Forex And Cryptocurrencies Forecasts For March 8 - 12

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First, a review of last week’s events:


There is a saying, “a new broom sweeps clean”. If the previous US President Donald Trump were in the shoes of Joe Biden now, he would probably call the head of the Fed Jerome Powell a "traitor" for the fact that his speech on Thursday literally brought down the stock markets of America. Powell stayed indifferent to the surge in US Treasury yields, which closed at an annual high. At the same time, he hinted at the possibility of premature tightening of monetary policy.

And although the head of the Fed stressed that the economy is far from overheating, and he does not yet see the need to raise the interest rate, the market has had a hint of a possible change in monetary policy. In response, the 10-year Treasury yields rushed up with the dollar, and the stock market rolled down. The S&P 500 lost over 120 points and the Dow Jones Industrial Average lost over 300 points.

The decline in stock prices is forcing investors to seek refuge in the dollar. As a result, the DXY dollar index reached a three-month high of 91.83 on Thursday, its growth continued Friday, March 5, and the DXY exceeded 92.00 at the time of this writing.

The data from the US labor market added optimism to investors. The number of new jobs outside the agricultural sector (NFP) increased from 166K to 379K, with the forecast of 182K. As a result, the forecast, for which the majority (70%) of analysts voted last week, turned out to be absolutely correct: the EUR/USD pair continued its movement to the south, reaching a local bottom at 1.1895 and ending the week slightly higher, at 1.1915;


Graphical analysis on D1 suggested last week a sideways movement of the pair within 1.3860-1.4240. However, the channel turned out to be narrower: it was trading in the range of 1.3860-1.4000 until Thursday. And then, thanks to the statement of the head of the US Federal Reserve Jerome Powell, the dollar began to grow stronger, and the GBP/USD pair, having broken through the lower border of the channel, dropped to the horizon of 1.3775. The last chord of the five-day period was set at the level of 1.3840.


The multi-month downtrend of this pair was stopped on January 6, it reversed and moved north for almost all of 2021. When making a forecast for the last week, a third of the experts sided with the bears, a third took a neutral position, and a third voted for the growth of the pair. And even fewer experts agreed that it would be able to reach the zone 108.00-108.50, they were only 25%. And they were right: the week's high was recorded at 108.60, followed by a slight bounce down and a finish at 108.35.

The reason for the rise of the pair is still the same: against the background of the growth in the yield of American bonds, which outstrips the yield on Japanese securities, investors get rid of such a protective asset with a negative interest rate as the yen. Along with the Japanese currency, gold and the Swiss franc are also particularly affected. In addition, the mentioned statement by Jerome Powell added fuel to the fire, after which the USD/JPY pair reached an eight-month high;


There is good news for the bulls: Bitcoin hasn't dropped below $43,000. But there is good news for the bears too: Bitcoin has not gone above $52,000. Having drawn a sinusoid, the BTC/USD chart returned on the afternoon of Friday, March 5, to where it started seven days ago. The question of whether this is a correction or the beginning of a new "crypto-winter" remains open.

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