The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 03.06.2021
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Markets all focused on today’s economic calendar as the ISM Services PMI (Purchasing Managers Index) in the US as well as the NFP (Non-Farm Payroll) employment data. All of which will have a definite impact on the EURUSD and Gold. EURUSD seems to be under pressure as it fails to break above 1.2250 and has sent the instrument to 1.2200. Gold is feeling the pressure as it has been unable to break above the $1,910 for the third time and negative pressure seems to be mounting once again. Bitcoin continued to trade in a sideways manner as the pennant formation on the 4-hour chart is pushing the downward scenario more.
With that said, let’s find out how the markets are doing on June 3rd, 2021.
Bitcoin Signals Downside Pressure
At the time of writing, Bitcoin is in a no-trade zone. Sideways trading saw the cryptocurrency dancing around $37,000 within a few days; as the previous price movement that targeted the $40,000 has lost its momentum, and the near-term support of $36,000 seems to be well protected. This kind of movement was enough to form a pennant pattern on the 4-hour chart, which is both a reversal and a continuation pattern. If the downturn on BTC matures as expected, the instrument might fall to attempt a break below the $30,000 to $27,000 levels.
The characteristic is the convergence trend line during asset integration. Please note that the integration will take one to three weeks. The volume at any point on the pennant is critical. Please note that the volume must first be large. But as the structure becomes narrower, they become weaker. After expiration, if the pennant is confirmed in large numbers, this could lead to another major price change. For Bitcoin, the bearish pennant pattern ends with a fall of half the length of the flagpole. Therefore, when the price is close to the upward trend line, traders need to monitor the increase in trading volume.
The MACD (Moving Average Convergence Divergence) shows that the current trend is slightly in favor of the Bulls. This is after a gradual rise from the May low of -4,400 to a level above the midline (0.00). It should be noted that the deviation of the signal line from the MACD line is a bullish signal. Therefore, if the technical side persists, as the Bulls begin to attack $40,000, Bitcoin may slowly resume its upward trend.
Current Market Sentiment:Sideways Trading
EURUSD Remains Under Pressure
The EURUSD is reducing its intraday losses and rebounding from the intraday low of 1.2202 before the European session on Thursday. However, as the USD consolidated its weekly decline during the calm Asian session, major currency pairs fell for the third consecutive day. The recovery is due to lack of data/key events that led to typical pre-NFP (Non-Farm Payroll) market jitters, and comments on new incentives and US efforts to encourage additional taxes on major technologies may contribute to a corrective fall in the USD.
However, as of press time, the U.S. dollar index (DXY) rose by 0.05% to 89.95, putting pressure on the EURUSD price. With the rise in inflation data, ECB President Lagarde rejected any kind of talks about the tapering in QE. In addition, retail sales in Germany fell for the first time in three months, heightening concerns about Brexit and suppressing currencies in the region. Elsewhere, mixed signals from Fed policymakers and the Fed's Beige Book join continued immunization in the West and the recent surge in immunization in Europe to maintain market confidence.
The US ADP employment change, the early signals of Friday’s NFP and the US ISM Service PMI (Purchasing Managers Index) put additional downward pressure on the EURUSD. Today's ADP measure may conflict with official data on NFP. Once the weakness of the labor market is overcome, the number of people applying for unemployment benefits for the first time may decline further.
Current Market Sentiment:Data Driven
Gold Sellers are in Control
As European traders prepared for Thursday's opening bell, gold was still under pressure near $1,900, and fell 0.26% to near $1903 that day. At the same time, on a quiet morning, gold is receiving signals of a rebound in the dollar which would push the yellow metal further down. The reason may be related to the lack of risk catalysts and moderate macroeconomics. After disappointing last month, traders remained cautious about tomorrow's NFP expectations, so there were no major changes.
The recent disappointing US employment report, the controversial views of policymakers in the US Federal Reserve (FED), and signs of rising price pressure also jeopardized the safe-haven demand for the USD, which in turn put pressure on gold prices. Talks about the global push to increase taxes on wealthy companies as well as wealthy Americans, direct bond traders, and the decline in government bond yields, have also contributed to the decline in gold prices. On the other hand, the increasing possibility of the US-China trade agreement and Iran's re-joining the nuclear agreement may scare away gold shorts.
In addition, the trade agreement between the United Kingdom and Australia and the hopes of further stimulus from the United States and global institutions such as the International Monetary Fund (IMF) and the World Health Organization (WHO) limited the immediate decline of gold. Futures showed moderate gains, but government bonds yields are still sluggish, because the US ADP employment is expected to undergo a major shift, which is an early sign of Friday's NFP data and the US ISM Services PMI.
Current Market Sentiment:Sideways - Bearish Leaning
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