The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 08.04.2021
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The overall market sentiment remains to be quite optimistic which is allowing for most risk assets to rise. Bitcoin has found a bottom around $55,400 before climbing back higher as it tests the current resistance at $57,000. EURUSD found the bullish pressure, limited as it may be, to continue moving higher towards 1.1900, but the overall bearish pressure that level will attempt to stop any further movements. Gold’s bullish pressure is nothing to scoff at either as the movement is poised to break above $1,745.
With that said, let’s find out how the markets are doing on April 8th, 2021.
Bitcoin Falls Under $57,000
Wednesday wasn’t a pretty sight for the cryptocurrency market, because there was a great drop, for Bitcoin especially, as it fell below the $56,000 support level. This move below was made possible after several failed attempts by the BTC Bulls to break above $60,000. Currently, the instrument is trying to break above $57,000 which has turned into the resistance after the Bears broke through it and through the 100-SMA, however, breaking above that level would bring the buyers back into the market and strengthen market stability.
As the bullish pressure continues to strengthen and tailwinds begin to pick up, BTC is very likely to continue with the upward move and attempt the $60,000 once again. If this move fails once again, then BTC will more than likely fall once again, but this time the bearish pressure will take it down to $50,000.
Looking at the technical aspect of Bitcoin, we can notice the emergence of a falling wedge pattern, which is usually a bullish omen. This means that if the pattern finalises itself, it could lead to massive gains that will break above $60,000, possibly even setting a new record high.
The RSI (Relative Strength Index) is showing some increase in the bullish momentum, especially as the indicator bounced from the 30-level oversold barrier. This gives the Bulls enough fire power and range to indeed break higher once more. It’s worth noting that BTC is currently facing the 100-SMA on the 4-hour chart and if that breaks, then Bears will more than likely seek to stop the movement higher at the 50-SMA.
Current Market Sentiment: Bullish
EURUSD Holds Above 1.1800
The Asian session has been good to EURUSD as the instrument managed to keep above 1.1800 after the instrument failed to effectively break above 1.1900. The softer tone USD has given the instrument enough bullish presence to climb higher. Adding to the mix, the common currency that was supported by Wednesday’s final Eurozone PMI reads. They showed that business activity is beginning to bounce back in March.
The vaccination attempts by France, Germany, Italy, and Spain have increased dramatically as it seems they’ll have enough supplies to vaccinate over 55% of their people by the end of June, which is much earlier than expected, adding to the bullish pressure of EURUSD. Despite the bullish presence, the upside seems to be capped by the upbeat U.S. economic outlook, which is helping limit the USD losses. Investors still remain very optimistic about the economic recovery in the U.S. amid the impressive pace of vaccinations, not to mention the infrastructure spending plan by Joe Biden.
Investors are also quite adamant on the fact that with the increase in economic activity, the FED will be forced to increase interest rates much sooner than expected, however, after yesterday’s FOMC Minutes, that narrative has been downplayed. U.S. policymakers remain very cautious about the continued risks associated with the pandemic. This shifts the focus towards the Fed Chair Jerome Powell, himself, whose speech will play a key role in affecting the USD price movements.
Current Market Sentiment: Cautiously Bullish
Gold Continues Moving Higher
Gold investors are once again coming into the market to bid the instrument higher. This comes after the USD started it’s corrective decline, especially after the S&P 500 futures recorded another lifetime high. Furthermore, the FOMC minutes yesterday revealed that the Fed will likely continue with the accomodative monetary policy, which helped put a stop to any recent rhetoric of faster than expected increase in rates, this helped buoy the general market sentiment.
That said, any downside in USD seems to be limited as Joe Biden’s infrastructure plan will have to pass through both houses of Congress to make it into reality as concerns continue to rise. Furthermore, COVID-19 vaccines remain a big win for the U.S. which will likely help the USD in its upward move. In the meantime, gold traders will be looking at fresh input from the speech by Fed Chair Jerome Powell later on today.
Looking at the support and resistance structure of gold, it appears as if the precious metal remains poised for more upside, enough to capture the resistance at $1,745. Breaking above that level, the Bulls will set their eyes on $1,750 followed by $1,753. The $1,760 will be the level that tests the Bulls’ commitment to moving this instrument any higher. On the other hand, the immediate support is found around $1,737, with some healthy support seen around $1,734.
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