The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 12.08.2021
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The market was rather disappointed by the US CPI data, as they thought the figure was going to push the FED to increase interest rates much earlier than expected. However, that wasn’t the case, and the USD experienced some negativity during the US and Asian sessions. This has allowed the other instrument to rebound higher, as traders waited for some fresh impetus to trade the next leg.
With that said, let’s find out how the markets are doing on August 12th, 2021.
Bitcoin Consolidates as Correction Risk Increases
Bitcoin price is still facing strong resistance near the $46,500 and $46,700 levels. BTC is currently consolidating below the resistance level of $46,700. Recently, there was a slight downward correction from the mentioned resistance. The price traded below the support level of $46,000, falling below the 50% Fibonacci retracement level of the uptrend, which takes the low of $44,714 to a high of $46,699. It also fell below the main uptrend line, supporting around $46,000 on the hourly BTC/USD chart.
The currency pair is currently located above the $45,000 area and the 100-hour simple moving average. The immediate downside support is near $45,450. On the other hand, the initial resistance is at $46,200. The first major resistance is around $46,500. A huge resistance is currently formed near $46,700. A clear breakthrough of $46,700 is needed for the Bulls to retake control and show some positive momentum, in which case, the price could easily rise to the $47,500 level.
The next major resistance is near $48,000, and it might continue to fall, unless Bitcoin rises above the resistance levels of $46,200 and $46,500l. Initial support for the downward movement is near $45,450. Now the first major support is near the $45,200 area and the 100-hour moving average. The basic support may be $45,000. Therefore, a break below the $45,000 support area may trigger a sharp decline, with the next important support level at $43,400.
Current Market Sentiment:Consolidation with Bearish Bias
EURUSD Moves to 1.1750 after US CPI
EUR/USD rebounded to 1.1740, bouncing off the intraday low, but remained unchanged on the day preceding the European session on Thursday. Although the earlier US dollar weakness may be related to the July US CPI data and the comments of Fed policymakers, the recent decline reflects the hesitation of traders amidst mixed dynamics.
According to the latest inflation data from the United States and Germany, and due to the rise in COVID cases as well as the future actions of the Federal Reserve and the European Central Bank, the policies of the United States and Europe on economic recovery issues are causing problems for the euro/dollar currency pair. Due to rising government bond yields and slightly optimistic fundamentals, EUR/USD traders will focus on industrial production in the Eurozone in June as well as the US Producer Price Index (PPI) in July.
After last week's strong NFP results, weekly US Unemployment Claims data are also important. It is crucial to keep an eye on COVID headlines and US budget negotiations. As for the new direction, it should be pointed out that the Euro/Dollar pair Bears may be losing some steam at the current support, meaning that any negative news against the USD will be met with Bullish zeal.
Current Market Sentiment:Consolidation
Gold Struggles Near $1,750
Due to the weakening of the U.S. dollar and the falling U.S. Government Bond yields, the price of gold is trying to rise above $1,750. The dollar index (DXY), which measures the vitality of the USD and compares it to the six main currencies, fell below 93.00. The US inflation came in at 5.4%, in line with market expectations of 5.3%. The lower inflation read in the United States has eased investors’ concerns about the Fed’s expected downsizing.
The falling Government Bond yields and the weaker U.S. dollar are helping the precious metals catch their breath. The bet is that the Fed may act faster-than-expected to reduce the $120 billion allocated each month for the epidemic-hit-economy. Concerns about COVID Delta spreads have limited the fall in the price of gold. At the time of writing, the XAU/USD price was $1,750, and it remained unchanged on the day of the overnight transaction consolidation.
Core inflation in the US in July was not as strong as expected, since the US bonds and dollar fell. The market is consolidating the recent volatility surrounding the central bank's narrative (at least temporarily), and the continued underperformance of gold indicates a lack of investor interest in the context of declining real returns. Analysts have also stated that short-term hedging and profit-taking have played a role in tracking lows. However, trend followers may further increase their short positions in the upcoming trading day, growing the selling pressure as the market seeks supply.
Current Market Sentiment:Consolidation
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