The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 07.06.2021
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The market is still recovering from the NFP (Non-Farm Payroll) release from last week as they digest the lower than expected figure. The EURUSD and Gold were trading higher during the opening of the week, however, they seem to be succumbing to the negative pressure. This is coming from the overall bearish risk-off mood in the market which gives the USD the needed push higher. Bitcoin, on the other hand, is trading in a clear sideways manner as it tries to ignore the latest Elon Musk tweet on the duo parting ways.
With that said, let’s find out how the markets are doing on June 7th, 2021.
Bitcoin Shows Possible Bullish Move
Bitcoin has failed to reach a high of around $39,000 in the past week. After Elon Musk posted a humorous "breakthrough" tweet that he had parted ways with Bitcoin, the price fell to $35,000. Most of the weekend trading hours were slow, and the price failed to reach $40,000. The main thing is that many analysts are focusing on long-term trends rather than short-term prospects, which have been around for some time.
At the same time, as the Bulls encountered direct resistance at the 50-SMA and 100-SMA on the 4-hour chart, the benchmark cryptocurrency hovered at $36,000. Overcoming these obstacles is obviously difficult and will delay the rebound. The chart pattern is formed by converging a pair of trend lines that connect consecutive highs and lows. Suppose the trend lines intersect on the same slope, then it would appear before the triangle gives way to the next important move, whether it is a breakout or not. Note that the breakout comes from an uptrend line and marks the beginning of a downtrend.
On the other hand, the breakout occurs on the downtrend line and defines the beginning of the uptrend. Symmetrical patterns usually have specific breakthrough price targets. Or a breakthrough measured from the highest point to the lowest point of the pattern. The pattern in the figure above indicates that a breakthrough of 35% may push Bitcoin to a high of just over $50,000.
Current Market Sentiment:Sideways
EURUSD Remains Calm Below 1.2200
The EURUSD currency pair is trading with minimal losses on the first day of trading in the new week. The currency pair trades within a very narrow range of 15 points, with no obvious traction. At the time of writing, the trading price of the EUR/USD currency pair is trading lower by 0.06%. The U.S. dollar index (DXY), which tracks the performance of the USD against a basket of other currencies, reported 90.12, down 0.41% on the day.
The DXY showed negative pressure because of the labor figures which showed negative results for the second consecutive month. Labor data show that the number of NFP (Non-Farm Payroll) in the United States in May was 559,000, which was nearly 90,000 less than market expectations. After accepting the data, investors found that inflation worries had subsided because the market believed that the data was not encouraging and would not trigger a change in the Fed's current monetary policy stance, which would affect the demand for USD.
Over the weekend, US Treasury Secretary Janet Yellen said that even if inflation and interest rates rise, US President Joe Biden should continue to implement his $4 trillion spending plan. However, even with the weakness of the USD, the common currency could not gain much. Eurozone retail sales fell more than expected in April, while the European Central Bank (ECB) hinted that it could follow the example of the Federal Reserve and restrict the purchase of corporate bonds.
Current Market Sentiment:Neutral to Bullish
Gold Flirts With Intraday Low
Gold is struggling to break the daily low of $1,884.58, which fell by 0.26% the day before Monday's European session. The risk-off mood in the market is pushing demand higher for the USD, which in turn is negatively correlated with the price of gold. The employment report eased concerns about re-inflation, while US Treasury Secretary Janet Yellen said that raising interest rates would benefit the Fed, and new concerns about falling market positions are affecting market sentiment.
Among these trends, as of the press release, the U.S. 10-year Treasury bond yield rose by 1.6 basis points (bps), while the U.S. dollar index (DXY) remained stable at 90.00. The same thing is putting downward pressure on gold, and the instrument is looking for new clues in the near-term direction. With the help of the high COVID-19 vaccination rate, NFP increased by 559,000 last month, but this was lower than the general expectation of 650,000 new jobs in May.
There have been talks concerning President Biden’s readiness to ease the tax rate proposal amid positive COVID conditions, which may push the yellow metal even further down. In the case of an upturn in the NFP release, the situation may indicate a slight decline in the price of gold. Fed’s Powell may provide entertainment in between by advocating loose monetary policy, but gold traders will be more interested in the confirmation of NFP.
Current Market Sentiment:Bearish
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