Natural Gas Appears Trapped in Prolonged Price Range

Chandan Gupta

Traders' Opinions

Economic

Commodity

Energy

Summary:

Taking swift profits is recommended due to the market's unpredictable nature.

Natural Gas has rebounded from a recent four-year low, reaching $2.04 on Thursday. This surge is attributed to the US approving military strikes in Iraq and Syria. Simultaneously, a proposed cease-fire between Israel and Hamas fell through as Hamas reneged on earlier commitments.

The US Dollar (USD), which typically shows a negative correlation to Natural Gas, experienced a decline following troubling jobless data. Traders opted to sell the Greenback as the US Challenger Job Cuts data revealed over double the layoffs in January compared to December. Additionally, both Initial and Continuing Jobless Claims are showing an upward trend compared to the previous week.

Despite the upbeat numbers in the US Jobs Report, countering the negative sentiment for the Greenback, the US Dollar is regaining ground and returning to elevated levels observed during the last US Federal Reserve rate decision.

In essence, Natural Gas's rebound is tied to geopolitical factors, including the approved military strikes and the failed cease-fire. The US Dollar's decline, driven by concerning jobless data, reflects the complex interplay between economic indicators and market reactions. While positive US Jobs Report numbers are influencing the Greenback positively, challenges persist, leading to a nuanced market landscape.

Investors are navigating through these developments, weighing the impact of geopolitical events on Natural Gas and the economic indicators affecting the US Dollar. The situation underscores the intricate relationship between global events, financial markets, and investor sentiment. As the market continues to respond to unfolding events, participants will closely monitor the dynamic interplay between geopolitical factors and economic data, shaping the trajectory of Natural Gas and the US Dollar in the coming days. Natural Gas Appears Trapped in Prolonged Price Range_1

Natural Gas Appears Trapped in Prolonged Price Range_1

The natural gas market saw a modest decline in Thursday's trading, indicating an overall negative sentiment. However, it's crucial to highlight that the market currently lingers just above a significant support level, as evident on longer-term charts. This sets the stage for an anticipation that traders will likely continue engaging in back-and-forth trading within this market.

Despite an initial attempt to rally during Thursday's session, natural gas relinquished its early gains. The $2 level holds particular importance as a significant support threshold and potentially marks the lower boundary of the prevailing consolidation range expected to persist in the longer term. It's worth noting that this market has a tendency to exhibit such behavior, so it's not surprising to witness it again in 2024.

Historically, natural gas tends to undergo a consolidation phase for a substantial part of the year. With the winter season winding down, the likelihood of another spike in prices remains limited and, if it occurs, is expected to be of a short-term nature, mirroring recent trends. The winter period, characterized by subdued demand, has contributed to an oversupply of natural gas, posing a notable challenge.

For short-term traders, potential opportunities may emerge through buying on price dips, although these trades are anticipated to be short-term in nature. The current fair value revolves around the $2.50 mark. A breach above this level could potentially pave the way for an ascent towards approximately $3.33, though the $3 level is likely to exert its influence.

Conversely, a scenario where the market experiences a breakdown below the $2 level would represent a significant development. However, such an outcome appears less likely, given the historical resilience of the $2 level as a support point.

Expectations for this market include choppy volatility and a prevailing range-bound pattern. Traders adept at using range-bound systems, such as stochastic oscillators or similar tools, may find this market suitable for their trading strategies in the coming months. Notably, the market currently leans closer to its lower boundary than its upper limit, prompting a search for buying opportunities. However, it is advisable to capitalize on profits promptly, given the market's characteristic erratic and choppy behavior.

