A Plunge Is Expected Before Bottoming Out

Cryptocurrency

Summary:

The bitcoin market continues to be thin with great short-term downward pressure. It is expected to extend the downward oscillating pattern.

SELL BTC-USDT

Close Time

CLOSED

57500.0

Entry Price

55200.0

59000.0

58747.6 -1586.6 -2.63%

680.0

Pips

Profit

55200.0

56820.0

Exit Price

57500.0

Entry Price

59000.0

Fundamentals

Cryptocurrency prices have been low for months. Investors were expecting the Fed to cut interest rates in September, which could be a catalyst for a bull market. However, escalating recession fears have washed out the sentiment in the cryptocurrency market, which may even result in a deeper retracement.

Meanwhile, Nvidia fell 16% in a week due to an antitrust investigation. As a heavyweight in the U.S. stock market, this weighed on the entire U.S. stock market, triggering some market panic that spilled over into the crypto market. Bitcoin is now under higher downward pressure.

Technical Analysis

A Plunge Is Expected Before Bottoming Out _1

In the 4h chart, BTCUSDT failed to reach new highs and oscillated downward in a narrow descending channel. Despite some chances to rebound, BTCUSDT may plunge further before hitting the bottom.

It is better to sell bitcoin at highs. When BTCUSDT reaches 58000, investors can sell and set the target at the support of 55000, with the stop-loss order above 58550.

Trading Recommendations

Trading direction: Sell

Entry price: 57500

Target price: 55200

Stop loss: 59000

Support: 58000/57000

Resistance: 58500/61600

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

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Warren Takunda

Economic

Summary:

The Japanese yen strengthened against the US dollar as Japan’s real wages rose by 3.6% year-over-year, surpassing expectations.

SELL USDJPY

Close Time

CLOSED

143.400

Entry Price

141.000

145.000

140.798 -0.008 -0.01%

52.6

Pips

Profit

141.000

142.874

Exit Price

143.400

Entry Price

145.000

The Japanese yen (JPY) saw a steady rise against the US dollar (USD), as the latest labor data showed that real wages in Japan have increased for the second consecutive month. In July, Japan’s Labor Cash Earnings surged by 3.6% year-over-year, marking the highest growth since January 1997. Although this represents a slowdown from the 4.5% rise in June, it still exceeded market expectations of 3.1%. This robust performance has intensified speculation that the Bank of Japan (BoJ) may shift towards a more hawkish stance and could raise interest rates before the end of 2024.

Bank of Japan Board Member Hajime Takata, in a recent speech, acknowledged that Japan's economy is recovering at a moderate pace. However, he also highlighted that certain weak signals remain in the economic outlook. While the stock and foreign exchange markets have seen heightened volatility, Takata reaffirmed the BoJ’s commitment to achieving its inflation target. His comments have fueled further discussion around the BoJ's future monetary policy, with some analysts debating how soon the central bank might begin reducing its balance sheet.

Meanwhile, the US dollar, which had been under pressure, managed to recover some of its recent losses, supported by a rise in US Treasury yields. However, the Greenback faced headwinds after the release of the US JOLTS Job Openings report for July, which came in lower than expected. Job openings dropped to 7.673 million, down from 7.910 million in June, marking the lowest figure since January 2021. This data points to a cooling labor market, which could lead the Federal Reserve to adopt a more dovish approach.

The market now shifts its focus to upcoming US economic data, particularly the ISM Services PMI and Initial Jobless Claims reports. Any further signs of economic slowdown could increase pressure on the Fed to implement rate cuts sooner rather than later. San Francisco Federal Reserve President Mary Daly recently stated that the Fed should consider cutting policy rates as inflation declines and economic growth slows. Daly’s neutral stance, along with Atlanta Fed President Raphael Bostic's cautious remarks about maintaining restrictive policy for too long, reflect the ongoing debate within the central bank.

The FedTracker tool, which measures the tone of Fed officials’ speeches, rated Daly's comments as neutral, while Bostic's words were slightly more hawkish, further indicating mixed signals from the Federal Reserve.

