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GBPUSD has been edging higher since September when it found its feet at the all-time low of 1.0324. However, this latest rebound seems to be fading after being rejected twice at the 1.2445 region, with the price remaining stuck in a tight range formed by its 50- and 200-day simple moving averages (SMAs).

Despite the pair’s rangebound pattern, the short-term oscillators are indicating that near-term risks remain tilted to the downside. Specifically, the RSI is pointing downwards after failing to cross above the 50-neutral mark, while the MACD histogram is currently below both zero and its red signal line.

To the downside, the congested region that includes the 200-day SMA and the recent low of 1.1914, which has rejected further declines three times in the past two weeks, could act as the first line of defence. Should that floor collapse, the price might test the January low of 1.1840. Even lower, further declines could cease at the October resistance of 1.1645, which could act as support in the future.

Alternatively, should buyers re-emerge and push the price above its 50-day SMA, initial resistance could be found at the recent peak of 1.2270. Breaking above that zone, the price may ascend to test the crucial 1.2445 territory, which capped the pair’s upside twice in the past three months. A break above that zone could turn the spotlight to the May high of 1.2666.

In brief, GBPUSD continues to fluctuate within a tight trading zone, with its 50- and 200-day SMAs acting as an upper and a lower limit, respectively. Therefore, a break above or below this sideways pattern is likely to be followed by a significant move in the same direction.

EURGBP pulled below its 50-day simple moving average (SMA) at 0.8820, following encouraging headlines that the UK and the EU have found a new deal to replace the problematic Northern Ireland Protocol, which caused severe disagreements between the two sides.

The downside correction, however, was not strong enough to violate February’s low of 0.8782, providing a ray of hope that the pair may switch back to recovery mode soon. That said, the technical indicators are not generating clear bullish signals yet. Despite the soft upturn in the Stochastic oscillator, the RSI is still hovering slightly below its 50 neutral mark, while the MACD has slipped into the negative region, mirroring persisting selling interest in the market.

Given last week’s bearish channel breakout, the pair might be subject to fresh downside pressures. A decisive close below February’s floor of 0.8782 could intensify selling forces towards January’s trough of 0.8752, where the 50% Fibonacci retracement of the former 0.8201-0.9249 uptrend is located. Another move lower could clear the way towards the constraining descending line from October and the 200-day SMA both seen within the 0.8670-0.8650 zone.

On the upside, the pair keeps facing resistance around its 50-day SMA at 0.8825, while the 0.8850 zone, where the 20-day SMA, the 38.2% Fibonacci level, and the channel’s lower boundary are positioned, may prove a tough obstacle too. Then, a decisive close above the 0.8895 bar will be required for the pair to climb towards February’s resistance zone of 0.8955-0.8978.

In short, EURGBP is still at risk of bearish continuation to 0.8725 despite its resilience above February’s low of 0.8782.

Hello Traders, in this article we will see how the NIKKEI ( JAPAN225 ) index has found support from equal legs area. Here at Elliott Wave Forecast we have developed a system that allows us to define areas of the market in which buyers and seller agree to a reaction. These are high frequency areas in which gives us at least an 85% chance of a 3 waves reaction from these areas. As soon as we can project an equal legs area we present it into our charts and our members know what they can expect. Nikkei has been trading within cycle from 02.06.2023 to complete its B leg lower. Consequently, having it’s first leg lower and connector within the corrective bounce we have presented the equal legs area. Let’s see the 1 hour update we presented to members from 02.22.2023 New York update.

NIKKEI 1 Hour New York update 02.22.2023

As we can see at that time we were within equal legs area of 27172 – 26790 area in which we were expecting a minimum of 3 waves bounce higher at least. Traders have a defined entry level with a defined Stop Loss at this point. As it is highly important to have a proper risk management system that allows you to enter and exit the market at all times. Next let’s have a look at the aftermath after the update. We will check the latest Asia update from 02.28.2023.

