March 28, 2024

CEX.IO company blog | Monthly results: In August, oil rose 5%, Ethereum soared by 25%

Alexander Yanyuk, CEX.IO Broker finance expert comments:

As practice shows, August isturbulent month, but in 2020The last month of summer passed relatively calmly. Brent oil, which started the month at $43.61, was able to consolidate above $45 per barrel and finish the last day of the month at $45.64. Note that from a technical point of view, oil has faced important resistance, coinciding with the correction level of 38.2% of the downward movement since the beginning of the year. Most likely, in September we will observe a corrective downward movement, which, however, will be limited to the level of $40 per barrel. Further developments will depend on the state of supply and demand in the energy market and the presidential elections in the United States. However, short-term surges in quotes to the range of $46-47 are possible. Fixing prices at these levels will most likely provoke bullish sentiment up to the $50 mark. During August, gold formed a “doji” at $1,975, while reaching historical highs above $2,000 per troy ounce. The rebound from historical values ​​is likely to be technical in nature, and gold will remain strong ahead of the US presidential election. We should also not forget that gold continues to be in demand as a protective asset against uncertainty in the global economy, which can be triggered by both the current ultra-loose policies of central banks and the repeated coronavirus pandemic in the world.

The US dollar continued to weaken againstbasket of major currencies: during August, the USD index dropped from 93.28 to 92.10. This was facilitated by statements from the head of the US Federal Reserve, which spurred the appetite for risk among investors on foreign exchange markets. Most assets will likely experience positive dynamics in the coming months of autumn ahead of the presidential elections. Investors will most likely use the time-tested axiom: “buy on expectations - sell on news.” The GBP/USD pair will look most promising in this sense in the fall, which will begin to lose ground after the final configuration of Brexit. It is likely that after the US presidential elections the pound will drop to 1.24 per US dollar. The ruble formed a doji on the monthly chart, not succumbing to the positivity in the currency markets. Having started August at 74.41, the ruble strengthened by only 20 kopecks to a value of 74.21 per US currency. For investors, two factors remain sensitive: the oil factor and the factor of possible sanctions. We maintain a wait-and-see position on the ruble, but are inclined to implement a negative scenario with a decline in the Russian currency to the range of 76-78 per USD.

The crypto market showed positive dynamics in August.Bitcoin rose from $11,333 to $11,700, Ethereum rose from $346 to $434 (+25.43%). In general, digital assets waited out August quite calmly and in the fall, when news drivers appear, they will be ready for strong movements. From a technical point of view, Ethereum currently has the greatest growth potential. This is also facilitated by the fundamental background, which is likely to make Ethereum the trend of digital assets in the fall of 2020. If you look at the weekly charts of ETH/USD, you can see a continuation pattern - flag – with a target of $600 per ETH. If ETH/USD quotes fail to stay above $400, a reversal pattern will form in the pair—a “double top”—the target of which will be near the $300 level. For now, we are taking a wait-and-see approach, since the market’s reaction to Ethereum’s transition to the new proof of stake algorithm is unpredictable.

 

Dynamics of main assets in August:

Oil rose from 43.61 to 45.80 (+5.02%)

Gold decreased from 1978.45 to 1975 (-0.17%)

The USD / RUB pair fell from 74.41 to 74.21 (-0.27%)

Bitcoin increased from 11 333 to 11 700 (+ 3.24%)