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Technical Analysis for Bitcoin, Euro vs U.S. dollar, and Gold for 14th June 2021

The Daily Cryptomenon

This analysis was written at 9:00 am GMT +3, on 14.06.2021

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This week is promising to be one very volatile, as the new developments concerning the G7 as well as the upcoming Fed policy decision. This has affected both the EURUSD and XAUUSD which have dropped severely as the thought of a stronger dollar is keeping any gains on a tight lid. Bitcoin saw the opposite as it rose towards $40,000 because of the latest tweet from Elon Musk.

With that said, let’s find out how the markets are doing on June 14th, 2021.


Bitcoin Close to Reclaiming $40,000 

Bitcoin gradually but steadily rose from $31,000 to a level close to $40,000, however, the flagship cryptocurrency did not fully overcome the said resistance, especially considering the 200-SMA represented on the 4-hour chart a strong resistance. At the time of writing, after a slight rejection of the direct obstacle 200-SMA, BTC was trading at $38,800. The $40,000 bet continues to challenge the Bulls, even if the shorts increase the number of entries.

On the other hand, the immediate support of $38,000 is the key to moving towards the near-term goal again. MACD (Moving Average Convergence Divergence) emphasizes the advantages of Bulls based on a four-hour time frame. This indicator tracks the trend of an asset by measuring its momentum. It does not identify overbought and oversold conditions in the market, and it helps identify positions that are bought at the time of decline or sold at the top. At the same time, the MACD on the Bitcoin chart shows that the buyer's influence is greater: the indicator reached a positive value after falling to $31,000.



In addition, the MACD line (blue) maintains a divergence above the signal line; therefore, the path of least resistance is upward. As mentioned earlier, the support of $38,000 is still the key to maintaining the upward trend. However, should the resistance of the 200 SMA disappear, that would bring Bitcoin close to $40,000, and a breakthrough will be of great significance. Given the recent frequent pullbacks, this is a milestone that may trigger a large number of buying orders, which may lead to price increases. However, if the $38,000 support level gives way, we can expect BTC to fall to $36,000-buyers marked as 50 SMA and 100 SMA are overloaded.

Current Market Sentiment:Some Bearish Bias


EURUSD Sinks Pre-Fed

EUR/USD sellers flirted at monthly lows in the blink of an eye on Friday and during slow trading hours on Monday morning. Nevertheless, since the price fell by 0.10% around 1.2095 during European time, the bullish sentiment remained unchanged on the third day. The market's desire to hedge risks means that the price is lower than the US dollar, despite the lack of new catalysts, the price has fallen. The recently announced strong US data and G7 rulings may also boost the pair, which seems to exacerbate the dispute between the West and China.

The dollar index (DXY) rose by about 0.08%, while Friday’s upward trend remained at 90.57. Due to the strong consumer confidence index in Michigan, which provided the impetus for the Fed to shut down, the dollar index rose in the previous week. In addition, the uncertainty of President Joe Biden’s infrastructure spending and concerns about Covid options have also contributed to the dollar. On the other hand, the G7 agreed to take a tough stance against Beijing because politicians support detailed investigations into the origin of the new crown virus and criticize caviar from China, Xinjiang, and Hong Kong.


In addition, Biden's failure to gain a foothold in Brussels on the issue of Brexit has also affected the price of EUR/USD. Politicians in the European Union are pushing for US intervention to break the blockade of the Northern Ireland Agreement (NIA). However, Biden did not issue any serious warning to British Prime Minister Boris Johnson. The United States and the global economic recovery after the pandemic are suppressing the euro/dollar exchange rate. Small timetables and stopovers in Australia and China also check paired sellers in the same direction.

Current Market Sentiment:Bearish


Gold Weak Amid Strong USD

As investors flocked to safe-haven assets before the FOMC's decision this week, gold was the first to be affected by the continued upward trend surrounding the US dollar. Although Fed officials believe that the rise in inflation is temporary, the market is still waiting for the outcome of the FOMC meeting. At the same time, the Group of Seven nations called for an investigation into the origin of the coronavirus in China and an end to forced labor in Xinjiang, prompting investors to remain cautious.

Preliminary consumer confidence data released on Friday also supported a stronger dollar, however some investors are not backing down and believe that the yellow metal will climb back higher. In the future, the decline in light trading volume during holidays may arouse people's attention to the development of dollar prices and risks.

 


On Friday, gold fell more than 1% against the U.S. dollar falling from a high of $1,903.12 to a low of $1,874.54. The US dollar index rose from a low of 89.9570 to a high of 90.6110, and closed up 0.5% on the day. The U.S. dollar has recently been hit by the Federal Reserve’s claims that high inflation will be a temporary blow, but economists believe that the central bank will announce a strategy in August or September to reduce its large-scale U.S. dollar bond purchase program to a certain level.

Current Market Sentiment:Bearish


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