Japan’s government is also closely monitoring both domestic and international market developments. Chief Cabinet Secretary Yoshimasa Hayashi emphasized the need for close coordination between fiscal and monetary policy. Japan recently announced a ¥989 billion plan to fund energy subsidies, aiming to alleviate the pressures caused by rising energy costs. These measures come as Japan continues to face cost-of-living challenges.

In addition to wage growth, Japan’s service sector has also been expanding. The Jibun Bank Services PMI for August was revised to 53.7, marking the seventh consecutive month of growth. While the index reflects stable service sector activity, it remains unchanged from July's figure, signaling a potential plateau in the sector's recovery.

Technical Analysis

From a technical standpoint, USD/JPY has experienced further bearish momentum, with the pair breaking below the key support level at 145.36. This move suggests that USD/JPY is likely to continue its downward trajectory, approaching the next significant support level at 143.00. If bearish pressure persists, the pair could drop even further, with the next target being 141.00.

The current bearish bias is reinforced by the negative pressure exerted by the 50-day Exponential Moving Average (EMA). As long as USD/JPY remains below the 145.36 level, we expect the bearish trend to continue. The expected trading range for the near term is between the support at 142.80 and resistance at 144.50.

TRADE RECOMMENDATION

SELL USDJPY

ENTRY PRICE: 143.400

STOP LOSS: 145.00

TAKE PROFIT: 141.00

Risk Warnings and Disclaimers

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Eva Chen

Central Bank

Forex

Summary:

GBP is supported by high interest rates in the UK and could be driven by risk sentiment this week.

BUY EURGBP

EXP

PENDING

0.83990

Entry Price

0.85790

0.83390

0.84407 +0.00027 +0.03%

Pips

PENDING

0.83390

Exit Price

0.83990

Entry Price

0.85790

Fundamentals

So far, the GBP remains the best-performing G10 currency of 2024, supported by factors such as resilient domestic demand, better-than-expected economic growth, the expected improvement in UK-EU relations under a Labour government, and the GBP's appealing valuation.

We expect that the relatively high interest rates in the UK indicate that the path of least resistance for the GBP is upward. The robustness of the UK economy suggests that any rate cuts by the Bank of England (BOE) will be gradual. The market currently assesses the likelihood of another rate cut in September at less than 25%, but this outlook could shift if the upcoming economic data significantly diverges from market expectations.

This week, in light of the lack of compelling economic data from the UK, global risk sentiment may emerge as the primary catalyst for the GBP. Meanwhile, the EURGBP seems poised to await the impetus for its "next major move."

The EURGBP is likely to test the annual low around 0.8380 at some point or could rise from the current 0.8434 level towards the 0.8500 range. Over the past few months, there has been a growing consensus suggesting that the EURGBP will ultimately rebound; however, we acknowledge that neither the BOE nor UK economic data provides substantial justification for this, and the short-term risks appear well balanced.

Range Bottom Is Expected as the Short-term Risks Are Well Balanced_1

Technical Analysis

The EURGBP is currently in a downward trend. Oscillators are presenting a mix of signals. The Relative Strength Index is indicating a neutral position below 50, while the MACD continues to show positive momentum above the trigger line.

We do not rule out the potential for a stronger rebound; however, as long as the weak resistance level at 0.8466 is not breached, further declines are expected. A break below 0.8399 would reinstate the downtrend initiated from 0.8624, targeting the support level at 0.8382. A break of this level would signify a resumption of a more substantial downtrend.

Overall, since embarking on a significant decline starting August 8, the EURGBP has shown signs of improvement. If the downward momentum halts at prior lows, there remains hope for a bullish outlook.