In conclusion, the natural gas market is navigating through a phase of consolidation, with short-term fluctuations and a prevailing negative sentiment. The $2 level serves as a crucial support point, and traders are likely to continue engaging in back-and-forth trading. As winter concludes, the prospects for a significant price spike diminish, considering the oversupply challenges faced during the season. Traders may find short-term buying opportunities, with the $2.50 mark as fair value, and potential movements towards $3.33. While a breakdown below $2 is a possibility, the market's historical resilience at this level makes it less likely. The overall outlook suggests a range-bound pattern, offering opportunities for traders using range-bound systems. Despite potential buying opportunities, it is prudent to capitalize on profits promptly due to the market's erratic and choppy behavior. Natural Gas Appears Trapped in Prolonged Price Range_2

Natural Gas Appears Trapped in Prolonged Price Range_2

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Ukadike Micheal

Economic

European banks experienced a remarkable year in 2023, generating record profits propelled by a swift succession of interest rate increases. However, analysts predict a challenging path ahead, anticipating a 6.3% decline in combined net income for 11 major European banks in the current year compared to the €56.5 billion ($61.5 billion) achieved in 2023. Despite the projected dip, this would still represent the second-highest on record over the past two decades.

The robust performance in 2023, fueled by the European Central Bank's rapid interest rate hikes, allowed banks to charge more for loans while maintaining lower deposit costs. Yet, as inflation moderates and eurozone rates stabilize or decline, the tailwind that propelled their profits is expected to wane. This poses a particular challenge for banks heavily reliant on lending in their home markets.

Notably, about 80% of ING Groep NV's income is tied to interest, a vulnerability acknowledged by its CEO, Steven van Rijswijk. The Dutch lender, facing a potential hit of about €600 million due to weaker revenue from higher rates passed on to depositors, exemplifies the broader challenge faced by European banks. The impact on profitability is further exemplified by the fact that this surpasses the anticipated €200 million from lending growth.

While other major players such as Deutsche Bank AG and Banco Bilbao Vizcaya Argentaria SA confront similar challenges, efforts are underway to diversify geographically or explore alternative income sources. Deutsche Bank, for instance, has raised its mid-term revenue outlook, banking on a rebound in dealmaking to boost fee income. Similarly, Spain's BBVA, offsetting the slowdown in interest income with higher-than-expected revenue from fees and commissions, underscores the strategic importance of diversification.

As banks grapple with the headwinds of changing interest rate dynamics, the need for diversification becomes increasingly apparent. ING's caution and the subsequent market reaction highlight the urgency for institutions to adapt to evolving economic conditions. This challenges banks to explore new revenue streams and strategic shifts to maintain resilience in a changing financial landscape.

In contrast to the overall trend, French banks faced limitations in capitalizing on the interest income bonanza due to local rules making it difficult to raise rates on loans. BNP Paribas SA, adjusting revenue expectations, cited the European Central Bank's decision to stop paying interest on minimum reserves and Belgium's debt sale diverting deposits away from banks. Despite these challenges, European banks are set for a more profitable trajectory than the past decade, replacing loans issued during an era of historically low interest rates.

While the boost from rising rates might diminish in the current year, European banks are positioned for a higher level of profitability compared to the previous decade. This positive outlook is supported by the gradual repricing of fixed-rate mortgages, offering a sustained revenue stream despite the changing interest rate environment.

In summary, European banks face the challenge of maintaining profitability in the wake of changing interest rate dynamics. The anticipated decline in net income in 2024 marks a shift from the record-breaking year in 2023. However, the strategic efforts to diversify and explore alternative income sources illustrate a proactive approach among major banks. As the industry adapts to evolving economic conditions, the trajectory of European banks in the coming years will depend on their ability to navigate challenges, seize opportunities, and strategically position themselves in a dynamic financial landscape.

Source: Bloomberg

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Devin

Political

We can only understand the Ukraine War from the lens of a bloody European Game of Thrones.

The war is less about a single country than about the whole European security architecture or power balance. The Europeans have been more often at war with each other than not since the fall of the Roman Empire, with only intermittent periods of peace.

After Western Rome was destroyed by Germanic tribes in 476 AD, Christianity swept across Europe, but European kings and queens fought each other in between, fending off invasions from barbarians such as the Huns and Mongols. The kingdoms also fought over religion. The Byzantine Empire (395-1453 AD) was Orthodox, ruling from Constantinople, whereas the Catholic Church ruled from Rome, with the famous Crusades against the Saracens in the 11th-13th centuries, including the sack of Constantinople in 1204 AD.

