EUR/USD: Fed’s “Boring” FOMC Protocol
The DXY DOLLAR Index HIT A MULTI-YIEAR of 105.05 On FRIDAY, AFTER A SIX-WEEK Rise. The Last Time It Climbed This High Was 20 Years Ago. However, A Reversal Followed, and Its Already At The Level of 101.50 Exactly Two Weeks Later. Following the General Trend, The EUR/USD 1 111 Pair Has Also Been Growing Since May 13, Reaching the Height of 1.0764 on May 27. Theuro Has Pushed the Dollar By 415 Putins Durints Durints Durints Durints Duins Duints Duints Duints Duints Duints Duints Duints Duints Duints Duints Duints Duints Duints Duints Duints Duints Duints Duints Duints Duints Duints Duints Duints Duints Duints Duints Duints Duints Duints Duints Duints Duins And this is not at all the European Currency that vid it, but the American One. More Specifically, The Us Federal Reserve. The minutes of the last Federal Open Market Committe (Fomc) Meeting ReleASDE ON WEDNESDAY 25 DID not Bring Any Surprises. IT Had Only What EVERYONE ALREADY KNEW ABOUT. The Content of the Document Simply Confirmed the Intention of the Regulator to Raise the Refinancing Rate by 0.5% At each of the Next Two Meetings. Fed officials also unanimously approved a plan to start reducing the asset portfolio, which currently stands at $9 trillion, from June 1. The absence of any surprises in the FOMC protocol hurt the dollar, but it helped the shares: the stock indices S&P500, Dow Jones and Nasdaq Went Straight Up. The Eurozone Macroeconomic Calendar Remained Almost Empty Last Week. As for the Statistics from the Us, It Came Out Rather Multidirectional. Initial Jobless Claims for the Week Fell to 210k, Which is Less ThatsTed 215k. Orders for Durable Goods Rose by 0.4%, Indicating Further Growth In Consumer Activity, Which is Driver of Economic Growth. However, On the Other Hand, US Gdp for the Q1 Was Revised Down To Negative -1.5%, Which Is Worse THAN BONOVIUS ESTEMATEAMATE OF -1.3%and The FORECAST of -1.4%. Among Medium-Term Factors, The Aggressive Policy of the Us Central Bank Continues to Play on the Side of the Dollar. ITS Head, Jerome Powell, Has Repeatedly Confirmed HIS Intention to Raise Interest in Order to Curb Inflation and Prevent the Economy from Overheating. US Annual Inflation (CPI) HIT 8.3% In April, More than Four Times The Target of 2%. At the Same Time, According to Analysts, A Record Rise in Energy Price Will Continue to Push Inflation Upward in the Coming Months. And this, in turn, May Push The Fede Further Tighten Monetary Policy. The US Currency Also Continues to Be Supported by Its Status as a Protective Asset. As the Armed Conflict Between Russia and Ukraine Is Expired to Escalate, Demand for It Will Continue to Grow, As Investors Are Concertoat of Stagflation Inoope. Rising Tensions Between China and Taiwan Havy Increased Craining for Safe Haven Assets as Well. EUR/USD Completed the Past Week at 1.0701. At the time of writing the review, on the evening of May 27, the voices of experts were divided as follows: 30% of analysts are sure that the pair will return to the movement to the south, 50% of analysts are waiting for the Continuation of the Ascent to the North, and the Remaining 20% Have Taken A Neutral Position. There is no unity in the readings of the Indicators on D1. Oscillators are 80% Green, 10% RED, and 10% Neutral Gray. At the Same Time, a Quarter of the “Green” is already in the overbouchht zone. There Is Parity Among the Trend Indicators: 50% Vote for the Growth of the Pair, 50% Vote for Its Fall. The Nerest Resistance Is Located in Zone 1.0750-1.0800. IF SUCCESSFUL, The Bulls Will Try to Break Through The Resistance of 1.0900-1.0945, The 1.1000 and 1.1050, After Which They Meeet Resistance in the 1.1120-1137 Zone. For the Bears, Task Number 1 is to Break Through The Support AT 1.0640, then 1.0480-1.0500, and that Update the May 13 Low At 1.0350. IF SUCCESSFUL, They Will Move On to Storm The 2017 Low of 1.0340, There is Only Support from 20 Years Ago Below. A LOT of Statistics on Consumer Markets in Germany (May 30 and June 01) and the EU (May 31 and June 03) Will Be Released this Week. The Publication on WeedNesday, June 01 of the ISM Business Activity Index in the US ManUFACTORS ALSO Noteworthy. On the same day, the ADP report on US non-farm employment will be published, and another piece of data from the US labor market will arrive on Friday, October 08, including such important indicators as the unemployment rate and the number of new non -farm Payrolls (NFP). GBP/USD: “Not Boring” Decision of the UK Government The main factor behind the strengthening of the pound and the growth of the GBP/USD pair, as in the case of the euro, was the general weakening Of the us currency. The Two-Week Drop in the Dxy Dollar Index Was Its Worst Losing Streak SincEak December 