Losses for the Euro, search for direction in Bitcoin.
Losses for the Euro
The Euro emerged as a big “loss” in the currency market last week (7 – 11 February), recording total losses of 8% against the 7 currencies of the world’s strongest economies (USD, GBP, JPY, CHF, AUD, CAD, NZD). The biggest drop was against the Australian dollar with the exchange rate closing Saturday morning at 1.5893 from 1.62 which opened at last Monday.
This pair (EUR/AUD) has shown a persistent sideways movement on the weekly chart since the beginning of 2018 with the only exception being the first half of 2020 presenting several buying and selling opportunities in this range.
Commodities: Gas is the exception
At the same time with the backdrop of the ongoing crisis in Ukraine as a backround and the fear of inflationary pressures in developed economies the prices of most commodities again fluctuated with gains with the only exception being Natural Gas whose price continues to fall from the highs of $6.50 in early October last year to the $4.00 it is currently at.
The buyers’ momentum lasted for two consecutive weeks and the hopes of the cryptocurrency king’s fanatics for a new price rally to the 2021 highs have been raised. But it seems – at least at the time of writing these lines – that the $46000 level is a good “resistance” since the retreat from there was quick and drastic.
I remind you that in mid-January bitcoin had tried to break through these levels without success, eventually rolling to $33000. An emphatic break of these limits would also be a confirmation that we have entered a new upward cycle.
The important move of Friday 11/02
Regarding gold I pointed out last week: “…If the upwards scenario comes true (which technically seems very likely) we will see the price move back towards the recent resistance of $1850, depending of course on the developments that will occur in the market in general, especially with the pressing issue throughout the Western world, which the rise in inflation and the question of whether it is an occasional problem or whether it is taking on structural and long-term characteristics…”
The significant move on Friday 11/02 that sent the precious metal close to 1870 (with a daily gain of 2%) verified this exact scenario that seemed very clear from its chart.
At where we are today it is also clear that we will either rejoin the trendline (with a temporary prevalence of sellers) for a new launch towards the next “resistance” of $1910 or alternatively the uptrend will continue uninterrupted up to that point as there is no major resistance in between.
My assessment is that at the market opening and at the latest within the first few days of the week a consolidation at these levels maybe even a bit more towards $1870 makes the second scenario more likely. The verification of this second case could potentially act as a catalyst for the verification of all those analysts who predicted that in 2022 the price will reach and exceed $2200.
Finally, I note that the seasonality of gold over the last 25 years acts as a significant “green light” for traders who also consult this factor but with a time limit until February 20-25 and of course with an entry point not at the “highs” we are now.
In anticipation of a “Pullback” in Copper
In forex-art we are currently holding our open positions in Petroleum (Oil) and Silver hoping that both commodities will extend their (already good) gains in the next period while at the same time I am waiting for a pullback in Copper near $4.30 to enter this commodity as a buyer.
I will see you again most likely in two weeks but until then stay tuned for updates and new trading signals at forex-art.com, have a nice week and good trading everyone! Make time for your family, friends and hobbies and don’t expose yourself to more than you can afford to lose. Demetrios