Bitcoin / U.S.Dollar (BTCUSD) Elliott Wave Technical Analysis 7 December 2022
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10/06/21 10:53
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07 February 2023 Spot Gold The price of gold has extended its pullback from overbought territory over the last week and has found some near-term support at the 50-day simple moving average (50MA) (green line). Our preference remains to look for long entry on a bullish price reversal. A bullish reversal might be considered if we can see price closing above the 1875 level, provided that the 50MA is not broken with a price close below. Should the 50MA level be broken and the price reversal not confirm, 1820 becomes the next downside support target from the move. In this scenario we not looking to short gold but would rather be looking for a bullish price reversal closer to this level for long entry once again. Should either of these scenarios manifest we will update our guidance accordingly with resistance targets and stop loss considerations. Source: IG charts Brent Crude Oil The bearish reversal off the 8770-level guided in our previous note has yielded a significant decline, although fallen short of the 7760-support target. The price now looks to be rebounding from oversold territory. Traders who have been short might consider this an indication to exit their trades. The longer-term trend bias is still considered down and should a bearish price pattern emerge before this level, new short entries might be considered. In this scenario a close above the 8770 level might be used as a stop loss consideration, while targeting a move back towards the support low at 7760 once again. Only on a move / close above the 8770 level would the longer-term trend bias be reassessed, and long trades reconsidered Source: IG charts Our weekly technical report is compiled by in-house senior market analyst, Shaun Murison. -
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USDJPY recovery comes into question as surge in Japan wages highlight case for further downside Source: Bloomberg Joshua Mahony | Senior Market Analyst, London | Publication date: Tuesday 07 February 2023 Japanese wages surge, shifting the tone after NFP volatility USDJPY has managed to fight back against the recent downtrend, breaking higher towards the back end of last week. Interestingly, this comes some days after the Federal Reserve laid out a somewhat hawkish stance that many would have expected to bring such upside for the dollar. However, market scepticism around those FOMC comments were undermined on Friday when a bumper jobs report provided the basis for the Fed to continue on this tightening path. Today has seen Japanese nominal wages for December grow by the fastest pace since 1997, driving speculation that the BoJ will look to tighten policy once Governor Haruhiko Kuroda leaves his post in April. Below we can see how the shift in relative inflation rates between the USA and Japan has led to recent declines for USDJPY. Largely that is a reflection of shifting expectations as the Federal Reserve moves towards their terminal rate, and the Bank of Japan potentially edging towards taking concrete steps to arrest the rise in inflation. With that differential between inflation levels continuing to fall, there is a case for continued weakness in USDJPY going forward. The wage differential has closed entirely after todays release from Japan, with the two countries seeing opposite trajectories of late. The relationship against the USDJPY Pair is less well correlated, but it makes sense that higher wages would ultimately lead to higher inflation. Meanwhile, it also provides a shift in sentiment that could drive USDJPY. USDJPY rebounds into Fibonacci resistance The fact that we have seen Japanese wages spike sharply higher brings the focus back to the story of rising inflation in the region, with USDJPY on the back foot today as a result. The downtrend does remain intact despite the trendline break that occurred last week, with the 76.4% Fibonacci resistance level providing a potential turning point of note here. A rise through the 134.77 resistance level would bring about a bullish reversal signal. However, the theme continues to remain bearish until these levels are cleared out. Source: ProRealTime
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