The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 02.08.2021
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The overall market is quite erratic, and there doesn’t seem to be a single direction for everything. Still, the USD is showing strength after the last FOMC meeting and the subsequent comments of various Fed officials. With that said, the EURUSD is regaining some power, thanks to the latest news from the ECB decision. On the other end, Gold is experiencing increased negative pressure, and the prognosis for it doesn’t seem to be all that well. Bitcoin could also be on the verge of additional negative momentum, as it broke below the $40,000 support level, but the Bulls are attempting to keep things settled.
With that said, let’s find out how the markets are doing on August 2nd, 2021.
Bitcoin Could Extend Losses
Bitcoin prices continued to climb above the $42,000 resistance level, and even managed to surpass $42,500, remaining above the 100-hour simple moving average. However, the price struggled to break through $42,600, forming a maximum of around $42,630, before beginning a downside correction. Later on, the instrument fell below $41,200 and $40,500, even breaking the $40,000 support level and the 100-hour simple moving average.
BTC registered a low at $39,281 and the price is now consolidating. This led the $40,000 level to regain its status as a strong resistance level, and Bulls will surely be aiming to break above it. For some reason, this level happens to be close to the 23.6% of the Fibonacci retracement level of the downtrend, from a high of $42,629 to a low of $39,281. While the first major resistance is around the $40,500 level and the 100-hour simple moving average. An important downtrend line has also been formed on the hourly chart of the BTC/USD currency pair, with resistance at around $40,500.
The trend line is close to 50%, as the Fibonacci retracement level fell from a high of $42,629 to a low of $39,281. If the trend line breaks, Bitcoin may rise to the $41,200 area. After the Bears had capitalized on the movements, the instrument fell below $40,000 and $40,500 resistance levels, but the instrument is still not out of the woods and may fall further. The initial downside support is near $39,200, with the first major support near the $38,500 area.
Current Market Sentiment:Bearish
EURUSD Attempts a Move to 1.1900
The EUR/USD currency pair reversed the trend of falling from the monthly high on Friday, pushing the exchange rate to 1.1870 before Monday's European session. However, traders are cautious about the monthly retail sales data in Germany and the US ISM Manufacturing Purchasing Managers Index, not to mention the ongoing negotiations in the Senate on President Joe Biden’s infrastructure spending.
China’s economic growth and the record decline in US public wealth from the world’s largest pension fund, the Japanese Government Pension Investment Fund (GPIF), have also been affecting the overall market sentiment. Realizing the need to get rid of monetary tightening, the European Central Bank raised the topic of Delta-Covid. However, Germany continues to strongly support Easy Money, hence the emphasis on today’s July Retail Sales read will be the dealbreaker on the impasse.
The major currency pair snapped a four-day uptrend on Friday, posting the bearish spinning top pattern on the 4-hour chart. The candle formation also gains support from a bearish cross of the 200-day EMA over the 50-day EMA, suggesting further weakness of the instrument. However, MACD (Moving Average Convergence Divergence) is showing bullish signals and hence the pair Bears are awaiting a clear signal.
Current Market Sentiment:Wait-and-See Approach
Gold Begins to Downward Correction
On Monday, gold witnessed a losing start when it approached the $1,800 mark and fell. At the time of writing, the Bears are testing a bearish risk exposure of 21-DMA around $1,808. Basically, the U.S. dollar remains strong amid rising global concerns and weak US economic data. Meanwhile, a fresh sell off in Chinese stock markets exerted additional downside pressure on gold price, following the decision of the country’s regulator to impose fines on three private tutoring companies.
The attractiveness of the U.S. dollar as a safe haven has added additional pressure on gold prices, as the market is disappointed with the Manufacturing PMI data of the second-largest world economy. James Brad, chairman of the Federal Reserve Bank of St. Louis, believes that the Fed should begin "soon" to cut its monthly bond purchases of $120 billion, this fall. Those remarks caused the price of gold to fall.
Technically, the Bulls need to break through the $1,834 level to tighten long-term forecasts. Having said that, in the near future, the reverse weekly upward trend is in development, which will be a compelling feature. However, if the price fails to break through $1,800 points and then successfully conducts the fourth weekly test at $1,790, the situation will change, and the short position will break through $1,750.
Current Market Sentiment:Bearish
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