2021. However, Unlike The Eura, The British Currency Was Helped by More Factors. The first ist is Strong Labor Market Data. The Second Is Inflation in April, Which Peaked in Four Decades and Gave Investors Hope for Further Tightening of Monetary Policy and Higher Intersts by the Bank of England. British Prime minister boris Johnson Expressed HIS Concern ABOUT THE COUNTRY ECONOMIC Prospects Last Week. He Said in An Interview with Bloomberg TV 27 That He “Expects a Difficult Period Ahead” Doesn’t to See a Return to the 1970s-Style Wagice Spiral. ” A Day Earlier, The Decision of the Government of the United Kingdom, In Contrast to the “Boring” of the Feda’s Protocol, Greatly Surprised the Markets. UK Finance Minister Rishi Sunak Announced a One -off Payment of £ 650 to the Lowest Income HouseHolds To Help Them with Rising Price. The Total Amount of this Fiscal Bailout Will BE £ 15bn. And although Sunak argued that the support package would have a “minimal impact” on inflation, many analysts thought that this injection could prompt the Bank of England to revise its economic forecasts for this and next year. It is possible that the regulator will decide to take a more hawkish stance in order to limit inflationary pressure on the country’s economy. At the same time, for now, growth prospects for the UK economy remain significantly lower than on the other side of the Atlantic. And this causes many experts to doubt that the pound, together with the GBP/USD pair, can continue to grow steadily in the medium term. Especially if the tension around the Northern Ireland Protocol increases. Recall that this document is an addition to the Brexit Agreement, which regulates Special Trade, Customs and Immigration Issues Between The UK, Northern Ireland and the European Union. The Last Chord of the Past Week Sounded at 1.2628. 55% of Experts Vote for Further Growth of the Pair, 35% For Its Fall, and the Remaining 10% are for a sideways trend. The SITUATION with Indicators ON D1 is Similar to Their Readings for EUR/USD . Among the Trend Indicators, 50% Indicate the Growth of the Pair, and the Same Number Indicate the Fall. Among the oscillators, the balance of power is somewhat different: only 10% are looking south, another 10% are neutral, 80% are pointing north, although a quarter of them are already in the overbought zone. Supports are located at 1.2600-1.2620, 1.2475-1.2500, 1.2400, 1.2370, 1.2300, 1.2200, then 1.2154-1.2164 and 1.2075. A Strong Pivot Point for the Pair is at the Psychological Important Level of 1.2000. In Case of Further Movement to the North, The Pair Will Have to Overcome Resistance 1.2675, then there are zones 1.2700-1.2750, 1.2800-1.2835 and 1.2975-1.3000. Among the events of the upcoming week concerning the economy of the United Kingdom, we can note Wednesday, June 01, when the May value of the index of business activity in the manufacturing sector (PMI) will be published. Thursday 02 June and Friday 03 June Are Bank Holidays in the UK. USD/JPY: Japan Has Its Own Way. But Which One? Japanese Prime Minister Fumio Kishida has recently said that “the recent movements of the yen are driven by various factors” and has added that the government’s priority is to help ease the pressure on households and businesses through various policy measures. It is interview to Know What Lies Behind the Wording “The Recent Movements of the Yen”. Is it The fact that USD/JPY HAS Soared from 102.58 to 131.34 SincE January 2021, and the Japanese Currency Has Weakened by 2.876 Points? So this is not just some kind of “movement”, but a real collapse, about which the country’s households are moaning. Inflation in the country continues to grow, which eventually causes dissatisfaction among the population. The rise in consumer prices is recorded for the eighth month in a row. They increased by 2.5% in April compared to the same month a year earlier, showing the highest growth rate since October 2014. As noted by Dow Jones, inflation has exceeded the 2.0% mark for the first time since September 2008, and this is without taking into account the effect of the consumption tax increase. But how do the leaders of the country react to this? Whereas US and UK regulators fight inflation by tightening monetary policy, the opposite is true in Japan. According to the Aforemented Prime Minister Fumio Kishida, The Authorites are Aiming to Meet the Inflation Target Through The Government’s Structural Reforms, Fiscal Policy, and Easing of the Bank of Japan’s Monetary Policy. (Recall That the Interest Rate on the Yen Has Been At a Negative Level of -0.1% for a Long Time). Bank of Japan Governor Haruhiko Kuroda, in turn, explained that if energy prices do not show a sharp drop, Japan’s core consumer price index (CPI) is likely to remain near the 2% mark