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Market Picture

On Monday morning, the crypto market capitalisation stood at $2.07 trillion, up slightly from $2.05 trillion a week earlier. In the previous two weeks, the market failed to rally above the $2.15 trillion level, which has become a local resistance. The weakness in the crypto market undermines our confidence in a global recovery in risk appetite, even though last week was the strongest week for US equity indices in many months.

Interestingly, the sell-off from local resistance in the crypto market over the past two weeks has been accompanied by a surge in stablecoin capitalisation to new records after a prolonged sideways period from April to the end of July. Typically, the growth in stablecoin volume coincides with the bullish phase of the market. The crypto whales buy on dips, and it is clear from Bitcoin’s dominant dynamics that their focus remains on the first cryptocurrency, whose market share has risen to 56.5% – the highest since April 2021.

Litecoin’s dynamics illustrate what is happening in cryptos, except for the largest coins. Again, it’s mostly selling on growth. Litecoin fell sharply below its 50-day moving average in April and has been selling off on approaches to this line for the past four months. On Sunday, this downtrend touched again at around $67. An intensification of the negative trends could send the price to $56 (the area of the previous uptrend reversal) or even trigger a major liquidation with a slip below $50.

News background

According to SoSoValue, the spot bitcoin-ETFs saw modest total inflows of $32.6 million last week after two weeks of outflows. In contrast, the Ethereum-ETF saw net outflows of $14.2 million last week, with net outflows of $0.42 billion since the products were approved, compared to $17.37 billion for Bitcoin ETFs.

According to Bitcoin Magazine, nearly 75% of all Bitcoins in circulation have been inactive for more than six months, reflecting a hoarding trend. Factor LLC CEO Peter Brandt said Ethereum on the four-hour chart is ‘signalling’ a possible drop to $2,000 or even lower.

Bernstein gave shares of mining companies Riot Platforms, CleanSpark, IREN and Core Scientific an Outperform rating on the market. The IMF proposed an 85% increase in energy tariffs for bitcoin miners globally, which could significantly reduce carbon emissions.

Artificial intelligence-related crypto projects could fail due to the potential ‘collapse of the bubble’ in the sector, according to Blockcircle. AI in cryptocurrency is ‘largely fashionable,’ although there has been little real-world application of neural networks in the crypto sphere.

The absence of US Democratic presidential candidate Kamala Harris from the Crypto for Harris event has led the community to question her support for the crypto industry.

Chainalysis noted that attackers stole cryptos worth nearly $1.6 billion in the first half of the year, increasingly targeting centralised exchanges (CEX). The figure nearly doubled compared to the same period in 2023.

EURUSD keeps firm tone at the start of the week and extends gains above psychological 1.10 barrier after registering a weekly close above this level for the first time since late December.

Bulls also cleared a Fibo resistance at 1.1012 (76.4% retracement of 1.1139/1.0601), adding to bullish stance.

Falling 200WMA (1.1063) is in focus, with break here to generate fresh bullish signal and open way for push through 1.1100 and attack at December’s peak at 1.1139.

Technical studies remain in full bullish setup on daily chart, but overbought conditions and fading bullish momentum on weekly chart warn of increased headwinds that bulls may face on approach to 200WMA barrier.

Broken 1.10 pivot reverted to solid support which should ideally keep the downside protected, with deeper dips to find firm ground above rising 10DMA (1.0965) to keep bulls in play and provide better levels to re-enter bullish market.

Res: 1.1050; 1.1063; 1.1100; 1.1139.
Sup: 1.1021; 1.1000; 1.0965; 1.0933.

• Gold posts new all-time high on Monday
•  But oscillators haven’t reached overbought conditions
•  The divergence suggests that the advance may extend further

Gold has been on the rise in the past couple of sessions, storming above the 2,500 psychological mark to a fresh record high on Monday. The latest rally could extend further given that the momentum indicators have not yet entered their overbought territories.

Should the recent uptick extend further, the bulls may attack 2,514, which is the 123.6% Fibonacci extension of the July 2,483 - 2,352 downleg. A decisive break above that zone could set the stage for the 138.2% Fibo of 2,533. Failing to stop there, bullion may advance to test the 161.8% Fibo of 2,564.

Alternatively, in the case of a downside reversal, immediate support could be found at the July peak of 2,483. Further declines could then cease at the 61.8% Fibo of 2,433, a region that also provided support in August. Even lower, the 38.2% Fibo of 2,402 could curb gold’s downside.

In brief, gold posted a fresh all-time high in today’s session before paring some gains. However, the advance could resume considering that the short-term oscillators have not yet shown any signs of a rally exhaustion.

• US 500 index rises above long-term uptrend line
• 200-day SMA still holds well
• Stochastic and RSI indicate overstretched market

The US 500 cash index recovered by almost 10% from the bearish wave that started from the all-time high of 5,673.39 and is currently returning to a position above the long-term ascending trend line. The index found strong support at the 2,090 support level, which stands near the 200-day simple moving average (SMA).

