The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 15.07.2021
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The market is still dealing with Jerome Powell’s testimony yesterday and his message that the recovery of the economic situation is still in its infancy. This has perpetuated the idea that the ultra accommodative monetary policy that the Fed is employing will not be ending any time soon. This has led the EURUSD to bounce from the lows it was testing and continued to move towards the resistance of 1.1840. Gold traders were also very bullish as the risk-off mood allowed traders to invest in safe-havens, allowing the metal to break above certain levels. Bitcoin also seems to be moving a bit higher as it attempts a recovery from the lows that it reached at around $31,000.
With that said, let’s find out how the markets are doing on July 15th, 2021.
Bitcoin Attempts Recovery
Yesterday, the price of Bitcoin continued to fall below the $32,200 and $32,000 support levels. BTC even spiked to $31,500, well below the 100-hour simple moving average. Before the upward correction began, it was trading at only $31,560. The resistance levels are $32,000 and $32,200. Bitcoin rebounded above the 23.6% Fibonacci retracement level of its recent decline, falling from a high of $34,530 to a low of $31,560.
The hourly resistance of the BTC/USD currency pair is near $32,500, which also broke through the main downtrend line. The current trading price of the currency pair is approximately $33,000 and a simple 100-hour moving average. The 50% Fibonacci retracement level that recently fell from a high of $34,530 to a low of $31,560 has also become a resistance for the Bulls. With a good rebound, the price should consolidate above the $33,200 and 100-hour moving average. The next major resistance is around $33,500.
Unless Bitcoin rises above the resistance levels of $33,000 and $33,200, it is at risk of further declines. The initial support for the downside is around $32,500, with the main support area around $32,000. Now a big support is formed near the $31,500 area. A closing price below $31,500 may put heavy pressure on the Bulls. Under such circumstances, the price is likely to fall to the level of $30,000.
Current Market Sentiment:Bearish
EURUSD in Bullish Consolidation
The euro/dollar fluctuated between the ups and downs, consolidating the recent gains above 1.1800, as the US dollar tried to rebound amid deteriorating market sentiment. The high infection rate of the COVID-19 Delta Variant and the slowdown in China's economic growth, have decreased the overall risk-on sentiment, which even turned sour. China's economy grew by 7.9% year-on-year in the second quarter, but fell behind the expected 8.1%.
In general, the U.S. dollar appreciated as the Fed’s aggressive expectations have been intensified by the better-than-expected inflation data. However, during the US session, the euro/dollar exchange rate rose sharply after Fed Chairman Jerome Powell eliminated hope of possible normalization of monetary policy. He pointed out that since the economic recovery has not yet arrived, the end of monetary support still has a long way to go. Distributors are now waiting for Powell's next day to receive new business incentives.
At the same time, most of the macroeconomic news and overall market sentiment from the United States will have a major impact on the main ones, as the continued decline in government bond yields is still offsetting the decline. The EUR/USD Bulls need to break through the 1.1860 figure, which is the top line of the indicated wedge, to reach the 200-SMA level of 1.1985. At the same time, before testing the bullish pattern, the pullback is similar to the 1.1800 circular number on the chart. The current support line is seen near 1.1765.
Current Market Sentiment:Bullish
Gold Seeks $1,845
As the European traders prepared for Thursday's opening bell, the gold Bulls took a breather near the $1,826 level. At the same time, after a six-week rebound, gold held the important resistance of 200-DMA (Day Moving Average) and set a new monthly high. Fed Chairman Jerome Powell rejected the need for monetary policy adjustments when the US dollar was weak the night before Fed Chairman Jerome Powell. The US Dollar index (DXY) tested the support levels, because the strong US PPI before the bullish consumer price index (CPI) forced traders to ignore Powell's comments.
The Delta variant of COVID has conquered advanced economies, and its spread in the Asia-Pacific region is still slow. According to Reuters, this led World Bank Group President David Malpass to say: “The shortage of vaccines means that many vaccines in East Asia and the Pacific may not be able to fully vaccinate the population by 2024, even if new vaccines are available.” The politician also reduced the GDP growth in East Asia and the Pacific to 4.0% from the 4.4% expected in March. It’s worth noting that since January, the infection rate in the UK has been at its highest levels, while the daily increase in cases in Tokyo has also been at its highest levels since May.
In addition, unfortunately, Indonesia is leading among the Asian countries in terms of the virus outbreak. Australia has expanded the local Covid ban, as well as the expectation that the Fed will continue to mature. However, as traders wait for new evidence in a new direction, the dollar index is falling. These updates, in addition to the weekly US unemployment data and the Philadelphia Federal Reserve Manufacturing Index, are crucial to gold buyers, as a further rebound in the dollar may trigger a recent rebound in metal prices.
Current Market Sentiment:Bullish
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