The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 24.03.2021
The market seems to leave the risk-on mood and ventured risk-offs, which have an effect on almost all the instruments. Bitcoin seems to be consolidating for the time being, however, there seems to be an increase in the negative pressure.
EURUSD is waiting on some important economic indicators to decide whether a downward continuation is warranted or not. But, gold is finding some mixed factors that are affecting the negative and positive side of the trade, which means more consolidation for the time being.
With that said, let’s find out how the markets are doing on March 24th, 2021.
Bitcoin Signals More Bearish Pressure
Yesterday’s decline below the crucial $55,500 support line was a real dent into the positive momentum that Bitcoin was hoping to establish. Breaking below that support forced the instrument to continue moving lower and even reaching the $53,100 support level which coincided with the 200-SMA on the 4-hour chart. This convergence between the SMA and the support line, gave that level the needed strength to halt any kind of further declines along the way.
The instrument managed to jump a bit from $53,100 and reached the $56,000 resistance, however, with the lack of any kind of sustainable momentum, the instrument quickly fell back to the support line, and it currently trades around the $54,740 level.
Looking into the RSI and MACD (Moving Average Convergence Divergence) indicators, we can notice that both are signaling more bearish pressure on the horizon. The RSI is printing below the 40 level indicating that there’s still some more room to the downside, while the MACD is showing negative pressure mounting as the Moving Averages are below the midline.
Despite the strength of the 200-SMA and $53,100 support levels, the downward momentum might be too great to handle, but if Bitcoin fails to break, it might have a sustained movement above the $55,000 and $55,500 resistance levels.
If that doesn't happen, we might expect more downside pressure that takes the instrument below the $53,100 with a target for Bears around the $50,000.
Current Market Sentiment: Bearish
EURUSD Remains Pressured
Despite the small bullish correction that we saw the day before, this doesn't mean that the negative pressure has ended. The EURUSD instrument managed to reach the 1.1950 in that small push higher, but with that level being a very strong and psychological level, the momentum higher, couldn’t break above it.
The result was a mighty turn of events that led the instrument to fall two weeks lower at 1.1835. EURUSD now appears to have entered into a bearish consolidation mode as investors wait for fresh input that comes in the form of Eurozone PMIs (Purchasing Managers’ Index).
USD proceeds to show increased bullish pressure against all other instruments, and not just EURUSD. The reason behind that is the optimism surrounding the U.S. economic outlook, which has been bolstered by the pace of COVID-19 vaccines, this also kept a lid on any further increases in the common currency.
Another aspect that kept the EURUSD from realizing any more gains was the drop in the global risk sentiment, after the newly imposed sanctions on Chinese officials by Western countries over human rights violations in Xinjiang.
The focus for today will be on the Eurozone PMI reads. The endless lockdown, which the Eurozone is experiencing, almost ruined any kind of recovery in the Eurozone’s dominant services industry and that’s why, today’s release of Services PMI will have a much bigger impact than expected.
A weaker reading on the economic indicator will only drive the point home of the uneven economic recovery in the region, which will pave the road for additional weakness in the EURUSD.
Current Market Sentiment: Bearish
Gold Lacks Follow-Through
With the lack of any meaningful movements in the precious metal, we reverted to analyzing the microscopic movements that happen on a daily basis. During the Asian session, gold was under some negative pressure, however, that was quickly thwarted as the instrument found enough bounce to counteract any kind of negative pressure, this combination of factors helped gold gain some traction and recover part of the previous day’s losses.
The yellow metal was sought by Eurozone traders after the weak trading sentiment in the equity market gave investors a pause and looked around to assess their positions. They, however, remain quite cautious as a spike in COVID-19 infections and renewed lockdown measures in Europe, pushed them away from risky assets and into the laps of safe-havens. The other factor that played a role was the general risk-off mood in the markets, which caused the yields in the U.S. Treasury market to retreat giving the non-yielding metal a bit of a boost.
But, those supporting factors were offset by the underlying bullish sentiment in the USD. This, along with Powell's second day of testimony before the Senate Banking Committee, might influence how the USD will trade and inturn might provide with some interesting trading opportunities around the XAU/USD.
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