Cryptocurrency market rallies over US central bank comments
The cryptocurrency market staged a major rally this week after Federal Reserve Chair Jerome Powell said the US central bank were increasingly looking towards digital currencies. Major cryptocurrencies such as Bitcoin, Litecoin, and Ethereum surged to fresh 2020 highs, as the US central bank head acknowledged the important of blockchain technology. Bitcoin traded at its highest level since October 2019, while Ethereum surged towards the $300.00 level, with the ETHUSD pair trading higher by over twenty percent since the start of February. The total market capitalization of the cryptocurrency surged above the $300 billion mark as the breakout rally gathered pace.
- The BTCUSD pair is only bullish while trading above the $9,700 level, key resistance is found at the $10,500 and $10,900 levels.
- The BTCUSD pair is only bearish while trading below the $9,700 level, key support is located at the $9,200 and $8,500 levels.
Risk-on trading sentiment remained in full-force this week, as the Chinese authoritized were deemed to be sufficiently dealing with the outbreak of the coronavirus in China. US equity markets trading towards all-time highs, while investors continued to shun the Japanese yen, silver and gold. Chinese stock markets also recovered recent losses as the Chinese government promised additional policy stimulus measures to boost the economy. Analysts speculated that the economic impact of the coronavirus on the Chinese economy may not be known until the next GDP figures are released.
- The USDJPY pair is only bullish while trading above the 109.70 level, key resistance is found at the 110.23 and 111.00 levels.
- If the USDJPY pair trades below the 109.70 level, key support is located at the 108.90 and 107.90 levels.
The New Zealand dollar received a strong boost against the greenback this week as the Reserve Bank of New Zealand kept interest rates unchanged and showed a more dovish stance towards monetary policy than expected. The NZDUSD pair found support from the 0.6377 level and subsequently rallied towards the 0.6500 level, as RBNZ policmakers noted that the recent cycle of rate cuts had likely come to an end. RBNZ policmakers also noted that unless the coronavirus caused significant economic damage then the central bank should maintain rates at current levels.
- The NZDUSD pair is only bearish while trading below the 0.6620 level, key support is found at the 0.6530 and 0.6400 levels.
- If the NZDUSD pair trades above the 0.6620 level, buyers may test towards the 0.6700 and 0.6750 resistance levels.
The United Kingdom economy posted above consensus monthly GDP figures this week, making the UK economy the third fasting growing inside the G7 and boosting sterling back towards the 1.3000 level. The United Kingdom economy grew by +0.3 percent in December, as UK consumer spending increased, while fears over Brexit subsided. The United Kingdom economy also avoided falling into a recession during the last fiscal quarter OF 2019, as UK growth flatlined in Q4. Market sentiment towards the British pound increase, with the GBPUSD pair recovering higher, while the EURGBP slumped towards the worst levels of 2019.
- The GBPUSD pair is only bearish while trading below the 1.2960 level, key support is found at the 1.2900 and 1.2870 levels.
- If the GBPUSD pair trades above the 1.2960 level, buyers may test towards the 1.3060 and 1.3100 resistance levels.