There is a possibility that the EUR/USD will continue falling as sellers target the next key support at 0.9850.

Bearish view

• Sell the EUR/USD and set a take-profit at 0.9850.
• Add a stop-loss at 1.0035.
• Timeline: 1-2 days.

Bullish view

• Set a buy-stop at 1.0025 and a take-profit at 1.0095.
• Add a stop-loss at 0.9950.

The EUR/USD price continued its bearish trend after a series of hawkish statements by the European Central Bank (ECB) and Federal Reserve officials. It dropped to a low of 0.9963, which was slightly lower than last week’s high of 1.0095.

Hawkish ECB and Fed

The EUR/USD resumed its bearish trend as investors reacted to last week’s Jackson Hole Symposium comments. In his speech, Jerome Powell reiterated that there will be some pain for both investors and consumers as it continued to battle the soaring inflation.

He said that the bank will continue with its hawkish tone until it sees a clear sign that inflation has started dropping. Data published this month showed that the headline inflation in the US dropped from 9.1% in June to 8.7% in July.

And on Friday, the closely watched PCE data showed that the country’s inflation continued dropping as gasoline prices pulled back. Therefore, analysts were expecting the Fed to start slowing down its hawkish tone in the coming meetings.

The EUR/USD price also dropped after several ECB officials reiterated that the bank will continue hiking rates in the coming months. Speaking at the Jackson Hole Symposium, Isabel Schnabel and Francois Villeroy Galhau said that a large sacrifice will be needed to tame inflation.

The two officials believe that the bloc’s inflation will continue soaring in the coming months. Analysts expect that the bloc’s inflation rose to a record 9% in August as gas prices surged. European gas prices rose to a record high of 343 euros per megawatt hour, which is sharply higher than where they were when the year started.

As a result, the EU will convene an emergency meeting to deliberate on the way forward since these prices mean that the bloc will likely head to a deep recession.

EUR/USD forecast

The four-hour chart shows that the EUR/USD pair has been in a strong bearish trend in the past few weeks. It managed to move below parity level for the second time this year last week. As a result, the pair remains below the 25-day and 50-day moving averages and is slightly above last week’s low of 0.9903.

The EUR/USD pair has also formed what looks like an inverted cup and handle pattern. Therefore, there is a possibility that it will continue falling as sellers target the next key support at 0.9850.

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The NASDAQ 100 has fallen hard during the trading session on Monday, as we continue to see a lot of negativity. The 50-Day EMA is currently rising higher, and it should show a certain amount of support. However, if we break through there, then the next target will more likely than not end up being the 12,500 level.

The NASDAQ 100 of course is very susceptible to noise as there are only 7 stocks that move the thing for the most part, so you would do well to follow Tesla, Apple, Microsoft, Alphabet, and all of the usual suspects. As interest rates continue to show signs of strength and central banks around the world look to be very tight with monetary policy, that does tend to work against the value of these types of companies, so it all ties in together quite nicely. It’s also worth noting that we close at the very bottom of the candlestick, so it looks like we are ready to test the major support level in the form of the 50 Day EMA and the previous noise between there and the 12,500 level.

Strategies for trading Nasdaq today

If we were to break down below that level, then it’s likely that the market could go to the 12,000 level. On the other hand, if we were to turn around and reach higher, the 200 Day EMA sits just below the 13,500 level, and therefore it should offer a bit of resistance, therefore I think it’ll take a lot of effort to get above there. If we can break above all of them, then fine, we will go much higher. This week should be crucial for the markets, and by the time we take off for the weekend, we should have a good idea as to where things are going to end up.

• I would anticipate a lot of noise more than anything else, so be aware of the fact that the markets are going to be difficult to navigate going forward.
• We continue to see a lot of headline noise cause headaches for most traders.
• The next couple of days are going to be difficult and crucial, so make sure you keep your position size reasonable.
• I do believe the we will get a longer-term answer, but we need to let the market tell us what it wants to do.

