Global stocks waver ahead of key earnings and Fed decision
Bitcoin and other cryptocurrencies rebounded as the market waited for the upcoming Fed interest rate decision. Bitcoin rose by more than 10% to 53,683 while currencies like Ethereum and Ripple also gained by double digits. The currencies declined sharply last week as enthusiasm for the Coinbase Global listing waned and after Turkey announced its intention to ban the cryptocurrencies. This led to a sudden collapse of two exchanges from the country. Later this week, the price will react to the decision by the Fed. If it hints at potential tightening, the currencies could decline and vice versa.
The euro rose slightly against other currencies even after the relatively disappointing sentiment data from Germany. According to the Ifo Institute, the country’s business climate increased from 96.6 to 96.8, a slower pace than the expected 97.8. In the same period, the current assessment increased from 93.1 to 94.1, also below the expected 94.4. Business expectations also increased from 100.3 to 99.5. The miss was mostly because of the relatively slow pace of the country’s vaccination process. Recent data shows that the country has vaccinated less than 20% of its population.
Global index futures wavered ahead of key corporate earnings. In the United States, futures linked to the Dow Jones and S&P 500 index rose slightly while in Europe, the FTSE 100, CAC 40, and DAX index were relatively unchanged. This week, top American companies like Boeing, Microsoft, Apple, Alphabet, and Facebook will publish their results. In the UK, closely watched companies like NatWest, BP, Barclays, and Royal Dutch Shell will release their results this week. The indices are also in a price discovery mode ahead of the BOJ and Fed interest rate decisions.
The hourly chart shows that the EUR/USD pair has been in an overall bullish trend recently. Along the way, the pair has formed an ascending channel that is shown in pink. It is at the same level as the middle line of the Bollinger Bands while the Relative Strength Index (RSI) has moved from the overbought level of 70 to 57. Now that the pair has already tested the upper side of the channel, there is a possibility that bears will attempt to retest the lower side at 1.2045.
The USD/JPY pair has been in a steep downward trend in the past few weeks. This has seen it drop to the lowest level since March 4. On the hourly chart, the downward trend is being supported by the short and medium-term moving averages while the awesome oscillator and the MACD are below the neutral line. Therefore, the pair may continue falling as bears target the next key support level at 107.50 ahead of the BOJ decision.
The BTC/USD pair rose to an intraday high of 53,683, paring back most of the losses made last week. On the 30-minute chart, the price is above the 25-day and 15-day moving averages (EMA). It is also slightly below the important resistance at 55,502 while the RSI has moved above the overbought level. Therefore, the pair may keep rising as bulls target the resistance at 55,502.