for about the next 12 months. At the Same Time, If We Analyze The Statements of Both Officials, Certain Discrepancies in Their Assessment of the Economic Sitation Become Noticeable. On the One Hand, Fumio Kishida Says That The Government’s Priority Is to Alleviate Inflationary Pressure, Including by raising the Wages of Citizens. On the Other Hand, Haruhiko Kuroda Says that AGainst the Background of Such Wage Increases, A Steady Inflation is Possible. As a result, it is not yet clear at What Point a Compromise Will Be Reted BetWeen The Government and the Central Bank of Japan, and What the Country’s Economic Policy Will Like Like in the Coming Months. Many Investors, Especially Foreign Onees, Expect that, Despite the Regulator’s Assurances of its CommitMit to an Ultra-Soft Monetary Polys And, Apparently, this Expecation, Along with The Fall of Dxy, Provides Support To the Yen: The USD/JPY Pair Ended the Last Week at 127.11. At the moment, 60% of analysts side with the bears, expecting further movement of the pair to the south, 15% vote for the resumption of the medium-term uptrend, and 25% expect movement in the sideways. AMONG the Indicators On D1, The Alignment of Forces is as Follows. For Oscillators, 60% Are Colored Red, Among Which a Third Gives Signals that Pair Is Oversold, 10% are colred Green, and 30% are neutral Gray. Among Trend Indicators, The Parity IS 50% TO 50%. The Nerest Support Is Located at 126.35, Followed by Zones and Levels 126.00 and 125.00 and 123.65-124.05. The Goal of the Bulls IS to Rise ABOVE The Horizon of 127.55, The Overcome the Resistance of 128.00, 128.60 129.40-129.60, 130.50.50.50.50 and RENEW THE HIGH of MAY 09 AT 131.34. As the Ultimate Goal, The January 01, 2002 High of 135.19 is Seen. No Important Information Regarding the State of the Japanese Economy Is Expicted to Released this Week. Cryptocurrencies: The Background Is Negative, But There is Still Hope WE HAVE TWO PIECES of News For You: Good And Bad. Let’s Start with The Good One. Many experts, such as ARK Invest CEO Katherine Wood, literally dreamed that bitcoin would “get rid” of the S&P500, Dow Jones and Nasdaq stock indices, stop following them in the tail and take on a life of its own. And finally, WE HAVE SEEN SOMELAR ORET TWO WEEKS. Despite the volatility in the stock markets, the bulls are desperately trying to keep the defense in the $30,000 zone from May 13 to May 27, preventing the BTC/USD pair from falling below the $28,620 support. This isa there the good News Ends. Let’s move on to the bad One. MORE PRECISILY, to the BAD ONES, BECAUSE THERARE ARE QuITE A LOT of them. Cryptocurren no. 1 is trading in the negative zone for the first time in its history for the eighth Week in a row. An Important Role in the Dynamics Was Played by the Direct Corrections of BTC with Stock Indices, Which Broken Inly in the Last Desades of May. Experts from Goldman Sachs NOTED in APRIL THE FEET’S AGGRESISE POLIDE POVOKE Recessionary Phenomena in the US ECONOMY. SUCH Expectations Led to the Flight of Institional Investors from Risky Assets, Including Cryptocurrencies. The Overall Trading Activity is Decline. The outflow of funds from cryptocurrency investment funds in the past two weeks has reached its highest levels since July 2021. The total amount in fund management has fallen to $38 billion. The Number of Transactions is Also Falling. The Total Volume of Coins on Crypto Exchange Has Decreased to 2.5 Million BTC, Bitcoin Flows To Cold Wallets. AGainSt this background, Negative Statements ABOUT THE MIN CRYPTOCURENSY ARARD MORE AND MORE OFEN. The Head of the ECB, Christine Lagarde, Said on May 22 that cryptocurrency doz not security that could Serve as Stability. The Next Day, She Was Joined by the Head of the Bank of England Andrew Bailey, According to Whom Bitcoin Has No Intrinsic Value and is not Suitable as a Means of Payment. Scott Minerd, Investment Director of Guggenheim Partners, Agrees with the Heads of the Central Banks. “Currency should store value, be a means of exchange and a unit of account. There is nothing like it, they [cryptocurrencies] have not even come to a single basis,” he concluded and compared the situation on the crypto market with the dot -com bubble. According to HIM, Most Digital Assets Are “Junk”, But Bitcoin and Ethereum Will Survive the Crypto Winter, Which Will Be Long. “When you break $30,000, $8,000 is the ultimate bottom. Therefore, I think we still have a lot of room to decline, especially with the Fed acting tough,” Scott Minerd predicted. Galaxy Digital CEO Mike Novogratz also sees the outlook for the entire financial market as grim. He believes that even despite a significant drop from their all-time highs, altcoins risk losing more than half of their value. However, despite the