The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 09.04.2021
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As the shortened week, thanks to the Easter Holiday, comes to a close, we can see that the risk sentiment has once again turned to the negative side allowing for the USD to gain some momentum against other assets. Bitcoin is currently battling against the 50-SMA (Simple Moving Average) as the somewhat directionless trading continues to play its role.
EURUSD has managed to reach a two-week high before the USD gained enough momentum to the top side thanks to the risk sentiment souring with COVID-19 cases and vaccines being at the forefront of traders’ minds. Gold is in the same boat as it reached a five-week high before falling with the risk sentiment as traders’ are more interested in holding USD or Treasuries than Gold.
With that said, let’s find out how the markets are doing on April 9th, 2021.
Bitcoin Faces Two Crucial Levels
Despite the bullish momentum seen on BTC since it’s recovery from $55,400, it still wasn’t enough to effectively reach the $60,000 psychological level, which remains quite the thorn in the sides of Bulls. At the time of this writing, the instrument is trading just above $58,000 as it faces off against the 50-SMA on the 4-hour chart.
However, the MACD does seem to have a different mind set, as the MAs are heading above the midline into positive territory as the speed at which they are moving higher, i.e. the histogram, is also showing some impressive gains, all pointing to a higher move in the near-term. It’s also worth noting that for the Bulls to continue doing their job and push this instrument higher, there will need to be a solid support level around the 100-SMA, breaking below there could jeopardize the entire bullish camp.
As mentioned, the first level of importance for the BTC lies at the 100-SMA, it was a break below that level that triggered a correction towards $55,400. So, for the Bulls to continue doing their job and move BTC higher, the 100-SMA must be protected at all costs. If things get a bit out of hand, and the 100-SMA is unable to save the bullish momentum, we might be facing enough bearish pressure to force BTC back towards $50,000. The Bulls, on the other hand, are looking to continue the recent rise all the way past $60,000 to $70,000.
Current Market Sentiment: Bullish
EURUSD Falls from Two-Week Highs
EURUSD has managed to continue moving higher reaching a two-week high around the 1.1930 resistance level. However, a combination of increasing demand for the USD and powerful resistances caused the instrument to fall back to 1.1900 which is currently acting as a support. The increase in USD was also boosted by the recovery in the U.S. Treasuries yield as well as what’s happening in Asia.
In Asia, several factors are affecting the market sentiment, spooking investors as they run towards the safety of the USD. The relentless march in COVID-19 cases across Asia, concerns over the side-effects of the AstraZeneca vaccine, as well as the mixed Chinese inflation data, just to name a few are all responsible for the lack of confidence of investors and their search for some safe-haven assets, and currently USD is king. Furthermore, the U.S. Treasury yields are also attempting to bounce higher, after Jerome Powell’s ultra dovish comments spooked many investors.
As the European session kicks off, EUR traders will be looking towards a plethora of second tier macro economic news from the Eurozone, such as the Industrial Production data. However, the USD price dynamics will remain a big influencer on the movement of this major pair especially ahead of the Producer Price Index (PPI) to be released later on today.
From a technical backdrop, Bulls remain the dominant influencer in the markets, that’s despite the most recent pullback from its two-week high. Therefore, the EUR Bull traders will be aiming to move the instrument higher towards the 1.1970 resistance.
Current Market Sentiment: Cautiously Bullish
Gold Losing Momentum
The market seems to be changing its mood from that of risk positive to risk negative. This is giving the USD enough bullish presence to push the precious metal down. Recently the instrument has been climbing higher reaching a five-week high around $1,760, since the instrument reached that resistance, it has been experiencing some pullback as a combination of technical and fundamental factors take effect.
Markets are becoming more and more concerned with the COVID-19 surge as well as the effectiveness of the vaccines against the new strain of the virus. Not to mention, the side effects from the AstraZeneca vaccine, all of which are affecting the risk sentiment as investors flee towards USD instead of XAU, giving the instrument some downside pressure. Furthermore, the USD is getting enough bullish pressure thanks to the better-than-expected jobs data allowing for investors to reinstate the sooner rate hikes.
Looking at the resistance and support structure of the instrument, we can find that gold is extending its retreat after facing off against $1,760 and failing to break above. Since then, Bears have been accepted below the $1,755 support and now the next level that Bears are eyeing is the $1,745 level. This happened to be the previous resistance-turned-support which might allow the Bulls to stop the downward move. In order for the Bulls to resume their march higher, then they will need to break above $1,760.
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