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The market is torn between the desire to grow and the need to continue to decline

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Stock markets have rebounded, other markets are unchanged.

 

After a strong sell-off on Monday, the stock markets experienced a reflection on Tuesday, which investors had been waiting for a long time. However, nothing special happened in other markets.

European and US stock indices rose relatively sharply as a result of trading – this was expected after the fall of the main stock indices. Now the question: is it really a local turnover or not?

We still find it difficult to say. The reflection is usually natural after a sharp decline, but so far it does not make sense to consider the overall situation as significantly better. The problems of the coronavirus pandemic did not disappear. Given inflation, which has climbed to a 13-year high, there is also the risk of an earlier change in the Fed’s monetary policy. However, a good factor that can mainly support US stock markets is that corporate news should be entirely positive and could stimulate demand for corporate shares.

What to expect in the oil and currency market?

We believe that the stabilization of oil prices will be only temporary. Data on oil stocks and oil products will be published today. They are estimated to have fallen by 4.466 million barrels last week, compared to 7.897 million barrels the previous week. If data are not unsatisfactory and stock market sentiment remains good, oil prices may rise.

On the other hand, the currency market is still very boring. According to the dynamics of the ICE index, the US dollar continues to rise gradually and broke the level of 93.00 points this week. It is mainly supported by the factor of high inflation and the continuing risk of an earlier change in the Fed’s monetary policy than its representatives predict.

In general, the USD is expected to rise steadily, perhaps until updated employment and inflation data in the United States are released.

Forecast of the day:

The AUD / USD pair continued to decline due to the announcement of negative retail sales in Australia and the overall increasing pressure of the US dollar. The price fell to the level of 0.7315, which may be the basis for a further decline to the level of 0.6265 and then to 0.7220.

The EUR / USD pair is trading below 1.1770 due to the wave of growth of the US dollar. We expect it to fall further to 1.1685.

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