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Technical Analysis for Bitcoin, Euro vs U.S. dollar, and Gold for 10th May 2021

The Daily Cryptomenon

This analysis was written at 9:00 am GMT +3, on 10.05.2021

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The markets are still in an upheaval from the most recent NFP (Non-Farm Payroll) read, the disastrous implications that the US economy is still not in full recovery. This affected all the markets as they started to strategize on what’s the next move of the FED, as fears of more ultra-accommodative monetary policy might still be in place.

Bitcoin was able to capitalize on the movement higher in ETH as well as other cryptocurrencies, allowing it to test a break above $60,000. EURUSD and Gold are both still feeling the positive effects of a failing USD as both continue to move higher, breaking through their respective resistances.

With that said, let’s find out how the markets are doing on May 10th, 2021.


Bitcoin to Reclaim $60,000 

The bullish momentum on Bitcoin has allowed it to attempt a break above the $60,000 psychological level, over the weekend. This came to life thanks to the uptrend which occurred in crypto assets like Ethereum, that stepped above $4,000 for the first time in history. At the time of writing, the pioneer cryptocurrency trades at $59,000 following an ongoing upswing from the support at $56,000. This movement, however, seems to be stalling as per the RSI and MACD (Moving Average Convergence Divergence).

In our last brief, we had highlighted the divergence between the RSI and price action. This usually means that the price action will have to adjust to the RSI’s movements or the other way around, and it seems that it was the other way around, as now both the RSI and price action seem to be a consolidation groove. This is collaborated by the MACD, and even though it prints above the midline in a positive fashion, the histogram is right at the midline indicating that the momentum is extremely low.



In order for BTC to ensure that the upside momentum remains intact, it would need to break above $60,000 to affirm that a breakout is happening. Should there be a rejection at the topside, the first line of support would be seen at $58,000, which followed by the $56,000 level. This level coincides with the 50- and 200-SMAs which we talked about in the previous section. In case these levels fail to keep the bearish move in check, we can expect a move lower towards $53,000 and might continue towards $50,000.

Current Market Sentiment:Consolidation


EURUSD Continues Upward Move

The USD has come under extreme bearish pressure especially after the disastrous NFP read and increase in unemployment. This allowed the EURUSD to blast through the roof, attic, and into the lower atmosphere almost breaking above 1.2185. However, the current increase in USD, is forcing the common currency to consolidate the gains that it made.

The greenback performance was hit very hard with the bad NFP read which spooked the market. Traders started to speculate that the Fed will continue its ultra-accommodative monetary policy. This pushed the US Treasury downhill, although it recovered a bit from the whole ordeal. The recovery in treasuries could be the main reason that the EURUSD has started to consolidate the gains.


On the other hand, the Eurozone posted remarkable growth in service sector data, shown by the Eurozone PMI survey which was released last week. In addition to that, the retail sales rose firmly in March despite the coronavirus-led lockdown. As for now, the dynamics around the US Treasury yields will continue to influence the pair’s performance ahead of the Eurozone Sentix Investor Confidence release.

Current Market Sentiment:Consolidating Gains


Gold's Breaks Above $1,830

Gold defends the $1,830 support, rising around 0.20% for the day just as traders prepare for Monday’s European session. In doing so, gold prices react to the US dollar’s failures to keep early Asia’s corrective pullback from the lowest point since late February. However, the upbeat US Treasury yields and stock futures keep gold buyers hopeful.

Gold cheers the risk-on mood that initially took clues from Friday’s NFP debacle. The latest push to the market sentiment should have arrived from the weekend comments of the Fed Minneapolis Boss Neel Kashkari who said, “The US labor market remains in a “deep hole”...needs aggressive support.” Also, on the positive side, this could be the latest covid vaccine optimism from Eurozone and Australia.

 


Looking at the resistance and support structure of the yellow metal, we can see that the path of least resistance is towards the upside. The first level of resistance is found around $1,845 as the buyers seem to be struggling to keep the momentum alive, as portrayed by the RSI and MACD. Any pullback moves will be facing against the $1,830 and $1,800 thresholds. Should gold continue on the downward path, a close below $1,796 would direct the sellers towards $1,785 as the next target, before attempting a move towards the $1,700s.

Current Market Sentiment:Consolidation


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