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• Ex-post Apple and Amazon earnings results reinforced the current +1.4% rebound seen on Index from its 3 August 2023 low in today’s 4 August Asian session hours.
• The ongoing rebound is still not showing any clear signs of a reversal from its current short-term downtrend phase in place since 29 July 2023 as price actions remained below the 20-day moving average.
• Medium-term momentum has turned bearish as indicated by the bearish divergence condition seen in the daily RSI at its overbought region which may see a further extension of the current short-term downtrend phase.
• Key short-term resistance to watch will be at 15,600.

The price actions of the US Nas 100 Index (a proxy for the Nasdaq 100 futures) have shaped a decline of -3.6% from its 29 July 2023 high of 15,818 to print a recent intraday low of 15,255 on 3 August reinforced by a significant surge in longer-term US Treasury yields triggered by the aftermath of Fitch’s US sovereign debt credit rating downgrade to AA+ from AAA.

In today, 4 August early Asian session; the two US mega-cap technology firms; Apple and Amazon reported their respective earnings results for the quarter that ended June 2023. Ex-post earnings results release saw the share price of Apple tumble by -2% in the after-hours trading session due third consecutive quarter year-on-year revenue decline hampered by lacklustre demand for iPhones, Mac laptops, and iPads.

In contrast, the share price of Amazon soared by +8.7% in after-hours trading reinforced by its biggest earnings beat since Q4 2020 assisted by significant cost-cutting measures implemented in the prior two quarters.

The overall net effect is a rebound of +1.4% seen on the US Nas 100 Index from its 3 August 2023 low of 15,255 to today’s 4 August Asian session intraday high of 15,441 at this time of the writing.

Medium-term momentum has turned bearish

Fig 1:  Nasdaq 100 medium-term trend as of 4 Aug 2023 (Source: TradingView, click to enlarge chart)

The daily RSI oscillator has flashed a bearish divergence condition (lower highs in RSI in contrast with higher highs in the corresponding price actions of the Index) at its overbought region which suggests that the medium-term uptrend phase of the Index in place since 28 December 2023 low of 10,675 may have reached a terminal point at the 15,690/15,810 key medium-term resistance.

The odds now have increased for a potential multi-week corrective decline to retrace a portion of the medium-term uptrend in the first step if 15,260 near-term support fails to hold (also the 50-day moving average).

Still below the 20-day moving average

Fig 2:  Nasdaq 100 minor short-term trend as of 4 Aug 2023 (Source: TradingView, click to enlarge chart)

The ongoing rebound from its 3 August 2023 low of 15,255 has not surpassed its 20-day moving average which is acting as an intermediate resistance at 15,510/15,540.

Watch the 15,600 key short-term pivotal resistance (also the 61.8% Fibonacci retracement of the decline from the 29 July 2023 high to the 3 August 2023 low) to maintain the short-term downtrend to retest 15,260 and a break below it exposes the next support at 15,110 in the first step.

On the flip side, a clearance above 15,600 invalidates the short-term bearish tone for a retest on the 15,810 key medium-term resistance.

Market picture

The crypto market capitalisation has seen little change over the past 24 hours, stabilising around $1.165 trillion. The Fear and Greed Index is also little changed at 54 since the middle of last week. The market has been waiting for new signals, equally ready to return to growth or continue to fall.

The most fluctuation in Bitcoin over the last week and a half has been around $29.2K. And this is interesting because during this time, the dollar has gone into a growth mode, and there has been significant profit-taking in the equity market. It’s unlikely that investors’ caution in Bitcoin is due to expectations of the US jobs report.

A drop below $28.8K could quickly take the market to $28K or even $27K. A rise above $29.5K would open a quick path to $30K and on to $31K.

News background

Most investors prefer to buy Bitcoin while trading below $30K, Glassnode noted. The number of addresses with a balance of at least 0.01 BTC has reached an all-time high of more than 12.22 million, while the number of wallets in deficit is 14.04 million, the highest since late June.

MicroStrategy bought 12,333 bitcoins worth $347 million in the second quarter of this year, the largest quarterly purchase since 2021.

Former CFTC lawyer Mike Selig suggested that if spot bitcoin ETFs are allowed to launch in the US, ETFs linked to Ethereum and XRP are next in line.

Hong Kong issues its first cryptocurrency retail trading licence. HashKey crypto exchange has been authorised to provide services to local retail investors.

The Australian Securities and Investments Commission (ASIC) sued the eToro platform over its line of CFDs that allow speculation on cryptocurrencies.

Daily Pivots: (S1) 180.15; (P) 181.45; (R1) 182.44; More...

Intraday bias in GBP/JPY stays neutral first. Firm break of 180.85 will extend the corrective pattern from 183.99 with another falling leg. Intraday bias will be turned to the downside for 176.22 support. On the upside, decisive break of 183.99 will resume larger up trend.

In the bigger picture, as long as 172.11 resistance turned support holds, up trend from 123.94 (2020 low) is expected to continue through 183.99 at a later stage, towards 195.86 (2015 high). Nevertheless, firm break of 172.11 will argue that larger correction is already underway.

Daily Pivots: (S1) 155.31; (P) 156.28; (R1) 157.02; More....

Outlook in EUR/JPY is unchanged and intraday bias remains neutral. On the upside, decisive break of 157.99/158.03 will resume larger up trend to 162.82 projection level next. However, break of 155.10 will extend the corrective pattern from 157.99 with another falling leg instead.

