A sideways oscillating state is often just for the next start. Now there are two assets that the whole world will pay attention to are in this kind of continuous shock and sideways trading. Will they get out of the real market in a short time?
The first variety with a relatively short cycle is Bitcoin, which has been very red and extremely red in the last year. However, with the doubling of the market and record highs, the currency price has shown a flag-shaped consolidation pattern since March this year, which has been almost half a year. We have compared the performance of the U.S. stock index and gold before, and we expect that the market will reach a new high after the consolidation of an A-B-C model move. Unfortunately, things backfired, and the performance of the market was tangled, which tested patience.
After briefly falling below the $5W level, the bulls returned to the market again. After about a month, the currency price was in the middle of the box. Considering its high volatility, it is not far from the top now. Based on the previous long-term architectural judgment, we are still more inclined that the market will eventually move upward and complete the long-term target of 9-9.5 W near the end of the year, and then turn downward.
The monthly lines in July and August (about to close) both flow to a very obvious lower shadow line, which means that if a new low is hit in September and October, the bullish thinking will be falsified.
There is a macro expectation that the Federal Reserve will cut interest rates next month, so whether it can break through the high level in September is also very critical. After all, investors who buy bottoms may not have much patience to wait too long for shocks.
In addition to the currency circle, the turmoil in the foreign exchange market also seems to be coming to an end. After Powell gave a clear dovish expectation last week, the dollar encountered another negative line in August. The diamond structure since the beginning of 2023 is on the verge of breaking, and after breaking through 99.57, it will be in a more negative bearish expectation in terms of technical form.
We previously recommended going long at the bottom of the pattern to wait for the price to reverse after returning to the shock or bear market trap, but now we need to reassess the possible risks. In addition to breaking through the low level and needing to stop loss and leave the market, we also noticed that the yen is rebounding further under the weak the US Dollar Index.
This implies that the foreign exchange market may become a key factor stirring up the financial market after several years of flat. The last counterattack of the yen caused most assets to fall significantly. Once this trend is strengthened, panic selling pressure will reappear. Of course, if that happens, in most cases, there will still be the cooperation of other safe-haven assets
Going back to these two assets themselves, Bitcoin still mainly buys low. If it is a fixed investment, it can also be considered to wait for the accelerated market after the new high. In terms of the US dollar, first pay attention to the performance of key support/low points, and secondly, whether there will be a possibility of extreme prosperity after the interest rate cut lands. Finally, the yen can't be completely ignored. After USD/JPY falls below the 140/137 area, we should be alert to the possible risk of market crash.
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