bearish macroeconomic background, the head of Galaxy Digital remains optimistic and believes in The Recovery of the Crypto Market In the Future. According to the Head of Galaxy Digital, “The Crypto Community Is Resilient and Believs that Markets Still Provide Early Entry Opportunites.” Indeed, if you analyze social networks, you can see that their users, unlike institutional ones, have much more faith in a better future. Thus, the analytical company Santiment published the data of its Weighted indicator, which calculates negative and positive comments on an asset in social networks. Based on this information, a kind of mood of the crypto community is determined. According to the readings of this instrument, bitcoin has already reached the global bottom and can be expected to rise in the coming weeks. ” Now is the Moment When Bitcoin Has Ery Chance of a Limited Strengthening, “Analysts at Santiment Believ. One of the Most Respected Social Media Analysts Aka Credible Also Believs that, Despite the General Bearish Moody in The Markets, BTC Is Ready to Take Off. Credible Uses The Elliott Wave Theory for Technical Analysis, Which Predicts The Behavior of the Rate Based Uehchology of the Crowd, Which Manifests Itself in the Form OF WAVESS. This Assumes that a Bull Market Cycle Goes Through 5 Impulse Waves, with the Asset Correcting During the 2nd and 4th Waves and Rallying The 1st, 3RD and 5TH WAVES. In Addition, Each Major Wave Consists of 5 Smaller Sub-Waves. According to the analyst, bitcoin is now in the middle of the main 5th wave that began at the start of 2019. In addition, BTC is currently still in the 5th sub-wave, which can push the asset to a new all- Time High ABOVE $ 100,000. “I Understand that My Approach Is Controversial,” Writes Credible. “Most Do Not Expect a New-Time High Until The Next Halving In 2024, But I Expect It Sooner, In a Few Months.” Rekt Capital, Which Has Over 300,000 Twitter Followers, HAS WARNED that BITCOIN COULD BREEFLY DROP 28% BELOW Its 200-SWEK MOVING AVERAGE. He Explained that this SMA Is Playing The Role of An Ever-Growing Latest Support. Bitcoin Has Fallen below This in the Past, But these Periods of Capitulation Were Schort-Live. The Weekly Candlestick Has Never Closed Below this Sma Yet, But Its Shadows Were As High as 28%. IF THIS HAPPENS AGain Now, The CRYPTOCURENCY RATE Will Be at The LEVEL of $ 15,500. The 200-Week Moving Average is Currently in the $ 22,000 Zone. According to another cryptanalyst named Rager, “If the price of BTC declines and bounces off the 200-week moving average, as in past bearish cycles, this is a good sign. There will be a decline of only 68% of the maximum . ” However, According to His Calculations, Such Declines Were As High as 84% In the Past, and “In the Current Realites, An 84% Pullback Woold to $ 11,000.” That Being Said, Given The Length of BTC’s Bearish Cycles in 2014 and 2018, it COULD TAKE 6 to 8 months BEFORE BOTTOMING OUT. Rager believes that in the short term, the price of bitcoin will continue to depend on the strength or weakness of the US stock market: “BTC has limited upside right now, but it will not strengthen until the stock markets turn around.” According to Glassnode, the ratio of open put- and call-options for BTC has increased from 50% to 70%, which indicates an increased desire of investors to secure positions from continued negative dynamics. The open interest (OI) in call contracts with expiration at the end of July this year is concentrated around the $40,000 mark. However, participants give the greatest preference to put options, which will bring profit in case of price reduction to $25,000, $20,000 and $15,000. In other words, Until the Middle of the Year, The Market Focuses on Heding Risks and/Or Speculating on a Further Price Reduction. Optimists Predominate Over The Longer Distance. Contracts Maturging at the End of the Year has the most Open Positions in the Range of $ 70,000 to $ 100,000. In the Put Option, The Largest OI IS Concentrated Between $ 25,000 and $ 30,000, that is, it is in the Zone of Current Values. WE Complete the Review of Good and Bad News for Today. We only not at the time of writing the Review, on the Evening of Friday May 27, the Total Capitalization of the Crypto Market is at the $ 1.194 trilleion ($ 1.248 Trilleion ($ 1.248 The Bitcoin Fear & Greed Index Firmly Entrenched in the Exteme Fear Zone and is at Around 12 Points. (Recall that it Fell to 8 Points on May 17, The Lowest Level SincE MARCH 28, 2020). The BTC/USD PAIR IS Struggling to Stay in the War Zone, Trading at $ 28,800. Nordfx Analytical Group Notice: Thus Materials ARE NOT Investments Or Guidelines for Workal Markets and ARENTENDENDED FOR Trading in Financial Markets Isky and Can Result in a Complete Loss of Deposited Funds.