Last week, we saw a wave of hawkish sentiment after the FOMC press conference which included some bullish statements from Jerome Powell, the chair of the U.S. Federal Reserve.
Even though the rate hike expressed a slowdown as the incremental increase was 25 basis points less than the previous consecutive hikes, the market did not receive the minutes as bearish as we saw the terminal rate increase to 5.1%. This may point to the fact that we should see rate hikes up until march of next year.
The Fed also made it clear that they would now lower rates until 2024 which is extremely hawkish. Additionally, they mentioned that in 2024 they would cut rates by a full percentage point.
Gold fell on the hawkish statements but not enough to entice a reversal. We saw retracements across the market followed by consolidations into Friday close, however, we can conclude that the trend is still being followed.
According to analysts, the Dollar is still short and all other assets can be traded against it.
In today’s DIFX Analytics, we’re going to look into the following assets:
Bitcoin is expecting more downfall
Bitcoin fell over the weekend to hit the $16,600 support. Here it was held and started to consolidate with RSI heavily oversold, giving a reading of 27-36.
The digital asset market has been reactive to the price of the Dollar and analysts are eyeing to see what trend develops before forecasting price action in crypto.
If we see the dollar fall and continue trending downwards, we can expect crypto to gain. Traders can expect the opposite if the dollar reverses to the upside.
Dollar consolidates after rate hike week
The Dollar is trading at $104.6 at the moment. Price action is trending downwards as it hovers near the 50-day EMA on the 4-hour chart.
We could expect consolidation over the holiday season as traders take some time off and there is less volume in the market.
The support levels are at $104.17 and $103.47 and the key resistance levels are marked at $105.2 and $105.8.
Ether hit $1155 and rebounded to the upside
Ether has decreased significantly over the weekend and is now trading at $1180. We saw a selloff in crypto going into Saturday followed by sideways moves throughout the weekend.
We are anticipating a trend to be solidified in the Dollar market before crypto settles on a direction.
If $1155 is broken then we can expect more downside price action until $1080. Otherwise, we can see upwards momentum up to $1200.
Gold trending sideways
Gold briefly traded sideways around the $1780 range towards the end of last week post the FOMC meeting. The market still seems to be pricing in whether the statements were hawkish enough to cause a reversal in the trend.
Gold is trading at the 50-day EMA which has usually been rejected to the upside recently but after the rate hike, we are seeing consolidation throughout the market.
We saw a rejection upwards to $1790 and for now, we await to see whether price action will turn bearish or continue bullish.
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DIFX shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained. The contents of this publication should not be construed as an express or implied promise, guarantee, or implication by DIFX that the forecast information will eventuate, that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. Trades in accordance with the recommendations in an analysis, especially leveraged investments such as foreign exchange trading and investment in derivatives, can be very speculative and may result in losses in particular if the conditions or assumptions used for the forecast or mentioned in the analysis do not eventuate as anticipated and the forecast is not realized.