GBP/USD, JPY/USD, EUR/USD and Bitcoin forecast this week 19-23 April

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First, a review of the events of the past week:

pair EUR/USD

Last week was marked by two significant economic events: impressively strong macro statistics from the United States and a collapse in the 10-year US government bond yield.

According to data published on Thursday, April 15, US retail sales jumped +9.8% in March (versus expectations of +5.9% and -2.7% fall in February), which is the best indicator for the past 10 months. What is happening in the labor market also shows an active recovery of the country's economy. Thus, the number of initial applications for unemployment benefits decreased from 769 thousand to 576 thousand. And not only is this better than the 700,000 expected, this is the lowest level since the start of the COVID-19 pandemic. Industrial production grew by 2.7%.

All these numbers clearly indicate the rapid growth of the US GDP in the first quarter of 2021. They allow us to speak with confidence about its continuation in the coming months. Against this backdrop, the collapse in US Treasury yields, the strongest since the beginning of last November, seems surprising. If at the end of March the yield on the 10-year bond reached its multi-month domestic maximum at 1.775%, it has now fallen to 1.583%.

Besides bonds, the dollar is weakening. USD DXY is trading at 91.5 on Friday, April 16, 180 points below this year's high of 93.3. As a result, as most experts (65%) expected, the EUR/USD pair continued its growth last week, approaching the important support/resistance level at 1.2000, and ending the five-day period at 1.1980.

This situation indicates that the strong economic statistics from the United States can no longer provide a serious support for the American currency. The latter is now more closely related to the yield on Treasuries. Apparently, the rate of vaccination against the Corona virus has already been taken into account in US dollar rates. New fiscal stimulus programs and endless printing of new money by the Federal Reserve started working against the dollar. Its weakness has already exceeded the usual correction, exacerbating investor sentiment: in addition to the euro, the currencies of commodities and developing countries are also growing, and the S&P500 is renewing its all-time high for the 22nd time this year

pair GBP / USD

The weakness of the dollar supported the British currency, and the fall of the GBP/USD pair was halted, and it even managed to climb 120 pips. Thus, its movement over the past four weeks can be identified as a sideways channel 1.3670-1.3920. As for the last chord, the pair placed it in the central zone of this channel, ending the trading session at 1.3840

pair USD / JPY

It was said above about a sharp drop in the yield on US 10-year Treasuries. Experts consider the coverage of short positions by hedge funds, as well as the return of Japanese buyers to the market, among the possible reasons for this collapse. They were actively getting rid of US bonds at the end of the fiscal year, but they are starting to replenish their investment portfolios with them now. This increased the demand for the yen, which is used to finance such operations, thanks to the negative interest rate.

One of the scenarios announced a week ago was that dollar weakness and a stronger yen would push the USD/JPY pair towards the 108.40 support. This is exactly what happened: starting from the level of 109.65, the pair fell to the horizon 108.60 by Thursday, April 15, followed by a small bounce and an end at 108.80

Bitcoin

The much anticipated over the past eight weeks has come true: Bitcoin has finally broken through the $60,000 horizon and is now trying to gain a foothold above this psychologically important level. The new historical high was the $64,800 high that the BTC/USD pair reached on Wednesday, April 14th. However, a correction followed, and the bulls were struggling to prevent the major cryptocurrency from dropping below $60K throughout Friday, April 16th.

According to the Forbes rating, thanks to the growth of bitcoin, its creator under the pseudonym Satoshi Nakamoto has become among the 20 richest people in the world. According to various estimates, he owns between 750 thousand and 1.1 million bitcoins, and his fortune has now exceeded 60 billion dollars.
But if Nakamoto became the owner of countless crypto treasures long ago, the current major investors are only at the beginning of their journey. According to the Analytics Service Santiment, the so-called “whales” continue to accumulate bitcoins. Analysts have found that they have amassed as much as 2.2% of the total supply in the cryptocurrency market so far, reaching an 11-month high. A similar situation was observed at the beginning of May last year. As the Santiment report says, we are talking about investors who control 100,000 or more BTC.
Besides the “whales”, for the first time since December 2020, miners also began accumulating savings, which leads to a shortage of supply and contributes to an increase in the price of the main digital asset.

