Forex And Cryptocurrency Forecast For May 17 - 21

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First, a review of last week’s events:

EUR/USDAs predicted by most experts (60%), the first half of the week benefited the dollar, strengthening it and dropping the EUR/USD pair to support 1.2050. The US inflation report, released on Wednesday May 12, pointed to an impressive rise in April and hit the stock market hard. The consumer price index climbed 0.8%, the strongest monthly gain since 2009. In annual terms, inflation rose by 4.2% versus 2.6% between March 2020 and March 2021 and showed the strongest acceleration since 2008.

Thanks to this jump, rumors about the possible curtailment of fiscal stimulus programs and an increase in the interest rate on USD began to circulate in the market again.

Risk appetite began to fall, the S&P500 and Dow Jones stock indices went down, and the yield on 10-year US Treasuries moved up. However, the Fed knows how to restore order in the markets. The regulator explained that this jump in inflation and consumer prices is a temporary phenomenon and is caused in first place by a surge in prices for transport services and used cars. Therefore, the FRS does not intend to either curtail QE programs or raise the interest rate due to the growth of one specific sector of the economy.

The situation turned 180 degrees after such explanations. Trading volumes in the stock markets rose again, reaching the highest values over the past two and a half months. And the European currency won back about 100 points from the dollar, finishing at 1.2143;

GBP/USD

100% of trend indicators and 85% of oscillators were pointing north last week. But only 30% of experts agreed that the pair, having broken through the upper border of the channel 1.3670-1.4000, would be able to reach the resistance of 1.4085. But it is them who turned out to be right: - the week's high was recorded on Tuesday, March 11 at 1.4165. The next day, the US inflation report pushed the pair down to the 1.4000 level, which turned from resistance to support. The fall was facilitated by profit-taking on the pound after reaching two-month highs. Then a rebound followed, and the pair completed the five-day period at 1.4096.

Cryptocurrencies

It seems that the crypto market influencers are only busy trying to destroy it in recent days.

Crypto billionaire Vitalik Buterin knocked Dogecoin clone quotes by an average of 50%. The creators of the meme currencies Shiba Inu, Akita Inu and Dogelon, currying favor with such an authority as Buterin, sent him their coins as a gift, hoping that he would not spend them and give them flattering reviews. However, the creator of Ethereum sent 50 trillion Shiba Inu ($1.2 billion at the time of the transaction) to a fund to help India fight COVID, and donated half of Akita Inu tokens ($ 431 million) on the Gitcoin platform. As a result, all these meme currencies lost about half of their value in just one day.

Facebook founder Mark Zuckerberg also distinguished himself, who shared a photo of two goats, calling one of them Bitcoin. Social media users saw a secret message in this. And some even took offense, deciding that Zuckerberg compared the holders of the main cryptocurrency with these animals. What the billionaire really meant remains a mystery. The price of bitcoin dropped by about $5,000 after the post was published.

However, it was Elon Musk who delivered the biggest blow to the market with his tweet. He expressed concern about "the growing consumption of fossil fuels for mining and transactions on the bitcoin network" on Wednesday and announced that Tesla would no longer accept the cryptocurrency as payment for its cars. The market reacted to this statement with a crushing collapse. In just a few hours, the BTC/USD pair fell by almost 20%, reaching a strong medium-term support level in the $46,600-47,000 zone. Perhaps it would have broken through it too, but the panic was somewhat lowered by Musk's words that Tesla would not sell the previously acquired bitcoin tokens.

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Notice: These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for informative purposes only. Trading on financial markets is ...

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