However, short-term movement looks very unpredictable, as there is also support very close by at $29,559 which has held the price up effectively over recent hours.

I think the best strategy for now is to stand aside until the price tests the $28k area again, and to watch what happens. I doubt we will see a close below that level at the end of today, but I would be happy to enter a short trade if it does.

If Bitcoin recovers and gets established above $32k / $33k, that will be a bullish sign.

There is a great deal of fear in crypto markets now, with questions being raised over the viability of minor coins and aspects of the crypto ecosystem. However, this may benefit the major cryptocurrencies such as Bitcoin and Ethereum in the end, as crypto investors and speculators could move more heavily into these coins as safer bets.

Regarding the US Dollar, there will be a release of the ADP Non-Farm Employment Change forecast at 1:15pm London time.

The overall trend is bullish, meaning that Bitcoin will likely retest the resistance at $35,000.

Bullish View

• Buy the BTC/USD pair and set a take-profit at 34,000.
• Add a stop-loss at 31,000.
• Timeline: 1-2 days.

Bearish View

• Sell the BTC/USD pair and set a take-profit at 31,000.
• Add a stop-loss at 33,500.

The BTC/USD pair continued its bullish momentum as investors continued buying the dip. Bitcoin rose to a high of $32,100, which was the highest level since May 9th this year. It has made a strong recovery after rising by 27% from its lowest level in May.

Buying the Dip

Bitcoin had an eventful performance in May. It started the month by crashing to the lowest level since 2020 as Terra’s ecosystem imploded. Terra’s LUNA declined from over $180 to less than $0.0002 costing investors over $50 billion.

The decline also happened as investors reacted to the significantly hawkish Federal Reserve. In May, the Fed decided to hike interest rates by 0.50% and hinted that it will continue hiking by this pace in the next three meetings. It will then shift to 0.25% rate hikes later during the year.

Therefore, the BTC/USD pair declined as investors embraced the new normal of a hawkish Fed and a strong US dollar. The US dollar index surged to the highest level since May 2002.

Now, Bitcoin has made a strong recovery as investors buy the dip. The hope among buyers is that Bitcoin has become extremely cheap in the past few months and that its price will continue rising.

Bitcoin is also recovering as global inflation keeps rising. Data published on Tuesday showed that the Eurozone consumer price index surged to a record high in May. The trend will likely continue considering that the bloc decided to place an embargo on Russian oil.

Meanwhile, on-chain data shows that Bitcoin is having some inflows as investors buy the dip. Most importantly, options data shows that the put to call ratio has continued dropping, signaling that there are more bulls in the sector.

BTC/USD Forecast

The BTC/USD pair has been in a consolidation phase in the past few weeks. As a result, it made a symmetrical triangle pattern that is shown in black. This week, it managed to move above this triangle, signaling that there are more buyers now. It has also risen above the 25-day and 50-day moving averages while the Relative Strength Index has moved to the overbought level.

Therefore, the overall trend is bullish, meaning that Bitcoin will likely retest the resistance at $35,000. The alternate scenario is where it retests the upper side of the triangle pattern through what is known as a break and retest pattern.