Bitcoin is our latest addition to the EdgeFinder as we now have it in our scoring algorithm for users looking to trade the crypto. This report will cover an in depth analysis on Bitcoin as well as our strongest setups this week.
EdgeFinder Anlaysis
Price action looks overall bearish on our scanner as its score reads -5. Both the trend reading and seasonality agree that lower lows are likely to occur especially now that the dollar is gaining strength from recent CPI and Core CPI news.
The crypto looks a little bearish from sentiment data as well. Retail is mostly long while institutions are mixed. It's also harder for a speculative crypto like Bitcoin to thrive in a high inflation market. This could be an entirely new market for Bitcoin as it has never treaded in these waters before.
Swiss-Yen is on another run to the upside as JPY continues to weaken on dovish sentiment. The EdgeFinder is still scoring this pair as a strong buy at +6 which is telling for any pair. As price bounced from the lows of Thursday’s session, the pair is coming up to test a previous high around 152.24s.
A break in this level would indicate higher highs towards resistance around 154. The reason for the pair's uptrend is likely not due to sentiment data from COT or retail, but rather a BOJ announcement that rates will not be raised and remain negative while Governor Ueda maintains focus on economic expansion.
EURUSD is now a strong sell on the EdgeFinder after taking quite a tumble from recent US inflation data. Price seems to be attempting a recovery from here, although the break under the trend line looks somewhat like a bearish trend reversal. Price could come down to support around 1.05313 where there is a previous bottom.
The 10 year seasonality average and trend reading do not agree, but it seems that sentiment on the retail side is shifting to a more bearish sign for the pair. Analysts and banks alike are projecting higher prices for the pair, however. Both groups believe that price is bullish looking into the next month and quarter with an average quarterly price forecast of 1.1029.
Retail Spotlight
Between the majors, commodities and crypto, retail is leaning towards NZDUSD, USDCHF and USOil bullishness. The crowd's biases start at USDCAD as the strongest sell, while USDJPY and Gold follow behind. Bitcoin is also heavily bullish on the retail side.
Smart Money Spotlight
Smart Money is showing some interesting data for commodities, SPX and JP225. It seems that gold sentiment is back to mixed after reading a stronger bullish reading last week. The Yen is still net bearish in change in open positions last Friday, while the Japanese stock index (JP225) is increasingly bullish. Institutions are scaling out of US stocks while investing in more Japanese stocks.
Fundamental Spotlight
When comparing interest rates, NZDJPY and USDJPY is the highest yielding pair for the carry trade. With an already bearish yen outlook, investors are more enticed to trade and hold positions against the yen as they will receive a payout each day. From looking at this chart alone, it's clearer why the yen is so bearish for the time being.
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