市場新聞與洞察

The recent price action of the Bitcoin suggests that the leading cryptocurrency may be ready for another sell off. Since last November when the currency peaked it has seen a sharp decline with retracements along the way. With inflation and recessionary pressures prevalent short-term volatility remains high as the market determines how to price the asset.

The Jackson Hole symposium is set to begin on Thursday in the USA and may effect the price in the short term if bullish or bearish sentiment comes from the event. The Chart The long-term outlook for Bitcoin is bearish. With constant sell downs and both the 50 Day and 200 day moving average both firmly pushing towards the downside.

Furthermore, the price has not been able to sustain any significant rally and has broken through its major support at $30,000 USD. Recent Price Action The concern for BTC is that it has sold out of the channel that it had been consolidating in and has therefore rejected the upward move. Similarly, the price has followed this action, twice before with both resulting in sell offs.

These patterns appear as traps for bulls because, buyers begin to feel FOMO and then enter long only to be ‘fake out’ as sellers soak up the buying volume and then continue to push the price back down. The RSI also supports more selling as it currently sits at 38 whilst the prior sell offs reached below 20. The RSI also looks to have made a triple top as shown in the chart further indicating that sellers may be ready to drive the price down further.

The concern for buyers is that this current sell off may not be finished. The 5-hour pattern looks to be forming a bear flag/pennant. If the price can break below it may fall to the next support at $17,000/18,000 USD.

This pattern is to be expected and is just reflective of sellers taking a breath before they continue to push the price lower. The price has also fallen back below the 50-period moving average indicting short term bearish sentiment. If the short-term target of $ 17,000/18,000 USD cannot hold the next target is the $13,500 USD level.

Iron ore prices have continued to rally to a six-month high this week, due in part to reports of potential easing of China’s strict COVID-19 policy and their signs of improved steel demand. The Singapore Exchange has the iron ore futures price reaching $165 USD a tonne on Tuesday, this is the highest level since July 2021. The price increase could have been attributed to a report that concluded that Beijing was considering potentially moving away from a zero-tolerance approach to COVID-19.

If this occurs, it could potentially put an end to the stop-start nature of China’s economic activities which has been happening since the start of COVID-19 pandemic. Another report indicated that experimental opening measures could arrive in a few select cities across China as early as June, which will coincide with the beginning of their Summer. A potential sign that China’s stimulus is contributing to rebound in growth can be evident earlier this month with the release of China’s Manufacturing Purchasing Managers Index (PMI).

The PMI had increased to 50.2, which was greater than the economists’ consensus of 49.8. Some experts and economists believe that the PMI’s figures released next month of March will likely provide a better indication of the true state of China’s economy, given the effects of the Lunar New Year period in the first two months of the year. Iron ore supplies could also heavily affect its global price.

There are concerns about the supply disruptions caused by the conflict between Russia and Ukraine, given their iron ore sector accounts for 100 million tonnes and 81 million tonnes a year, respectively. Heavy rain in the south-east of Brazil earlier this year, linked to the La Nina weather pattern, has forced producers to cease operations. Brazil is the second largest iron ore producer behind Australia, producing almost 400 million tonnes compared to Australia’s 900 million tonnes.

The increase in price to iron ore and energy has driven the AUD/USD to reach a new four month high of 74.41 US cents. Commonwealth Bank (CBA) believes that the currency is currently on track to end the first quarter near 74 US cents. They have updated the fair value estimate of the Australian dollar following the release of the RBA’s commodity price index for February.

CBA’s fair value for the AUD/USD ranges between 78-90 US cents, centred on 84 US cents. All in all, the AUD/USD has a healthy positive correlation with the price of iron ore due Australia being the largest producer. Investors can research the supply and demand of iron ore to achieve a good potential indication of the strength of the AUD/USD.

If you would like to take this opportunity to trade on the AUD/USD and require a trading account, you can open a trading account with GO Markets. Source: GO Markets MT5, Tradingview, Tradingeconmics, Statista, WSJ, Science.org, AFR

Gold has seen a resurgence in the past few weeks on the back of inflationary pressure and geopolitical tensions in Ukraine and Russia. Prior to the conflict, the price of Gold was hovering around $1,800 USD per ounce. After pushing through $2000 USD per ounce the price is now moving closer to its all-time high at $2070.

The rise in other commodities such as Oil, Gas, and Coal has also added to the rise in the price of Gold as concerns of inflation are increased, the interest in Gold usually follows. An interesting comparison can be made with regards to the increasing price of Oil. Whilst both commodities can be used as hedges against the market, Gold provides a more stable option whilst Oil is the more volatile option.

Both have seen strong rises due to the conflict and whilst Oil’s has been more meteoric, Gold has been steadier, as can be seen in the chart below. Gold has also performed extremely well against Bitcoin and other cryptocurrencies during the volatility that has been caused by the conflict. There was potential for Bitcoin and Cryptocurrency to provide a hedge against the market, however Bitcoin has been outperformed by Gold at this point.

