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During Monday's trading session, the yellow metal was supported by the 100-hour simple moving average to end the trading session at 1302.00. On Tuesday morning, the rate was located at the 1,305.92 mark.

In regards to the near-term future, it is expected, that the 55-hour and the 100-hour simple moving averages will support the rate to push it to the 1,308.00 level.

Questions are being asked constantly when it comes to Bitcoin's battle with $4000 mark. The result of this battle makes the sentiment's bed for a bullish or bearish trend. Since December 14, there have been several battles between bulls and bears at the price level of $4K. In each of this battle, bulls have lost the war because, after the first attack on the $4K, bears have been able to gain enough strength to push the price back below this critical mark. It is in this essence, that this particular level has become a matter of death or life for crypto traders.

This is because if you are a long term investor, you will not really worry about these short term levels. The element of risk premium is of critical importance here and I find this immensely interesting. For a simplicity reason, consider this as a premium that one is willing to pay over the previous low which would have been a better entry price. For instance, the price of Bitcoin at the time of writing this article is trading at 3962 and the recent meaningful low was formed on March 4 when the price touched the price level of $3671. The difference between the two is your risk premium. We all know that it is extremely arduous to catch the extreme low, it is all about making an intelligent choice and buying it when the price is still close enough to its bottom. For investors who are buying at these levels, they usually have a target of previous high, and for Bitcoin, it needs to be the level of 20K.

This is because there is no doubt in mind that the actual next bull run has a minimum potential of pushing the price 5 times higher, that is over $100K. I personally believe that each Bitcoin can go up as much as $400K and if history repeats itself, this number is not a fool paradise. This is a simple math calculation: approximate percentage projection of the price which we experienced during the last bull run.

Why I am saying that crypto winter is coming to end?

Well, before I go and talk about fundamentals, the below chart shows the percentage drop for Bitcoin price after its major rallies. Back in 2011, the price plunged nearly 93 percent and in 2014, it dropped 84 percent. As for the most recent price crash, we have experienced the smallest price crash, 79 percent from its recent high. The most important part is that the price has started to rally back up. This argument becomes even more clear when we look at the bottom panel of this chart. The drawdown percentage curve is much higher now (shown in green circle) as compared to what happened back in 2011 (shown in red circle).

Similarly, if we look at the monthly gains of Bitcoin and plot this on a chart (as I have done this in the chart below), it becomes clear that Bitcoin has broken its longest streak of monthly losses. This is the strongest signal for the bulls that crypto winter is no longer as cold as it was back in December or November.

Another major bull signal comes from the weekly chart as I discussed before, the 200-week moving average (shown in green) has saved the day for the bulls. The 50-week moving average (shown in pink) is moving fast towards the price to close the distance between them. Now, if the price kisses the 50-week moving average goodbye and moves above it at that stage, all bets would be in favor of the bulls. Looking at the chart, when the price breaks above the 50-week moving average, it sends the strongest bull signal and so far it is worked really well. But this is something that we would have to wait and see. It may take a couple of months for this to happen.

UK unemployment rate dropped to 3.9% in the three months to January, down from 4.0% and beat expectation of 4.0%. That's also the lowest level since the period between November 1974 to January 1975. For men, unemployment rate dropped to 4.0%, lowest since 1975. For women, unemployment rate dropped to 3.8%, lowest since 1971.

Average weekly earnings including bonus rose 3.4% yoy, unchanged from December and beat expectation of 3.2% yoy. Average weekly earnings excluding bonus rose 3.4% yoy, down from December's 3.5% and matched expectations. Also release, jobless claims rose 27.9k in February, above expectation of 13.1k.

Full release here.

EUR/USD

Current level - 1.1350

The test of 1.1350 is still underway and only a slide below 1.1290 crucial low will signal a reversal and dive towards 1.1175. Next resistance on the upside lies at 1.1420.

USD/JPY

Current level - 111.27

The pair broke through 111.45 support and the bias is bearish, for  a slide through 111.00 area, towards 110.20.

GBP/USD

Current level - 1.3268

The support at 1.3190 is still intact, so the overall outlook remains positive, for a rise towards 1.3450 area.