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The pair will likely continue rising as buyers target the second resistance level at 1.2415.

Bullish View

• Buy the GBP/USD pair and set a take-profit at 1.2420.
• Add a stop-loss at 1.2200.
• Timeline: 1-2 days.

Bearish View

• Set a sell-stop at 1.2225 and a take-price at 1.2150.
• Add a stop-loss at 1.2320.

The GBP/USD price continued its bullish trend as investors refocused on the upcoming interest rate decision by the Bank of England (BoE). It also rallied as the US dollar and bond yields continued falling. The pair rose to a high of 1.2295, which was the highest level since June 28th of this year. It has risen by more than 4.22% from the lowest point this year.

US Dollar Sell-Off

The GBP/USD pair continued its bullish trend as the US dollar continued falling. The dollar index has droopped from last week’s high of $109.30 to the current $105.7. This decline is mostly because of the ongoing feeling that the Federal Reserve will not be as hawkish as expected.

Last week, the Fed decided to hike interest rates by 0.75%, bringing the year-to-date increase to 225 basis points. The bank will also continue reducing its balance sheet. At the same time, the committee warned that it will continue hiking interest rates in a bid to fight the soaring inflation.

However, analysts now believe that the Fed will not be as hawkish as expected because of the performance of the economy. Data published last week revealed that new and existing home sales declined sharply in June.

Worse, additional data showed that the country sank to a recession in the second quarter as it contracted by 0.9%. As a result, the yield of the 10-year bond year government bonds dropped to 2.66% while the 30-year fell to 2.90%.

The next key catalyst for the GBP/USD pair will be the upcoming American JOLTs data. Economists expect the data to show that the number of vacancies dropped from 11.25 million in June to 11 million in July.

On the bigger picture, the next key catalyst to watch will be the upcoming Bank of England interest rate decision and the US jobs data.

GBP/USD Forecast

The four-hour chart shows that the GBP/USD pair formed an inverted head and shoulders pattern in July. In price action analysis, this pattern is usually a bullish sign. The pair has managed to move above the 25-day and 50-day moving averages. As the pair rose, it moved to the first resistance of the standard pivot point.

Therefore, the pair will likely continue rising as buyers target the second resistance level at 1.2415. A drop below the support level at 1.2200 will invalidate the bullish view.

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Ultimately, I think we will break out and I don’t have any real interest in trying to short this pair anytime soon.

The Canadian dollar initially dropped Wednesday but saw a nice recovery late in the day. This lines up quite nicely with the oil markets, as they had initially sold off, but have also recovered quite a bit. Because of this, the market has jumped right back to its old correlation between crude oil and this market, so it does make sense that we would see the shape of the candlestick look the same in both markets.

At this point, there is no reason to think that this market will not continue to go higher, because the Bank of Japan continues to fight interest rates rising in that country, meaning they are essentially “printing Yen” along the way. They are by far the loosest central bank in the world, so the Japanese yen will continue to pay the price. Furthermore, if there is more demand for crude oil out there, that benefits Canada, and it’s also worth noting that Japan imports 100% of its crude oil.

The ¥102 level looks to be supported, especially now that the 50-day EMA is rapidly approaching that level. This is a nice uptrend, and there’s no reason to fight what’s going on here. Waiting for dips that you can pick up a little bit of value in makes the most sense. It is worth noting that the ¥107.15 level has caused a minor resistant barrier, but there’s nothing from a psychological or long-term standpoint that suggests that we cannot break above that level and continue to go higher. In fact, I fully expect that to be the case, especially after the price action during the trading session on Wednesday.

With oil recovering the way it did late in the day, it does make sense that we would see the CAD/JPY pair continue to show signs of life. That being the case, if we can get some type of significant rally in the stock markets, that may help this pair as well. It’s worth noting that it was a strong balance during the day, so everything lined up for a nice recovery after some early selling during the Asian session. Ultimately, I think we will break out and I don’t have any real interest in trying to short this pair anytime soon.