As the economic historian Angus Maddison calculated, from 1500 AD — when the Portuguese and Spaniards discovered new routes to Africa, the East and the Americas — Europe, including Russia, had only 16.1% of the world population and 23.9% of world income, compared with the population giants China and India, which together had half of world gross domestic product and population respectively.

Over the next five centuries, Europe saw intense conflicts between the land powers of France, Germany and Russia versus the maritime powers of Spain, Holland and Great Britain. In between, smaller powers such as Portugal, Sweden, Poland and Austria-Hungary rose and fell. Unlike China, which had a unitary continental civilisation, no single European country managed to unify the continent. Instead, Britain used its maritime technology and skills to dominate the oceans, but skilfully played “divide and rule” with Europe and the rest of its colonies.

In the 16th century, the European wars took a religious tone, with the rising Protestant kingdoms of Sweden, Prussia, Holland and Britain fighting the Catholic kingdoms of Spain, France and Italy. After 1600, competition spilled over to land grabs for colonies or trading rights in the Americas, Africa, South Asia and Southeast Asia. This outward expansion was helped by superiority in military technology, with the conquest of Moghul India, even as China was conquered by the Manchus in 1644.

Intense European competition sparked the scientific and industrial revolutions, and even organisational and energy revolutions. In the 1600s, Britain and Holland contended as naval powers, fighting for control of the Southeast Asian spice trade. The British East India Company and the Dutch East India Company were chartered in 1600 and 1602 respectively. Thus began the first modern private companies designed to take over colonies, trade, shipping and treasure from the natives, Portuguese and the Spaniards. Technology, religion, greed and organisational power fused to carve up the world, forming what the West today calls “the rules-based order”. The West rules, the rest pays and obeys.

During this crucial period, the bloody Thirty Years’ War (1618-48) between essentially Catholic and Protestant monarchies in Europe ended with the famous Treaty of Westphalia. This established the secular principle that each country was sovereign over its internal affairs (free of interference from the Catholic Church and free to establish its own national church or choose religious freedom). Reason and raw power conquered emotion. Finders keepers was the ground rule, and all wars were settled through treaties.

It was during this period also that the Russians emerged from being a peripheral power to become a major player in European politics, particularly after Peter the Great (1672-1725) and Catherine the Great (1729-1796) made Russia not only a key market for sophisticated European goods, but also a major supplier of food and commodities. That situation has remained to this day.

Russian behaviour today stems from the country’s bitter experiences with Europe. These were the failed Napoleonic invasion of Russia in 1812, the Russian Revolution of 1917, the failed Nazi Germany invasion of Russia in 1943 and the collapse of the Soviet Union in 1991. The Russians are proud empire builders but bad economic reformers. They reached the Pacific Ocean in 1639, giving them the span of Eurasia from the Atlantic to the Pacific. Catherine the Great took Crimea from the Ottomans in 1783, opening up the Black Sea to Russian ships. At its peak in 1895, Russia covered 8.8 million square miles, second only to the British Empire, which at its peak in 1920 controlled 13.7 million square miles and 23% of the world population.

In 1900, the Eight Allied armies (Britain, Germany, Japan, Russia, France, the US, Italy and Austria-Hungary) occupied Beijing in the midst of China’s century of humiliation and unequal treaties. By 1905, Japan proved that it was an industrial and naval power by crushing the Russian Pacific fleet in the famous Battle of Tsushima.

World War 1 proved an unmitigated disaster for Europe. It started with the dismemberment of the ailing Ottoman Empire, with France, Germany and Britain fighting over Morocco (1905), annexation of Bosnia and Herzegovina by Austria-Hungary, Italy-Turkish war (1911), and finally fighting over the Balkans.

By 1914, Germany with Austria-Hungary and the Ottomans (Central Powers) faced Britain/France on the Western front and Russia on the Eastern side. Economic historian Paul Kennedy (The Rise and Fall of Great Powers, 1987) showed that although Russia was the population giant (171 million in 1913), its national income was only US$7 billion. The British Allies had US$30 billion in national income and 347 million people, more than double the German side’s US$15 billion in national income and 117 million people. This looked like an unequal fight, but German military and industrial skills were sufficient to fight the Allies to a standstill, until the US, already a behemoth in national income with US$37 billion and 98 million in population, joined the war in 1917. After that, German defeat was a foregone conclusion.