NIKKEI 1 Hour Asia Update 02.28.2023

It has reacted as we were expecting within it’ possible first leg up within wave ((i)). We can subdivide it into 5 waves in blue with internal waves in red as presented in the chart. What we can expect next from the instrument is to provide us with a 3 waves pullback within wave ((ii)) before finding more support to continue higher in wave ((iii)). NIKKEI belong to our Group 1 instruments amongst other Indices such as the SPX, FTSE, DOW JONES.

Market Picture

Over the past 24 hours, Bitcoin has fallen 0.25% to $23.4K. The total capitalisation of the crypto market has fallen 0.3% to $1.07 trillion. The slight decline came despite a rebound in global stock indices. The crypto market has seen minimal changes since the start of the day, indicating a wait-and-see attitude.

The short-term technical picture is bullish for Bitcoin, with the price above its 50-day average and near late January’s local highs. Ethereum’s uptrending 50-day twice acted as support in February. Resistance since last October remains at the 1700 level. ETHUSD is selling off from here.

According to CoinShares, investments in cryptocurrencies decreased by $2 mln last week, the third consecutive week of declines. Investments in bitcoin fell by $12 mln and Ethereum by $0.2 mln. Investments in funds that allow shorts on bitcoin increased by $10 mln.

Over the past few weeks, Santiment has seen a slowdown in bitcoin whales’ activity. There has also been a decrease in activity among mid-sized addresses controlling between 10 and 100 BTC.

News background

Michaël van de Poppe, Eight platform founder, remains bullish, saying the bear phase is over, and Bitcoin is about to break out.

According to IntoTheBlock, 39% of Ethereum’s total supply is concentrated on the balance sheets of a limited number of addresses. This starkly contrasts Bitcoin, where whales account for no more than 11% of the total.

The ongoing cryptocurrency crisis and tighter regulation have had no impact on interest in digital assets. According to Morning Consult, 20% of US adults (over 50 million people) own cryptocurrencies.

The US dollar regained traction in early Tuesday’s trading, following a pullback on Monday, which signaled a partial profit taking after 0.8% rally last Friday.

The US currency keeps firm tone against the basket of its major peers, boosted by expectations that the US Federal Reserve would continue to raise interest rates more than initially expected, which resulted in dollar’s strong rally in past four weeks.

Recent solid economic data from the US signal that the economy is resilient and fuels Fed’s hawkish stance, with revised expectations that Fed funds rate would peak just above 5.4% in the third quarter.

The US policymakers see the inflation still high, despite the price pressures eased in past few months and their primary task is to put it under control and push towards the central bank’s 2% target.

Technical studies on daily chart are predominantly bullish, with the price action continuing to hold above initial support – bull-trendline drawn off 100.66 (2023 low, posted on Feb 2) and focusing pivotal barriers at 105.40/53 (Jan 6 high / top of rising weekly cloud), violation of which would open way towards next targets at 106.03/33 (Fibo 38.2% retracement of 114.72/100.66 bear-leg/daily cloud top/200DMA).

Formation of reversal pattern on monthly chart as the dollar index is on track for the first monthly gain (around 2.7%) after a steep fall in past four months, adds to bullish signals, although reversal pattern requires confirmation on break above key barrier at 106.03 (Fibo 38.2% of 114.72/100.66, reinforced by 10MMA).

On the other hand, weekly studies show overbought stochastic and 14-period momentum still in the negative territory, warning that larger bulls may hold in prolonged consolidation before extending higher. The action should find solid supports at 104.37/20 zone (rising daily Tenkan-sen / Fibo 23.6% of 100.66/105.30) to keep larger bulls intact, while loss of these supports would put bulls on hold for deeper correction.

Res: 104.84; 105.40; 105.53; 106.03.
Sup: 104.37; 103.98; 103.54; 102.98.

ECB Chief Economist Philip Lane said in an interview, "our assessment of December remains solid, that we needed a sequence of 50 basis point hikes to bring us inside a zone where we would need to think harder about whether rates are sufficiently restrictive to deliver the return of inflation to 2%.