Miners get income in cryptocurrency, but they pay money to service providers and equipment, so they are forced to sell part of the cryptocurrency. The volumes of these sales are based on current market conditions and Bitcoin price expectations. Starting on March 31, miners started accumulating BTC reserves once again. Whereas for four months before that, they reduced their positions, converting bitcoins into fiat currencies. The largest amount of cryptocurrency, from 17,000 to 24,000 BTC per day, was sold by them in January 2021.

“The miners turned to accumulating digital assets, because they had enough cash reserves to support their activities, which they accumulated during the rise of Bitcoin from $20,000 to $40,000. Or, most of them are holding cryptocurrencies in anticipation,” Flex Young, CEO of Hong Kong-based Babel Finance, told CoinDesk. The number of bitcoins in miners' wallets has increased to 1.806 million BTC over the past two weeks.

The growth of the BTC/USD pair is facilitated by the weak dollar and the lower long-term US government bond yields as well. This increases the attractiveness of the cryptocurrency as a hedge against inflation.

The total cryptocurrency market cap on April 10 finally exceeded $2.0 trillion, and, on April 16, it reached $2.2 trillion.
At the same time, the share of Bitcoin in the total market capitalization of cryptocurrencies continues to decline continuously: if it was 72.65% on January 2, it was only 52.10% on April 16. As mentioned earlier, this is most likely due to the fact that speculators are switching to other, more profitable assets.

As for the Crypto Fear & Greed Index, it rose from 70 to 78 points in the week. Both values are in overbought territory, but they are still far from critical, and therefore cannot become a serious obstacle to the growth of the BTC/USD pair.

Next week's forecast:

pair EUR/USD

As mentioned in the first part of the review, trillions of dollars in economic support programs are not only increasing the US national debt, but also beginning to put serious pressure on the US currency. And the low and near-zero interest rates don't help it either. But at the same time, the Chairman of the Financial Review Committee says that although the pace of recovery in the US economy is impressive, it is not even enough to start a discussion of reducing fiscal stimulus programs. According to Jerome Powell, this would require several more months of these positive results. The economy must make "more significant progress" toward targeted levels of employment and inflation.

Of course, such statements are not good for the dollar and contribute to the growth of risk sentiment. But on the other side of the Atlantic, there are more and more strong statements by EU officials about the imminent end of the lockdowns and the unprecedented growth of the Eurozone economy. According to forecasts by Bloomberg experts, the European Central Bank will slow the emergency asset purchase (QE) program by July, and at the end of this year will announce the termination of the program in March 2022.

All of the above could lead the EUR/USD to break through the 1.2000 resistance and rise to the January highs in the 1.2300 region. Resistance on this path will be 1.2125 and 1.2185 levels.

However, at the moment, only 25% of experts support such a bullish forecast. Analysis 100% of the trend indicators on H4 and 90% on D1 are on their side. The picture differs slightly between oscillators. Only 65% of the oscillators on both timeframes are colored green, while the rest are already giving signals that the pair is overbought.

The majority of analysts (50%) are now neutral, believing that the bulls and bears will engage in a “tug-of-war” at the 1.2000 line in the near future. But victory will remain with the dollar in the future. And when moving from the weekly forecast to the monthly forecast, the number of bear supporters increases from 25% to 70%. In their opinion, the EUR/USD pair will test the support in the 1.1700 area again, and if it succeeds, it will drop by another 100 pips.

For next week's events, pay attention to Thursday, April 22nd. The next meeting of the European Central Bank will be held on that day. It is not likely to expect any special changes in its monetary policy. Nevertheless, the press conference of the European Central Bank administration is interesting, as investors can receive positive signals about the intentions of this regulator. If the indicators of business activity in Germany and the eurozone, which will be released the next day, April 23, are also encouraging, this may support the euro

GBP/USD, JPY/USD, EUR/USD and Bitcoin forecast this week 19-23 April

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pair GBP / USD

Problems after the UK's exit from the European Union, massive trade and state budget deficits continued to put pressure on the British pound. Even the dollar, which weakened against other currencies, let the GBP/USD pair only get sideways, but never return to sustainable growth.

