The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 19.03.2021
Following the FOMC meeting, the markets simply shrugged off the contentious tone of the Fed and continued to trade as they were. Bitcoin proceeds to attempt a move higher, but with heavy resistance at $59,600 and $60,000, the road ahead will be bumpy.
EURUSD fell once again amid a surge in the U.S. Treasury yields, which prompted a powerful USD. Gold appears to be affected by the U.S. Treasury yields, but with talks between the U.S. and China climbing to the forefront again, the precious metal will be focusing on this..
With that said, let’s find out how the markets are doing on March 19th, 2021.
Bitcoin Battles $59,600
As Bitcoin proceeded to move higher, it reached the $59,600 resistance level which had immense selling pressure built up. As soon as the instrument reached that level, the result was a break back lower towards the $57,000.
A break below the $57,000 was seen, reaching towards the $56,000, but the Bulls were quick to capitalize on the dip and drive the price higher. So far, the 50-SMA on the 4-hour chart is keeping things in check, as any movement lower will have to deal with that moving average.
However, that doesn’t mean that the upside is free from any restrictions. The resistance zone between $59,600 and $60,000 is showing a lot of selling pressure built up closure, and short orders are waiting for the price to reach these levels.
The RSI (Relative Strength Index) on the 4-hour chart is reinforcing the bullish momentum, as it bounces off the 50 midline and is headed towards the overbought zone, it would be safe to say that as long as the RSI prints above the 50 level, the bullish momentum on Bitcoin will proceed.
However, traders must be warned that a break below the 50-SMA would mean a reversal is likely to happen. The next level of support after the 50-SMA is seen around $56,000. If the selling pressure continues and those support levels are unable to hold the burden of keeping things in check, then you can expect the instrument to reach $52,000.
Current Market Sentiment:Bullish
EURUSD Remains Vulnerable
Despite the recent surge in the EURUSD, thanks to the FOMC decision, the instrument was able to maintain the bullish presence and continue to fall below the 1.1950 support. However, it was able to find enough buyers around the 1.1900 to stabilize the downfall.
USD witnessed a dramatic turnaround yesterday allowing it to regain the bullish momentum after the U.S. Treasury yields started to surge once more. This was the key factor that gave EURUSD Bears a reason to short the instrument.
There was some positive news from the European side of things after the European nations announced plans to resume using AstraZeneca's COVID-19 vaccines. This would pause any more downsides in the EURUSD as follow-through selling might pause and allow the instrument to catch its breath. The Bulls will be focusing on breaking above the 1.2000, however repeated failures only prove to embolden the Bears as a break below 1.1800 becomes a reality.
From an economic standpoint, there aren't any major market-moving indicators from either side of the spectrum, U.S. or Europe. This leaves the movement of the EURUSD under the mercy of the USD movements and the fluctuations of the U.S. Treasury yields. Furthermore, broader market risk sentiment might produce some movement in the instrument.
Current Market Sentiment: Netural
Gold Consolidates Amid U.S.-China Talks
The precious metal gold seems to have shifted from an offensive pose to a defensive one. The recent surge in the U.S. Treasury yields is playing the most major role that lifted the USD against all of its counterparts in the market. The investors started to bet on faster economic growth and recovery and higher inflation. Not to mention that the BOE (Bank of England) also mirrored the Fed’s position on monetary policy.
Any further downside in the markets is most likely to be stopped by the renewing jitters as talks between the U.S. and China started once more, add to that the slump in global equities and rising inflation fears. The Dynamics of the U.S. bond market, and the ongoing talks between the U.S. and China are bound to have an effect on the yellow metal, as the U.S. economic agenda remains dry for the day.
The support and resistance structure of gold shows that the instrument is defending the $1,732 support. If that level fails, the next level that awaits Bears would be seen at $1,727 with a dense support clustering around it. Any lower and Bears will be looking at the 1,717 as the ultimate goal. Bulls, on the other hand, must break above the $1,740 in order to sustain a good bullish momentum, after which the $1,750 and $1,755 will play a major role in keeping the instrument pressured.
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