"The data flow since then suggests that the assessment is solid, that we need another 50 basis points in March," he said.

Beyond March, "the overall philosophy is that we will bring rates to a level that is sufficiently restrictive, which depends on where the inflation forecast is, where we are with underlying inflation and where we are with the monetary transmission mechanism."

"There is a zone of interest rate paths that the Governing Council will have to assess in March, in May and thereafter, and determine where in that zone we want to be," he added.

Without commenting on whether rate will stay at a significantly long plateau, Lane said "I absolutely sign up to the monetary policy philosophy that wherever we get to, we should be slow to come down until we have very strong evidence – not just in the forecast but also in our ongoing assessment of underlying inflation – that we are returning inflation to target."

Full interview here.

Swiss KOF Economic Barometer rose for the third month in a row, from 97.4 to 100 in February, hitting the long-term average. It's also above expectation of 98.0.

KOF said, "Since the last low in November 2022 (89.3), we are now observing an encouraging upward trend lasting for already three months."

"The indicators from the manufacturing sector are primarily responsible for the increase, but the indicators for the consumer-related sectors and the export economy as well as, albeit somewhat less clearly, the financial sector are also sending positive signals.

"The other indicators included in the barometer show hardly any change, with the exception of the hotel and restaurant industry, where sentiment has deteriorated slightly."

Full release here.

Swiss GDP stagnated in Q4, worse than expectation of 0.3% qoq. Looking at some details by production approach, manufacturing contracted -0.3% qoq. Construction was down -0.2% qoq. Trade rose 0.4% qoq. By expenditure approach, private consumption rose 0.3% qoq, government consumption rose 0.3% qoq, construction investment dropped -0.5% qoq, exports of goods dropped -1.7% qoq.

SECO said, "The challenging international environment curbed manufacturing output and also exports. Domestic demand showed robust growth."

Full release here.

EURUSD is battling with the medium-term uptrend line as the market sank towards a new seven-week low of 1.0530 on Monday. The 20- and 50-day simple moving averages (SMAs) confirmed the recent negative move as they posted a bearish crossover. The MACD is extending its bearish structure beneath its trigger and zero lines, while the RSI is pointing down in the negative region.

Further losses should see the seven-week low of 1.0530 acting as a major support ahead of the 1.0480 barrier and the 38.2% Fibonacci retracement level of the up leg from 0.9535 to 1.1030 at 1.0460. A drop below this level would reinforce the bearish structure and open the way towards the next key level of the 200-day SMA at 1.0330.

In the event of an upside reversal, the 23.6% Fibonacci retracement at 1.0680 could act as a barrier before being able to re-challenge the bearish cross of the SMAs at 1.0725. A break above this line would shift the outlook to a more neutral one, meeting 1.0800 and the 1.1030 peak. More gains could add optimism for more bullish movements towards 1.1180.

All in all, EURUSD posted a bearish wave from the 1.1030 peak but if there is a daily close beneath the uptrend line again, this may open the way for more losses.

The USDCHF pair seems to be forming a triple zigzag Ⓦ-Ⓧ-Ⓨ-Ⓧ-Ⓩ. Its final part, wave Ⓩ, is under development.

It is assumed that the wave Ⓩ can end in the form of a standard intermediate zigzag (A)-(B)-(C). Wave (A) is a 5-wave bearish impulse, wave (B) has a horizontal internal structure of a double three W-X-Y.

Thus, the formation of the final intermediate wave (C) can be expected in the near future. It is possible that it will be at 76.4% of impulse (A), and will end near 0.871.

Alternatively, the development of correction (B) may continue. Its structure is similar to the double three W-X-Y.

At the moment, two parts have been completed in it - the minor sub-waves W and X. Both of these sub-waves are similar to double zigzags of the minute degree ⓦ-ⓧ-ⓨ.

To confirm this scenario, the last minor wave Y is needed, it can also be a minute double zigzag.

It is likely that the bulls will send the market to the level of 0.960, which is on the resistance line.