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Technical Analysis for Bitcoin, Euro vs U.S. dollar, and Gold for 12th May 2021

The Daily Cryptomenon

This analysis was written at 9:00 am GMT +3, on 12.05.2021

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The current situation in the Middle-East as well as the increase in US Treasury yields is spurring the demand for USD which in turn is applying downward pressure on the market as a whole. Bitcoin, however, has its own problems as the US Securities and Exchange Commission (SEC) has delayed its decision on VanEcks BTC ETF until the end of June, which only seems to aggravate BTC buyers that much more.

EURUSD hasn’t been able to break above the 1.2180 resistance forcing the Bears to take over and drive back towards the 1.2120 support. The mentioned USD demand is the main catalyst for this, despite the better-than-expected economic figures from the Eurozone. Gold seems to be in the same boat as the EUR. XAU is facing downward pressure as well, with eyes on $1,820 as a first level of resistance.

With that said, let’s find out how the markets are doing on May 12th, 2021.


Bitcoin Waits for First US ETF Approval 

The US market is eagerly waiting for the launch of the first ever US Bitcoin ETF. There are already some big names in the market when it comes to Bitcoin ETFs, however, none of them are based in the US, in fact they are based in Canada, which already has 3 or 4 Crypto ETFs. The US SEC (Securities and Exchange Commission) has delayed (again) its decision for the approval of the VanEck Bitcoin ETF to the end of June. This comes after the clear market manipulation that Elon Musk was doing concerning the price of Dogecoin, a clear pump and dump scenario, and since this is a decentralized framework and unregulated, there’s no one to really stop him from doing so.

The SEC Chairman Gary Gensler is an advocate for cryptocurrencies, as his field of study revolves around the implementation of blockchains, so he’s much more crypto-friendly, if you will, than his predecessor. However, the latest comments concerning BTC and other crypto speculations do hint that a BTC ETF approval might take some more time. In the meantime, BTC remains trading within a large consolidation zone between $60,000 on the top side and $53,000 on the down side.



The technical background of BTC is showing a great deal of volatility, the RSI has managed to keep the bullish momentum alive as the indicator failed to break below the 40-level indicating that the Bears have not taken over the instrument. Meanwhile, the Bulls aren’t in full control either as the RSI fails to break above the 60-level, further focusing on the consolidation aspect of it all. The MACD does seem to collaborate that idea as the negative momentum from the most recent move downwards has been removed as the histogram recovers towards the midline.

Current Market Sentiment:Consolidation


EURUSD Remains Pressured to 1.2100

Persisting and buying opportunities in the USD drag EURUSD back towards 1.2100 ahead of the European open. The pair extended the previous day’s decline and refreshed daily lows near 1.2120. The US Treasury yields have been marginally higher, which is giving the USD the needed boost in demand, which in turn is applying pressure on the common currency with sudden revival of said demand. The primary sponsor for the added demand, comes from the Middle-East escalations and tensions, prompting investors to seek the USD as a safe haven.

Additionally, concerns over inflation continue to increase amid rising commodity prices and supply chain issues, as investors are beginning to speculate again if the FED could tighten the monetary policy sooner-than-expected. The US economic data on Monday revealed US inflation expectations surged to their highest in a decade.


On the other hand, the EUR remained somewhat unmoved as Eurozone data on Tuesday showed mixed results. German’s ZEW Economic Sentiment rose to 84.4 from 70.7 beating the market expectations at 72. For the Eurozone, the Economic sentiment Index edged higher at 84.0 against the market consensus of 65.0. Italian Industrial Production fell by 0.1% in March against the market expectations of 0.4%. However, the focus will be majorly on the US Consumer Price Index (CPI) data to gauge the market sentiment.

Current Market Sentiment:Cautiously Bearish


Gold's Heads Lower with USD Bounce

Gold lost some of the gains that it managed to make previously just as the USD demand starts to pick up thanks to a couple of things. The first has to do with the rising Middle-East escalation, as well as the inflationary anxiety which is spooking market participants into seeking the safe-haven against any sort of increase in volatility and uncertainty. Furthermore, US Treasury yields remain elevated at 1.62% ahead of the US Consumer Price Index (CPI) data.

US inflation expectations rose to 3.4% in April, the highest it has reached in almost a decade, the main contributing factor to that has to be the reopening of the country after the COVID-19 pandemic as the vaccination attempts continue to play a major role. This might lead to higher prices and economic overheating, thus it will, eventually, lead the Fed to end the ultra-loose monetary policy to curb the inflationary pressure.

 


However, XAU remains in a very bullish mood as the $1,820 level is acting as a strong support, keeping any kind of bearish move on a tight leash. That being said, if the Bears are able to break away from the mentioned support, the first level of support that they’d encounter is situated at the 50-SMA on the 4-hour chart at $1,800 which is a tough level to beat.

Current Market Sentiment:Consolidating Gains


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