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WTI oil price fell in early Wednesday as unexpected rise in US crude inventories further soured the sentiment on rising demand concerns.

Fresh weakness emerged below the base of rising daily Ichimoku cloud and broke through pivots at $78.16 and $77.66 (100DMA / 50% retracement of $67.70/$87.61 rally) reinforcing bearish signal generated on weekly close below psychological $80 support (also Fibo 38.2% and 200DMA).

The price hit the lowest in almost two months, with fresh acceleration lower signaling continuation of larger downtrend from $87.61 (2024 peak) which paused for a brief consolidation in past three days.

Close below $77.66 to confirm bearish signal and open way towards targets at $75.31/00 (Fibo 61.8%, reinforced by 200WMA / round figure).

Daily studies on daily chart are in full bearish setup, though oversold conditions may slow bears in coming sessions, with limited upticks to offer better selling opportunities.

Only return above $80.00 would sideline bears and generate initial signal of reversal.

Res: 77.66; 78.16; 78.79; 80.00.
Sup: 76.78; 75.31; 75.00; 73.54.

The Japanese yen is down for a third straight day and has declined 1.5% this week. USD/JPY has risen 0.43% on the day and is trading at 155.35 at the time of writing. Early Thursday, the BoJ will release the Summary of Opinions from the April meeting.

Japanese officials remain mum about suspected interventions on the currency markets last week. The yen broke below the 160 line before recovering and surged 3.4% last week. However, the yen’s strength did not take long to dissipate and has dropped below the 150 level today. Previous interventions by Tokyo boosted the yen for only a short time and that appears to be the trend again.

The Bank of Japan and the Ministry of Finance (MoF) weighed into the yen crisis earlier today. BoJ Governor Ueda said the central bank could take monetary action if the yen’s depreciation has a significant effect on prices. Ueda stated his readiness to tighten policy, saying that if inflation was higher than expected, it would be appropriate to adjust interest rates. Ueda’s remarks may be an attempt to provide the yen with a boost by sending a message that further rate hikes are on the table if inflation moves higher.

Finance Minister Suzuki expressed “strong concern” over the weak yen and warned that he was ready to intervene to boost the yen. It seems questionable whether the warning will have much effect. The yen posted strong gains last week after suspected interventions but has already coughed up close to half of those gains. Barring another intervention, the yen could be on its way back to the 160 level.

USD/JPY Technical

• USD/JPY is testing resistance at 155.35. Above, there is resistance at 155.91
• There is support at 155.01 and 154.43

Market picture

The crypto market has lost 2% of its capitalisation over the last 24 hours to $2.29 trillion. Bitcoin is losing 1.8%, Ethereum – 1.7%. Among the top altcoins, Solana is experiencing the biggest decline of 4%, while BNB has lost the least, just 0.5%.

Bitcoin is drawing its fourth consecutive declining candle on Wednesday, registering a sequence of lower intraday highs and lows. The previous resistance line is temporarily acting as support.

Ethereum is back to $3000, having been close to trading range support since late February. If the decline develops, we should pay attention to the dynamics near $2900. The break of this support will cause a drop to $2500-$2600 in the main scenario, where the previous consolidation area and the 200-day moving average are located.

News Background

According to CoinShares, crypto funds saw outflows of $251M last week after $435M a week earlier. Bitcoin investments were down $284M. Ethereum funds saw net inflows of $30M after seven weeks of outflows.

Bitcoin was the only digital asset that saw outflows. Meanwhile, inflows were seen in a wide range of altcoins.

Last week was the first time there were meaningful outflows ($156 million) from spot ETFs in the US. The average buy price of these ETFs since launch is valued at $62,200, which triggered a wave of selling when the price fell below that level.

The ratio of bitcoin options positions points to BTC rising toward $70K-$100K by the end of 2024, said CoinDesk analyst Omkar Godbole. According to QCP Capital, the degree of positivity in options traders’ sentiment on Ethereum is lower than on Bitcoin.

The US SEC has extended the review period for an application to launch a spot ETF on Ethereum from Invesco and Galaxy. The next deadline is 5 July 2024.

Custodial crypto wallet developer Exodus will be listed on the NYSE on 9 May. The company’s shares are tokenised on the Algorand blockchain, making Exodus the only publicly traded crypto firm in the US whose securities are traded on traditional and blockchain platforms.

Following its decision on 7th May, the Reserve Bank of Australia (RBA) opted to maintain the interest rate at 4.35%, despite inflation continuing to decrease at a slower pace than anticipated by the RBA.

"I think we still think they’re reasonably balanced with perhaps a little bit of a signal that we need to be very watchful on the upside," RBA governor Michele Bullock said.

According to The Guardian, the absence of more aggressive language led to a decline in the Australian dollar.

Specifically, on the morning of 8th May, the AUD/USD rate fell below the 0.657 level, whereas on 7th May, the rate was at 0.664 - a decrease of approximately 1.3% in 30 hours.

Technical analysis of the AUD/USD chart indicates that:

→ The 0.664 level serves as a significant resistance - the price turned down from this level several times since March;

→ The price may continue to decline, staying within the channel shown in red.

Current bearish sentiments point towards a potential decline in the AUD/USD price towards the median line of the red channel. Support may be found around the 0.6555 level, where:

→ The lower boundary of the intermediate rising channel (shown in black);

→ 50% correction level from the bull impulse A→B. → EMA (100).

The near-term fluctuations in the AUD/USD exchange rate (as well as other financial assets denominated in USD) could be influenced by comments from Federal Reserve representatives expected on Thursday and Friday.

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The USD/JPY pair is on the rise again this Wednesday, recovering more than half of its previous losses despite ongoing warnings from Japanese authorities about sharp fluctuations in the yen. Finance Minister Shunichi Suzuki reiterated today that the government is prepared to act against excessive currency volatility. Additionally, Bank of Japan Governor Kazuo Ueda noted that the BoJ is assessing the impact of yen movements on inflation to inform future decisions better.

