The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 13.04.2021
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The markets will be focusing on the upcoming CPI (Consumer Price Index) from the U.S. as it will play a huge part in the price dynamics of USD. Bitcoin appears to be eyeing a breakout as it trades higher as well as establishing a triple top on $61,220, which might give added momentum to Bears or allow Bulls to move to a new high.
EURUSD and Gold are both feeling the effects of a stronger USD. This comes on the back of surging U.S. Treasury yields give the USD the needed strength to regain it’s previous position. However, as mentioned, the CPI figure later on today will affect the instrument so traders will be using that for their trading ques.
With that said, let’s find out how the markets are doing on April 13th, 2021.
Bitcoin Eyes Breakout
Since yesterday and BTC has been able to sustain a move higher above $60,000. However, the last couple of weeks have been a great for selected altcoins (alternative coins) such as Binance Coin (BNB), Stellar (XLM), and Ripple (XRP), as all of them were able to rally higher, while BTC has remained rather lethargic and not moving all that much. That said, there seems to be enough momentum building for another push higher as the pioneer cryptocurrency trades around the $60,500 level.
Looking at the 4-hour MACD (Moving Average Convergence Divergence), one can notice that the upward movement is still intact with the MAs printing above the midline in positive territory. However, momentum to the upside is muted as per the histogram which shows how strong the current momentum is. With the histogram on the MACD printing at the midline, one can expect some consolidation with a bit of bullish bias, but the strong resistance at $61,220 needs much more than that in order to fall for the move higher.
The path of least resistance is upwards as per the resistance and support structure of BTC. This gives Bulls the needed motivation to continue moving higher, and it could happen, if they are able to break above the upper bound of the ascending channel that it finds itself in. BTC has been without a major move for quite some time now, and should this breakout higher happen, it could trigger another FOMO (Fear Of Missing Out) reaction from traders and help push the instrument that much higher.
Current Market Sentiment: Bullish
EURUSD Moves Below 1.1900
The EURUSD pair has been moving lower as the European session kicks off. The instrument has reached a high at 1.1917 with some resistance converging around that level and giving enough pressure to move EURUSD downwards. The renewed strength of the USD has given the Bears the needed push to drag the instrument back below 1.1900 as it trades around 1.1893 as of this writing. The strength of the USD came on the back of a faster economic recovery in the U.S. as well as the sudden pickup in the U.S. treasury yields which gave the USD the needed bullish boost.
Looking at the European side of things, the Eurozone continues to struggle with dwindling economic prospects as the rise in COVID-19 cases is leading to more forced lockdowns, not to mention the lagging vaccination drive by the European countries is putting added pressure on the struggling economy. Furthermore, the economic divergence between the U.S. and the EU is weighing heavily upon the shared currency.
The economic calendar from the European side is quite light without much happening. This will shift the focus towards the release of the U.S. CPI (Consumer Price Index) data, as investors will take their trading ques from rising bond yields.
Current Market Sentiment: Consolidation
Gold Extends Downward Move
The precious metal has reversed the bounce during the Asian session and continued to move in a downward move extending its two-day decline. This comes on the back of increasing Treasury yields as well as rising U.S. inflation expectations. This move higher in yields has given the USD the needed strength to move higher, while investors continue to focus on the U.S. CPI data to be released later on today.
Seemingly, Gold’s fate is tied with the inflation numbers coming from the U.S. This should offer some fresh perspective and insight on the strength of the U.S. economic recovery as well as the Fed’s Monetary Policy outlook. Jerome Powell had already explained, in his 60-minutes interview, that rates are not expected to increase any time soon, and definitely not this year. The coming figure will play a huge role in confirming or refuting his words.
Looking at the support and resistance structure shows that gold has breached the key support at $1,730, but that should remain a big level in the upcoming movement because of the convergence of all three SMAs on that level (50, 100, and 200). The next relevant support is seen around $1,725, followed closely by $1,721. Should both of these levels fail to keep the downward pressure in check, then Bears will target the $1,716. On the other hand, recapturing the $1,730 will be crucial for the Bulls to revive the upside momentum.
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