The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 06.04.2021
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The markets are coming back from their long weekend as banks and major financial institutions resume their daily work. This means that liquidity is back on the menu and the wild movements that happened during that time will be evaluated and adjusted.
Bitcoin’s bullish pressure has continued to move higher allowing for a retest of the $60,000 psychological level, however, the Bears might have another say if the $59,500 resistance is not broken. EURUSD has managed to break above 1.1800, when actually there isn’t much left in the bullish tank to continue above or even establish a decent foothold. Gold has enjoyed the corrective move especially with the decrease in the U.S. Treasury yields as it tries to break above the $1,740.
With that said, let’s find out how the markets are doing on April 6th, 2021.
Bitcoin to Retest $60,000
We’ve talked about how important the $60,000 resistance level is for the Bitcoin Bulls. They’ve tried many times to break above it and each time it has ended up with the Bears seizing control of the market. However, this hasn’t scared away the Bulls yet. In fact, they seem to be gearing up for another move higher. The break above the 50-SMA was the key trigger that could plant the fire of more upside, however, before even reaching the mentioned resistance level, BTC would need to break above another resistance.
Since the move from the lows of $57,000 and from the bounce from the 100-SMA, the instrument has been facing strong resistances such as $58,000 and $59,500, with the latter forming the current obstacle for the instrument. By examining the technical indicators of RSI and MACD, one wouldn't be as optimistic about a break above $59,500. The RSI is currently printing between the 50 and 60 levels which usually shows some consolidation with an upward bias, while the MACD is showing pure consolidation after the MAs are printing right at the midline along with the histogram.
If the market doesn’t wish to experience another move to the downside, then a proper break above $59,500 is needed. This would ensure that the Bulls have what it takes to properly test the $60,000 psychological level. If that was not to happen, then the Bears are more than likely to take over the reigns of this instrument and drive back towards the 100-SMA with hopes of breaking below it.
Current Market Sentiment: Neutral
EURUSD Moves Above 1.1800
The bullish pressure on EURUSD has continued to move the instrument higher in a corrective manner. However, this movement was not going to last especially with the sellers quickly entering the market and forbidding the instrument to move beyond 1.1820. This comes on the back of the increase in demand for USD as safe-haven demand for that currency darts to make a comeback, with Eurozone data looming above the major pair.
The risk sentiment in the market has turned a bit sour as investors hunt for the safety of the USD, hence we’re seeing a small pullback in the corrective pressure on the currency pair. This risk aversion is coming from the flip in the futures related to US indices, while investors are rethinking the prospects of the economic recovery after the whole pandemic has ended, while contemplating whether Joe Biden’s $2.25 trillion infrastructure plan will indeed pass through the houses of government.
Europe isn’t helping with the progress of this job at all. Surging COVID-19 cases as well as strict restrictions in France, Germany, and Italy are continuing to fuel concerns about the future of economic growth, which is increasing the skepticism over the EURUSD. So as long as the economic divergence between the U.S. and Europe continues to widen, any upward move in the major currency pair will be extremely limited.
Current Market Sentiment: Cautiously Bearish
Gold Battles 200-SMA & $1,740
U.S. Treasury yields have continued to fall, allowing the non-yielding precious metal to benefit as it edges higher. Markets have begun to see some hesitation coming from the traders as the sentiment turns risk-averse, following a potential hike in tax rates in the U.S. This might hamper any economic growth that the country might face, slowing down the recovery. Adding to the mix, the COVID restrictions in Europe are only increasing the risk aversion in the markets.
However, with risk aversion, demand for the USD might increase which could put a lid on any increase in the gold market. The stronger-than-expected economic data from the U.S. that came out on Monday, caused Gold to fall as a fresh move in Wall Street indices, which paused any attractiveness in the yellow metal. Looking at the support and resistance structure of Gold, we can notice that it’s currently challenging the resistance at $1,735 which corresponds with the 200-SMA on the 4-hour chart.
If there was a break above the 200-SMA, then the next relevant resistance will be at $1,740. This marks a move above the consolidation zone which plagued the instrument during March. Further up, gold will be challenged by the $1,755 high which will be the ultimate goal for the Bulls during this leg of the journey. On the flip side, support on gold can be seen at $1,730 should the Bears take over the momentum. Further down, the $1,725 level will try and protect the buyers from any strong support.
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