Market Focus

After cryptocurrencies faced a major selloff, Solend, a lending platform built on the Solana blockchain, attempted to gain control of its largest account in order to stop it from collapsing the system. The largest, so-called “whale” account, might influence the market movements significantly if the largest account holder decided to sell off their assets. Over the weekend, Solend passed the proposal to take over the “whale” account, which is an unprecedented move in the DeFi world. According to Solend, the decision that it made allowed it to liquidate assets through OTC to avoid a possible collapse in the market. Solend users have since voted to block the move.

As the war between Russia and Ukraine continues, gas supplies remain in shortage. German Economic Minister Robert Habeck warned that the situation is going to be really intense and tight during winter if there are no precautionary measures. As a result, Germany has mentioned that it will seek to compensate for a cut in Russian gas supplies by burning more coal, the most carbon- intensive fossil fuel in terms of emission.

Main Pairs Movement

AUD/USD was up 0.2%, closing at 0.69499 on Monday. The Aussie was favourable in an upbeat market due to China’s Covid news and the US weighing lifting restrictions on China. Further price movements eye the RBA meeting on Tuesday.

EUR/USD was up 0.16% at the end of the day. The market was relatively quiet due to a bank holiday. In the meantime, the ECB has foreseen hiking rates in July and September, which slightly boosting the euro.

Bitcoin and Ethereum both rebounded on Monday, edging up more than 8% and 13%, respectively after falling below its 2017 high over the weekend. However, Bitcoin still sits 70% below its all-time high. The cryptocurrency markets remain under pressure and have been plagued by several issues, starting with the collapse of the supposed stablecoin terraUSD.

Gold prices oscillated on Monday ahead of Fed Chairman Jerome Powell’s testimony. Gold is confronting the headwinds of an extremely tight monetary policy period with the odds of consecutive 75-basis-points rate hikes in the US. 

Technical Analysis

EURUSD (4-Hour Chart)

EURUSD traded higher on the first trading day of the week. The German CPI came in above expected values at a 1.6% increase, month over month. Last week’s ECB conference presented a more hawkish outlook for the Eurozone’s monetary policy. However, while leaving negative interest rates could ease the soaring inflation, market participants should still be aware of the slowing economy and price pressures from global commodities. ECB’s president Lagarde is due to speak during today’s European trading session.

On the technical side, EURUSD has rebounded from our previously estimated support level of 1.04035 and is on a gradual downtrend despite last week’s positive correction. RSI for the pair sits at 51.69, as of writing. On the four hour chart, EURUSD is currently trading below its 50, 100, and 200-day SMAs.

Resistance:  1.05483, 1.07691

Support: 1.04036, 1.03783

GBPUSD (4-Hour Chart)

GBPUSD advanced on the first trading day of the week after falling more than 1% on Friday’s trading. The British Pound took full advantage of the easing demand of the US Greenback. The 25 basis point interest rate hike by the BoE is poised to ease soaring inflation in the UK. However, the slowing British economy poses longer term threats to the Pound. US existing home sales figures will be released during the American session and should provide a gauge to the real estate market and overall economic health of the US public.

On the technical side, GBPUSD met fresh resistance at around the 1.239 price region. The 1.2 support level remains firmly intact. RSI for Cable sits at 43.26, as of writing. On the four hour chart, GBPUSD is currently trading below its 50, 100, and 200-day SMAs.

Resistance: 1.25944, 1.239

Support: 1.2173, 1.20824

USDJPY (4-Hour Chart)

USDJPY continued its upward movement on the first trading day of the week. Following a 2.04% gain from last Friday, USDJPY has continued to inch towards its previous high. The losing demand of the US Greenback did not affect the overall movement of USDJPY as the Japanese yen continued to depreciate against the US Dollar. The benchmark US 10 year treasury yield currently sits at 3.231%. On the economic docket, the US is due to release its initial jobless claims figures on Thursday and Fed chair Jerome Powell will speak later on the same day.

On the technical side, USDJPY has rebounded strongly from our previously estimated support level of 132.5 and is closing in on our estimated resistance level of 135.5. RSI for the pair has once again reached into overbought territory and sits at 65.98, as of writing. On the four hour chart, USDJPY is currently trading above its 50, 100, and 200-day SMAs.

Resistance: 135.56

Support: 133.5, 132.5