In the bigger picture, as long as 151.60 resistance turned support holds, rise from 114.42 (2020 low) is in progress. On resumption, next target is 100% projection of 124.37 to 148.38 from 138.81 at 162.82. Nevertheless, sustained break of 151.60 will argue that larger correction is already underway. Deeper decline would be seen to 55 W EMA (now at 145.56).

Daily Pivots: (S1) 0.8590; (P) 0.8623; (R1) 0.8648; More...

While recovery from 0.8543 continues to gyrate high, upside momentum remains unconvincing. Intraday bias stays neutral first. On the downside, below 0.8543 will target a test on 0.8502 low. Decisive break there will resume larger decline from 0.8977. On the upside firm break of 0.8717 resistance will suggest larger reversal and target 0.8874 resistance next.

In the bigger picture, the down trend from 0.9267 (2022 high) is seen as part of the long term range pattern from 0.9499 (2020 high). Firm break of 0.8717 support turned resistance will argue that it has completed with three waves down to 0.8502. Further break of 0.8977 will bring retest of 0.9267 high. Nevertheless, rejection by 0.8717, followed by break of 0.8502 will resume the decline towards 0.8201 (2022 low).

Daily Pivots: (S1) 1.6680; (P) 1.6723; (R1) 1.6760; More...

Intraday bias in EUR/AUD is turned neutral again as it retreat ahead of 1.6785 high. On the upside, decisive break of 1.6785 will resume larger up trend to 1.7377 projection level next. On the downside, break of 1.6577 resistance turned support will turn bias back to the downside for 1.6259 support, to extend the corrective pattern from 1.6785.

In the bigger picture, with 38.2% retracement of 1.4281 to 1.6785 at 1.5828 intact, rally from 1.4281 is still in progress. Firm break of 1.6785 will confirm rise resumption. Next target is 100% projection of 1.5254 to 1.6785 from 1.5846 at 1.7377. On the other hand, rejection by 1.6785 will extend the corrective pattern with another fall leg. But outlook will stay bullish as long as 1.5828 holds.

Daily Pivots: (S1) 0.9550; (P) 0.9582; (R1) 0.9602; More...

Intraday bias in EUR/CHF remains neutral and outlook stays bearish with 0.9670 support turned resistance intact. On the downside, break of 0.9520 will resume the fall from 1.0095 towards 0.9407 low. Nevertheless, sustained break of 0.9670 will be the first sign of bullish reversal and target 0.9840 resistance for confirmation.

In the bigger picture, medium term outlook is staying bearish as the pair is capped well below falling 55 W EMA (now at 0.9876). Down trend from 1.2004 (2018 high) is in favor to continue. Sustained break of 0.9407 will target 61.8% projection of 1.1149 to 0.9407 from 1.0095 at 0.9018. For now, this will remain the favored case as long as 0.9840 resistance holds, in case of strong rebound.

Daily Pivots: (S1) 1.3329; (P) 1.3353; (R1) 1.3378; More....

Intraday bias in USD/CAD remains neutral for the moment. Also, as long as 1.3386 resistance holds, further decline is mildly in favor. Below 1.3260 minor support should resume larger decline through 1.3091 low. Nevertheless, on the upside, firm break of 1.3386 will indicate near term reversal and turn outlook bullish for 1.3653 resistance next.

In the bigger picture, price actions from 1.3976 are viewed as a correction to up trend from 1.2005 (2021 low) only. But even so, deeper decline is expected as long as 1.3386 resistance holds. Further fall could be seen to 61.8% retracement of 1.2005 to 1.3976 at 1.2758. Meanwhile, break of 1.3386 will be a sign that the correction has completed and bring stronger rally back to retest 1.3976.

Daily Pivots: (S1) 0.6520; (P) 0.6545; (R1) 0.6575; More...

Intraday bias in AUD/USD is turned neutral first with a temporary low formed at 0.6513. On the downside, below 0.6513 will target 0.6457 support first. Break there will resume the fall from 0.7156 to 100% projection of 0.7156 to 0.6457 from 0.6894 at 0.6195. On the upside, above 0.6628 minor resistance will turn bias back to the upside for stronger rebound.

In the bigger picture, outlook is mixed for now as AUD/USD failed to sustain above both 55 D EMA (now at 0.6701) and 55 W EMA (now at 0.6784). On the upside, break of 0.65898 resistance will solidify the case that down trend from 0.8006 (2021 high) has already completed, and target 0.7156 resistance for confirmation. However, break of 0.6457 will likely resume the down trend through 0.6169 (2022 low).

Daily Pivots: (S1) 1.0920; (P) 1.0941; (R1) 1.0971; More...

EUR/USD is losing some downside momentum as seen in 4H MACD. But further decline is still expected with 1.1046 resistance intact. Current fall from 1.1274 would target 1.0832 support. Sustained trading below there will target 1.0609/34 cluster support. On the upside, however, break of 1.1046 resistance will turn bias back to the upside for stronger rebound instead.

In the bigger picture, a medium term top could be formed at 1.1274, after failing to break through 61.8% retracement of 1.2348 (2021 high) to 0.9534 at 1.1273 decisively, on bearish divergence condition in D MACD. Sustained trading below 55 D EMA (now at 1.0963) will bring deeper correction to 1.0634 cluster support (38.2% retracement of 0.9534 to 1.1274 at 1.0609). Strong support could be seen there, at least on first attempt, to set the range for consolidation.