After the bullish start of the year, the rand has started to weaken since the last Thursday. Let’s point out the main factors affecting the ZAR and set the key levels for this week’s trading.
Bitcoin (BTC/USD) poised to do another leg lower
The corrective movement in Bitcoin continues to spread across the board and we are currently observing that it is finding support on the 200-hour moving average, around the 17,555 level. We have also seen that the bullish trend line projected from the lows of December 10 has been fractured, which has allowed the bears to take control of the situation.
In the most recent fundamental developments around cryptocurrency, the head of the Central Bank of Denmark has issued a warning to those who wish to invest in Bitcoins, since according to him, the BTC is a dangerous instrument because it is not regulated. On the other hand, Kuwait's finance minister has declared that he will not recognize Bitcoin and warns that financial institutions should not trade it.
However, the optimism around cryptocurrency remains high and is that according to an ING analyst, the BTC could become a "niche product" in the financial field. The RSI indicator in the H1 chart remains in negative territory, which is an indicator of a bearish continuation in the BTC/USD.
What do we expect?
According to our forecasts, the Parabolic SAR continues to show strength in the current bearish movement, although the 200-hour moving average could serve as a dynamic support for the pair. However, in case of yielding to the bears, the next target would be set at the level of 16,559. In a general plane, the spotlights continue pointing to the Fibonacci extension of 100% in 20,504.
If we look at the daily charts of the US dollar index and the USD/JPY pair, we will see a misleading trend.
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The last "Pennant" pattern has been broken, so bulls found resistance at 1.2915. Nevertheless, the market is likely going to move on, so we should...
USD/CHF remains weak across the board and stays strong with a bearish consolidation below the 200 SMA at H1 chart…
There's no any reversal pattern so far, so the market is likely going to test the nearest resistance area in the short term...