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On Monday, Bitcoin was down 3.6%, ending the day around $29.9, but is trading back above $30K on Tuesday morning. Ethereum has little changed over the past 24 hours (-0.4%), remaining near $2000. Other altcoins from the top 10 changed in price from -2.7% (Polkadot) to 1.2% (Solana).

Total crypto market capitalisation, according to CoinMarketCap, rose 0.1% overnight to $1.30 trillion. Bitcoin’s dominance index fell 0.1 points to 44.3%. The Cryptocurrency Fear and Greed Index was down 6 points to 8 by Tuesday, hitting its lowest level since August 2019.

Technically, the crypto market on Monday followed the cautious sentiment of the stock market. We note that after hitting lows on May 12th, a short-term upward channel is forming in BTCUSD with increasingly higher local lows and local highs.

Such dynamics of the flagship crypto resemble the work of traders of institutional managers, who moderately “buy the fear” or fix the profit from the short positions. So far, there is little reason to argue that a prolonged rise will follow the current buying, as the fundamentals (tightening markets, slowing economy) remain in place.

According to CryptoQuant, institutional investors continue to buy BTC through market makers despite the decline in the crypto market.

Sam Bankman-Fried, CEO of cryptocurrency exchange FTX, believes bitcoin has no future as a payment network because of its low scalability and negative impact on the environment. There is a need for an alternative blockchain-based Proof-of-Stake (PoS) protocol for payments.

IMF managing director Kristalina Georgieva called for a new public infrastructure for payment systems, including digital currencies.

Do Kwon, founder of the Terra ecosystem, presented a new plan to rehabilitate the project. On May 18th, the developer intends to present Terraform Labs team with a new management system for the Terra fork, decoupling it from the TerraUSD (UST) stable coin.

Crude oil has added 15% since last Wednesday, rising to $112/bbl WTI and $113/bbl Brent. Both grades reached new two-month highs on Tuesday morning, despite a decidedly bearish news backdrop.

A sharper than previously estimated slowdown in China and not yet agreed package with Russian Crude oil phased embargo was met with buying in Crude, despite those suggesting lower demand and higher supply.

Since early April, WTI has seen a sequence of higher highs and higher lows. Oil’s dip under the uptrend line last week only encouraged buyers, kick-starting the latest upward momentum.

This is the third time Brent has reached that horizon, from which it has rolled back in April and early May. A consolidation above $114 could signal a new buying wave and quickly take prices to the $120 area – near the late March peaks.

In this case, the North Sea Brent lags behind the US WTI as the supply-demand balance favours the latter. It should not be surprising if WTI becomes more expensive than the heavier Brent in a few weeks, restoring the historic balance broken by tight OPEC+ quotas and once rampant US production.

Nevertheless, be prepared that the oil rally that started from lows in April 2020, culminating in the war events in Ukraine, is coming to an end. The global economy and energy consumption are slowing to recover while the cartel continues to raise quotas.

Temporarily, due to lower investment in production in previous quarters, OPEC has not kept pace with production increases. Still, this balance will change sooner rather than later, promising to keep the price from rising.

Cable extends rebound from new 2022 low into third straight day and accelerates recovery on Tuesday after upbeat jobs data.

UK unemployment fell to 3.7% in March, the lowest since 1975, improving the sentiment on rising bets for BoE 50 basis points hike on June 16 policy meeting that would lift interest rate to 1.5%.

Markets focus Wednesday’s UK CPI data on Wednesday with inflation expected to rise to a 40-year high at 9.1% in April from 7% in March that would add to BoE’s hawkish expectations and give fresh boost to the pound.

Improving daily technical studies support the notion as 14-d momentum is in steep ascend and approaching the midline which divides positive and negative territory and RSI is heading north after reversal from oversold zone.

Fresh advance broke above 10DMA (1.2348) and extended towards pivotal barrier at 1.2512 (Fibo 38.2% of 1.3090/1.2155 bear-leg / falling 20DMA) with firm break here to allow for stronger correction.

Broken 10DMA offers solid support and the price should hold above here to keep fresh bullish bias.

Res: 1.2512; 1.2534; 1.2600; 1.2622
Sup: 1.2411; 1.2375; 1.2348; 1.2311

The dollar index remains at the back foot in early Tuesday, extending pullback from new 20-year high as traders collect profits from the recent strong rally, driven by the US central bank start of tightening its monetary policy and signals for further rate hikes in attempts to bring soaring inflation under control.