The British currency may regain its attractiveness, especially if the large capital left behind by Brexit begins to return to the country. The pound also supports COVID-19 vaccination successes. Therefore, some analysts believe that the long-term upward trend, which began on March 20, 2020, has not ended, and that the pair has an opportunity to continue its movement towards the north.

30% of experts vote bullish at the moment. However, when switching to the prediction of the end of spring, their number doubles: up to 60%. The nearest resistance levels are 1.3920 and 1.4000.
In the meantime, the vast majority of analysts, supported by chart analysis on D1, first expect the pair to fall to the lower boundary of the trading channel 1.3670-1.3920, and in case it is broken, the pair will move to the 1.3600 area.

Among the events of the coming week that could influence the formation of domestic trends, we can note the release of statistics on the UK labor market on Tuesday 20 April, data on the consumer market on Wednesday 21 April, and business activity in the Markit service sector .. on Friday 23 April. Also worth noting is BoE President Andrew Bailey's April 21st speech.

pair USD / JPY

The pair starts next week within the range of 108.60-109.25. Remember, this is a very tight trading range that he was unable to break out of for a full three weeks in March. It is entirely possible that it will now become a serious obstacle on the path to the yen's further strengthening. Graphical analysis is fully compatible with this version. According to its forecasts on the H4 and D1 timeframes, before continuing to move south, the USD/JPY pair will be compressed within these limits for several days.

And 70% of analysts are sure that the pair will continue to decline. support levels 108.35, 107.50 and 106.00; The remaining 30% expect the pair to bounce. Resistance is at 109.25 and 110.00, the goal is to beat the March 31 high at 110.95 and the high at 111.00

Bitcoin

It is strange and funny that the most optimistic predictions for the price of Bitcoin were given by the authors of The Simpsons series. A continuous line with quotes of financial assets appears on TV in the new eighteenth episode of season 32. The bitcoin exchange rate is marked with a green infinity sign.

Naturally, such dynamics will greatly delight investors. However, the forecasts of specialists still seem more modest. Although they also struggle to the top. Therefore, according to the latest report from the Kraken platform, its analysts, relying on historical data, admitted that Bitcoin grew by 50% in April. Considering that the month started at $59,000, the move target could be $90,000. However, before the rally resumes, the first cryptocurrency can expect a correction of at least $10,000.

As for the second major cryptocurrency, Ethereum, Kraken expects it to rise to $15,000. In their opinion, stock market analysts note the support and resistance levels for this altcoin: $1,462 and $2,695. By plotting the historical patterns of ETH price action on the logarithmic curves, they concluded that the peak of the bullish cycle is still far away. Experts are confident that the price of Ethereum could rise by 700% from the levels at the end of March and reach a high of $15,238.

A more modest forecast for the price of this digital currency was given by the famous crypto trader and podcast host The Wolf Of All Streets Scott Melker. According to him, Ethereum may surpass Bitcoin in terms of profitability in 2021, and the coin’s price may rise to $10,000.
He revealed in an interview with Cointelegraph that he has largely shifted his strategy from first cryptocurrency to ETH in recent months. “I don't understand why this is crazy. In fact, this is just an increase of less than five times the current price. "Bitcoin nearly tripled last year," Melker told reporters. "It reminds me of investing in the internet in the early '90s."

Maciej Vitkoviak looked deeper into history, revealing to the world a breakthrough in crypto life for nearly 40 years - an emulator of an old Commodore-64 computer from 1982, adapted for mining bitcoins. This developer has created C64 Bitcoin Miner specifically for this PC. It showed a hash rate of 0.2h/s on the VICE simulator, which would allow it to get a block of BTC “within” 337 years and 10 months.

GBP/USD, JPY/USD, EUR/USD and Bitcoin forecast this week 19-23 April


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