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Technical Analysis for Bitcoin, Euro vs U.S. dollar, and Gold for 18th March 2021

The Daily Cryptomenon

This analysis was written at 9:00 am GMT +3, on 18.03.2021

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The FOMC had a major effect on the markets as the USD was offered heavily, following the decision to keep interest rates near the zero bound. Bitcoin was able to recapture important resistances as the Bulls focus on breaking above $60,000.

EURUSD and gold were also able to capitalise on the bearish movement in the USD allowing them to post their respective gains, as a new day begins.

With that said, let’s find out how the markets are doing on March 18th, 2021.

 

Bitcoin Rebounds… A Lot

Embracing the $54,000 support level is what allowed the pioneer cryptocurrency to establish a decent ride higher, after the massive drop due to India’s Cryptocurrency Ban Bill. This movement gave Bitcoin the needed energy to break above important resistances such as the $57,000, but lost steam before reaching $60,000.

The instrument is now trying to keep the dream of another all-time high alive by trading close to $58,700. If Bulls manage to stay above $58,000, we can expect another major run to the topside. With all the focus on keeping the price trading above $58,000, the Bears will most likely attempt a move to break below and stop the bullish momentum.

The RSI (Relative Strength Index) and the MACD (Moving Average Convergence Divergence) are showing that the bullish move still has room for more upside with the former indicator printing around the 60-level indicating bullish presence, while the MACD histogram is showing that the momentum to the upside is increasing.



Looking at the long term chart, we can notice that a death cross is happening on the BTC. This pattern emerges when the long term Moving Average, in this case the 200-SMA, crosses above the short term moving average, which is the 50-SMA.

With that said, this gives the impression that BTC isn’t out of the woods just yet, and the recovery is still on its way making the road towards new All-Time highs much more difficult.

Current Market Sentiment: Bullish


EURUSD Corrects FOMC Gains

The FOMC event yesterday, came a bit as expected. The Central Bank kept its monetary policy settings unchanged, with near zero interest rates and reiterating the ‘no rush’ stance of increasing the benchmark interest rate any time soon.

This, however, triggered a massive USD sell-off which in turn assisted the EURUSD in climbing towards the 1.1950 level and breaking above it reaching 1.1980 before back tracking a bit. But, the Bulls weren’t in a position to really capitalize on this rally, failing to really break above the psychological barrier at 1.2000.

The statement from the FOMC iterated that the U.S. is showing signs of a strong economic recovery, which limited the downside of the USD, and in turn provided headwinds on the EURUSD to battle against. Furthermore, the current situation with COVID-19 vaccinations in Europe and the continued lockdowns which are playing a detrimental part in getting the Eurozone economy back on its feet.

Nevertheless, any further declines in EURUSD will likely be limited ahead of Chrisitne Lagarde’s speech later today.



The economic calendar for today will have markets watching the Philly Fed Manufacturing Index, and the usual Initial Weekly Jobless claims, not to mention the continued monitoring of U.S. Treasury yields which have the biggest part in controlling the flow of EURUSD. With the decision of the Bank of England revealed later on today, traders might focus on the GBP for some cross-asset driven movements.

Overall, traders of the common currency will be observing the exchanges at the 1.2000 barrier, as a failure there for Bulls will give Bears the best opportunity to strike back.

Current Market Sentiment: Somewhat Bullish


Gold Battles Against $1,755

After the FOMC decision and the subsequent statement and Q&A, gold was able to break the consolidation zone between the 50- and 100-SMAs. The move higher allowed the precious metal to continue moving higher reaching a high of $1,755 before dropping slightly. 

The Bulls will continue to attempt a move higher as their entire focus is breaking above the $1,755. The weak USD could be of use this time after the FOMC kept rates on change while downplaying any increase in inflation.

In order for the yellow metal to continue with the Fed-inspired upbeat momentum, a break above the $1,755 is desperately needed. If that comes to the limelight, the next level which Bulls will target is seen at $1,773, which coincides with the 200-SMA on the 4-hour chart. 

 


Looking to the downside, the $1,740 will most likely keep a strong lid on any negative pressure that the instrument might face. If that level falls, there would be enough support around the $1,730 to help Bulls along as it’s a level which the 100-SMA on the hourly chart and on the 4-hour chart are currently settling on. If it got any lower, the instrument will be right back where it started around $1,724, with the ultimate target for Bears seen at $1,717.

Current Market Sentiment: Somewhat Bullish


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