Improved risk sentiment also contributed to dollar’s dip, along with traders’ focus shifting from inflation towards a growth story, although investors will remain cautious as the market expectations about more aggressive Fed hikes in coming months were cooled down, while rising concerns about the economy might be sliding into recession, add to worries.

This may put larger bulls on hold and allow for deeper correction, with a number of other factors that influence the greenback’s performance, such as growing geopolitical tensions over Ukraine, potential deepening of energy crisis and the effect of major central banks’ policy tightening on raging inflation, in light of slowing economic growth.

Pullback from new 20-year peak cracks strong 103.80 support, former critical resistance (peaks of 2017/2020, reinforced by daily Tenkan-sen and 50% retracement of 102.35/105.04 upleg), break of which would increase downside pressure.

Daily studies show a rapid loss of bullish momentum and south-heading stochastic and RSI that add to negative near-term signals.

Close below 103.80 would expose supports at 103.38 (Fibo 61.8%) and 103.08 (20DMA) which guard a key levels at 102.35/24 (May 5 trough / Fibo 38.2% of 97.72/105.04 rally).

Larger bulls also need to register a monthly close above 103.80 to confirm strong bullish stance, while failure would weaken near-term structure and add to correction signals.

Res: 104.24; 104.68; 104.94; 105.04
Sup: 103.38; 103.08; 102.35; 102.24

EURJPY is recovering from its spike below the 133.00 mark, where the rising 100-day simple moving average (SMA) underpinned the price, following one-month of declines from the multi-year peak of 140.00. Despite the recent retracement in the pair, the ascending SMAs are endorsing the positive outlook.

The Ichimoku lines indicate that negative forces have softened, while the short-term oscillators are conveying mixed messages in directional momentum. The MACD remains beneath its red trigger line and is promoting negative impetus. However, the climbing RSI and the positively charged stochastic oscillator are both suggesting buyers currently have the upper hand.

If positive pressures endure, upside limitations could commence around the 136.30-136.73 region, the former being the 23.6% Fibonacci retracement of the uptrend from 124.38 until 140.00. If the pair ascends past this obstacle, the bulls may then propel for the 137.70-138.38 resistance section before challenging the 139.00 handle and opening the door for a revisit of the multi-year top of 140.00.

Otherwise, if positive impetus starts to wane and the price recoils beneath the red Tenkan-sen line at 135.48, tough support may occur around the advancing 50-day SMA at 135.00. Slipping further, the Ichimoku cloud’s upper band could try to curb the price from confronting the 38.2% Fibo at 134.00. However, should selling interest continue to grow, the 133.00 hurdle may return to the spotlight ahead of a fortified zone of support linking the 100-day SMA at 132.41 with the 131.90 barrier. From here, traders’ focus could then turn to the 130.96-131.37 boundary, containing the 200-day SMA.

Summarizing, EURJPY is exhibiting fresh sturdy upside backing and should the price remain north of the 133.00 mark and the 132.65 trough, the odds for rekindling the broader positive bias improve. Yet, if the price recedes below the 135.00 hurdle and back into the cloud, this price action could reinforce negative tendencies.

The British pound moved sideways ahead of the upcoming data release from the UK. The data will come at a time when the UK has become the epicenter of the global stagflation crisis. There are also worries that the situation could get worse as fears of a recession rise. The Office of National Statistics will publish the latest jobs data from the UK. Economists expect the data to show that the unemployment rate declined to 3.7% while the number of claimants declined. Further, the average earnings ex-bonus and with bonus are expected to have increased to 4.1% and 5.4%, respectively. On Wednesday, the UK will release the latest inflation numbers.

The euro tilted lower as concerns about the bloc’s economy continued. There are worries that the rising energy crisis will put the bloc into a recession. Further, there are concerns that the bloc will be extremely volatile as Finland and Sweden applies to join NATO. In a statement on Monday, Putin said that he did not have any opposition to that provided that the two countries don’t install military equipment close to its borders. The euro will react to the latest Italian consumer inflation data from Italy and the important GDP and employment change from the EU. Christine Lagarde will also have a speech in which she will likely talk about monetary policy.

The US dollar remained at elevated levels ahead of the latest US retail sales numbers. Economists expect the data to show that the headline retail sales dropped to 0.5% in April. Core retail sales are expected to drop to 0.4%. The trends in retail spending have been lower as consumer price index (CPI) remains at the highest level in 40 years. The dollar will also react to the latest statements by several Fed officials like James Bullard, Jerome Powell, and Loretta Meister.