Trading Recommendations

Trading Direction: Buy

Entry Price: 0.8399

Target Price: 0.8579

Stop Loss: 0.8339

Deadline: 2024-09 - 19 23:55:00

Support: 0.8399, 0.8382, 0.8365

Resistance: 0.8435, 0.8478, 0.8544

Risk Warnings and Disclaimers

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Alan

Forex

Central Bank

Summary:

The EURUSD remains in a downtrend in the 1M timeframe; it is recommended to go short at the highs once the price rebounds to the resistance level.

SELL EURUSD

EXP

TRADING

1.10769

Entry Price

0.98300

1.15060

1.10868 +0.00122 +0.11%

0.0

Pips

Flat

0.98300

Exit Price

1.10769

Entry Price

1.15060

Fundamentals

Currently, the slowdown in the U.S. economy aligns closely with expectations, and the risk of a recession remains low. The projected GDP growth rate for the U.S. is 2.5% in 2024 and 1.5% in 2025. Supported by an increase in labor supply, steady growth in productivity, and a surge in manufacturing investment demand driven by fiscal policy, potential output continues to expand rapidly.

In contrast, the European Commission has released economic forecasts, downgrading the growth outlook for the eurozone in 2024, with the revised growth prospects now at 0.9% for the EU and 0.8% for the eurozone. Moreover, economic activity in the EU and eurozone grew merely by 0.5% in 2023. In comparison, the growth outlook for the U.S. economy appears slightly more favorable than that of the eurozone, potentially making the USD more attractive relative to the EUR and exerting downward pressure on the EURUSD.

Technical Analysis

Go Short after Rebounds as Monthly Downtrend Continues_1

In the 1M timeframe, the EURUSD trend shows a significant decline, rebounding at the support level of 0.94440 after the downtrend. However, it remains in a bearish trend.

Currently, the market has approached the resistance level of 1.2087 twice, and it is recommended to wait for a potential upward breakthrough. If it declines below the 1.2087 resistance, it is recommended to go short at the highs. If it breaks the resistance level and even surpasses the descending trendline, it is recommended to be more patient, waiting for clearer directional signals before trading.

Trading Recommendations

Trading Direction: Sell

Entry Price: 1.11000

Target Price: 0.98300

Stop Loss: 1.15060

Deadline: 2024-09-18 15:00:00

Support: 1.10410, 1.09500, 1.08822

Resistance: 1.11100, 1.12000, 1.14970

Risk Warnings and Disclaimers

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Warren Takunda

Commodity

Summary:

Crude oil prices are struggling to hold above $70.00, pressured by weak demand signals from China and Europe, alongside increasing supply from OPEC and potentially Libya.

SELL WTI

EXP

PENDING

71.000

Entry Price

67.650

75.000

67.912 -0.466 -0.68%

Pips

PENDING

67.650

Exit Price

71.000

Entry Price

75.000

Crude oil prices continued their downward spiral on Wednesday, struggling to maintain support around the $70.00 mark. The market's woes are compounded by a series of negative headlines that have driven oil prices to their lowest levels of the year. Tuesday's sharp 5% decline extended the bearish trend, reflecting mounting concerns on both the demand and supply sides of the oil market.

On the demand front, recent Purchasing Managers Index (PMI) data from China revealed a severe contraction in the manufacturing sector, which could signal a further slowdown in oil demand. This downturn in China, a major global consumer of oil, adds to the already grim outlook for crude oil consumption.

On the supply side, the situation presents a different set of challenges. OPEC is pressing forward with its plans to normalize oil output, which could increase market supply at a time when prices are already under pressure. Additionally, political stability in Libya appears to be improving, raising the prospect of Libyan oil returning to global markets sooner than anticipated. This potential increase in supply adds another layer of bearish sentiment to the oil market.

Amid these developments, the US Dollar Index (DXY), which measures the greenback against a basket of other major currencies, remains resilient above the 101.00 level. Traders are keenly awaiting upcoming economic data, particularly the US Jobs Report set for Friday.

Later today, at 20:30 GMT, the American Petroleum Institute (API) will release its weekly update on crude oil stockpiles. The previous report showed a significant drawdown of 3.4 million barrels. This data will be closely monitored for insights into the current state of oil inventories and potential implications for prices.