The Russians suffered 3.6 million casualties in World War 1. Such heavy losses caused the weakened tsar to abdicate in 1917. This led to the Bolshevik October Revolution, which pulled Russia out of the war.

World War 2 destroyed four monarchies: Russian, Ottoman, German and Austrian. Europe exhausted itself, so global power shifted to a rising US. Unfortunately, the 1919 Treaty of Versailles punished the Germans so much that by 1934, Adolf Hitler came to power under a nationalist (Nazi) platform, rearmed, signed a 1939 treaty with the Soviet Union under Joseph Stalin, and then started World War 2. This time round, the Germans were allied with the fascist Italians and Japanese.

When Germany launched a massive tank campaign against the Soviet Union in 1941, almost reaching the gates of Moscow, the Russians lost up to 27 million people defending the country, which is why they feel the West owed them respect.

In essence, after two debilitating world wars, Europe and Britain emerged broke and second rate players, with two continental sized powers (the US and the Communist bloc) eyeing each other.

This potted history explains the gap between the Russian and American/European elites. In each encounter with Western Europe and America, Russia suffered near defeat and invasion, including collapse. When the Soviet Union collapsed in 1991, Russia was totally humiliated. The Russian elites thus saw the eastward expansion of the North Atlantic Treaty Organisation (Nato) as threatening to Russia’s existence. If Ukraine joined Nato, missiles and tanks would be stationed only 300 miles away from Moscow.

Thus, there can be no European peace, without the Russians and the Americans sitting down to agree on the future of the European power balance.

The current power balance looks unequal. Ukraine (41 million people and US$66 billion in GDP) is too small to fight Russia (145 million and US$1.6 trillion GDP), but its army initially fought better than expected. Nato (949 million people and US$44.2 trillion in GDP) outclasses Russia, but its nuclear weapons mean that Nato would not want to engage in mutually assured nuclear destruction (MAD).

In other words, Ukraine is a Nato proxy war to wear down Russia. The effect will be like the war of attrition during the World War 1 when ultimately, industrial power made the difference. So far, Nato seems to have overestimated Russian military capacity, but underestimated Russian resilience against economic sanctions with the ability to inflict high economic costs to Nato in terms of energy and food inflation. The rest of the world seems to prefer to sit on the sidelines.

Rhetoric and disinformation aside, Nato is worried that if it drives China and Russia into one camp, the balance of power would be more equal (1.55 billion population and US$16.3 trillion in GDP). The longer the prolonged war of attrition, the greater the probability of an accidental or intentional nuclear conflict. This explains why, over time, even Germany and France want to see some kind of negotiation to end the fighting.

My observation is that when Nato declares that it must defend Ukraine (a non-Nato member) on a matter of principle, it is acting emotionally, like conducting a historical Crusade against the non-believers. Realists understand that no good can come out of a war of attrition. Our common enemy is climate change, we should not be fighting each other like alphas on a burning planet.

Unfortunately, we do not have a generation of statesmen who are able to negotiate peace; each is more concerned with his own political survival. When you call Vladimir Putin a devil, you cannot be seen to negotiate with a devil.

We cannot predict how the Ukraine war will unfold because there are too many unknowns waiting to happen. The disinformation from both sides is so bad that there is no objective source of information on conditions to negotiate peace. In peace, someone will have to lose face or lose ground. The biggest mistake is to believe your own lies and then underestimate the other side.

Winter is coming. Europe’s real Game of Thrones has no magic queens or dragons, only very weak leaders. Sadly, this is not fiction but a nightmare that we all have to confront.

Source: The Edge Market

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Alex

Bond

Economic

Everyone's guilty of it - but an obsessive guessing game over precise dates for the first central bank interest rate cuts this year seems increasingly pointless to many investors.

