Forex Today: Cryptocurrencies, Stocks, Commodities Bounce Back

Adam Lemon

Markets see a notable improvement in risk sentiment, with stocks, cryptocurrencies, and commodities rising firmly, while the Japanese Yen and US Dollar weaken.

  • Markets are dominated by a recovery in risk sentiment:
    • Stock markets are rising everywhere, despite the mostly bearish long-term trends.
    • Major cryptocurrencies continue their recoveries from technically significant breakdowns last week. It seems the danger of a catastrophic meltdown has passed.
    • Risk currencies are strong, notably the Australian Dollar, while the safe havens the Japanese Yen and US Dollar are selling off. We are seeing firm upwards movement in AUD/USD and AUD/JPY over the short term.
    • Agricultural commodities are rising firmly, with several threatening to make significant new high prices.
  • The major cryptocurrencies seem to have survived a major technical scare last week in which they threatened to make massive declines in value after the price broke down below crucial long-term support. This suggests there may now be a longer-term bullish opportunity in the major cryptos.

  • Bitcoin/USD broke below crucial support at $28,800 and traded as low as $25,400 before recovering with a daily pin bar / bullish reversal to settle above the psychologically important $30k level.
  • Ethereum/USD broke below crucial support at $2,041 and traded as low as $1,700 before making a strong bullish recovery to trade above the old key resistance level at $2,048. Bitcoin looks a bit stronger than Ethereum.
  • The Governor of the Bank of England Andrew Bailey yesterday warned of a “very real income shock” coming from higher energy prices plus “apocalyptic” food prices for the UK, as he testified before Parliament. However, the Pound continued to strengthen against both the Euro and the US Dollar.
  • The Reserve Bank of Australia’s Monetary Policy Meeting Minutes showed RBA were close to a stronger rate hike last month than the 0.15% it went ahead with, giving a slight hawkish tilt and sending the AUD higher against other currencies.
  • Later today there will be releases of US Retail Sales data and Australian Wage Price Index data.
  • Daily new coronavirus cases globally fell last week for the eighth consecutive week.
  • It is estimated that 65.6% of the world’s population has received at least one dose of a coronavirus vaccination, while approximately 6.6% of the global population is confirmed to have contracted the virus at some time, although the true number is highly likely to be much larger.
  • Total confirmed new coronavirus cases worldwide stand at over 523.2 million with an average case fatality rate of 1.20%.
  • The rate of new coronavirus infections appears to now be significantly increasing only in Saudi Arabia, Costa Rica, the USA, Australia, Barbados, Dominica, Panama, the Solomon Islands, South Africa, and Taiwan.
  • The Chinese state is maintaining its “zero covid” strategy, and new cases have begun to fall. Recent lockdowns have caused economic disruption and damage, but restrictions will be lifted in Shanghai next month.
Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.
Learn more from Adam in his free lessons at FX Academy

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