Bitcoin, BTC/USD, Crude Oil, Japanese Yen – Talking Points
- Bitcoin prices paced higher alongside US stock indexes
- Japanese Yen fell to a fresh multi-decade low overnight
- BTC/USD faces confluent resistance if strength continues
Tuesday’s Asia-Pacific Outlook
Bitcoin rose more than 5% overnight as US stocks rose modestly on Wall Street. The Nasdaq-100 Index (NDX) closed 0.41% higher. Sentiment remained fragile, however, evidenced by a concurrent rise in the VIX index. A broadly stronger US Dollar was unsurprising given the fragile market backdrop. Risk-sensitive currencies, such as the Australian Dollar, fell against the Greenback. Bitcoin, along with other major cryptocurrencies, faces a tough path to sustain a rally, given a fragile backdrop in broader market sentiment.
Crude oil prices fell across the Brent and WTI benchmarks despite news that Saudi Arabia’s Aramco increased July delivery prices to Asian customers. Oil traders are awaiting inventory reports to further gauge supply and demand factors in the global market. On Monday, Citi Research raised its price forecasts for this year next year, citing a delay in Iranian oil hitting the market. US and Iran remain in talks.
The Japanese Yen weakened considerably, pushing USD/JPY to a two-decade high, as Japanese bond yields severely lag behind most of its major peers. US monetary policy is expected to tighten further, which may help to support the Dollar versus the Yen throughout this year. Meanwhile, Bank of Japan (BOJ) policymakers appear hesitant to do the same, dissuaded by lagging wage growth in the island country. April’s average cash earnings are due out this morning after rising 1.2 y/y in March.
Today’s main event, however, is the Reserve Bank of Australia’s policy decision, due out at 04:30 GMT. Analysts, on a median basis, expect a 25-basis point rate hike at today’s meeting, according to a Bloomberg survey. However, some are calling for a larger 40-basis point hike, which would likely see a round of buying on the Australian Dollar follow. Earlier this morning, Britain’s Prime Minister, Boris Johnson, narrowly escaped a vote of no confidence after Tory lawmakers failed to secure the required votes to oust Mr. Johnson.
BTC/USD Technical Forecast
BTC/USD added 5% overnight, although prices moderated below the late-May swing high near the 32,000 mark. If prices continue to rise, a descending trendline from the March 2022 high may offer a point or resistance, potentially reinforced by the falling 50-day Simple Moving Average (SMA). Alternatively a break lower would return prices to a range that contained prices through much of May.
BTC/USD Daily Chart
Chart created with TradingView
— Written by Thomas Westwater, Analyst for DailyFX.com
To contact Thomas, use the comments section below or @FxWestwater on Twitter