Bitcoin Analysis: Resistance Turned Support Insight

Solid ECN–Bitcoin trades in the bearish channel, as shown in the BTCUSD daily chart. Bears managed to close below the $59,598 resistance and are stabilizing the price below this level. As of writing, the BTCUSD pair trades near the broken resistance, which now acts as support.

From a technical standpoint, the trend remains bearish, and Bitcoin might dip to $50,940 in the subsequent selling pressure. For the scenario to come into play, the price should stay below the median line of the Bollinger band.

Conversely, if the BTCUSD price closes above the support at $59,559, the consolidation phase would extend further to the upper band of the flag.

NZDUSD - Awaiting RBA's Impact on NZ Policy

Solid ECN – The New Zealand dollar, commonly referred to as the NZD, has seen a notable increase, surpassing the $0.59 mark. This resurgence comes after a period of losses earlier in the week. The uplift was triggered by a retreat in the US dollar, which occurred following the Federal Reserve's decision to maintain current interest rates.

Adding to the momentum, Fed Chair Jerome Powell indicated that further rate hikes were unlikely, reinforcing the central bank’s current stance towards easing monetary policy.

Economic Signals in New Zealand

Recent economic data from New Zealand has shown some concerning trends, with the unemployment rate climbing to 4.3% in the first quarter of the year. This is the highest it has been in three years and surpassed economists' forecasts. Such figures hint at a possible shift in monetary strategy, potentially prompting the Reserve Bank of New Zealand (RBNZ) to lower interest rates earlier than the US Federal Reserve.

Anticipation for RBA’s Decision

As the market digests New Zealand's unfolding economic indicators, attention is now turning towards the Reserve Bank of Australia’s (RBA) upcoming policy announcement.

The decision is keenly awaited as it could have significant implications for New Zealand's monetary policy direction. Investors and economists alike are closely watching, with many predicting a rate cut by the fourth quarter. However, opinions vary, with some forecasts suggesting stable rates until 2025.

Pound Hits $1.26 as U.S. Jobs Disappoint

Solid ECN – The British pound has risen to its highest value since early April, reaching $1.26, as U.S. employment data fell below expectations, prompting a shift in interest rate forecasts for 2024. This surge comes as traders adjust their expectations for the Federal Reserve's rate cuts, now anticipated in September rather than November. The change in sentiment follows the April jobs report, which showed that the U.S. economy added 175,000 jobs, which was markedly lower than the 243,000 jobs economists had forecasted.

Impact on U.S. Economic Performance

The disappointing job growth has been accompanied by underwhelming wage increases and a surprise uptick in the unemployment rate. These indicators suggest a cooling in the U.S. labor market, affecting Federal Reserve policies. Originally, rate cuts were expected later in the year, but the new data has brought these expectations forward, reflecting concerns about economic momentum.

British Economic Outlook

In contrast, the Bank of England maintains a steady stance, with no changes expected in the upcoming rate decision. However, investors anticipate the first rate cut to occur in August, a slight advancement from previous estimates. Governor Andrew Bailey remains optimistic, citing a decrease in inflation to 3.2% in March, aligning closely with the target. This is Britain's lowest inflation rate since September 2021, signaling a potentially stabilizing economic environment.

Gold Prices Rise Amid Fed Speculations

Solid ECN – Gold prices climbed to $2,310 per ounce on Monday, rebounding from a near one-month low. This surge is influenced by anticipation of upcoming remarks from Federal Reserve officials, which traders are eyeing for hints about potential interest rate cuts.

This keen interest stems from recent U.S. labor data that indicated a slowdown in job growth last April, suggesting that the Fed might start reducing rates later in the year.

Interest Rate Expectations and Gold's Appeal

The possibility of reduced interest rates, which decrease the opportunity cost of holding gold, has bolstered the metal's attractiveness. According to the CME's FedWatch Tool, a rate cut by September is 67% likely.

Furthermore, geopolitical tensions, such as the fading hopes for a Gaza ceasefire reported on Sunday, have heightened gold's status as a safe-haven asset.

Global Gold Demand Fluctuates

Despite the price drop, gold demand in India remained subdued last week, with buyers waiting for further price declines. In China, gold premiums decreased for the second consecutive week, reflecting reduced demand during the holiday period.

USDCAD - Canadian Dollar Surge

Solid ECN – The Canadian dollar recently hit a high of 1.36 USD, marking its strongest position since early April. This rise comes amid a widespread weakening of the U.S. dollar, driven by disappointing labor statistics from the U.S. The data showed only 175,000 new jobs created in April, well below the anticipated 243,000.

This underperformance, coupled with slower wage growth and a slight increase in unemployment, suggests that the Federal Reserve may cut rates as early as September.

Economic Indicators in Canada

In contrast, economic signals from Canada also hint at an upcoming rate adjustment, with several key indicators underscoring potential economic challenges. The Manufacturing PMI fell to 49.4, indicating continued contraction in factory activity for the twelfth consecutive month.

Furthermore, the Canadian economy's growth was a modest 0.2% in February, with expectations of stagnation in March, signaling a possible earlier rate cut by the Bank of Canada.

Oil Prices Stabilize Amid Geopolitical Tensions

Solid ECN – WTI crude futures remained steady, trading at approximately $77 per barrel as of Tuesday. This stability comes despite the market being close to its nearly two-month low of $78.1, recorded on May 3rd. The current price balances ongoing geopolitical concerns and the global perception of an ample oil supply.

Impact of Middle East Tensions on Oil Prices

Despite escalating tensions in the Middle East, where the Israeli military cabinet has unanimously rejected a ceasefire agreement with Hamas, the situation has not severely disrupted oil shipments.

