FUNDAMENTAL ANALYSIS
Carl Braganza
AUD/USD
The AUD incurred some losses on Friday which continued the Aussie’s first week of losses after five weeks of gains as it closed just under 0.73. However, during the week it did manage to reach a new high for 2022 of 0.7441, with gains coming from rising iron ore prices and the Aussie’s nature as a commodity-backed currency. The drop in the Aussie later in the week can be attributed to the decrease in risk-on sentiment due to the recent rise in COVID cases in China, with the country registering more than 1000 new cases for the first time in two years. A further contributor is the continuing geopolitical tensions arising from the Russia-Ukraine crisis, which has continued to add to investor worries with not much promising news of de-escalation. Looking to the week ahead, all eyes will be on the Fed as they aim to increase rates by 50 basis points after 40-year record inflation of 7.9%.
BTC/USD
Bitcoin’s price didn’t see great changes in the past week with the crisis in Ukraine continuing and little news about a diplomatic solution. However, risk-averse assets like gold have had an amazing week with gold rising above $USD2000 during the week and nearly reaching its record high of $USD2,075.64. Earlier in the week Bitcoin saw gains that pushed it above the $USD40,000 mark but the uncertainty in the market resulted in a fall to $USD39,000 by the end of the week. Other news impacting Bitcoin during the week included the UK’s Financial Conduct Authority (FCA) statement that crypto ATMs would be shut down. While this might have soured favour for Bitcoin, support for the cryptocurrency came from Apple co-founder, Steve Wozniak, earlier in the week as he described Bitcoin as the “the only one that’s pure-gold mathematics.” Looking to the week ahead, Bitcoin seems to be finding no support level indicating a possible bearish trend in the short term.
TECHNICAL ANALYSIS
Vikas Arkalgud
AUD/USD
Despite having fallen from the 0.7441 high earlier in the week, the AUD still appears to be travelling within the ascending channel created at the beginning of February. Since the AUD did take a dip over the past week, it will be interesting to see whether it falls further and breaks below the lower-bound of the channel, or rebounds. The fall after reaching the 0.7441 high may also be due to the AUD nearing the 0.7450 resistance level previously reached in September last year. Regarding EMAs, it should be noted that the 14-day EMA is approaching the 200-day EMA. Thus, we should look out for a possible cross-over during the next week as it may give early signs of a bull market.
The MACD line continued to travel above the signal line but has slowed down over the past week. Since both the MACD line and signal line are travelling well the zero value, an overbought condition may develop over the next few weeks. On the other hand, the RSI is travelling at a moderate level of approximately 55, meaning no overbought or oversold condition is present via this indicator.
BTC/USD
After having fallen heavily between November 2021 and January 2022, Bitcoin has entered into a sideways market, with a converging triangle pattern developing. BTC is currently trading at approximately $USD39,000 and has shown some strength over the past few days despite not yet having hit the pattern support level. There have been no significant developments in the EMAs. However, their decent has slowed down over the past one and a half months, giving some hope that the bear market in Bitcoin is slowly reversing. One should note that a death-cross materialised in early January when the 52-day EMA crossed below the 200-day EMA, solidifying the bear market we witnessed in Bitcoin during the summer.
On March 6, the MACD crossed below the signal line and has travelled below it for the past week. It is unlikely that this is indicative of any significant downtrend in the market as we have also noted that the pair is moving in a sideways market. The RSI is travelling at a moderate level of approximately 47, meaning no overbought or oversold condition is present via this indicator.
