Forex
Euro: Parity calls are very much in play when it comes to the EUR/USD pair. The conflict in Ukraine is expected to push German recovery into despair.
Investor confidence in Europe's largest economy is at its lowest level since the outbreak of the epidemic, as businesses continue to be concerned about the consequences of the crisis on the EU's border.
The ZEW institute's gauge of expectations decreased to -41 in April, down from -39.3 the previous month, while the indicator of present circumstances worsened.
The weakness in the euro is likely to prevail, and this is despite the fact that with every passing day, we hear more and more hawkish tones coming from the European Central Bank.
However, currency traders are completely ignoring those calls as they are more focused on the dollar index and its strength. The fact that some members of the Federal Reserve have renewed speculation that the Fed could still increase the interest rate by 75 basis points has brought more strength to the dollar index.
Having said that, euro bears should keep in mind that the European economy could fare better than current expectations, and this represents a significant risk to the euro-dollar parity call.
For instance, the Governing Council could potentially become immensely sensitive to headline inflation, or wage growth in the Eurozone could see a sharp rise—although this isn't a likely scenario.
All of this could push the interest rate hike much forward, and we could potentially see an interest rate by the ECB as early as July.
Cryptos
Bitcoin price retraced to the 30K price level, which we predicted in yesterday's comment. There is no doubt that the Bitcoin price is extremely oversold, and this message can be seen by looking at the RSI indicator on the daily chart, which tells us that the price is oversold.
In addition to this, the 30K support level is of extreme importance among traders, and no one wants to see the price falling below this price level as it will seriously damage the price action.
It is important to keep one thing in mind, and that is Bitcoin price at its current level does represent a huge bargain opportunity, and it will not be long before we start hearing funds and corporates bagging Bitcoin at its current price levels.
For instance, yesterday, El Salvador bought more Bitcoins, and this continues to send one message and one message alone, and that is sheer determination to back the cryptocurrency no matter what.
Technically speaking, on-chain transaction analysis also confirms that Hodlers are still unshaken by the current price action, as transaction analysis doesn't seem to suggest that they are liquidating their positions.
However, if the price breaks the 30K price level, it is highly possible that we may see some capitulation taking place, and that could bring another wave of intense sell-off for Bitcoin.