The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 09.06.2021
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The market is preparing for Super Thursday as market participants have decided to calm themselves ahead of the economic release. They are playing on the sidelines until concrete data has been observed before entering the market. EURUSD and Gold are both consolidating their gains after yesterday’s mild decline, now the focus is on Thursday’s data release. Bitcoin is also trading on the lower end of the spectrum as more analysts are joining the bandwagon of a bearish cycle starting on the instrument.
With that said, let’s find out how the markets are doing on June 9th, 2021.
Bitcoin is Under Pressure
Bitcoin remained in the bearish zone below the $35,500 support zone and continued to fall, the bearish momentum did not stop there and continued to move lower breaking through the mentioned support level and remained below the 100-hour simple moving average. The price even broke the $32,000 support area, reaching $31,065 before the price started to correct upwards.
The price rebounded above the 23.6% Fibonacci retracement of the recent decline, which connected the high of $36,820 to a low of $31,065. The $34,000 level is currently the level to beat for Bulls after recently falling from a high of $36,820 to a low of $31,065. The 50% Fibonacci retracement level seems to be an obstacle. The first major resistance is near the $33,500, and the major resistance is near the $34,000 area. Prices above this area can test the 100-hour simple moving average.
If Bitcoin does not break the resistance level of $34,000, it may fall further, with the downside support located around $32,500. The first major support is near the $32,300 and the channel trend line. If it breaks below the channel support, the price may fall to $31,000. The basic support is around $30,000. If the Bulls fail to defend the $30,000 support area, there is a risk of a sharp decline which might increase further.
Current Market Sentiment:Bearish
The sluggish price dynamic of the USD kept the EURUSD higher during the Asian session. The currency pair is taking a comprehensive trend, falling below 1.2200 about 15 points, however, at the time of writing, the EUR/USD is trading at 1.2184, an increase of 0.11%. The U.S. dollar index (DXY), which tracks the performance of the USD, hovered around the 90 mark as it restrained the gains in early Asian trading.
After the disappointing ADP data was released last week, the USD was under selling pressure. This weakened the prospect of the Fed withdrawing earlier than expected. Before the inflation data released on Thursday, market participants are avoiding any kind of positioning on the dollar. At the same time, the Biden administration voted to form a "strike team" to identify specific violations that are "eroding" the supply chain. Market uncertainty is pushing funds to the dollar as safe-haven bids continue to increase, which temporarily limits the dollar's decline.
On the other hand, the euro got some support from mixed economic data, and investors waited for the European Central Bank. Data show that the euro zone’s economic contraction was less than the initial estimate, while disappointing data from Germany showed that investor morale unexpectedly deteriorated in June, and industry and industrial production both declined in April. For now, the price dynamics will be focusing on ques from the USD as investors wait for the all important inflation print on Thursday.
Current Market Sentiment:Consolidation
The price of gold is still in a very narrow trading range, with gains on the modest side. Prices are still under pressure due to rising U.S. dollar, ETF closures and weak consumer demand in India. Investors have now shifted their attention to the US Consumer Price Index (CPI) data, which may affect the Fed's monetary policy decisions. After several Fed officials made comments, people's expectations that the Fed will cut interest rates soon rose.
The exchange rate of the US dollar index (DXY) remained stable at 90.08, rising by 0.02 against a basket of six competing currencies. This is making the metal less attractive to foreign exchange holders, and investors have remained stable even though the market is shifted from the central bank to the US inflation data in anticipation of events in the next few days. Any further increases in the inflation rate, the first step that the Fed might take may be to reduce bond purchase.
Although the market is calm, currency volatility is at its lowest level in a year. With the release of the European Central Bank and the US Consumer Price Index, the market is preparing for Super Thursday, and the US dollar has almost withdrawn. This alleviates concerns about the imminent decline in monetary stimulus from the Federal Reserve, the US dollar should be curbed against the Federal Reserve, which is expected to keep gold prices near the recent high of $1,900.
Current Market Sentiment:Consolidation
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