EURUSD

The EURUSD pair declined slightly as investors waited for the latest US and EU economic data. It is trading at 1.0400, which is slightly lower than this week’s high of 1.0425. The pair has moved below the middle line of the Bollinger Bands. It has also formed a bearish flag pattern that is shown in blue. The Relative Strength Index (RSI) has also pointed downwards. Therefore, the pair will likely have a bearish breakout in the near term.

GBPUSD

The GBPUSD pair has been in a tight range ahead of upcoming UK jobs data. The pair is trading at 1.2245, where it has been in the past few days. It has moved below the 25-day moving average while the Relative Strength Index (RSI) has formed a bullish divergence. The Stochastic Oscillator has moved slightly below the oversold level. Therefore, the pair will likely also have a bearish breakout.

XBRUSD

The XBRUSD pair rose to a high of 111.47, which was the highest level since May 11. The pair moved above the 25-day moving average. It is also approaching the important resistance level at 114, which was the highest level in April this year. The pair is also above the ascending trendline shown in blue. The pair will likely keep rising today.

It’s a new week but the same old story for financial markets as global growth concerns and inflation fears leave investors on edge.

Asian shares advanced on Tuesday morning despite the negative close on Wall Street overnight, after soft Chinese economic data added further pressure on the global economic outlook. These gains were the product of some technology firms rising as market players evaluated a possible relaxation in China’s regulatory crackdown on the industry. The easing of lockdown restrictions in Shanghai is also helping more positive sentiment.

European futures are pointing to a positive open, but gains could be limited by the sense of caution in the air. Although U.S futures are positive following a mixed session yesterday, more volatility could be expected this afternoon due to key US economic reports and speeches from numerous Fed officials.

Weak economic data from the world’s two largest economies has left a bitter aftertaste in the mouth of investors and reinforced concerns around the global economic landscape. Adding to the horrible cocktail are ongoing geopolitical risks which continue to sap confidence and sour appetite towards riskier assets. Given how sentiment remains shaky and fragile, equity markets could be primed for further losses as investors turn to safe haven assets.

On the data front, the UK’s unemployment rate fell to its lowest level in almost 50 years and employment continued to grow in April. Official figures from the Office for National Statistics showed the country’s jobless rate dropped to 3.7% from 3.8% in Q1 of 2022 – the lowest since 1974. Sterling appreciated across the board following the report with GBPUSD pushing above 1.2400.

A volatile week ahead for the Dollar?

King dollar kicked off the week in shaky fashion despite crossing 105.0 last Friday, its highest level since December 2002. Regardless of the slow start, it has appreciated against almost every single G10 currency this month thanks to Fed rate hike expectations and risk aversion stemming from global growth concerns and ongoing geopolitical risks.

The next few days could be volatile for the currency due to key economic reports and numerous speeches from Federal Reserve officials. All eyes will be on the U.S April retail sales and industrial production data this afternoon which the former providing fresh insight into how U.S consumers are coping with high inflation. Fed Chair Powell will be under the spotlight today with other policymakers also on the wires, and if they strike a hawkish tone, this may fuel speculation of a 75-basis point rate hike in June, ultimately elevating the dollar.

Looking at the Dollar Index (DXY), bulls are certainly in a position of power. There have been consistently higher highs and higher lows. However, a technical pullback could be in the making before bulls propel prices higher. 105.00 remains a key level of interest.

Commodity spotlight – Oil

Oil prices were on standby on Tuesday morning after closing at the highest level in almost eight weeks in the previous session. Oil bulls cheered reports about Shanghai reporting no new Covid-19 infections for a third consecutive day. However, news that Hungary resisted the European Union’s move to ban Russian oil imports capped upside gains.

The global commodity remains pulled and tugged by various forces. On one side of the equation, concerns over rising interest rates and recession fears continue to support oil bears. However, bulls remain encouraged by ongoing geopolitical risks revolving around Russia and Ukraine.

Taking a look at the technical picture, WTI has gained over 50% since the start of 2022. Prices are trading around $114 as of writing with the current upside momentum potentially taking prices towards $116.60 and $120, respectively. A decline back below $110 may trigger a selloff towards the $100 level.

Commodity spotlight - Gold

Gold bulls fought back yesterday after prices dipped to their lowest level since late January 2022. A weaker dollar and slight retreat in Treasury yields were seen as key factors triggering a move to the upside. Regardless of recent gains, the precious metal is certainly not out of the woods yet. Should the pending US economic data and speeches from Fed officials boost Fed hike expectations and propel the dollar higher, gold could be in trouble.

On the technical front, prices are approaching the 200-day Simple Moving Average at around $1835. A break above this level could open the door back towards $1855. Should $1835 prove to be reliable resistance, gold may decline back below $1800.

