Forex
Euro: Parity calls are very much in play when it comes to the EUR/USD pair. The conflict in Ukraine is expected to push German recovery in despair.
Investor confidence in Europe's largest economy is at its lowest level since the outbreak of the epidemic, as businesses continue to be concerned about the consequences of the crisis on the EU's border. The ZEW institute's gauge of expectations decreased to -41 in April, down from -39.3 the previous month, while the indicator of present circumstances worsened.
The weakness in the euro is likely to prevail, and this is despite the fact that with every day passing, we hear more and more hawkish tones coming from the European Central Bank. However, currency traders are completely ignoring those calls as they are more focused on the dollar index and its strength. The fact that some members of the Federal Reserve have renewed speculation that the Fed could still increase the interest rate by 75 basis points has brought more strength to the dollar index.
Having said that, Euro bears should keep in mind that the European economy could farewell than current expectations, and this represents a significant risk to the Euro-dollar parity call. For instance, the Governing Council could potentially become immensely sensitive to headline inflation, or wage growth in the Eurozone could see a sharp rise—although this isn't a likely scenario. All of this could push the interest rate hike much forward, and we could potentially see an interest rate by the ECB as early as July.
Cryptos
Bitcoin price retraced to 30K price level, which we predicted in our yesterday's comment. There is no doubt that the Bitcoin price is extremely oversold, and the message of this can be seen by looking at the RSI indicator on the daily time frame chart, which tells us that the price is oversold. In addition to this, the 30K support level is of extreme importance among traders, and no one wants to see the price falling below this price level as it will seriously damage the price action.
It is important to keep one thing in mind, and that is bitcoin price at its current does represent a huge bargain opportunity, and it will not be long before we start hearing funds and corporates bagging bitcoin at its current price levels. For instance, yesterday, El Salvador bought more Bitcoins, and this continues to send one message and one message alone, and that is sheer determination to back bitcoin no matter what.
Technically speaking, on-chain transaction analysis also confirms that Hodlers are still unshaken by the current price action, as transaction analysis doesn't seem to suggest that Hodlers are liquidating their positions.
However, if the price breaks the 30K price level, it is highly possible that we may see some capitulation taking place, and that could bring another wave of intense sell-off for Bitcoin.
The information is purely for education purposes only and cannot be perceived as an advise.
Recommended Content
Editors’ Picks
EUR/USD struggles to hold above 1.0400 as mood sours
EUR/USD stays on the back foot and trades near 1.0400 following the earlier recovery attempt. In the absence of high-tier data releases, the cautious risk mood helps the US Dollar hold its ground and forces the pair to stretch lower.
GBP/USD declines below 1.2550 on renewed USD strength
GBP/USD loses its traction and trades below 1.2550 in the second half of the day on Monday. The US Dollar (USD) benefits from safe-haven flows and weighs on the pair as trading conditions remain thin heading into the Christmas holiday.
Gold drops to $2,620 area as US bond yields edge higher
Gold struggles to build on Friday's gains and trades modestly lower on the day near $2,620. The benchmark 10-year US Treasury bond yield edges slightly higher above 4.5%, making it difficult for XAU/USD to gather bullish momentum.
Bitcoin fails to recover as Metaplanet buys the dip
Bitcoin hovers around $95,000 on Monday after losing the progress made during Friday’s relief rally. The largest cryptocurrency hit a new all-time high at $108,353 on Tuesday but this was followed by a steep correction after the US Fed signaled fewer interest-rate cuts than previously anticipated for 2025.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.