On the horizon of a two-year bond or longer, the exact timing of the first cut matters less than the fact rates are now set to fall this year and the extent of that down cycle is the only issue.

After two years of brutal credit tightening, the three main western central banks - the Federal Reserve, European Central Bank and Bank of England - signalled this both this week and last that the top is finally in.

Echoing ECB statements from last week, Fed chair Jerome Powell on Wednesday was pretty clear: "Our policy rate is likely at its peak... and... it will likely be appropriate to begin dialling back policy restraint at some point this year."

In an unusual step, he specifically doused market bets on a March cut but suggested easing was on the table thereafter.

Powell's Bank of England counterpart Andrew Bailey used different words to say much the same thing - although, by contrast, he pointedly refused to protest at market speculation. "For me, the key question has moved from 'How restrictive do we need to be?' to 'How long do we need to maintain this position for?'"

And so, as it stands, money markets are now fully priced for a first quarter point ECB cut in April, a first Fed move in May and a first BOE move in June.

That deck of dates may well be shuffled many times over the weeks ahead - not least as the seemingly confident official statements mask internal policymaker divisions.

BoE rate setters, for example, were split three ways on what to do with rates this week for the first time in 16 years - one vote for a cut, five for standing pat and two for another hike.

The dispersion of Fed policymakers' rate projections too is estimated to be as wide as it's been for a decade. And hawks and doves at the ECB slug it out verbally on a daily basis.

To be sure, the starting gun for market speculation on timing the first cuts sounded many months ago.

But now it's become a day-to-day, hour-to-hour obsession. Frenetic trading switches the prime month on futures and swaps back and forth between March, April or May and even out to August as strategists chop and change the rate horizon on each major data point or policymaker pronouncement.

No surprise in that - that's the lifeblood of short-term market trading that's intent on accurately pricing the precise timing of shifts in cost of money or relative currency values.

And it can matter to the wider economy too to the extent companies or households face refinancing deadlines early this year or imminent debt repayments.

By extension, central bankers, mindful of the lags with which their decisions hit the economy, also care about exact timing as it helps signal relative confidence in sustaining disinflation back to 2% targets - perhaps cooling upcoming wage settlements or helping prevent premature bank lending bursts. Dating First Rate Cuts A 'Red Herring' For Bonds_1

Dating First Rate Cuts A 'Red Herring' For Bonds_1

'Red herring'

But for investors in longer-term bonds, the top of the rate cycle and the now officially-blessed prospect of lower rates ahead makes the timing of the first or second moves somewhat irrelevant.

Far more important is the size and extent of that easing.

And despite Powell's sideswipe at March bets this week, the full extent of 2024 easing priced into markets actually rose 15 basis points to 145 bp this week.

"For the longer-term allocator, the risk/reward of being long the front-end is looking pretty good, based on two quite reasonable assumptions," TS Lombard's Skylar Montgomery Koning and Andrea Cicione told clients before this week's Fed meeting.

"The next move from the Fed will be a cut and 200bp is a reasonable minimum for cuts this cycle, whether the Fed cuts 150bp or 75bp this year."

Some 200bp of cuts to 3.37% would still leave Fed policy rates at twice the 20-year average and almost 90bp above what Fed policymakers see as neutral - and hence still 'restrictive' in Fed parlance - and that seems conservative in the scheme of things.

Even so, the TS Lombard strategists reckon that based on a 50-year average premium on two-year Treasury yields over Fed rates of some 30bps, then current two-year yields still at 4.20% offer good value whatever the exact time of the individual cuts.

Morgan Stanley analysts doubled down on that idea and said the March rate cut debate was now a "red herring" for longer-term bond investors.

"We think headlines around the March cut, or timing of the first cut in general, has limited consequences beyond the Fed funds contract pricing for the March meeting," its macro team told clients, favouring positions in five-year Treasuries.

Little wonder then that despite the March pushback from Powell - and alongside Fed signals that it would begin to discuss slowing its balance sheet rundown or 'quantitative tightening' at the next meeting - long-term Treasury yields continued to plummet on Thursday.