I look at every rally as an opportunity to get short yet again as soon as we see signs of exhaustion.

The S&P 500 bounced significantly from the 3900 level, which is a large, round, psychologically significant level, and an area where we’ve seen a little bit of support. By the end of the day, we ended up forming a bit of a hammer, so I think we are going to enter a bit of consolidation in this area. The 4100 level above is resistance, and therefore I think we are going to bang around in this 200-point range in the short term.

While the market is oversold, the reality is that there’s no real fundamental reason to think that the market is going to turn around for a bigger move, and I think that anytime the S&P 500 rallies from here, you should be looking for selling opportunities. I think that the markets will continue to be noisy and focus on the fact that there is a lot of inflation out there that the Fed will be fighting. By finding inflation, they will be raising rates, thereby making money much more expensive for gamblers on Wall Street.

If we were to turn around and break down below the 3800 level, it would break down below the recent low, and of course the bottom of the hammer from a couple of sessions ago. If that does get violated, it’s likely that we will continue to go much lower. It’s worth noting that we had recently formed the so-called “death cross”, which is when the 50-day EMA crosses below the 200-day EMA. Quite often this is a very late signal, but a lot of people will pay close attention to it. Ultimately, I think this is a market in which if you get a bit of a rally, you have to be looking for signs of exhaustion to jump upon. Even if we broke above the 4100 level, there is significant resistance at the 50-day EMA, as well as the 4300 level. If we were to somehow break above that 4300 level, then it’s likely that the market will go much higher. Until then, I look at every rally as an opportunity to get short yet again as soon as we see signs of exhaustion. Forward guidance by a lot of CEOs on Wall Street has been miserable, and I think that continues the way up on the index as well.

Bearish View

• Sell the BTC/USD and set a take-profit at 25,470.
• Add a stop-loss at 30,000.
• Timeline: 1 day.

Bullish View

• Set a buy-stop at 29,525 and a take-profit at 32,000.
• Add a stop-loss at 27,000.

The BTC/USD crashed below the support at 30,000 as demand for cryptocurrencies waned. The coin dropped to a low of 27,830, which was the lowest level in eleven months. It has crashed by more than 60% from its all-time high.

Terra Contagion

The biggest story in the cryptocurrency industry has been the implosion of Terra and its ecosystem. LUNA, which was one of the top-ten cryptocurrencies, declined sharply after its main stablecoin lost its peg.

As a result, LUNA saw its price crash below $1, which was a dramatic collapse considering that it was trading at $120 in 2021. Additionally, the total value locked (TVL) in its ecosystem declined from over $30 billion to less than $4 billion.

Therefore, the BTC/USD pair has crashed as investors worried about contagion in the blockchain industry because of the important role that stablecoins play in the sector. Also, there are signs that there will be more regulations in the sector.

The pair also declined as the US dollar index held steady after the latest American consumer inflation data. According to the Bureau of Labor Statistics (BLS) showed that the consumer price index declined slightly in April. The decline was nonetheless better than what analysts were expecting. As such, investors believe that the Fed will stick to its plan of hiking interest rates.

Meanwhile, on-chain data shows that many Bitcoin holders have started liquidating their positions during the crash. At the same time, inflows have been limited, as evidenced by the performance of Coinbase. On Tuesday, the company revealed that it made a major loss of over $400 million as the number of active users crashed. Its revenue and forward guidance missed what analysts were expecting.

BTC/USD Forecast

The BTC/USD pair has been in a spectacular crash in the past few months. The pair managed to move below the important support at 30,000 as the LUNA implosion continued. It is now trading between the third and second support lines of the standard pivot points.

The pair has also formed a bearish flag pattern and moved slightly below the 25-day and 50-day moving averages. Oscillators have all moved lower. The pair will likely keep falling as sellers target the key support level at 25,470, which is the third support. The stop for this trade will be at 30,000.

