Powell bashes cryptocurrencies

TAKEAWAYS

•    Bitcoin falls back under $55,000 as Fed Chair Powell bashes crypto
•    US dollar and bond yields decline ahead of Fed Chair Powell’s testimony 
•    USD/JPY trades in narrow range around highs at 109 
•    S&P 500 nears record as tech stocks rebound
•    Oil price fell back from a 1-day rebound on Friday as US rig count rises
•    Gold dips after 2-week bull run
•    Airline stocks slump as Europe falls back into lockdown
•    Jack Dorsey’s first tweet sold as NFT for $2.9 million
•    Biden administration planning a $3 trillion infrastructure plan - NYT
•    Germany tightens covid restrictions through April 18, Italy to enter Easter lockdown

BEST CHART
GBP/USD – Daily Candlesticks

 
Source: GKFX / MT4 (March 22, 2021)

GBP/USD is testing a confluence of support from a rising trendline, recent lows and the 1.38 level. A break lower would suggest a deeper correction, perhaps toward the 1.35 handle. Whereas if it holds, it would suggest the uptrend can resume with a test of the 2021 high.

GURU WISDOM

“Cash combined with courage in a time of crisis is priceless.” - Warren Buffett 

MARKETS

*Daily closing price
↗ EUR/USD    1.1937        (+0.45%)
↗ GBP/USD    1.3866        (+0.23%)
↘ USD/JPY    109.15        (-0.03%)
↗ S&P 500    3940.59    (+0.70%)
↘ Hang Seng    28,885.34    (-0.36%)
↘ Gold        1731.82    (-0.39%)
↘ Oil (Brent)    64.30        (-0.37%)
↘ Bitcoin    54,671        (-4.70%)

NEWS

The dollar dipped on Monday with EUR/USD heading back over the 1.19 handle ahead of testimony from Fed Chair Powell and Treasury Secretary Yellen in a 2-day testimony that begins Tuesday. Powell released pre-prepared remarks on Monday saying “The recovery is far from complete, so, at the Fed, we will continue to provide the economy the support that it needs for as long as it takes.” 

Powell also took the opportunity to knock cryptocurrencies, saying they are “not really useful stores of value” helping Bitcoin drop over 5% on the day.

Throughout the day central bankers will be giving speeches at a virtual conference held by the Bank of International Settlements (BIS). The comments have the potential to move markets with the intense scrutiny of bond yields and a rising belief that all the monetary stimulus will lead to inflation this year. The central bankers are expected to say they think any rise in inflation is ‘temporary’ so will not need to see them lift interest rates.

The drop in the dollar came alongside a drop in bond yields, which helped out tech stocks where valuations would be unjustified were bond yields to continue rising. As a result, the S&P 500 was close to a record high.

DAY AHEAD 

*Times in GMT
07:00 – UK ILO Unemployment Rate (3M) (Jan) [5.2 % Exp vs. 5.1 % Prev]     
07:00 – UK Average Earnings Including Bonus (3Mo/Yr) (Jan) [4.9 % Exp vs. 4.7 % Prev] 
11:50 - BoE's Governor Bailey speech 
14:00 - Fed's Bullard speech
15:10 - Fed's Bostic speech
16:00 - Fed's Chair Powell testifies 
17:25 - Fed's Brainard speech         
18:45 - Fed's Williams speech         
19:45 - Fed's Brainard speech