Amana FS Daily Market Reports
- Sterling moves below 1.3450 support level, under heavy selling pressure
- Key support found at 1.3390 and 1.3302, resistance now 1.3450 and 1.3500
Sterling has fallen to its lowest trading level of the year so far, driven by broad-based U.S. dollar strength and strong technical selling. The GBP/USD pair had largely been trading between the 1.3450 to 1.3600 price-range since the Bank of England policy meeting, with today’s key break-lower providing the catalyst for strong technical selling in the pair.
The British pound is likely to be heavily in focus this week, as the United Kingdom economy releases a slew of high-impacting macroeconomic data. Recently, the United Kingdom has seen a weakening of key domestic data-points, and this week’s Consumer Price Index, Retail Sales and first quarter GDP releases promise to shed further light on the true state of the UK economy.
I would also like to mention that the 1.3450 support level marked the GBP/USD pair’s 50-week moving average, which gives a key indication of medium to long-term strength in sterling. If price stays below the 50-week moving average, sellers may be encouraged to target the pair's 100-week moving average, which currently sits just above the 1.3000 handle.
Key technical support for the GBP/USD pair below 1.3400 level comes from the 1.3390 level, which marks the bullish swing-low from December 28, 2017. Below the 1.3390 level, the 1.3302 area is certainly worth watching, as it denotes the important swing trading-low from December 10th, 2017.
To the upside, critical resistance is found at the 1.3450 level, as I previously mentioned it is the pair’s 50-week moving average and former range-bottom. If buyers can move price above this level, the psychological 1.3500 level would be the key resistance level to watch to contain rallies back towards the 1.3606 range-top.
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- Ethereum moves back above $700 level as dip-buyers return
- Key resistance found at $734 and $758, support comes in at $676 and $647
Ethereum has moved back above the key $700 level and started the trading new week with a solid bid-tone, after the previous trading week’s sharp decline to $647. Dip-buying demand across the broader cryptocurrency market has also been prevalent over the weekend, with the value of Bitcoin making a strong recovery back above the $8,000 level, after coming under selling pressure during the later part of the previous trading last week.
Buyers will also be encouraged that the ETH/USD pair has moved back above the wedge pattern seen across various lower time-frames. I would also like to note that risk-on trading sentiment has returned to financial markets, and this may also be supporting buying in across the cryptocurrency space.
Intraday bulls will need to keep price well above the psychological $700 level to keep the bullish momentum alive in the ETH/USD pair, with key near-term resistance currently found at the May 14th Swing-high, at $734, with the bearish swing-high from May 10th, at $758, the next key resistance level to watch above.
Near-term ETH/USD support is currently found at the wedge pattern top and bottom, at $695 and $676, with the current monthly price-low in the ETH/USD further support, at $647. I suspect a clear breach of the $647 to $800 price-range will be needed before a clear medium-term trend can be established in Ethereum.
Ethereum earlier moved to a new weekly trading-low, hitting $647.73, as the combination of broad-based weakness across the cryptocurrency market and heavy technical selling overall pushed price lower. The world’s second largest cryptocurrency by market capitalization is trading at its lowest price since May 2nd, following the sell-off.
The ETH/USD pair had been trading in an increasingly narrow-range, with an upcoming price break-out well flagged across the charts. Price has moved back to the break-out point, close to the bottom of the wedge pattern, at $676, and we have so far seen sellers continue overwhelm buyers at this area.
As I have previously mentioned, the $702 level has been a key level for technical traders, and when the ETH/USD pair starts to weaken below the $702 level and stay below it, traders can get a good indication that we may be about to see price start to travel lower.
The ETH/USD pair is currently bearish and creating lower-lows, we have key support below $647.73, at the May 1st low at $618.25. The April 26th low, at $586.26, is the next key support level to watch if price travels below $600. The upside, the wedge bottom is key near-term resistance, at $676, with the $702 level the next major resistance level to watch if price move back inside the wedge.
Since May 5, BTC/USD has been trading in a short-term downtrend, and today, the price dropped below $8,000 for the first time since mid-April, further giving back its gains from the previous month bullish rally.
According to Coinmarketcap.com, Bitcoin's price is down by 10% in the last seven days, and there no specific reason why most digital currencies are declining since the first week of May.
Currently, the price is trading slightly above the significant support level of $7762 (April 17 low). Breaching this support level might open up for a run towards the April 6 low of $6470. I am watching this closely as this might be viewed an excellent opportunity to enter short positions. Alternatively, if the $7762 level supports the price, I suspect that the price might bounce and may challenge the May 15 high of $8844.
Overall, the trend remains bearish as long as the price trades below the May 15 resistance.
Litecoin’s past few sessions were extremely bearish as the price failed to gain bullish momentum against the US dollar. The LTC/USD pair started a downside move on May 7 creating lower and lower highs and guided by a falling wedge-like pattern. The sixth largest digital coin with the market capitalization of $7.8B has recorded a decreasing trade volume due to negative sentiments in cryptocurrency market.
From the technical point of view, the trend remains bearish, and I suspect that the price may continue to slide further in coming sessions aiming for the April 12 low of $98. I am also closely watching the May 15 high of $150, once it’s broken, the trend may shift to bullish, and the coin may extend the upside towards the March 12 high of $185.
AUD/NZD: Aussie Dollar Maintains Its Bullish Composure, Next Target January 30 High
The AUD/NZD currency pair has been impressive over the past couple of weeks as the price bounced on April 13, and continuously traded higher. The price breached a couple of major resistance located at 1.0827 (February 28 high) and 1.0894 (February 8 high). Presently, the AUD/NZD is trading close to yesterday's high and slightly above the February 8 high as the Aussie drives against the Kiwi progressively.
The Kiwi is continuing its decline against the major counterparts as the Reserve Bank of New Zealand is being restricted by sluggish growth and low expectations of any future rate hikes. Because the AUDNZD has rallied strongly, it is fair to say that it may need a price correction. If we draw the Fibonacci retracement levels from the May 9 low of 1.0658 up to yesterday’s high of 1.0939, we can get the 1.0765 to 1.0833 range (38.2% to 61.8% Fibonacci levels). I suspect that bullish traders might be interested in entering long positions in this Fibonacci range aiming for the yesterday’s high followed by the January 29 high of 1.1073.
The trend will remain bullish as long as the price trades above the May 9 low of 1.0658.