Sample Category Title

Market Picture

The pressure on risk assets continues, pushing the crypto market capitalisation back below the bi milestone of $2 trillion. This level acted as resistance in early February and support since May, except for a brief dip in early August. The horizontal correction pattern risks turning into a downtrend if the market breaks below the August pivot point near $1.85 trillion.

Bitcoin was under pressure for most of Thursday but made attempts to push back from the $56,000 level. However, on Friday, momentum selling at the start of the active European session pushed the price down to a low of $55.25K and then stabilised below $56K.

Despite the dollar’s weakness, the financial markets are still in an anxious and expectant mood, which is not helping Bitcoin as much as it is helping gold. A key technical support level for the BTCUSD remains just above $54K, but slippage in the event of a volatility spike could see the price briefly drop below $53K.

News Background

According to CryptoQuant, the number of active wallets in the Bitcoin network has fallen to its lowest level in three years. Experts say this could lead to a further decline in the price of the first cryptocurrency.

Glassnode identified new investors as a risk factor for Bitcoin. The average new entrant incurs unrealised losses, which could increase selling pressure if BTC continues to fall. The break-even point for short-term holders is $62,400.

CryptoQuant calculates that Ethereum has fallen 44% against Bitcoin since the switch to Proof-of-Stake (PoS). Next week marks two years since the Ethereum network switched to PoS because of The Merge upgrade.

According to JPMorgan, the average revenue for miners of the first cryptocurrency has fallen to $43,600 per EH/s. Mining yields have hit record lows. Against this backdrop, the combined market capitalisation of 14 listed mining companies fell 15% over the month.

Californian authorities limited withdrawals from crypto machines to $1,000 per day. The initiative was put forward by the California Department of Financial Protection and Innovation (DFPI).

• Recent lacklustre key US economic growth-related data; ISM Manufacturing PMI & ADP Employment Change reinforced the recent bout of JPY strength.
• Bearish elements in the JPY crosses Index suggest further potential JPY strength in the medium-term horizon.
• Watch the 140.25 support on the USD/JPY.

A déjà vu experience is now ripping across the foreign exchange market where it saw a swift bout strengthening in the Japanese yen during a recent period from 31 July to 5 August, primarily triggered by the Bank of Japan’s interest rate hike.

Since Tuesday, 3 September, the Japanese yen bulls have reared their horns again as the JPY rallied by 3.5% against the US dollar at this time of the writing.

JPY has strengthened across the board

Fig 1: 1-month rolling performances of G-10 JPY crosses as of 6 Sep 2024 (Source: TradingView, click to enlarge chart)

Based on a one-month rolling performance basis, the G-10 JPY cross pairs (JPY is being quoted as the variable currency) have started to inch downward since Monday, 2 September where the worst performers are; USD/JPY (-1.13%), CHF/JPY (+0.12%), and EUR/JPY (+0.39%).

The recent strength seen in the Japanese yen in the past week is not attributed to the Bank of Japan but triggered by an increasing risk that the US economy may have already slipped into a recession and the US Federal Reserve being late on enacting an interest cut cycle may be forced to introduce bigger cuts on its Fed funds rate down the road.

The 2-year US Treasury yield has a higher sensitivity toward the US Fed’s monetary policy stance, slipped by 39 basis points from 4.10% printed on 16 August to 3.71% at this time of the writing while the 2-year JGB yield inched higher from 0.32% to 0.37% over the same period (see Fig 1).

Overall, the US Treasury yield premium against JGB has narrowed, reinforced by weak private sector hiring data in the US; the ADP employment change for August added the lowest number of jobs in August at 99K, over a downwardly revised 111K in July, and well below forecasts of 145K.

Today’s release of the government-compiled non-farm payroll data for August will shed more light on the state of the US labour market (Fed Chair Powell has highlighted labour market condition is now a primary focus of the Fed in his Jackson Hole Symposium speech); especially the unemployment rate that rose to 4.3% in July, the highest level since October 2021.

JPY crosses index has flashed out major bearish conditions

Fig 2: JPY crosses Index long-term secular trend as of 6 Sep 2024 (Source: TradingView, click to enlarge chart)

The JPY crosses Index, created by using an equal-weighted basket of G-10 JPY crosses is showing signs of technical weakness (see Fig 2).

Its monthly chart has depicted a recent major failure bullish breakout scenario from Feb to July as the JPY crosses Index reintegrated below 111.80, a major swing high formed in July 2007, a few months before the global financial crisis was unleashed.

Its monthly RSI momentum indicator triggered a bearish condition in July where it broke below a key ascending trendline support. Interestingly, a similar RSI bearish condition occurred in the past on August 2007 before the JPY crosses Index staged a significant decline of 36% in the next seven months.

If the 111.80 key long-term pivotal resistance of the JPY crosses Index is not surpassed to the upside, it faces the risk of a further decline toward the 103.90 major support in the first step; another bout of potential JPY strength looming on the horizon.