EUR/USD

Since Friday, the euro managed to find a bottom at around 1.0364, and on the first trading day of this week, it managed to continue its rally against the dollar. The marked weakness of the U.S. currency across the currency board was evident and allowed the bulls to gain ground. However, with the opening of the U.S. stock exchange at 13:30 GMT, the pair corrected around the resistance at 1.0440. Another upward momentum followed suit, which again hit the mentioned resistance and ended the session below the aforementioned level.Today’s macroeconomic calendar is expected to show data on the retail sales in the U.S. (12:30 GMT). If said data does not disappoint the traders and pushes them to buy the dollar, then the EUR/USD may have another decline on its hands, which could take it below the support of 1.0364. In the opposite scenario, in which the market’s reaction to the presented data is negative, the dollar might start to lose ground against the common European currency and the level at 1.0482 may be reached again.

USD/JPY

The strength of the dollar against the yen from last week has weakened, and in the early hours of today's session, we saw an 80-pip drop towards the key level of 128.70, where the USD/JPY found support. The following correction towards the resistance at 129.50 gave the bears some good entry points and they increased their short volumes. As a direct result, the Ninja lost even more ground. Whether the dollar will show strength and once more search for levels at around 130.50 depends on the market sentiment after the data on the U.S. retail sales is released at 12:30 GMT. A scenario, in which traders are disappointed following the release, should not be ruled out and declines towards the level of 127.48 can be expected.

GBP/USD

In the first trading session of the week, the bulls seem to be in full control of the sterling. The day started calmly – with a slight decline towards the support at 1.2215, but during the working hours of the European and the U.S. stock exchanges, the GBP/USD started an aggressive rally. The key level at around 1.2270 was breached after BOE governor Andrew Bailey’s statement that inflation is expected to rise towards a new peak of 10% by the end of the year. Activity today is expected to pick up after 6:00 GMT, when data on the UK labour force will be released. Unemployment is expected to remain unchanged at 3.8%, while wages are not likely to rise on a quarterly basis. Whether the pound will rise towards 1.2400 will largely depend on the reaction of the traders. The possibility of a recovery of the downward trend should not be neglected either, after which the Cable might target the levels at 1.2170.

EUGERMANY40

The German index suffered slight losses in its first session, despite last week's breakthrough at the key level of 13885. In the early hours of today’s trading, the EUGERMANY40 was locked in a range between 13885 and 14066, but with breaches on both ends of the channel. Shortly before the opening of the Wall Street index, it once again reached the above mentioned levels, but quickly gained momentum and corrected its declines with nearly 300 points. Despite that, it ended the session at about 13986. Lack of data shows that the EUGERMANY40 is likely to follow the movements of the U.S. indices. If they continue to rise amidst a weak dollar, then we can expect a breach of 14066 and a rise towards the next resistance at around 14310. However, the monthly trend should not be totally ignored, so if 13885 is attacked again, it is unlikely to last and it’s possible that the fall could deepen to levels below 13690.

US30

The blue-chip index gained momentum with the opening of the U.S. stock exchange at 13:30 GMT despite the choppy trading before that, when the index found support at the key level of 31937. The bulls were in control and the adjustments were minimal, with the US30 trading at 32530 a few hours before the closing bell. The peaks failed to hold until the end of the trading session and the corrections pushed the price down towards 32192. Whether traders will take advantage of the weak dollar and enter the market more aggressively will depend on the U.S. retail sales data, scheduled for today at 12:30 GMT. However, if we see a negative market reaction, then the US30 may try to breach its support from yesterday and once more search for a new bottom at around 31225. Another spike in volatility can be expected at 18:00 GMT, when the governor of the Federal Reserve Jerome Powell will hold a speech.

The Dow Jones 30 struggles as investors still ponder a recession scenario. A break below the daily support at 32600 has put the bulls on the defensive. Bargain hunting may cause limited rebounds, but the lack of buying momentum means that the mood is still extremely cautious. 32600 has become a resistance and its breach could extend the recovery to 34000, where sell orders could be expected from trend followers. 31250 is the closest support and a breakout may send the index to the psychological level of 30000.

The New Zealand dollar recovers as weak data from China may trigger more policy support. The RSI’s double dip into the oversold territory shows an overextension. The sell-off has become such a crowded one-way trade and the kiwi could use some breathing room. A bullish RSI divergence suggests a slowdown in the downtrend but needs a breakout to confirm buying interest. 0.6380 is a fresh resistance and 0.6450 on the 20-day moving average a major obstacle. A drop below 0.6220 would further extend the kiwi’s losses.