• Pound drops as Brexit angst deepens, but prospect of long extension offers ray of hope
• Growing Fed rate cut expectations support risky assets, weigh on dollar
• Crude oil continues to march higher

UK House speaker vetoes third Brexit vote – long extension in scope

UK politics made headlines yet again on Monday after the Speaker of the House of Commons, John Bercow, ruled out allowing the government to bring its Brexit deal to Parliament for a third time unless it was changed ‘substantially'. This plot twist likely blindsided PM May's administration, with government officials indicating they weren't warned. The pound, which was already under selling pressure, fell further on the news but managed to recover some of its losses later in the session.

Where does this leave Brexit and sterling? A delay is now all but inevitable, so the real question is how long any extension will be, and what strings will be attached to it. In this respect, the fact that the UK government likely won't be able to put its deal to another vote for now decreases the likelihood of PM May asking for a short extension, as she said she would if MPs approved her deal, and increases the odds of a longer one. While a long extension would keep uncertainty elevated and hence continue to hurt growth via investment decisions being postponed, it could also imply the UK ultimately ends up with a softer Brexit, or that another referendum may be held along the way. Therefore, at this stage, a lengthy extension seems like the most bullish outcome for the pound.

Today, UK employment data are due, though politics will likely to continue to eclipse economics in driving the pound.

Risk-on atmosphere lingers in the absence of news

In the broader market, risk appetite remained elevated, with US equity markets closing modestly in the green, again without any material news to drive price action. Perhaps sentiment is being supported, on the margin, by the slow albeit consistent increase in Fed rate-cut expectations that has been going on lately. Whereas just a few days ago market pricing was practically neutral, indicating little probability for either cuts or hikes this year, it has now moved firmly towards cuts, with futures markets assigning a ~30% for a quarter-point rate reduction by December.

In the FX market, this may have also been the key driver behind the dollar's recent underperformance. Traders seem to be bracing for a dovish Fed tomorrow, perhaps on anticipation the Committee could revise down its rate forecasts to the point of signaling no more hikes, and are thus reducing their exposure to the dollar. That said, influential officials like Bill Dudley, who recently left the NY Fed, have been quite vocal lately in indicating that another hike in 2019 is possible. This implies that the Fed may opt to retain some optionality and keep a hike on the table, a signal that could come as a ‘rude awakening' for markets given current dovish expectations.

Crude oil continues its slow grind higher

Oil prices continued their march higher yesterday, with WTI touching highs last seen in mid-November, crossing above the $59/barrel level. The latest leg higher was seemingly fueled by some signals from Saudi Arabia that OPEC's compliance with its output cuts will exceeded 100% in the coming months, though the broader risk-on environment likely helped as well.

In the somewhat bigger picture, the latest downward revisions in the EIA's forecasts for US production have also been a tremendous factor behind the latest uptrend. Alas, in the context of slowing global growth, it's increasingly questionable how much further this rally can go, unless something drastic changes on the supply side of the equation

Technical

Weekly: Trading within a long-term bullish channel. The recent corrective move from the highs at 7904 stalled at the 50% Fibonacci retracement level (6699). Buyers were found at this level and the market has rallied. There is no sign that the long-term bullish sequence is stalling.

Daily: A break of bespoke resistance at 7261, and the move higher is already underway. Broken out of the Head and Shoulders formation to the upside. The formation has a measured move target of 7904. The continuation higher in prices through resistance has been impressive with strong momentum and shows no signs of slowing.

Intraday: Broken out of the range formation to the upside. The medium-term bias remains bullish. Positive overnight flows lead to an expectation of a firm open this morning. News events could adversely affect the short-term technical picture. Preferred trade is to buy on dips.

Action: We look to buy on pullbacks towards 7215

Stop: Stops to be placed at 7120

Targets: 7600 & 7900

The British Pound fell yesterday afternoon, after the House of Commons Speaker John Bercow essentially banned Theresa May's Brexit deal from getting a third vote. Although prices later recovered, this once again highlights the tremendously fluid Brexit equation that markets have to contend with.

Now, all eyes turn to the summit in Brussels on Thursday, where EU leaders will have their say on an extension to Brexit. It's key to note that the extension has to be unanimously agreed upon by all 27 member nations before a no-deal Brexit can be safely removed from the table; should just one of the EU members reject reasons for the deadline extension, the Pound will most likely find itself exposed to significant downside risks. With the prolonged moving nature and fluidity of the Brexit situation weighing heavily on sentiment, Sterling remains at risk of unwinding its year-to-date gains.

