The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 02.06.2021
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The market is waiting for direction as more information is being released especially concerning the NFP release later on this week, as well as the resurrection of tapering talks amongst Fed policymakers. EURUSD and Gold are both showing apprehension in the movements as they fell from their respective highs with USD gaining some momentum thanks to the US Treasury yields. Bitcoin is on the fence at the moment, neither bullish or bearish as the instrument consolidates at its current levels.
With that said, let’s find out how the markets are doing on June 2nd, 2021.
Bitcoin Shows Potential for Increase
Bitcoin accelerated above the $35,500 resistance level and continued to rise. BTC even broke through the resistance level of $37,000 and the 50-SMA on the 4-hour chart. However, the Bulls are struggling to break through the $38,000 resistance zone. The highest level reached $37,900 but the price quickly corrected lower. BTC fell below the 23.6% Fibonacci retracement level of the recent bullish trend, rising from a low of $34,225 to a high of $37,900.
On the hourly chart, an important downward channel is also forming, and the resistance is near $36,800. The currency pair also found a quote near the 50% Fibonacci retracement level of the recent rise from a low of $34,225 to $37,900. On the other hand, the immediate resistance is around 36,800 USD. The first major resistance is near $37,000. A significant breakthrough that level may allow the instrument to reach a new high above $37,900. The next major resistance is near $38,800. On top of this, the price can test the $40,000 area.
If Bitcoin fails to break through the $37,000 resistance level, it may correct downwards. The initial downside support is near $36,200. The first major support is near $36,000 and the 50-SMA on the 4-hour chart. If it breaks below the $36,000 support level, the price may trigger another drop. If so, the price is likely to fall to $35,000.
Current Market Sentiment:Cautiously Bullish
EURUSD Remains Defensive Above 1.2200
The EURUSD currency pair remains trading above the 1.2200 support despite the most recent drop, it has managed to reach 1.2225 yesterday, this is where the EURUSD stands as the European session on Wednesday kicks off. The recent price movements can be attributed to slow Asian trading and the US dollar's attempt to sustain the previous day's rebound as well as some domestic catalysts from inside the Eurozone.
The impression from the CPI (Consumer Price Index) refutes the risk of inflation in the speech of the European Central Bank President Christina Lagarde in today's speech. Even so, political forces cannot ignore the strengthening of key catalysts, because the unemployment rate has also fallen in the last reading. The ISM Manufacturing PMI (Purchasing Managers’ Index) was strong, but the details failed to initiate re-inflation negotiations, nor did it help Fed policymakers to ease their concerns about tapering talks.
On the other hand, recent comments by Fed officials have been mixed, but active negotiations on a Sino-US trade agreement may help the dollar extend the final stage of its recovery. In other news, some positive sentiment is developing as Developing Countries might be benefiting from the International Monetary Fund (IMF) and the World Health Organization (WHO), with a $50.00 billion investment into these countries. It is worth noting that non-agricultural caution and uncertainty about the Fed's next move, as well as the support of US President Joe Biden, put the market's optimism to the test amid a light economic calendar.
Current Market Sentiment:Wait-And-See Approach
Gold Falls Below $1,900
Despite a daily gain of 0.17% to $1,897 before Wednesday's European session, gold was on the defensive for the second day in a row. Slow trading hours triggered a government bond yield fall, encouraging gold sellers to celebrate the rise in the dollar. Despite this, the U.S. dollar index (DXY) is resuming its bullish momentum, which was triggered on Tuesday night, when the U.S. 10-year Treasury bond yield was 1.61% at the time of release.
Institutions such as the International Monetary Fund (IMF) and the World Health Organization (WHO) appear to be curbing demand for safe havens specially with the $50 billion investment in developing countries. Technically, the gold sellers are aiming for the 50% Fibonacci retracement level of the weekly rebound at around $1899, and then hit the key support level from the high of $1875 at the end of January. In five days, despite hitting a 0.17% intraday low of $1897 on Wednesday's European session, gold benefited from the earlier fall of the US dollar in Asia.
At the time of writing, the US 10-year Treasury bond yield is 1.61%, showing strong momentum. The WHO seems to be reducing the demand for gold as a safe haven. Technically, the gold seller's goal is to retrace 50% from a weekly rebound near $1,899, and then hit key support from near the high of $1875 at the end of January.
Current Market Sentiment:Cautiously Bearish
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