We finally experienced a jump in cryptocurrencies. Cryptocurrencies have had an impressive run over the last 24 hours. Is this the reversal we’ve been waiting for? Is the USD reversing too after trading in a downtrend for more than a year? Let’s have a look at everything new in the market…

Cryptos have been surging over the last few trading sessions

USD Finally Gaining

The US Dollar has been stuck in a steep downtrend for more than a year. The pullbacks have been pretty shallow. Every decent retrace has been seen as a possible reverse and has attracted attention. At the end of the day, all retraces have ended in smoke and the downtrend resumed once again.

At the moment, the USD is going through such a period. The USD gained some considerable ground in the last several days, encouraging USD bulls.

The Dollar is not exactly running away with the money, but it is progressing steadily. The major currencies are having difficulty retracing against the USD, apart from the Yen, of course. The Yen found some strong bids yesterday when the equity markets crashed. This saw the cash flows head towards safe-haven currencies.

The Euro seems to lose whatever gains it makes; EUR/USD retraced about 890 pips higher yesterday evening, but it lost them pretty quickly this morning. The GBP is nearly five cents higher against the Buck, dooming this forex pair.

The commodity currencies have also hit a rough patch with the USD advancing constantly against the AUD and the CAD over the last couple of weeks. The Kiwi is showing resilience though. We had a buy forex signal in this pair yesterday which hit TP after the unemployment rate fell by 0.2% in New Zealand last night.

We can’t tell if this is a proper reversal or whether this is just another pullback before the next leg of the downtrend. USD bulls still need to push higher for the bigger trend to reverse. The coming days will tell us if the sellers have really given up.

Are Cryptocurrencies Finally Reversing Too?

Cryptocurrencies have had a hard time these last few weeks. However, it looks like they may have gotten to the light at the end of the tunnel. The price action of the last two days looks very promising for cryptos.

The H1 Bitcoin chart looks great for buyers. Bitcoin has gained more than $2,000 in the last 24 hours, starting from below $6,000. This means that Bitcoin value has gone up more than 35% during this time.

Bitcoin is breaking moving averages one after another on the H1 chart

You can see the bullish price action in the last hourly candlestick. Sellers tried to push lower after two sessions of trending higher. But, once they reached the 100 SMA on the H1 chart, the buyers jumped in and took the price above the opening level. This is pretty bullish.

Litecoin is still in a downtrend in the larger timeframe charts

Yet, the larger timeframe charts still look bearish. As you can see from the daily Litecoin chart, this looks like another retrace higher, unless all the moving averages that stand above get broken.

Bitcoin did jump from the 200 SMA on the daily chart, while Litecoin jumped from the 100 SMA. We made a nice profit from Ethereum yesterday and from Bitcoin today, so we’re not complaining.

Trades in Sight

Bearish AUD/USD

• The trend is changing
• The jumps higher are getting weaker
• The moves down are getting stronger

Moving averages are turning into resistance now, after being broken to the downside

While NZD/USD keeps showing resilience, the other commodity Dollars aren’t. The CAD has lost nearly 300 pips in the last few days, while AUD/USD has slipped 300 pips lower. The trend is changing, but I’m waiting for a retrace higher in order to open a sell signal. The 100 SMA (red) looks like a good place to go short since it provided resistance earlier today. Although, we must wait until the price retraces up there, if it does.

In Conclusion

Later on today we will have the US Crude Oil inventories, which will affect USD/CAD. I hope to see some drawdown on the inventories, sending USD/CAD lower. If that happens, I will look to buy this pair, since it is reversing the trend. In the evening, we will have the rate decision from New Zealand, but there’s plenty of time until then.