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Technical Analysis for Bitcoin, Euro vs U.S. dollar, and Gold for 11th August 2021

The Daily Cryptomenon

This analysis was written at 9:00 am GMT +3, on 11.08.2021

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The market continues to be quite hammered down due to the strength of the USD, which remains the most talked about point. The current stance of power that the buck has, continued to play an important role in deciding which way the market should be trading. The focus for the time being is on the US Inflation rate, which might cause some serious movements in the market.

With that said, let’s find out how the markets are doing on August 11th, 2021.

Bitcoin's Correction Is Imminent

Just like Ethereum, Bitcoin continued to trade higher reaching the $46,545 level, it faced some intense sellers at those high levels. BTC has tried several times to push above $46,000, but to no avail. It’s now correcting downwards and trading below $45,600. If we were to take the Fibonacci retracement levels from a low of $42,843 to a high of $46,546, we can notice that BTC fell below the 23.6% retracement level. In addition, on the hourly BTC/USD chart, it broke the main uptrend line, with a support at around $45,450.

Currently, the pair is trading above $45,000 as well as the 100-SMA (Simple Moving Average) on the hourly chart. The immediate support for the downtrend is around $45,000. On the other hand, the initial resistance is around $46,000, with the first major one being near $46,200. With that in mind, if BTC was able to create a significant break above the $46,500 resistance zone, this may trigger a good rebound. The next major resistance is near $47,000, and any additional victory could push the price up to $48,000.

 

 


Should bitcoin lack the needed momentum to continue its move higher, the chances of it falling will increase exponentially. The initial support for the downside is around $45,000. Now the first major support is near the $44,500 area and the 100-hour moving average, which coincides with the 50% Fibonacci retracement level of the rise from $42,843 to $46,546. Any further losses may need to test the $44,000 level. The next important support level may be $43,000.

Current Market Sentiment:Consolidation


EURUSD Defends 1.1700 Ahead of US Inflation

EUR/USD protected the 1.1700 line and retreated from the daily high of 1.1725, as the shorts took a breather in quiet trading, before Wednesday's European session. The major currency pair dropped before the recent consolidation ahead of the key US inflation numbers for July. Although the lack of data/major events in Asia indicate that the decline is heading towards annual lows, the Bears are still hopeful. The approval of the US infrastructure spending plan supports downside concerns, and the US dollar supports safe-haven demand.

Also helping the USD gain some traction against other currencies is the current COVID virus situation in the West and Asia-Pacific. That being said, it would seem that the USD Bulls have hit a speed bump, as policymakers are arguing over the key debt limit even as they’re yet to cross two more hurdles before announcing the $1.2 trillion infrastructure aid plan. In addition, Reuters reported that the European Union will not change its safe travel list this week, allowing non-essential travel from the United States to continue.



Despite the current rise in COVID cases in the US compared to Europe, this is helping the EUR a bit against the USD. It is worth noting that the remarks of Atlanta Fed President Rafael Bostic, Fed President Richmond Thomas Barkin and Chicago Fed President Charles Evans come in direct contrast with the European Central Bank (ECB) policies and this is putting more pressure on the EURUSD. Therefore, paired traders will pay close attention to the July inflation data in the US to confirm that the recent taper tantrums are also beneficial to the US dollar.

Current Market Sentiment:Bearish


Gold Consolidates Ahead of CPI

Gold is consolidating its recent losses above $1,700, rising from 0.28% to $1,733 before European time on Wednesday. In doing so, the commodity justifies the previous day’s Doji candlestick formation to portray the biggest daily gains in two weeks, so far. Prior to the release of the US Consumer Price Index (CPI) data, the recovery of the US dollar and cautious sentiment initially triggered a corrective in gold during the Asian session.

However, as European traders adapted to Germany's inflation, the metal failed to maintain its upward momentum. It is worth noting that the US Republicans are willing to slow down budget negotiations and do not support the Democrats, which also made the dollar weaker and the price of gold rise slightly. During the bearish consolidation in early Wednesday trading, gold was able to bounce off the intraday low towards the $1,760 level. However, the instrument remains on the back foot as the USD gains.

 


On the other hand, the comments of Atlanta Fed Chairman Rafael Bostic, Richmond Fed Chairman Thomas Barkin, and Chicago Fed Chairman Charles Evans indicated that interest rate cuts are very popular among Fed policymakers. It is worth noting that Australia’s consecutive record number of infections and the recent surge in the COVID cases number in China and India, the world’s largest gold consumers, are putting additional pressure on gold prices. That being said, the July US Consumer Price Index (CPI) is very important for determining short-term trends for gold.

Current Market Sentiment:Bearish


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