Ukraine optimism, Chinese fears & a busy economic calendar
Bitcoin => The cryptocurrency remains below 40k
DAX => The index falls away from 14000
GBP/JPY => The pair trades at a weekly high
Bitcoin stays below 40k despite EU vote
The cryptocurrency barely reacted to the rejection of a proposal that would have effectively banned the mining and transaction of energy-intensive cryptos such as Bitcoin in the EU.
The European parliament’s economic and monetary affairs committee voted against the proposed rule but instead voted in favour of a uniform legal framework for cryptocurrencies in the EU, including consumer protection and safeguards against financial crime as well as market manipulation.
Despite the good news, Bitcoin continues to trade range-bound, supported on the one hand by those looking to buy and hold Bitcoin long term, which is being offset by short-term sellers.
Bitcoin is often considered a hedge against inflation.
Today US wholesale inflation is due to be released and could spark some action in the cryptocurrency ahead of tomorrow’s Fed announcement.
| U.S. PPI inflation YoY Feb | Expected: 8.7% (0.4%) | Previous: 8.3% |
Where next for BTC/USD?
BTC/USD trades rangebound, in a holding pattern, capped on the upside by 45000 and on the lower band by 37000 and has traded within this range since mid-January.
While the price trades below its 50 & 100 sma favouring the sellers, the RSI is neutral, giving away few clues.
A break-out trade is needed here, and with the Fed rate decision due tomorrow, this could be the week of the breakout. Sellers will look for a move below 37,000 towards 34300 the February low ahead of 33,000 the 2022 low.
Buyers could look for a move over the 50 & 100 sma at 40300 and 43000 ahead of 45,000. A move over 45000 could open the doors to 50,000, the psychological level.
DAX eases on China concerns, German sentiment data due
The DAX closed 2.2% higher on Monday, adding to a 4% gain across the previous week.
Hopes of progress in Russia Ukraine peace talks boosted risk sentiment even as the shelling of Ukraine cities continued. Talks paused overnight and are set to resume again today.
The DAX is edging lower today as markets continue to monitor Ukraine developments and as China sees a rapid spread in COVID cases prompting lockdown restrictions. German ZEW economic sentiment data will focus.
Expectations are for investor confidence to fall steeply as the Ukraine crisis continues.
GBP/JPY rises ahead of UK unemployment data
GBP/JPY rallied 0.4% yesterday, building on gains of 0.7% across last week.
The risker pound pushed higher as risk appetite rebounded on hopes of diplomacy, as Russia Ukraine peace talks appeared to be moving in the right direction, albeit slowly.
Meanwhile, the safe-haven yen came under pressure.
Today the pair is rising again as attention also turns to UK jobs data. The UK unemployment rate is expected to tick lower, and average wages are expected to rise, adding more inflationary pressure for the BoE to address.
The BoE and the BoJ are both expected to announce interest rate decisions this week. While the BoE is expected to hike rates, the BoJ is not, highlighting central bank divergence.
| UK unemployment | Expected: 4% (0.1%) | Previous: 4.1% |
Support can be found at 154.00 (100 sma) and 152.90 (January low)
Resistance can be seen at 155.18 (50 sna) and 156.00 (round number).
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