The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 14.04.2021
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The most important figure of yesterday was the CPI (Consumer Price Index) which came in much better than expected and the USD fell dramatically. This turned the markets on it’s heels and made its way higher. Bitcoin was able to extract a new all-time high and even now, it still seems to be battling for a new all time high. EURUSD and XAUUSD both shared the same fate as the move lower turned higher. For now, they’re waiting for today's speeches by ECB’s Lagarde and Fed’s Powell.
With that said, let’s find out how the markets are doing on April 14th, 2021.
Bitcoin Etches New All-Time High
BTC Bulls are back in control of the market as they get ready to lift-off after they’ve set a new all-time high at $64,500. Since when do we encounter modest Bulls, though? Traders are gearing up for another push higher as they eye the $70,000 barrier just as the Market Capitalization of the cryptocurrency closes in around $2 trillion. This move wouldn’t have been able to manifest if the $60,000 barrier remained intact, once that level fell, it was smooth sailing higher.
Looking into the technical aspect a bit more deeply, we can notice that despite the current push higher, BTC remains within the ascending channel we highlighted in yesterday’s brief. Now, the instrument seems to be trying to break above the mentioned channel further into uncharted territory. It was the break above the midline that warranted the move higher as Bulls and Bears will be seeking confirmation around the midline in case things go downward.
The MACD is also indicating some bullish pressure especially with the MAs both above the midline and seem to have an upward trajectory. In addition, the histogram is showing an increase in the momentum giving Bulls hope that a touch around $70,000 is possible within this month. As long as the technical picture remains intact, BTC may continue to hold the current path higher.
Current Market Sentiment: Bullish
EURUSD Finds Support and Rallies
As Wednesday’s European session gets ready to start, we see the EURUSD printing with pretty interesting gains. The recent three-day move higher has been due to the overall USD weakness especially after yesterday’s CPI reading. Markets were expecting the inflation to be higher and it indeed was. The traders expected it to be so high that it put the fear of inflationary movements into the hearts of USD traders forcing them to back off from the instrument allowing the EURUSD to push higher.
The USD weakness is attributed to many things. This first is the CPI read from yesterday which caused market sentiment to deteriorate. The same release caused the U.S. Treasury yields drop which caused the demand for USD to drop as well. Furthermore, the Johnson & Johnson COVID-19 vaccine has shown that it could be causing blood clots forcing all 50 states in the U.S. to halt using it. This will put a dent in Joe Biden’s vaccination plan which hopes to have 75% of the country’s population vaccinated within 3 months.
With all the positivity that seems to be surrounding the EURUSD at the moment, the Bears still have a chance to turn this ship around. Later on today we have the Heads of the ECB and Fed, Christine Lagarde and Jeorme Powell, respectively, giving speeches. Traders will have their noses glued to their screens when the speeches are out so they can take trading ques from those highly influential figures. Lagarde will try to paint a rosy picture of the economic situation in the Eurozone, while Powell will most likely try and placate the bond market while also praising the latest figures.
Current Market Sentiment: Waiting on Speeches from Lagarde and Powell
Gold Remains Above $1,730
The precious metal has been edging lower as the $1,750 resistance level proved to have many sellers waiting to drive the price lower. It does seem to keep the gains it got after the CPI data out of the U.S. came in better-than-expected which allowed the XAU market to rally the way it did. The USD has fallen and it trades around three-week lows against its main competitors, as the sinking U.S. Treasury yields only drove the USD further down.
The market will be looking at Fed Powell’s speech, later on today. Powell will most likely try to calm the Bears of the bond market and keep them from selling any more bonds, especially that the strong inflation figures did not seem to suggest any Fed tapering any time soon. Powell will also be focused on the new figure and likely explain, once again, how the rise in inflation is only transitory and that there is no need to fear runaway inflation. The Fed had explained previously how they’ll allow the market to run hot for a period of time to offset the low inflation reads they’ve been getting.
Looking at the resistance and support structure of gold, we can notice just how strong the $1,750 really is. However, in order for the Bulls to keep the momentum higher going, a solid breach of $1,755 is needed. If that happens, expect the market to continue rising towards the $1,761 level. On the downside, the $1,740 should offer enough support to keep any push lower because any movement lower than the $1,735 level could challenge the Bears’ commitment for further downside.
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