Ten-year Treasury yields were down 12bp to 3.84%

on the day, the lowest level this year and down about 35bp from the high set less than two weeks ago.

What could go wrong? Plenty that central banks were at pains to detail this week - a possible troughing of inflation still well above target around midyear, renewed fiscal or debt supply concerns, geopolitics and upcoming election jitters perhaps.

But based on an uncontroversial assumption that the klaxon for an easing has now sounded, the exact month of the first cut may no longer make much difference to investors at large. Dating First Rate Cuts A 'Red Herring' For Bonds_4

Dating First Rate Cuts A 'Red Herring' For Bonds_4

Dating First Rate Cuts A 'Red Herring' For Bonds_5

Dating First Rate Cuts A 'Red Herring' For Bonds_6

Source: CNA

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Justin

Economic

The U.S. labor market closed out 2023 in strong shape as the pace of hiring was even more powerful than expected, the Labor Department reported Friday.

December’s jobs report showed employers added 216,000 positions for the month while the unemployment rate held at 3.7%. Payroll growth showed a sizeable gain from November’s downwardly revised 173,000. October also was revised lower, to 105,000 from 150,000, indicating a slightly less robust picture for growth in the fourth quarter.

Economists surveyed by Dow Jones had been looking for payrolls to increase 170,000 and the unemployment rate to nudge higher to 3.8%.

A more encompassing unemployment measure that includes discouraged workers and those holding part-time jobs for economic reasons edged higher to 7.1%. That increase in the “real” unemployment rate came as the household survey, used to calculate the unemployment rate, showed a decline in job holders of 683,000 as the ranks of those working multiple jobs increased by 222,000.

The labor force participation rate, or the share of the civilian working-age population either employed or looking for a job, slid to 62.5%, down 0.3 percentage point to its lowest since February and down 676,000 on a monthly basis.

U.S. Payrolls Increased by 216,000 in December, Much Better than Expected_1

The report, along with revisions to previous months’ counts, brought 2023 job gains to 2.7 million, or a monthly average of 225,000, down from 4.8 million, or 399,000 a month, in 2022.

Major averages meandered through the day as markets reacted to a lower than expected reading from the ISM services gauge. The measure posted a lower than expected 50.6 reading, reflecting only narrow expansion, and the lowest level of the employment component since May 2020.

Treasury yields were mostly higher, particularly in longer duration.

The December hiring boost as reflected in the Labor Department report came from a gain of 52,000 in government jobs and another 38,000 in health care-related fields such as ambulatory health-care services and hospitals. Leisure and hospitality contributed 40,000 to the total, while social assistance increased by 21,000 and construction added 17,000. Retail trade grew by 17,000 as the industry has been mostly flat since early 2022, the Labor Department said.

On the downside, transportation and warehousing saw a loss of 23,000.

The report showed that inflationary pressures, despite receding elsewhere, are still prevalent in the labor market. Average hourly earnings rose 0.4% on the month and were up 4.1% from a year ago, both higher than the respective estimates for 0.3% and 3.9%. The average workweek edged lower to 34.3 hours.

U.S. Payrolls Increased by 216,000 in December, Much Better than Expected_2

Fed funds futures markets also reacted, lowering the odds of a March rate cut from the Federal Reserve to about 56%, according to the CME Group.

"Today's report speaks to the bumpy road ahead for the Fed's journey back to 2% inflation," said Andrew Patterson, senior international economist at Vanguard. "The decision of when to first cut policy rates remains one for the second half of the year in our view."

Friday's data adds to the case that the U.S. economy continues to defy expectations for a slowdown, despite an inflation-fighting campaign from the Fed that has produced 11 interest rate hikes since March 2022 totaling 5.25 percentage points, the most aggressive monetary policy tightening in 40 years.

At their December meeting, Fed officials released projections that indicate they could enact three quarter-percentage point interest rate cuts this year. Markets, though, expect the central bank to be more aggressive, with futures traders pricing in up to six cuts.

The belief that the Fed can start cutting is fueled by the view that inflation will continue to recede after peaking at a 41-year high in mid-2022. Inflation is still above the Fed's 2% target but has been making steady progress lower since the increases began.

