After a strong downtrend over the last two weeks, the US Dollar has finally caught a break. The cryptocurrencies are pulling back lower but this may be a retrace after yesterday’s jump. There might be a trade setup forming here for those who are planning to make some pips from cryptos.

Bitcoin is trying to resume the uptrend again

Is the Big Reverse Finally Underway?

The US Dollar has fallen on some hard times in the last few weeks. This was probably just forex traders closing their trades and positioning themselves before the new year. Year-end cash flows might have had a say in that price action as well.

USD buyers were starving to see some bids and it looks like their prayers have been answered. The Buck is making some decent gains against some of the major forex pair, so hopefully a reverse might be forming. After all, it’s about time.

EUR/USD got close to 1.21 yesterday but it stopped just below that big level at 1.2080. It started sliding lower yesterday but today it is picking up pace. Right now, we are about 10 pips above 1.20. That will be a big level.

Keep in mind though, that the FOMC minutes later in the evening can take us anywhere, so don’t count too much on this level as we approach its release.

GBP/USD is also moving lower but it has just reached the 50 SMA on the hourly forex chart. This moving average is likely to provide some strong resistance, so we decided to go long on EUR/GBP.

The Swiss Franc has been one of the weakest currencies today. That went in our favor though; we had a live buy signal in EUR/CHF which we opened a few days ago. We just closed it manually for a 24 pips profit as this pair climbed higher today,

Cryptocurrencies Retracing Lower This Morning but the Uptrend Has Resumed

This morning, cryptocurrencies have been declining. Bitcoin is down to $14,700 right now from above $15,00 earlier on, while Ethereum is still trading near the record highs it set yesterday.

If you are looking at the 15-minute chart only, today’s decline might look bearish. But, looking at the daily chart, particularly the Ethereum and Ripple Coin charts, the picture seems pretty bullish.

Cryptocurrencies went through a flash crash at the end of December, losing somewhere between 30% and 50% of their value. Now, they’re back on their feet. Ethereum made new highs yesterday while Ripple Coin XRP climbed to record highs again today.

Bitcoin is still far from $20,000, but the $2,000 jump yesterday was a sign that the main digital currency is trying to catch up with the rest of altcoins. This sort of price action tells us that Bitcoin buyers have gained confidence and the uptrend is resuming.

I don’t know if Bitcoin will break the $20,000 anytime soon, but we don’t need that. All we need is a few hundred pips. If you are looking to trade cryptos, today’s retrace lower after yesterday’s jump is a good opportunity to go long. We are long on Bitcoin since late December, but we might be lured into another long term trade, probably in Ethereum or Litecoin.

Trades in Sight

Bullish GBP/USD

1. The trend has turned bullish for more than a week
2. The retrace lower looks complete
3. The 50 SMA is providing support on the H1 chart
4. Stochastic is oversold

As I said above, GBP/USD slipped lower this morning and some of that decline came from lower UK construction numbers. This is not a very important sector for the UK economy, so its impac on GBP is limited.

The retrace lower in GBP/USD seems to have run its course. Stochastic is oversold and the 50 SMA is providing support on the H1 chart. This might be a good time to go long on this forex par with a short term signal.

In Conclusion

The US Dollar is trying to fight its way back as it makes some reasonable gains. The FOMC meeting minutes are due to be released in the afternoon, so if you have open trades, don’t try to push them too far because the minutes could send us in any direction.