The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 09.07.2021
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The week finishes, there’s a lot of information for the investors to digest. The first comes from the FOMC with their explanation of the monetary policy decision from June as traders seem to be totally unfazed by that. The other issue the investors are looking at is the ECB inflation and GDP growth expectations. The EURUSD consolidated as it tries to digest all the information being thrown at it, while Gold has broken the upward move it has been doing as the case for negativity gains traction. Bitcoin has also broken the consolidation and it moves lower reaching $33,000 and even lower as Bears target $30,000.
With that said, let’s find out how the markets are doing on July 9th, 2021.
Bitcoin May Struggle to Recover
Bitcoin failed to hold the $33,500 support level and continued to fall. BTC even broke through the $33,000 support zone and is well below its simple 100-hour moving average. The price even fell below $32,200, but no further measures were taken. It is now consolidating losses above the $32,200 support zone. It’s also now close to the 23.6% Fibonacci retracement of the recent decline, falling from a high of $35,975 to a low of $32,150.
The triangle also formed short-term trading, and the hourly resistance of the BTC/USD pair is around $33,000. The support of the triangle is near the $32,200 area, so the first major support is near the $32,200 area. If the price of Bitcoin doesn’t remain above the support level of $32,000, a sharp decline may occur. The next big support is near $30,500. Any further losses may push the price below the large support zone of $30,000 in the short term.
If Bitcoin manages to remain stable, an upward correction may be set above the $32,000 support area. Direct upward resistance can be found near the $33,000. The first major resistance is near $33,500. This is close to the 50% Fibonacci retracement level of the recent decline from $35,975 to $32,150. If the closing price is above the resistance level of $33,500, the price may rise to the resistance level of $34,000. The main obstacle remains near the $35,000 area.
Current Market Sentiment:Bearish
EURUSD Consolidates Below 1.1850
The EURUSD experienced another set of negative pressure and fell slightly in early Asian trading on Friday. The currency pair is staying at a multi-month low near 1.1795. At the time of writing, the EUR/USD was trading at 1.1838, a decrease of 0.04% from the day. Despite the weak U.S. economic data and the falling U.S. Treasury yields, the U.S. dollar remained stable against its six major competitors below its 13-week high against the 10-year U.S. benchmark.
On the other hand, after the European Central Bank announced a new monetary policy strategy on Thursday, the exchange rate of the common currency against the US dollar remained strong. The ECB’s new policy made room, which would allow inflation to overshoot. In the first strategic evaluation since 2003, the European Central Bank adopted a 2% medium-term inflation target, while the previous target was close to the 2% inflation target.
It is expected that the Eurozone’s GDP will expand to 4.8% and 4.5% respectively in 2021. According to the revised growth forecast of the European Central Bank, the growth rate in 2022 will be 4.3% and 4.4%. Declining risk appetite and the moderate strength of the U.S. dollar have limited the couple's growth.
Current Market Sentiment:Bearish
Gold Turns Red
Gold reversed its recent gains to a three-week high of $1,815, which was the first decline in a week. However, the downward trend of gold is convincing for the following reasons: Under unfavorable market conditions, due to the increase in coronavirus cases in Asia and the decline in the Fed’s expectations, demand for U.S. dollars has reappeared, which has had a negative impact on U.S. dollar-denominated gold.
The 10-year US Treasury bond yield fell from a five-month low, which also helped push inefficient gold down. At the same time, yields and the U.S. dollar will continue to fluctuate, and investors await more news from Covid and the European Central Bank's inflation target. On the hourly chart, gold has confirmed that it has broken through the symmetrical triangle and continued to break through the $1,800 support level. As the price of gold approaches the 100-hour moving average (HMA) of $1,794, the Bears have expanded their control.
The resistance is getting bigger and bigger. The test of the July 6 low of $1,790 is still on the chart. If the gold Bulls successfully rebound from the key resistance level of $1,802 to $1,803 (21.50 convergent SMA), further gains may open to the triangular resistance of $1,806. Accepting the latter will invalidate the descending triangle breakout and will require a further push to $1,815.
Current Market Sentiment:Bearish
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