However, Friday's report could challenge the market narrative of a substantially easier Fed.

"Jobs growth remains as resilient as ever, validating growing skepticism that the economy will be ready for policy rate cuts as early as March," said Seema Shah, chief global strategist at Principal Asset Management. "Indeed, the recent run of labor market data generally points in one direction: strength."

Economic growth has held solid after consecutive negative-growth quarters to start 2022. Gross domestic product is on track to increase at a 2.5% annualized pace in the fourth quarter, according to the Atlanta Fed’s GDPNow real-time tracker of economic data.

Consumers have been resilient as well. Holiday spending likely hit a record this year, rising 5% to $222.1 billion, according to projections by Adobe Analytics.

Source:CNBC

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Chandan Gupta

Traders' Opinions

Cryptocurrency

Bitcoin encountered a slight dip in Thursday's trading session, coinciding with the anticipation of Friday's Non-Farm Payroll announcement. In this volatile market, investors consistently perceive any price drop as an opportunity to go long.

The price hovered close to the 20-day Exponential Moving Average, and the upcoming non-farm payroll data release on Friday raised the prospect of bond markets influencing Bitcoin and other financial markets. Consequently, some degree of market fluctuation is anticipated.

Despite a somewhat less dovish stance from Jerome Powell during Wednesday's FOMC press conference, the fundamental setup remains largely unchanged. Key support levels, including the 50-day EMA, the $40,000 price mark, and ultimately the $38,500 level, continue to act as a safety net. Short-term prospects suggest ongoing sideways movement as market participants strive to discern the cryptocurrency's future direction.

The Bitcoin market had witnessed a significant rally of nearly 90% in anticipation of a Bitcoin Exchange-Traded Fund (ETF). Now that the ETF has materialized, investors grapple with the uncertainty of what comes next. While uncertainty prevails, it's not uncommon for markets to undergo consolidation phases following substantial gains.

For longer-term traders, the pivotal level to watch is $35,000. A drop below this threshold, currently approximately $7,000 below the current Bitcoin price, could lead to unfavorable market conditions. The presence of the 200-day EMA further reinforces this concern. Consequently, the prevailing sentiment leans towards buying Bitcoin during price declines. However, breaking beyond the $47,500 level, especially in the short term, may prove to be a challenging endeavor.

In conclusion, Bitcoin's recent price retreat and the impending economic data release have injected a degree of uncertainty into the market. Nevertheless, the cryptocurrency continues to exhibit resilience, with clear support levels and a general inclination among investors to see dips as buying opportunities. The $35,000 mark remains a crucial level to monitor, with potential consequences for the cryptocurrency's trajectory if breached. Bitcoin's future trajectory remains speculative as market participants navigate through this consolidation and adaptation phase. Bitcoin's Volatility Persists Amid Market Fluctuations_1

Bitcoin's Volatility Persists Amid Market Fluctuations_1

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Chandan Gupta

Traders' Opinions

Forex

Fundamental Analysis

The US dollar has shown a modest recovery against the Japanese yen, signaling a renewed sense of vitality in the currency markets. This upswing can be traced back to the enduring interest rate differential between the two currencies, a fundamental dynamic that has been a defining factor in shaping market trends for quite some time.

In the ebb and flow of the USD/JPY currency pair, there was an initial minor retracement during the recent trading session. However, the greenback managed to stage a comeback, rebounding notably from the 50-day Exponential Moving Average. This development is noteworthy and calls for careful observation, particularly against the backdrop of the imminent release of non-farm payroll data – a key economic indicator that often ripples through the financial markets.

As we navigate these market waters, it's crucial to contextualize the prevailing conditions within the anticipated noise surrounding the release of non-farm payroll data. This economic announcement is expected to exert a significant influence on the bond market, prompting a cautious stance for market participants. The overarching sentiment, however, suggests that the current scenario presents a potential buy-on-dip opportunity, indicating a favorable outlook for those looking to enter the market.