Additionally, Bloomberg reports that the leadership dispute over the Libyan central bank is nearing resolution, which could expedite the return of Libyan oil to international markets. This development might impact global oil supply dynamics in the near term.

In a strategic move, the US has increased crude oil exports to India, aiming to reduce Russia's dominance as a major oil supplier. Ship-tracking data reveals that nearly $1 billion worth of US crude oil has been delivered to India, according to Business Standard. This shift in trade patterns underscores the broader geopolitical maneuvering in the oil market.

Technical Analysis

Crude oil prices have approached our anticipated target of $70.05, briefly testing this level and reinforcing the bearish trend observed in the short-term and intraday charts. If prices continue to breach this support level, the next targets are projected at $69.05 and subsequently at $67.65.

However, should the price fail to establish a firm break below $70.05, there may be a potential for a recovery rally. In such a scenario, oil prices could attempt to climb towards the $72.04 resistance level before any further downward movement.

For today, the expected trading range for crude oil is between $68.60 on the downside and $71.60 on the upside.

TRADE RECOMMENDATION

SELL WTI

ENTRY PRICE: 71.00

STOP LOSS: 75.00

TAKE PROFIT: 67.65

Risk Warnings and Disclaimers

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Eva Chen

Stocks

Economic

Summary:

The recent data weakness has reignited concerns about an economic slowdown, leading to a tumultuous start for U.S. stocks in September. After experiencing significant sell-offs, is there room for recovery in the stock market? Unless the "siphoning effect" reemerges, sustained upward momentum appears highly challenging.

SELL US30

Close Time

CLOSED

41159.92

Entry Price

39463.00

41600.00

41434.44 -17.46 -0.04%

3989.5

Pips

Profit

39463.00

40760.97

Exit Price

41159.92

Entry Price

41600.00

Fundamentals

The latest economic data has reignited concerns about the health of the economy, with U.S. stocks starting September on a negative trend, particularly in the technology sector which experienced a significant decline. The S&P 500 Index fell over 2.2%, marking its largest drop in nearly a month. The Nasdaq Composite plummeted by 3.3%, representing the worst day since the global market rout on August 5. During intra-day trading, the Dow Jones Industrial Average experienced a decline of as much as 700 points, settling at a 1.6% loss.

The volatility index, VIX, surged by 30%, similar to early August's spikes. Observational data suggests that readings of the "fear index" above 20 are indicative of consolidation and adjustment periods. Conversely, the volatility surge seen in early August proved to be a temporary shock, as the market swiftly rebounded from the technical corrections.

Recent data indicates that the final value of the S&P Global Manufacturing PMI for August has declined in the U.S., and the ISM Manufacturing Index for the same month fell short of economists' expectations. Chief Technical Strategist at Blue Chip Daily Trend Report, Larry Tentarelli, commented, "The market currently appears highly sensitive to any data." "We have evolved into a market that is very reliant on data."

The recent data weakness has reignited concerns about an economic slowdown, leading to a tumultuous start for U.S. stocks in September. After experiencing significant sell-offs, is there room for recovery in the stock market? We believe sustained upward momentum appears highly challenging.

Firstly, inflation constrains the Federal Reserve's capacity for easing. The performance of U.S. stocks during 2018-2019 demonstrated that simply lowering interest rates during an economic slowdown does not enable a breakout for the stock market. Secondly, the Fed's rate cuts have, in fact, diminished the stock market's "siphon effect," compounded by overseas investors' inclination to take profits ahead of the upcoming elections. Thirdly, the key to JPY carry trades lies in U.S. economic performance; further economic deterioration in the U.S. could potentially reverse yen carry trades and amplify volatility in global markets. Lastly, historical patterns of the U.S. stock market suggest that following the inauguration of a new president, there will likely be at least a year of annual adjustment pressures.