There is a possibility that the pair will continue falling ahead of the upcoming US consumer inflation data.

Bearish View

• Sell the BTC/USD pair and set a take-profit at 29,370.
• Add a stop-loss at 42,000.
• Timeline: 2 days.

Bullish View

• Set a buy-stop at 32,961 and a take-profit at 34,000.
• Add a stop-loss at 29,370.

The BTC/USD declined to the lowest level since July 23rd this year, which was about 52% from its highest level last year. Other cryptocurrencies and stocks have also sold-off dramatically, with the total market cap of all digital coins falling to about $1.5 trillion.

Cryptocurrency Currencies Sell-Off

Bitcoin price has been in a strong sell-off recently as worries about the Federal Reserve, US inflation, and recession continued. Other financial assets have also sold-off. For example, the tech-heavy Nasdaq 100 index has declined by 26% from its highest point in November. Similarly, the Dow Jones index has fallen by 12% in the same period.

Even the so-called safe assets have all declined. Gold has plummeted by 10% from its highest point in February while Treasuries have also fallen. The 10-year and 30-year Treasury Yields have risen to the highest levels in over 3 years. Bond yields are usually inverse to prices.

The sell-off accelerated when the Federal Reserve published a hawkish decision last week. In a statement, the bank said that it was hiking interest rates by 0.50%. At the same time, it warned that more 50 basis point hikes were on the way as it continues battling the soaring consumer price index data.

The BTC/USD pair has also declined because of the increased selling by many holders who are giving up on hopes that it will retest its all-time high. Besides, the unlimited liquidity that existed in 2021 has faded. For one, the US and other European countries are no longer providing the stimulus checks that they gave out last year.

All these factors have pushed investors to the safety of the US dolla. Indeed, the dollar index has been in a strong uptrend and is currently trading at the highest point since 2002.

BTC/USD Forecast

The daily chart shows that the BTC/USD pair has been in a strong downward trend in the past few months. The sell-off accelerated when the pair moved below the important support level at $32,961, which was the lowest level on January 24th. The pair has moved below the Ichimoku cloud and the 25-day and 50-day moving averages.

Therefore, there is a possibility that the pair will continue falling ahead of the upcoming US consumer inflation data. As a result, the next reference level to watch will be at 29,370.

I think it is probably going to continue to be very difficult and volatile trading.

The FTSE 100 broke down rather significantly on Friday as the futures market got pounded from the start. The futures market drop down to the 7300 region before bouncing rather drastically, perhaps in a bid to stay in the consolidation area that we have been in for a while.

Looking at the chart, you can see that we continue to look threatening, but it is probably worth noting that support did hold fairly well. If we can break down below the 7300 level, then it is likely that we will go much lower after initially wiping out the 200-day EMA underneath. If we were to break down below that level, then we will have a brutal selloff that should continue to be followed, perhaps allowing the FTSE 100 to drop down to the 7000 level. After all, one of the biggest problems that we are going to see in the FTSE 100 is the fact that the Bank of England has recently stated that they are going to anticipate a recession, and that suggests that the British economy is going to continue to struggle.

Looking at the chart, if we were to rally and take out the 7500 level, we may make another attempt to break out to the upside but I just do not see that being likely. If we were to see that happen, we could begin to build up massive pressure and perhaps even start to look at this market through the prism of an inverse head and shoulders. That seems to be very unlikely, but I suppose at this point in time anything is possible. If the Bank of England starts to loosen monetary policy, then it is possible we may see London traders celebrate. However, I think there are a lot of moving pieces out there that continue to put risk into the market, not only this one but pretty much every other market that I follow.

Pay close attention to other indices around the world because they all tend to be moving in the same general direction as of late. There are concerns about inflation, war, and shortages in the supply chain. Because of this, I think it is probably going to continue to be very difficult and volatile trading.

At this juncture, the market looks very likely to continue being bearish, but you may have to go down to short-term charts for entry signals.