USD/JPY is eyeing the 140.25 support next

Fig 3: USD/JPY medium-term & major trends as of 6 Sep 2024 (Source: TradingView, click to enlarge chart)

The recent major uptrend phase of the USD/JPY from 16 January 2023 has been damaged and technical analysis is suggesting that it is now evolving into a potential medium-term corrective decline sequence (see Fig 3).

The daily RSI momentum indicator is still exhibiting bearish elements which suggests that the ongoing multi-month corrective decline phase in place since 3 July 2024 may have not reached an exhaustion stage yet.

A break below 140.25 support exposes the next medium-term supports at 137.35 and 133.75.

Only a clearance above the 149.30/150.80 key medium-term pivotal resistance invalidates the bearish scenario for the next medium-term resistance to come in at 158.35 in the first step.

As shown on the XAU/USD chart today, the price of gold is:

→ above the psychological level of $2,500 per ounce;

→ near a key resistance marked by a red line labelled Support 2. This line has been preventing further price growth several times since 20 August, when the all-time high was reached.

If the bulls manage to break through this line, it could turn into a support level, as happened with Support 1 (as indicated by arrows). This would set the stage for a potential rally within the upward channel, marked in blue. From a technical analysis perspective, a break above the “bull flag” pattern could signal a resumption of the uptrend.

On the other hand, we can't rule out the possibility of a price reversal at Support 2. In this case, the chart could start to form a bearish “triple top” pattern from a technical standpoint.

Which scenario – bullish or bearish – will play out? Much depends on the fundamentals. Today at 15:30 GMT+3, US labour market data will be released, which is likely to have a strong impact on financial markets due to the upcoming Federal Reserve meeting, where a rate cut is expected.

Disappointing data on unemployment and job creation could indicate issues in the US economy and lead to a rise in gold prices, as gold is seen as a safe-haven asset during times of geopolitical tension and economic uncertainty.

Start trading commodity CFDs with tight spreads. Open your trading account now or learn more about trading commodity CFDs with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

GBP/USD is attempting a fresh increase from the 1.3090 zone. EUR/GBP is gaining pace and might extend its upward move above the 0.8440 zone.

Important Takeaways for GBP/USD and EUR/GBP Analysis Today

•  The British Pound is attempting a recovery above the 1.3130 zone against the US Dollar.
•  There was a break above a key bearish trend line with resistance at 1.3120 on the hourly chart of GBP/USD at FXOpen.
• EUR/GBP started a fresh increase above the 0.8420 resistance zone.
• There is a major rising channel forming with support near 0.8425 on the hourly chart at FXOpen.

GBP/USD Technical Analysis

On the hourly chart of GBP/USD at FXOpen, the pair started a fresh decline from the 1.3265 zone. The British Pound traded below the 1.3200 zone against the US Dollar.

A low was formed near 1.3090 and the pair is now attempting a recovery wave. There was a break above the 23.6% Fib retracement level of the downward move from the 1.3266 swing high to the 1.3088 low.

There was a break above a key bearish trend line with resistance at 1.3120, and the pair settled above the 50-hour simple moving average. On the upside, the GBP/USD chart indicates that the pair is facing resistance near 1.3175, and the 50% Fib retracement level of the downward move from the 1.3266 swing high to the 1.3088 low.

The next major resistance is near the 1.3225 level. If the RSI moves above 60 and the pair climbs above 1.3225, there could be another rally. In the stated case, the pair could rise toward the 1.3265 level or even 1.3320.

On the downside, there is a major support forming near 1.3150. If there is a downside break below the 1.3150 support, the pair could accelerate lower. The next major support is near the 1.3090 zone, below which the pair could test 1.3020. Any more losses could lead the pair toward the 1.3000 support.

EUR/GBP Technical Analysis

On the hourly chart of EUR/GBP at FXOpen, the pair started a fresh increase from the 0.8400 zone. The Euro traded above the 0.8420 level to move into a positive zone against the British Pound.

The EUR/GBP chart suggests that the pair settled above the 50-hour simple moving average and 0.8440. There was a clear move above the 50% Fib retracement level of the downward move from the 0.8467 swing high to the 0.8399 low.

Immediate resistance is near 0.8440 or the 61.8% Fib retracement level of the downward move from the 0.8467 swing high to the 0.8399 low.

The next major resistance for the bulls is near the 0.8450 zone. A close above the 0.8450 level might accelerate gains. In the stated case, the bulls may perhaps aim for a test of 0.8465. Any more gains might send the pair toward the 0.8500 level in the coming days.

Immediate support sits near a key rising channel at 0.8425. The next major support is near the 0.8400 zone. A downside break below the 0.8400 support might call for more downsides.

In the stated case, the pair could drop toward the 0.8365 support level. Any more losses might send the pair toward the 0.8340 level in the near term.