It's essential to underscore that concerns should only be heightened in the event of a breakdown beneath the 145 yen level. Such a scenario could signal a shift in market dynamics and warrant a reassessment of one's position. At present, the primary driving force in this market remains the interest rate differential, a factor that continues to wield substantial influence and provides ample room for trading opportunities.

Delving into the policies of the central banks governing these currencies adds another layer to the narrative. The Bank of Japan maintains a relatively distant stance from pursuing monetary policy tightening, indicating a commitment to a more accommodative approach. On the other side of the Pacific, the Federal Reserve is anticipated to embark on multiple rate cuts throughout the year, reflecting a divergent policy trajectory.

This substantial disparity between the policy stances of the two central banks underscores the appeal of holding the US dollar against the yen. The interest rate differential remains a pivotal factor, motivating traders to actively engage in this particular currency pair. The allure of the greenback is further accentuated by the anticipation of further rate cuts by the Federal Reserve, creating a compelling narrative for those seeking opportunities in the currency markets.

In conclusion, the recent rebound of the US dollar against the Japanese yen is not merely a blip on the radar but a reflection of deeper-seated market dynamics. The persistent interest rate differential, coupled with the upcoming non-farm payroll data release, shapes the current narrative. While caution is warranted in the face of potential market noise, the prevailing sentiment suggests a cautiously optimistic outlook, positioning the current scenario as a potential buy-on-dip opportunity for savvy traders. As we keep a keen eye on the 145 yen level and monitor central bank policies, the interest rate differential remains the linchpin in this ongoing currency market saga. USD Maintains Strong Position Against JPY with Consistent Buyer Interest_1

USD Maintains Strong Position Against JPY with Consistent Buyer Interest_1

Technical Analysis

The USD/JPY currency pair experienced a slight pullback in the recent trading session but managed to bounce back from the 50-day Exponential Moving Average (EMA). The key level to keep an eye on is 145 yen; a breach below this level would be a cause for concern.

On a positive note, if the pair maintains its position above 147.33, there's a potential upward movement towards 148.8 yen, with the next target being 149.8 yen. Conversely, a breakdown below the 50-day EMA could lead to a descent towards the 145 yen level.

The recent recovery of the US dollar against the Japanese yen can be attributed to the enduring interest rate differential. Despite a brief retracement, the currency pair found support at the 50-day EMA. The upcoming release of non-farm payroll data is expected to introduce some market noise and increased volatility. However, the current sentiment suggests a strategic approach focusing on value and seizing buying opportunities.

It's crucial to note that only a significant breach below the 145 yen level would warrant heightened concerns in the market. The overall dynamics continue to be influenced by the substantial interest rate differential, providing a favorable environment for trading within this pair.

In summary, the USD/JPY currency pair is navigating through minor fluctuations, finding support at the 50-day EMA. The potential for an upward move is highlighted above the 147.33 level, with targets at 148.8 yen and 149.8 yen. Conversely, a breakdown below the 50-day EMA could lead to a descent towards the 145 yen level, raising concerns.

The recent recovery of the US dollar against the Japanese yen is rooted in the persistent interest rate differential. Despite a brief retracement, the pair rebounded from the 50-day EMA, showcasing resilience. The upcoming release of non-farm payroll data is expected to inject some volatility into the market, but the prevailing sentiment suggests a strategic approach focused on identifying value and capitalizing on buying opportunities.

It's crucial for traders to keep a watchful eye on the 145 yen level, as a significant breach below this point would necessitate heightened concerns. Overall, the market dynamics revolve around the enduring interest rate differential, providing a conducive environment for trading within the USD/JPY currency pair.

In conclusion, the USD/JPY currency pair's recent performance reflects a nuanced interplay of factors, with the 50-day EMA serving as a crucial support level. Traders should remain vigilant, considering potential moves above 147.33 and the importance of the 145 yen level. The underlying interest rate dynamics continue to shape the market, offering opportunities for strategic trading within this currency pair. USD Maintains Strong Position Against JPY with Consistent Buyer Interest_2

USD Maintains Strong Position Against JPY with Consistent Buyer Interest_2

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USD Maintains Strong Position Against JPY with Consistent Buyer Interest

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