The British pound had a horrible session during the day on Thursday, as the 1.26 level has offered massive resistance. The turnaround after the Federal Reserve meeting is short-lived, to say the least, as we have broken down quite drastically. Ultimately, this is a market that I think will continue to go lower based on the size of this candlestick, and of course, the fact that we are closing towards the very bottom of the range. If we break down below the bottom of the candlestick, then it means that we should see plenty of momentum in this market so that it goes much lower.

Keep in mind that the US dollar continues to be the strongest currency that I follow in general, and I think that the British pound is not going to be able to put up much in the way of a fight against it. The Bank of England is looking to keep quite a bit of the asset on its balance sheet, unlike the Federal Reserve, which is looking to run those balance sheets down. This does favor the US dollar and the monetary tightening policy will continue to be the main driver. At this juncture, I think that a breakdown below the 1.25 level signifies that we are going to go down to the 1.23 handle, perhaps even down to the 1.22 level. With that being said, I would expect a short-term rally, but that rally will almost certainly be sold into.

I have no interest in buying this pair obviously, but if we were to turn around a break above the highs of the last two days, it would be a very bullish sign, perhaps opening up the possibility of a move to the 50 Day EMA. The 50 Day EMA is an indicator that a lot of people pay attention to, especially as it is now crossing below the 1.30 level. At this juncture, the market looks very likely to continue being bearish, but you may have to go down to short-term charts for entry signals. Those signals continue to be an invitation to get US dollars “on the cheap”, which is exactly the environment we have been in for a while. Ultimately, I do not see how this changes anytime soon, especially as the Federal Reserve is going to do a couple of 50 basis point rate hikes in a row.

The pair will likely keep falling as the risks to the European economy continues.

Bearish View

• Sell the EUR/USD pair and set a take-profit at 1.0500.
• Add a stop-loss at 1.0610.
• Timeline: 1 day.

Bullish View

• Set a buy-stop at 1.0600 and a take-profit at 1.0700.
• Add a stop-loss at 1.0500.

The EUR/USD price crashed to the lowest level in five years as concerns about the Eurozone economy continued. The pair fell to a low of 1.0513, which was significantly below its highest level this year.

Concerns About the Eurozone economy

There are serious concerns about the Eurozone economy as the energy crisis continued. On Wednesday, the price of European natural gas prices surged to an all-time high after Russia’s Gazprom stopped supplying oil to Poland and Bulgaria.

The company insisted that it will restart its supplies only if these countries start paying in rubles. Therefore, the EUR/USD declined because analysts expect that Russia will impose the same restrictions for other European countries like Germany and France. As such, there are risks that the European economy will experience a major recession this year.

Therefore, investors believe that the European Central Bank (ECB) will be slow to end its stimulus in a period of stagflation. On the other hand, the Federal Reserve is expected to continue being more aggressive by hiking interest rates and starting its quantitative tightening (QT) policy.

The pair also declined as investors rushed to the safety of the US dollar as the number of Covid-19 cases kept rising in China. Officials there have announced some strict measures, including lockdowns and strict testing. As a result, there is a likelihood that the global economy will see some weakness in the coming quarters.

The EUR/USD declined as the US dollar continued its strength. The dollar index moved above $102 as the currency rose against other key currencies like the Japanese yen, Swiss franc, and sterling.

The next key data to watch will be the second estimate of the US Q1 GDP data. The first estimate showed that the economy expanded by 7.6% in Q1. The pair will also react to the ECB bulletin and the bloc’s consumer and business sentiment data.

EUR/USD Forecast

The EUR/USD pair continued its bearish trend as risks to the global economy continued. It fell to a low of 1.0507, which was the lowest level in five years. It is slightly above the third support of the standard pivot points. It also moved slightly below the 25-day and 50-day moving averages. Also, the pair is along the lower side of the Bollinger Bands.

Therefore, the pair will likely keep falling as the risks to the European economy continues. The key support level to watch will be at 1.0500.