The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 11.06.2021
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Super Thursday has come and gone as markets digest the higher-than-expected Consumer Price Index (CPI) figure. However, the Fed might simply look at the increase as transitory which is forcing the weakness in the USD. This was shown in the movement of EURUSD and Gold which both faced bearish pressure but then started to rise higher after the move downwards. Bitcoin seems content to trade at the current stance as it waits for some fresh impetus.
With that said, let’s find out how the markets are doing on June 11th, 2021.
Bitcoin on Course to $40,000
Bitcoin broke the weekly support level of $31,000. The action is violent, in a V shape. Therefore, as the Bulls retreated to confirm further support, the recovery stalled at the level of $38,000. At the time of writing, the trading price of the flagship cryptocurrency is $36,600, after holding two key levels. Initially, 50-SMA ensured that the loss would not extend to $35,000, while slightly pushing BTC over the 100-SMA, which is currently trading as a key support.
MACD (Moving Average Convergence Divergence) has bullish momentum on the 4-hour chart. It is a technical indicator that tracks the trend of an asset and measures its momentum. MACD rarely shows oversold and overbought conditions. It simply defines the position that traders can buy below or below sell. Please note that when the MACD line crosses the signal line, a buy signal will appear. This means that as sellers start to lose ground, buyers have gained tremendous support.
Note that when the MACD moves above the zero line, the market usually moves north, as shown in the Bitcoin chart. A close at the 100-SMA support level could confirm the uptrend leading towards the $40,000 resistance. The RSI (Relative Strength Index) is not yet overbought; therefore, the Bulls have more room for growth in the short term. After breaking through $40,000, traders should expect resistance at the 200-SMA. If this breaks through, attention will shift to $44,000 and $50,000, respectively.
Current Market Sentiment:Bullish
EURUSD Survives Super Thursday
The euro/dollar currency pair retained some gains during the Asian session on the last trading day of the week. The currency pair opened flat, but quickly gained momentum in a move around 20 points. At the time of writing, the EUR/USD is trading at 1.2191, which is an increase of 0.18% on the day. The 10-year US benchmark rate of return hit a three-month low of 1.43%, compared with the previous day’s closing price of 1.45%.
At the time of writing, DXY was last traded at 89.72, down 0.12%. This move is in response to the decline in investor inflation concerns. The US Consumer Price Index (CPI) read came in at 5% which exceeded the Fed’s expectations, but that hasn’t changed anything. European Central Bank President Christine Lagarde reiterated that even if interest rates are higher than in the past, the central bank still insists on its plan to buy bonds. She has also spoken about the growth prospects of the Eurozone economy which are no longer overshadowed by the risks for the first time since 2018.
On the economic agenda, traders have the opportunity to track wholesale prices in Germany, inflation in Michigan, and consumer confidence as they look for fresh news to decide which way to trade. For now, the dynamic price action surrounding the USD continues to affect the movement of the currency pair.
Current Market Sentiment:Cautiously Bullish
Gold to Retest $1,913 Highs
Gold is in an upward consolidation phase, slightly below the $1,900 mark in Asian trading on Friday as the Bulls take a breather before the next bullish move. The outlook for gold prices remains optimistic. After the release of the CPI report, government bond yields fell alongside the USD because the Fed may still view price increases as temporary. President Joe Biden’s infrastructure spending plan also supports gold.
The market is now anxiously awaiting the release of the G7 meeting and Friday's preliminary data on Michigan consumer confidence, although the focus will still be on the FOMC meeting next week. The return on the last trading day of the week, when the Bulls briefly retreated to the $1,900 mark, continued to affect the price of gold at the expense of the USD. Despite the tepid impression of the US CPI, the market still believes that the Fed will reject temporary price increases and will maintain a loose monetary policy until the employment target is achieved.
The fall in the US dollar's yields pushed gold back from a five-day low of around US$1,870. Before the FOMC decides to support gold sentiment next week, the Fed’s cautious expectations will continue to show. At the same time, retailers are waiting for preliminary data on consumer confidence in Michigan to seek short-term trading opportunities.
Current Market Sentiment:Cautiously Bullish
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