Gold vs BTC vs Oil An interesting quandary to the Gold rise is the geopolitical element. For instance, Russia’s central bank purchased more Gold in 2021 than all other central banks, except for those in India and the United Arab Emirates. This means that there may be a shortfall in supply.

Technical Analysis The long-term chart has shown a long period of consolidation ultimately forming a symmetrical triangle pattern from which the price has broken out. It saw a big rise during the beginning of the pandemic and reached a maximum price of $2075 USD per ounce. When the price broke out of the triangle, initially an increase in relative volume occurred.

In addition, the retracement of the breakout was short-lived, and buying pushed the price up relatively easily. Another symmetrical triangle formed on the four-hour chart on the breakout of the breakout. Once again there was a strong increase in volume for the intimal move before it began the price began to contract again.

These continual price contractions and triangles forming may indicate that supply is being soaked up and that buying demand is present. On the four-hour time frame, it can be observed that the short sharp periods of consolidation have continued to be formed. Importantly, the consolidations have been relatively short, with in a tight range and broken with a high level of volume.

If volatility continues to be prominent and Inflation remains a threat, Gold will likely remain relevant. It will be interesting to see what happens with the price, if it is able to push through the all-time high price of $2075 per ounce.

For the last 2 years, Gold has been bouncing in a range between $1700 and $2070 and is currently testing the major support level around $1700 as seen below. The price has used the yellow highlighted as an area for support zone and a rejection zone. Over the last 2 years clear rejections have occurred every time the price has reached around $1700’s.

These candlestick rejections indicate a high probability of something similar potentially happening. We find further confluence of this analysis by looking at the weekly time frame, where Gold has broken above the trend line, and has now come back to retest it. This can often result in a bounce off the trendline, creating the start of a new uptrend.

If Gold continues to remain above the trendline and can hold the monthly support, it may indicate that it is in the early stages of a potential reversal. This may lead to another move toward the $2000’s.

The first quarter of 2020 was marred by unpredicted events that rattled the financial markets: Tensions between US and Iran; The extreme weather conditions across the globe as a result of climate change; The novel coronavirus; and An oil price war between Saudi Arabia, the oil kingdom, and Russia. A Trio of Crises Faced by an unprecedented health crisis that caused an abrupt slowdown of activities, forced by governments and an oil crisis derived from a simultaneous demand and supply shock, the world is currently bracing for an economic recession. The markets tumbled like dominoes hit by various headwinds at once.

The freefall in the markets has forced central bankers and governments to implement various stimulus packages, emergency rate cuts and engage in significant bond-buying. Confidence has taken a massive hit as the world faces unprecedented quarantines measures! Volatility Index (VIX) A look at the CBOE Volatility Index shows how investors are reacting to the impact of the coronavirus on markets and the economy.

Also known as Wall Street’s fear gauge, the index is a real-time market index that represents the market expectation of 30-day forward-looking volatility. The Index, on average, has been around the 20 levels but increased to decades high at 82.69 on the 16 th of March 2020. The sharp rise is the reflection of fears and anxieties prevailing in the financial markets.

Source: Bloomberg Stock Market Busts and Circuit Breakers Circuit breakers were first introduced in the 1980s to curb panic selling. For the US exchanges, the S&P500 is used as the pricing reference to measure a market decline and there are currently three levels to the circuit breakers: Level 1 (7%) Trading will halt for 15 minutes if the drop occurs before 3:25 p.m. At or after 3:25 p.m.—trading shall continue unless there is a Level 3 halt.

Level 2 (13%) Trading will halt for 15 minutes if the drop occurs before 3:25 p.m. At or after 3:25 p.m.—trading shall continue unless there is a Level 3 halt. Level 3 (20%) At any time during the trading day—trading shall halt for the remainder of the trading day.

There were four circuit breakers in one month which is a record number ever since circuit breakers were first introduced! The novel coronavirus has created such uncertainty around the globe, which has caused plunges in global equities. Despite the VIX easing to 65.54, further wild swings seem certain in the next couple of weeks.

Source: Bloomberg Rescue Packages In such plunging markets, the focus has been on the rescue packages. Some world leaders were complacent at the beginning, however, we are now seeing highly coordinated intervention measures flooding the markets in an attempt to cushion the effect of the COVID-19 on the global economy. Central banks issued emergency rate cuts as well as other policy tools like quantitative easing (QE).

Major countries like Australia and New Zealand were forced to join the QE wagon to support their respective economies. Governments issued various massive stimulus packages to relieve consumers and businesses from the coronavirus fallout. The US stands out with a $2 trillion stimulus package, the biggest in history.