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

• USDCAD trims September’s uptick to trade near key trendline
• Technical signals are mixed; a break below 1.3480 could shift the bias to the downside
• US & Canadian employment figures due at 12:30 GMT

USDCAD started Friday’s NFP session with soft negative momentum after a stagnant day, which prevented the pair from examining its weekly high of 1.3564.

While the technical indicators have barely shown any improvement, there is still a chance for a positive turnaround as long as the RSI maintains its rebound off its 30 oversold level and the MACD holds above its red signal line. Encouragingly, the price itself seems to have created a green doji candlestick on Thursday, but the candlestick pattern still needs confirmation.

A decisive close below 1.3480 and beneath the 61.8% Fibonacci retracement of the December-July upleg could renew selling pressures. If the 1.3437 low gives way as well, the price could dive towards the  50% Fibonacci of 1.3360 and the support trendline, which connects the lows from July and December 2023 seen at 1.3300. Another move lower could shift the spotlight the 1.3200-1.3225 constraining zone.

If there is some bullish action on the other hand, there could be an initial retest of the 50% Fibonacci level at 1.3560, which has been a barrier for bullish activity earlier this week. Then, strong buying will be necessary for the pair to overcome the 1.3585 region, the flattening 200-day SMA, and ultimately reach the 38.2% Fibonacci mark of 1.3650. Even higher, a tougher battle could take place between 1.3700 and the 23.6% Fibonacci of 1.3763.
In brief, USDCAD is in a wait-and-see mode ahead of the US and Canadian jobs data. A sustainable decline below 1.3480 could heighten negative risks.

Daily Pivots: (S1) 188.18; (P) 188.98; (R1) 189.90; More...

GBP/JPY's break of 188.23 support suggests that rebound from 180.00 has already completed at 193.45, ahead of 55 D EMA. Intraday bias is back on the downside for retesting 180.00. Firm break there will resume whole fall from 208.09. For now, risk will stay on the downside as long as 193.45 resistance holds, in case of recovery.

In the bigger picture, price actions from 208.09 are seen as a correction to whole rally from 123.94 (2020 low). Current development suggests that the first leg has completed and the range of medium term consolidation should be set between 38.2% retracement of 123.94 to 208.09 at 175.94 and 208.09.

Daily Pivots: (S1) 158.70; (P) 159.24; (R1) 159.93; More....

EUR/JPY's fall from 163.86 continues today and intraday bias stays on the downside. Deeper fall would be seen to retest 154.40 low first. Firm break there will resume whole fall from 175.41. On the upside, above 160.01 support turned resistance will turn intraday bias neutral first.

In the bigger picture, price actions from 175.41 are seen as correction to rally from 114.42 (2020 low). Current development suggests that the first leg has completed. The range of consolidation should be seen between 38.2% retracement of 114.42 to 175.41 at 152.11 and 175.41 high.

Daily Pivots: (S1) 0.8419; (P) 0.8429; (R1) 0.8439; More...

EUR/GBP is staying in consolidation from 0.8399 and intraday bias remains neutral. While stronger recovery cannot be ruled out, further decline is expected as long as 0.8466 minor resistance holds. Below 0.8399 will resume the fall from 0.8624 and target 0.8382 support. Firm break there will resume larger down trend.

In the bigger picture, as long as 0.8624 resistance holds, down trend from 0.9267 is expected to continue. Firm break of 0.8382 will target 0.8201 (2022 low). However, decisive break of 0.8624 will indicate that such down trend has completed, and turn outlook bullish for 0.8764 resistance next.

Daily Pivots: (S1) 1.6442; (P) 1.6482; (R1) 1.6522; More...

EUR/AUD is bounded in range of 1.6256/6580 and intraday bias stays neutral. With 1.6580 resistance intact, fall from 1.7180 is still in favor to continue. On the downside, break of 1.6256 support will target 1.5996 key support level next. However, decisive break of 1.6580 will turn bias back to the upside for stronger rebound.

In the bigger picture, outlook is mixed up by the deeper than expected fall from 1.7180. Yet as long as 1.5996 support holds, up trend from 1.4281 (2022 low) is still expected to resume at a later stage. Firm break of 1.7180 will pave the way to 61.8% projection of 1.4281 to 1.7062 from 1.5996 at 1.7715.

Daily Pivots: (S1) 0.9364; (P) 0.9386; (R1) 0.9399; More....

Intraday bias in EURCHF remains neutral with focus on 0.9351 support. Firm break there, will resume the decline from 0.9579 to retest 0.9209 low. Further decline will remain in favor as long as 0.9455 resistance holds, in case of recovery.

In the bigger picture, medium term corrective pattern from 0.9407 (2022 low) might have completed with three waves to 0.9928. Decisive break of 0.9252 (2023 low) will confirm long term down trend resumption. Next target will be 61.8% projection of 1.1149 to 0.9407 from 0.9928 at 0.8851. For now, outlook will stay bearish as long as 0.9928 resistance holds, even in case of strong rebound.