Notably, the absence of significant military escalations involving Iran has ensured that oil tanker movements through the critical Strait of Hormuz continue unimpeded. This situation has helped alleviate fears of potential new U.S. sanctions or disruptions in oil supply.

OPEC's Strategy and Global Oil Supply

In response to the current market conditions, Saudi Arabia has increased the official selling price of its Arab Light crude by 90 cents per barrel for June, exceeding market expectations by 30 cents.

This adjustment suggests that OPEC’s largest producer is likely to advocate for extending production cuts into the next quarter, aiming to stabilize prices and address the relatively loose supply on the global stage.

Canadian Dollar Climbs as US Jobs Disappoint

Solid ECN – The Canadian dollar peaked at 1.36 per USD, marking its strongest position since April 9th. This surge comes as the U.S. dollar experiences widespread weakness triggered by disappointing labor market data.

The U.S. economy added 175,000 jobs in April, falling short of the anticipated 243,000. This underperformance, coupled with a higher jobless rate and slowed wage growth, fuels speculation that the Federal Reserve might implement its first rate cut in September.

Economic Slowdown Signals Potential Rate Cuts in Canada

In parallel, Canada's economic indicators suggest a similar downturn, hinting at a possible earlier rate adjustment by the Bank of Canada. The Manufacturing PMI in Canada dropped to 49.4 in April 2024, signaling continuous contraction in factory activity for a twelfth consecutive month and falling below the expected 50.2.

Furthermore, with the economy only growing by 0.2% in February and predictions of stagnation in March, pressures mount for monetary policy adjustments.

BTC Bulls Eye Higher Targets Despite Price Dip

Solid ECN – Bitcoin broke out of the descending trendline (in blue), but the bulls failed to stabilize the price above the EMA 50 and the middle line of the Bollinger Band. Consequently, the pair formed a long-wick bearish candle on the daily chart. As of this writing, the BTC/USD pair has dipped and is currently testing the broken resistance at $61,896.

The technical indicators provide mixed signals. RSI hovers below 50, but AO is bullish, showing a green line.

From a technical perspective, the bullish outlook remains valid if the BTC/USD price remains above $61,896. In this case, the next target could be $67,333.

On the flip side, the downtrend will resume if the price falls below the support level, with $56,460 as the next support level.

USDJPY: Yen Holds Steady Amid BOJ Inflation Warnings

Solid ECN – The Japanese yen has shown relative stability, holding at about 155.6 per dollar following the release of the Bank of Japan's (BOJ) April policy meeting summary. During the meeting, the board highlighted potential inflation risks and deliberated on conditions that might necessitate future interest rate increases.

A significant focus was on the yen’s depreciation, which has been a key driver of escalating prices and draws particular scrutiny from the central bank.

BOJ’s Monetary Policy Outlook

Despite the inflation concerns, the BOJ plans to keep financial conditions accommodating and closely monitor the development of economic and price trends. This stance comes amid slowing wage growth in Japan for March, which complicates the BOJ’s projections of a positive feedback loop between rising wages and prices.

Furthermore, the yen's recent performance reflects a nearly 2% decline over the week, even amid indications of potential government interventions to stabilize the currency, following a sharp 5.2% rally from its lows, supported by about $60 billion in spending by the BOJ to defend its value.

Bitcoin Dips Below Key $61.9K Level



Solid ECN – Bitcoin dipped below $61,896 in today's trading session. The technical indicators are bearish, with the RSI hovering below 50 and the Awesome Oscillator bars in red.

From a technical standpoint, the downtrend momentum that started earlier this week will likely continue, with the median line of the Bollinger Band acting as resistance. If BTC/USD remains below this line, the next milestone for sellers will likely be $59,559.

Conversely, the bearish outlook could be invalidated if the price crosses and stabilizes above $62,702.

Key Reports to Influence Gold Prices

Solid ECN – Gold prices soared to $2,350 per ounce this past Friday, reacting to traders' expectations of a Federal Reserve rate cut. The anticipation grew after Thursday’s economic report showed a surprising increase in Americans filing for unemployment benefits, hinting at a potential cooling of the labor market.

Such economic indicators often lead to a softer approach to interest rates, benefiting assets like gold, which thrives in lower-rate environments.

Monitoring Future Economic Indicators

Investors and traders are now poised to closely analyze the upcoming Consumer Price Index (CPI) and Producer Price Index (PPI) reports. These indicators will provide further clarity on the Federal Reserve's stance.

Despite some Federal officials expressing caution about easing policies too quickly, the general sentiment leans towards reducing rates, especially with pressures from global economic uncertainties and market demand.

Influences on Gold’s Market Performance

Significant factors such as increased over-the-counter market investments, ongoing central bank acquisitions, and rising demand in Asian markets continue to push gold prices upward.

Additionally, geopolitical tensions in the Middle East and Ukraine are escalating, further increasing gold's appeal as a safe-haven asset. With these dynamics, gold is on track for a 2.2% weekly gain.

Gold Prices Steady Amid Economic Slowdown

On Thursday, gold prices were stable at around $2,330 per ounce due to weak US economic data, raising hopes that the Federal Reserve might lower interest rates soon. Recent figures indicate that US retail sales have stagnated, reflecting a decline in consumer enthusiasm.

This slowdown in spending, combined with signs of less tension in the labor and price sectors, has led the Federal Reserve to wait for more evidence of diminishing inflation before potentially reducing interest rates later this year. Austan Goolsbee, President of the Chicago Fed, praised the latest consumer price inflation figures on Tuesday as "excellent" and remained hopeful about continued easing of inflation.

Investors are now looking forward to this week's jobless claims and the upcoming purchasing managers' indexes on Friday to gain further insight into consumer behavior and overall economic health.