The rescue packages have not necessarily addressed the full extent of the economic pain which yet to be seen in the coming months, but have provided some relief to wounded economies. Stock Market – A Degree of Calm In the first quarter of 2020, it is evident that the 11-year bull run in the stock markets was over. Major equity indices dropped in bear market territory in what was the worst week since the global financial crisis.

Source: Bloomberg The stock market went on a roller coaster ride as investors pulled out of riskier assets. The degree of calm is driven by various interventions in the financial markets. But, the worst of the virus is not yet over and it may not yet be a lasting rebound.

It could well be a dead cat bounce. Notwithstanding, there are not enough signs to predict whether the stock market has found a floor or is yet to find a bottom. There are too many uncertainties to start pricing-in a recovery.

FX – The King Dollar? The currency market is on the same wild run as other markets. The immediate attention falls on the King dollar.

In the early stage of the outbreak, the US seemed relatively unfaed by the virus and the greenback gathered strength as a safe-haven compared to the rest of the world. As panic gripped markets, dollar funding pressures drove the US dollar index to a 3-year high above the 102 level. Source: Bloomberg Even though the greenback has somewhat retreated as policymakers stepped in to enhance flows, the US dollar index remains in elevated levels just below 100.

A significantly bigger stimulus package compared to its peers are fuelling hopes that the US economy would probably recover faster than other major economies. Gold – The Safe Haven The price movement of the precious metal also depicts the turmoil in the markets. At the start of the year, the US dollar and Gold were moving in tandem due to the prevailing uncertainties.

QE, low-interest rates, trade frictions, geopolitical tensions, global debt and growth uncertainties, gold hoarding by central banks have driven the gold price to a high of $1,680.47. Gold was liquidated due to the wider and rapid spread of the coronavirus across the globe. The precious metal is viewed as a highly liquid asset and investors were in a need of cash due to margin calls and other liquidity requirements.

The greenback and the US dollar have therefore started to diverge from each other. COVID-19-induced liquidity issues caused the yellow metal to plunge to a low of $1,471.24. Source: Bloomberg Once investors were reassured that central bankers are injecting money into the financial system, investors resumed the buying of gold as a safe-haven.

At the same time, gold is facing disruptions in the physical markets due to the shutdown of gold refineries leading to a shortage of gold. A combination of positive fundamentals, weaker US dollar and rescue packages lifted the XAUUSD pair back above the psychological level of $1,600. Source: Bloomberg The economic backdrop is creating a bullish environment for the precious metal.

Amid high volatility, Gold traders are likely going to keep monitoring any updates on the virus, liquidity in the financial markets, and the strength of the US dollar for fresh trading impetus. Volatility Means Opportunities Human lives and the global economy are at risk. The coronavirus has heavily impacted the way the world operates.

Even though the worst of the health crisis is not over yet, and many countries are bracing for another brutal quarter ahead, the health crisis will ease and end at some point. It is not all gloomy in the investment space despite the sharpest falls in history. The panic-driven volatility might present investment opportunities.

Investors will likely be in search of bargains by buying at rock-bottom prices once the number of coronavirus cases starts to slow down. An oil storage problem, higher storage costs, faltering demand and a significant rise in production are creating a perfect storm for the oil market.

The Euro has fallen to 20-year lows as it deals with increasing energy prices and increased bond yields as recession fears rise again. Across both the UK and Europe inflation has been especially high even compared other countries such as Australia and the USA and in response, the EUR has taken a large hit. The recent spike in energy prices has brought back fears into the market that inflation has not yet peaked and will continue to rise.

Two potential opportunities are on the EURCAD and the EURUSD. Firstly, on the EURCAD the price is sitting just above its long term supports and its lowest levels since 2015. With seemingly no fundamental reason for the price to bounce in the short to medium term, it is possible the price sells through the 1.30 CAD level and falls further to the 1.21/1.20 level.

The 50-week moving average is almost in a free fall as the currency continues to sell. In addition, the RSI, whilst in oversold territory, is forming a descending triangle. This indicates that sellers may be gearing up again to begin another move down below the 30 RSI level.

Whilst the EUR continues to be smashed there is always the potential that the market will see value and see a rally in the pair. Therefore, it is important to have risk management tools in place such as a stop loss. A stop loss could be set above 1.32 which would represent a potential risk reward of almost 2.5:1.

The EURUSD is following is showing an even more aggressive sell off. The EUR has fallen to 20-year lows vs the USD. The worrying sign is that the price has faced very little resistance since it began diving in January 2022.

Every long-term support has been sold through with without much of a pullback. With the 1.00 USD level expected to be a tougher level to sell through, short opportunities still exist. The next level of support is around 0.95/0.96 USD which is the next logical target for a short entry.

However, once it reaches this level, it may prove very difficult to fall lower as it would me mean breaching 50 year low prices.