Concerns for Federal Reserve Financing Problems Increase

EagleFX Team EagleFX

Investors in Wall Street are concerned about the aggressive efforts the Federal Reserve is making to control the level of short-term debt.

However, the Fed has encountered some problems along the way. In particular, a little over a month ago, they encountered difficulties in the repo market. The central bank encountered a liquidity problem causing an increase in several rates. In turn, the Federal Reserve forced the institutions to maintain an adequate level of liquidity.

Investors, for their part, are cautious because the efforts so far have worked, but nothing ensures that they will continue to work in the future.

Currently, the Federal Reserve is using its balance sheet to ensure that banks manage to have enough reserves and capital flows efficiently.

The problem surges as a result of the last announcement made by chairman Powell about the purchase of about $ 60 billion a month in Treasury bills.

Analysts explain that the Fed doesn't distinguish enough the credit quality of some institutions by providing cash in exchange for collateral.

This situation could increase its complexity at the end of the year. During this period, banks focus on maintain liquidity against overnight cash transactions.

Technical overview

The NASDAQ daily chart shows a potential Elliott Wave Pattern as an Ending Diagonal.

The internal sequence has a 3-3-3-3-3 structure. Currently, the technologic index could be running in the fifth segment. Given the Elliott Wave structure formed, there is a high likelihood of an increase from the actual zone to all-time highs between the 8,070 pts, and 8,210 pts.

In summary, the long-term wave pattern for NASDAQ corresponds to a topping structure, with further potential for new advances.

The short-term scenario is also bullish. The potential ending for the current segment is between 8,070 pts and $8,210 pts.

The invalidation level for the long-side scenario is a breakdown of the early October's low at 7,461 pts. In the case NASDAQ breaks below this invalidation level, a test of the 7,004 pts can be expected.

100% Anonymous Trading on EagleFX - Trade NOW!

Author

EagleFX Team

EagleFX

EagleFX Team is an international group of market analysts with skills in fundamental and technical analysis, applying several methods to assess the state and likelihood of price movements on Forex, Commodities, Indices, Metals and

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.