The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 07.05.2021
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The market has entered into a lull of trading ahead of the risk event of the day. That being the Non-Farm Payroll figure from the US. Traders will be eyeing this economic indicator for signs of a faster economic recovery in the US. Bitcoin has seen better days as the most recent rejection at $58,000 has triggered another downward move, however, the support remains at $53,000 as consolidation is taking over.
EURUSD and Gold have experienced a massive move higher as the optimism surrounding the waivers on vaccine patents allowed more companies to start mass producing already established one and give the economies a fighting chance to recover. EURUSD is now seeking to break above the 1.2100, while gold will want to keep a solid hand on its gains as it trades within the overbought territories.
With that said, let’s find out how the markets are doing on May 7th, 2021.
Bitcoin Hope for $60,000 Diminishes
Bitcoin has been moving in a very strong bullish trend after it was able to establish a decent support at $53,000. From there, the Bulls set their eyes on the ultimate prize of recapturing the $60,000 level, as the approach was steady and gradual, being able to break through several other resistances. However, they quickly lost the fight at the $58,500 level as seller congestion around that area forced the instrument to back down, losing two important supports, the 200- and 50-SMAs on the 4-hour chart.
Looking at the technical background for a minute, we can notice that the path of least resistance is towards the downside, as the MACD is giving off an increasing bearish impulse. With that said, the current structure of the pioneer cryptocurrency gives off the feeling of a wide spread consolidation between $53,000 and $58,500. This consolidation has been happening for the past week or so and as long as either level keeps blocking the path, we’d expect more of the same.
The RSI is showing more downside pressure as the bearish divergence of the price raises the alarm. The focus of the Bulls here would be to keep the 100-SMA on the 4-hour chart intact, and breaking below that would force the $53,000 into action, then there’d be some talk on just how much more it can take as the buyer congestion at that level is diminishing. Furthermore, if there was a break below said support, BTC Bears will be focused on taking the instrument lower towards $50,000.
Current Market Sentiment:Bearish
EURUSD Bulls Focus on 1.2100
EURUSD continued to pick up some bullish bids and move higher as Friday’s European session gets going. In doing so, the currency major enters a typical pre-NFP trading stage after rising higher only in two weeks. On Thursday, the US and the European Union (EU) agreed to back the waiver of the COVID-19 vaccine patent protections. The move triggered market optimism as it will speed up jabbing, especially important for the bloc which has been struggling to increase the speed of the inoculations.
Also on the risk-positive side, negative for the USd, were comments from the US Federal Reserve (Fed) policymakers who rejected the reflation fears and idea of dialing back the easy money policies, except for Dallas Fed President Robert Kaplan, who is a non-voting member, so his contributions should be taken with a grain of salt. Elsewhere, the US extends curb on investments in Chinese firms, introduced by ex-President Donald Trump, while joining the bloc in criticizing Beijing’s trade/ political roles.
The main focus of traders for the day will be the NFP, which is expected to be released later today. However, this doesn’t rule out the other important economic events for the day such as the German trade and industrial production details for March, as well as ECB President Christine Lagarde’s speech, could offer intermediate clues. While an expected pick-up in German numbers could help the instrument stay positive, ECB’s Lagarde need not highlight the risk for the region’s economy, mainly from Brexit and the COVID-19 to keep the markets hopeful.
Current Market Sentiment:Waiting on Data
Gold's Breaks Above $1,800
Gold Bulls catch a breather around $1,820, after printing the fresh high since mid-February just as Friday’s European session gets started. Gold buyers earlier cheered the hopes of extended monetary policy, as suggested by the Fed policymakers, as well as the faster COVID-19 vaccinations due to the latest drive to waive vaccine patents. However, the risk-on mood fades as traders from Brussels turn cautious ahead of the key US Nonfarm Payrolls data.
Gold recently took clues from the market optimism and hence a pullback in stock futures as well as the US 10-year Treasury yields, seem to have weighed on the prices. Even so, gold buyers remain hopeful as the US employment report for April is likely to print strong job numbers. Speaking of which, fewer Americans filed new claims for unemployment benefits COVID-19 vaccination efforts and massive amounts of government stimulus led to a further reopening of the economy.
The current structure of the technical picture shows that the instrument is showing more tendency to the upside with that being the path of least resistance. The recent move higher has allowed Bulls to enter the overbought zone as per the RSI printing above the 70 level. Moreover, the MACD is showing that the positive momentum is increasing with the histogram printing higher green bars.
Current Market Sentiment:Bullish
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