Last week, the yen strengthened by 5.2%, a move that the market largely attributes to financial interventions. While there has been no official confirmation of these measures, the market's interpretation is bolstered by data from the Bank of Japan, which indicates approximately 60 billion USD in expenditures. These actions are likely aimed at stabilising the national currency's value.

However, these interventions only provided a brief respite for the authorities. The yen's decline remains primarily influenced by the significant interest rate differential between the US Federal Reserve and the Bank of Japan. With rates at 5.5% and 0%, respectively, this disparity continues to exert downward pressure on the yen, and as long as it persists, the currency is likely to remain weak.

USD/JPY technical analysis

On the H4 chart, USD/JPY is currently forming a wave of decline towards 151.40. The local target of 151.86 has already been reached. The market is now correcting from the previous wave of decline and is expected to reach at least 156.00. After this correction, a new phase of decline towards 151.40 may begin. This scenario is technically supported by the MACD oscillator, whose signal line is below zero but directed upwards.

On the H1 chart, USD/JPY has formed a consolidation range around the 154.00 level, with an anticipated upward breakout leading to a correction towards 156.00. Currently, a growth link to 155.88 is forming. Following this, a potential decline back to 154.00 (testing from above) may occur before possibly rising again to 156.00. The Stochastic oscillator confirms this technical outlook, with its signal line above 80 and poised for a decline.

• GBPUSD reverses lower after 50-day SMA curbs advance
• Violates both the 200-day SMA and descending trendline
• Momentum indicators are neutral-to-negative

GBPUSD had been in a recovery mode following its bounce off the five-month bottom of 1.2298, with the price temporarily violating the 200-day simple moving average (SMA). However, the pair retraced back below the downward sloping trendline, in place since March, after failing to conquer the 50-day SMA.

Should bearish pressures persist, the price may retreat towards the April support of 1.2405. Further declines could then cease at the five-month low of 1.2298. Dipping beneath that area, the price may face the November 2023 support of 1.2186.

On the flipside, if buyers re-emerge and push the price back above the descending trendline, the April-May resistance zone of 1.2564 could act as the first line of defence. A break above that territory could pave the way for the recent deflection point of 1.2632. Even higher, the April peak of 1.2708 could curb further upside attempts.

Overall, GBPUSD has been on the retreat in the past couple of sessions due to its inability to reclaim the 50-day SMA. Hence, for the short-term picture to improve, the pair needs to break above the restrictive trendline that connects its lower highs since March.

• Gold retains sideways move in 4-hour chart
• MACD and RSI look weak

Gold prices are holding near the 50-period simple moving average (SMA) and the mid-level of the Bollinger band, trading within a sideways channel of 2,277-2,332 in the 4-hour chart.

According to technical oscillators, the MACD is losing momentum beneath its trigger line in the positive territory, while the RSI is ticking down, meeting the neutral threshold of 50. Both reflect the weakening momentum in the price.

Upside moves are likely to find resistance at the upper Bollinger band at 2,332. There is also an important resistance level around 2,362, taken from the inside swing low of April 16 ahead of the 2,400 psychological number.

In the event of a downside reversal, the commodity may meet the 2,306 immediate support ahead of the 200-period SMA at 2,302 and the lower Bollinger band at 2,294. Steeper decreases could take the market towards the support line of the consolidation area near 2,277.

Summarizing, the precious metal is failing to improve the bullish structure in the short-term view, although an exit above the upper Bollinger band could endorse an upside tendency. 

Daily Pivots: (S1) 192.94; (P) 193.54; (R1) 194.08; More..

Intraday bias in GBP/JPY stays neutral for the moment. On the upside, sustained break of 55 4H EMA (now at 193.86) will bring stronger rebound back toward 197.40 resistance. On the downside, below 191.34 will resume the correction from 200.53. Sustained trading below 55 D EMA (now at 191.51) will target 61.8% retracement of 178.32 to 200.53 at 186.80.

In the bigger picture, a medium term top could be in place at 200.53 after breaching 199.80 long term fibonacci level. As long as 55 W EMA (now at 183.34) holds, fall from there is seen as correcting the rise from 178.32 only. However, sustained break of 55 W EMA will argue that larger scale correction is underway and target 178.32 support.

Daily Pivots: (S1) 165.82; (P) 166.19; (R1) 166.73; More...

EUR/JPY's break of 55 4H EMA (now at 166.14) suggests that pull back from 171.58 has completed at 164.01 already. Rebound from there is seen as the second leg of the corrective pattern. Intraday bias is back on the upside for 168.64 resistance. On the downside, break of 164.01 will resume the correction from 171.58 instead.

In the bigger picture, a medium top could be formed at 171.58 after brief breach of 169.96 (2008 high). As long as 55 W EMA (now at 157.82) holds, fall from there is seen as correcting the rise from 153.15 only. However, sustained break of 55 W EMA will argue that larger scale correction is underway and target 153.15 support.

Daily Pivots: (S1) 0.8575; (P) 0.8587; (R1) 0.8611; More...

EUR/GBP's break of 0.8582 resistance suggests that fall from 0.8643 has completed at 0.8529. Intraday bias is back on the upside for 0.8643 resistance. Firm break there will resume the choppy rebound from 0.8497 low. On the downside, below 0.8566 minor support will turn intraday bias neutral first.

In the bigger picture, outlook remains bearish as EUR/GBP is capped below medium term falling trendline. That is, down trend from 0.9267 (2022 high) is still in progress. Firm break of 0.8491/7 will target 100% projection of 0.8764 to 0.8497 from 0.8643 at 0.8376.