Focus on Pullback Pressure as U.S. Stocks Turned Negative_1

Technical Analysis

Driven by the renewed decline of the S&P 500 and Nasdaq Index, the Dow Jones continues to exhibit a bearish trend.

Momentum indicators are gradually shifting towards a negative sentiment. Specifically, the Average Directional Index (ADX) is trending upward, signaling a strengthening bearish trend for the Dow Jones. The Relative Strength Index has also dropped below the midpoint. More critically, the stochastics are declining, falling beneath its overbought zone. If this trend accelerates, it will be regarded as a very strong bearish signal.

If the bears maintain their conviction, they may attempt to return to the 40,000 psychological level. If successful, they might aim to test the support levels within the 40,000-39,463 range to facilitate a potential rebound.

In the 1W timeframe, following a challenging start in September, momentum for the Dow has turned negative. However, in order to achieve lower lows, bears must navigate through a series of critical support levels.

Trading Recommendations

Trading Direction: Sell

Entry Price: 41200

Target Price: 39463

Stop Loss: 41600

Deadline: 2024-09 - 19 23:55:00

Support: 40586, 40090, 39645

Resistance: 41122, 41374, 41587

Risk Warnings and Disclaimers

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Eva Chen

Commodity

Economic

Summary:

A toxic combination of oversupply, slumping demand, bearish technicals, and poor product fundamentals are destroying crude oil prices today.

BUY WTI

Close Time

CLOSED

69.445

Entry Price

87.000

67.000

67.912 -0.466 -0.68%

244.5

Pips

Loss

67.000

66.996

Exit Price

69.445

Entry Price

87.000

Fundamentals

International crude oil prices experienced a significant drop of 5% on Tuesday, erasing the gains made earlier this year. This decline follows a statement from a Central Bank of Libya official indicating that an agreement to resume the nation's oil production appears imminent. With the potential return of over 500,000 barrels per day of Libyan crude oil to the market, global oil consumption is once again under scrutiny.

In light of this, three sources within OPEC+ reported on Wednesday that the organization is deliberating a postponement of its planned production increase for next month due to oil prices plummeting to a nine-month low. One insider noted that while OPEC seemed poised to raise production by 180,000 barrels per day in October, the disruptions caused by the shutdown of Libyan oil facilities, coupled with a dim demand outlook, have raised concerns within the group.

MARKET WATCH: The recent decline in oil prices appears to be overextended relative to fundamental data, creating room for a recovery in financial demand, despite the risks of further price drops. This downturn has been primarily driven by the anticipated restoration of Libyan crude oil supplies and investor risk aversion in response to disappointing economic indicators. Additionally, algorithmic trading strategies that follow market trends could be exacerbating the downward momentum.

We expect stronger supply growth from non-OPEC producers, particularly from Canada. Overall, while our price forecast for WTI crude oil remains in the range of US$70.00-US$8500, there is notable downside risk, yet financial demand possesses substantial upside potential.

Multiple Factors Are Undermining the Oil Market, Erasing This Year's Price Gains_1

Technical Analysis

WTI crude has breached the support level of its descending triangle pattern, indicating that a sell-off of similar magnitude is underway.

The 100-day SMA is positioned below the 200-day SMA, confirming that the path of least resistance is downwards, with potential for further declines. These SMAs are situated near the triangle's resistance level at US$75, enhancing their effectiveness as an upper boundary.

However, the stochastics have entered the oversold zone, signaling that bearish momentum may be waning, suggesting that a rebound could indicate the return of bullish sentiment. The relative strength index also sits within the oversold zone, indicating that selling pressure is diminishing, and buyers may soon seize control to retest the previous support-turned-resistance level around US$71.85.

Trading Recommendations

Trading Direction: Buy

Entry Price: 69.00

Target Price: 87.00

Stop Loss: 67.00

Deadline: 2024-09 - 19 23:55:00

Support: 68.85,67.99,67.00

Resistance: 71.25 ,71.85 ,72.50

Risk Warnings and Disclaimers

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Risk Disclosure