Still, the base case that markets are pricing in is one of a delayed Brexit, which may only happen in 2020. However, as we have learned in recent weeks more time may not wholly be a good thing, as it could also bring about extended periods of uncertainty and potentially more permutations to the final Brexit outcome.

Barring any more surprises, expect the Pound to trade range-bound this week.

Commodity spotlight – WTI Oil

WTI Crude found comfort near its highest levels so far this year, after OPEC+ assured markets that its members will stick to the output cuts through the first half of 2019.

Saudi Energy Minister Khalid Al-Falih says there remains a "significant glut" in global supplies which still needs to be drawn down before considering scaling back on production cuts, a move that's supportive of Oil prices.

OPEC+ producers need to demonstrate unified efforts in their attempts to rebalance the Oil markets and to have any chance of offsetting record US Shale production.

Between now and the OPEC meeting scheduled to take place in Vienna in June, markets will certainly be closely monitoring indicators on global supply and demand. With US shale production still robust as ever, oversupply fears are likely to linger in the background. However, sanctions on other Oil producers, namely Iran and Venezuela, may sooth such concerns. Meanwhile on the demand side, should global growth show more obvious signs of faltering, this may open up more downside for Oil.

It's not a minute to midnight just yet

This week is another pivotal week in the Brexit process and this time it's House of Commons Speaker John Bercow that's thrown a spanner in the works. The third vote on Theresa May's deal that was meant to take place this week may now not happen after he ruled against a vote happening on the same deal, something that may frustrate everyone from the PM herself to EU leaders hoping an agreement may be ready for sign-off later this week and even MPs that voted against it on previous attempts on the assumption that they'd have another shot further down the road.

While I don't think this is a deal breaker and a workaround will be found, it does potentially push the vote back to next week, after the EU Council meeting and days before exit day. Surely no one is surprised at this going right down to the wire at this stage. What this would do is give the EU one last chance to sway Parliament and give May something (slightly) different to put to the House. It also leaves MPs with no more time for a vote, which means we'll finally see what they really think of the deal after months of bashing it, with a long extension the only other real alternative and therefore, possibly, no Brexit at all. Sterling traders remain very relaxed, comforted by last week's vote against no deal and therefore assured that the only real options on the table range from a soft(ish) Brexit and no Brexit at all.

Patience key as oil prices edge higher

Oil prices are creeping higher once again today as we await more inventory data from API later in the session. Despite the best efforts of OPEC+, in particular Saudi Arabia, oil prices are rising at a snail's pace, which may necessitate the need for more extensions to the output cut agreement. Naturally the role of the US in all of this is significant, not to mention the timing of the global slowdown, but producers are confident that inventories will eventually shrink which in turn will lift prices. US output appearing to stabilise may also help.

Ultimately, there's nothing to stop the trend this year of very gradual gains in prices of Brent and WTI, with corrective moves along the way. Attempts to stabilise the market are proving less effective by the increasing influence of the US as a producer and exporter, not to mention the impact of its sanctions on Iran and Venezuela, which means we may have to be more patient than we've been in the past.

Gold looks soft despite trading in the green for third day

Gold is inching higher this morning but once again, it's struggling to gather any real momentum which suggests more downside lies ahead near-term. The yellow metal has been on a very positive trajectory over the last six months as central banks have become notably more dovish around the globe and the dollar has hit a ceiling. With the global economic outlook a cause for concern, the environment looks very favourable for gold, a traditional safe haven.

That doesn't mean we can't see some near-term weakness though following a very good run. We've seen a small corrective move over the last month but there's plenty of room for some more downside. Key support remains around $1,280, where we hit a low earlier this month and back in January, with a break below here bringing $1,250-$1,260 area into focus.

Pivot (invalidation): 58.70

Our preference Long positions above 58.70 with targets at 59.25 & 59.65 in extension.

Alternative scenario Below 58.70 look for further downside with 58.40 & 58.05 as targets.

Comment The RSI advocates for further advance.

Pivot (invalidation): 15.2900

Our preference Long positions above 15.2900 with targets at 15.4800 & 15.5300 in extension.

Alternative scenario Below 15.2900 look for further downside with 15.2400 & 15.1900 as targets.

Comment The RSI calls for a bounce.