The Fed is ready to start tapering in November. Since the markets were expecting this and it wasn’t a surprise, the USD slumped allowing risk-on currencies and gold to rally up.
Bitcoin is on sale, oil is on the way to $75
- The Bitcoin “death cross” has occurred: the 50-day moving average has crossed the 200-day moving average upside down, giving a bearish signal. Besides, renewed crypto crackdowns in China pressed the BTC down. China officials held a meeting to repeat a ban on providing cryptocurrency services.
- The US stock market rebounds as the prospect of very gradual policy tightening calms down investors. Earlier, the Fed surprised the markets with the hawkish move: the bank hinted about two rate hikes in 2023 and also started a discussion on cutting bond buys. It pushed the USD up and stocks down, but the sentiment changed yesterday.
- The S&P 500 rallied the most in five weeks! It has even outperformed the technological Nasdaq 100, driven by a recovery of value stocks like energy and financials.
- Crude oil and gold jumped as the US dollar weakened. Brent oil reached $75 a barrel for the first time in more than two years! Gold has been rising for a second day.
- Follow the testimony of the Fed Chair Jerome Powell today at 21:00 GMT+3!
Let’s start with the most traded pair in the Forex market: EUR/USD. The RSI indicator has bounced off the 30.0 level, giving a bullish signal. The pair has managed to come back to the area inside the channel. It has briefly jumped above the psychological mark of 1.1900. If it jumps above 1.1950, it will rally up to the next round number of 1.2000. In the opposite scenario, the move below yesterday’s low of 1.1840 will press the pair down to the 1.1750 support.
Gold has reversed up from the 61.8% Fibonacci retracement level of $1770. It gets closer to the next key resistance level at the 50% Fibo level of $1800 and the 100-day MA. It won’t cross it on the first try, but if it does, the way up to the 38.2% Fibo levels of $1825 will be clear.
Brent oil (XBR/USD) has broken above $74.00 and rallies up towards the next round number of $75.00. According to banks such as Citi, Bank of America, and Goldman Sachs, the oil will rally above $80.00 this year. Support levels are $72.00 and $71.00 – the recent lows.
US Retail Sales will be out on October 15 at 15:30 MetaTrader time (GMT+3).
The crypto market keeps recovering. Bitcoin has broken above $57,000. The way up to $60,000 is open now!
The United States will release the weekly Unemployment Claims on October 21, at 15:30 MT time (GMT+3).
Great Britain will publish the Inflation Rate on October 20, at 09:00 MT time (GMT+3).
The bullish movement in the stock market is gaining speed, and Bitcoin ETFs are closer than they might seem. What do we need to know for the next trading week?