Technically, the price is hovering above the short-term SMAs, but the momentum oscillators indicate an overstretched market with a potential downside retracement again. In the overbought area, the stochastic posted a bearish crossover within its %K and %D lines, while the RSI is ticking south above the 50 level.

If price action rises above the immediate resistance of 5,565, there is potential for it to test the record peak of 5,673.39. Rising above that point, the next round numbers, such as 5,800 and 5,900, could be significant resistance levels before hitting the 161.8% Fibonacci extension level of the downward wave from 5,673.39 to 5,090 at 6,030.

On the flip side, a successful dive beneath the uptrend line could meet the 50- and then the 20-day SMAs at 5,478 and 5,412 respectively before plunging to the 200-day SMA near 5,090.

As the market holds above the 200-day SMA the broader outlook is looking bullish. Near-term weakness is expected to remain as long as technical oscillators show negative signs.

Daily Pivots: (S1) 190.26; (P) 191.19; (R1) 191.99; More...

Intraday bias in GBP/JPY remains neutral for the moment. On the upside, above 191.99 will target 61.8% retracement of 208.09 to 180.00 at 197.35, as the second leg of the corrective pattern from 208.09. On the downside, however, break of 187.84 minor support will turn bias back to the downside for retesting 180.00 instead.

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) 162.14; (P) 162.99; (R1) 163.68; More...

Intraday bias in EUR/JPY remains neutral for the moment. On the upside, break of 163.86 will target 61.8% retracement of 175.41 to 154.40 at 167.38, as the second leg of the corrective pattern from 175.41. On the downside, below 160.57 minor support will turn bias back to the downside for 154.40 instead.

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) 0.8507; (P) 0.8523; (R1) 0.8534; More....

Intraday bias in EUR/GBP remains on the downside at this point. Correction from 0.8624 is in progress for 100% projection of 0.8624 to 0.8530 from 0.8591 at 0.8497, which is close to 55 D EMA (now at 0.8494). Strong support should be seen there to bring rebound. But for now, risk will stay on the downside as long as 0.8591 resistance holds, in case of recovery.

In the bigger picture, while the rebound from 0.8382 is strong, there is no confirmation of trend reversal yet. As long as 0.8643 resistance holds, down trend from 0.9267 could still resume through 0.8382 at a later stage. However, firm break of 0.8643 will indicate that such down trend has completed, and turn outlook bullish for 0.8764 resistance next.

Daily Pivots: (S1) 1.6499; (P) 1.6553; (R1) 1.6586; More...

Intraday bias in EUR/AUD remains neutral for the moment. Further rally would remain in favor as long as 1.6740 support holds. On the upside, above 1.6745 will argue that the pullback has completed, and turn bias back to the upside for retesting 1.7180. However, firm break of 1.6474 will dampen the bullish view and bring deeper pullback towards 1.5996 support.

In the bigger picture, corrective fall from 1.7062 medium term top should have completed at 1.5996. Larger up trend from 1.4281 (2022 low) is resuming. Next target is 61.8% projection of 1.4281 to 1.7062 from 1.5996 at 1.7715. This will now remain the favored case as long as 1.6474 support holds.

Daily Pivots: (S1) 0.9525; (P) 0.9552; (R1) 0.9578; More....

Intraday bias in EUR/CHF remains neutral for consolidations below 0.9579 temporary top. Further rally is expected as long as 0.9448 support holds. Sustained break of 55 D EMA (now at 0.9590) will pave the way back to 0.9972/0.9928 resistance zone. However, decisive break of 0.9448 will suggest rejection by 55 D EMA, and turn bias back to the downside for 0.9209 low.

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.

• EURUSD flirts with 8-month high again
• Remains well above the long-term symmetrical triangle
• 50- and 200-day SMAs ready for bullish cross
• Momentum oscillators confirm upside move

EURUSD has been in a bullish move, especially after the rally above the long-term symmetrical triangle last week. The pair is again battling with the almost eight-month high of 1.1050, with the simple moving averages (SMAs) mirroring the current upside movement as they are all ticking higher. Additionally, the 50-day SMA is ready to cross above the 200-day SMA.

According to technical oscillators, the %K and %D lines of the stochastic are posting a bullish crossover, while the RSI is flirting with the 70 level with strong momentum.

If the pair reactivates its uptrend above the previous top, the next target will be the 1.1140 resistance, taken from the peak in December 2023. Even higher, the bulls might head for the 1.1275 number, which was a key resistance area during the second half of 2023.

On the downside, the 1.0950 support has been guarding selling forces over the past two days. Beneath that line, the 20-day SMA around 1.0900 might produce fresh negative volatility, likely squeezing the price towards the 1.0870 barricade. Another defeat there could add more fuel to the bearish wave, bringing the 200-day SMA at 1.0840 immediately under the spotlight.

Overall, EURUSD is sustaining an upward trend as long as it stands above the previous sideways pattern and the 1.1000 psychological mark. To attract new buyers, the pair will need to pierce through the 1.1050 bar.