The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 19.08.2021
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The entire market was waiting on the FOMC (Federal Open Market Committee) to release its minutes from the last meeting it had in July. The FOMC decided that there is a possibility that the ultra loose monetary policy they've been employing could be ending sooner than expected. This gave the USD a bigger boost than expected forcing many instruments to fall. However, this all depends on today’s Unemployment Claims figure from the US, a lower than expected figure could mean more bullishness for the USD and the FOMC carrying out its plan.
With that said, let’s find out how the markets are doing on August 19th, 2021.
Bitcoin Becomes at Risk
Before attempting an upward correction, the Bitcoin price was only $44,258. BTC successfully climbed above the resistance level of $45,000. It broke the 50% Fibonacci retracement level of the recent decline, falling from a high of $47,200 to a low of $44,258. It even rebounded above the $45,500 resistance zone, but the upside is limited. Bitcoin failed to break through the $46,000 resistance zone.
An important downtrend line has also been formed on the hourly chart of the BTC/USD currency pair, with resistance at around $45,500. The currency pair struggled to break through the trend line, breaking the 61.8% Fibonacci retracement level of the recent decline, falling from a high of $47,200 to a low of $44,258. It is currently trading below $45,000 and the 100-hour simple moving average. The first major resistance is near the $45,500 USD and the mentioned trend line.
If Bitcoin breaks through the $45,200 and $45,500 resistance levels, it may try to rebound further above $46,000. If Bitcoin did not break through the mentioned resistance levels, the Bears could take over and push the instrument lower reaching the support near $44,250. The first major support level is now around $44,000. The next major support level is now approximately $43,800. If it falls sharply below $43,800, the price may decline even further to test the $40,000 psychological support.
Current Market Sentiment:Bearish
EURUSD Bearish Momentum Increases
The EUR/USD is still trading below 1.1700, falling 0.32% to 1.1670 before the European session on Thursday. Despite supporting interest rate cuts, the minutes of the July FOMC meeting dispelled concerns about interest rate hikes and expressed policy makers' dissatisfaction with the employment recovery. It is worth noting that despite the low yields on US Treasury bonds, the geopolitical tensions surrounding Afghanistan are also helping the dollar index bulls, which also reflects a wave of risk conversion.
The Philadelphia Fed’s August production report is also crucial. First, risk catalysts will dominate the EURUSD currency pair and favor shorts, unless there is a positive surprise that triggers the dollar's fall. A downward slopping trend line from June 18 challenges EUR/USD bears around 1.1655 before directing them to the late 2020 bottom surrounding 1.1600. Alternatively, sustained trading beyond 1.1700 becomes necessary to convince buyers.
The risk surrounding the EURUSD has shifted to the negative. The euro subsequently broke through 1.1700 and fell to 1.1692 during New York time. Now that 1.1700 has been broken, the next level to watch is 1.1670 (and then 1.1640). However, short-term oversold conditions may slow the pace of further declines. As long as the euro stays below 1.1775 (unchanged at the "strong resistance" level), the downside risk will not change.
Current Market Sentiment:Bearish
Gold Tests Support after FOMC
Gold is close to the low point near $1,780, waiting to continue to break through the integer level, and further move to the support area of $1,750. The bearish sentiment caused the price of gold to fall, while the U.S. dollar stabilized. The minutes of the Fed meeting show that officials are discussing an exit plan before the end of this year, which will help the dollar bulls. Looking ahead, given the lack of the latest business news from the United States, Covid updates and USD dynamics will continue to have a significant impact on gold prices.
Risk-free trading in global stocks, coupled with the weakness of US Treasury bonds, may give gold bulls some breathing room. From the daily chart, the price of gold failed to stay above the key short-term resistance of the daily moving average (DMA) of $1,788 before turning to the south. Now, the Bears are trying to get out of the abyss. The bears now look to take out Wednesday’s low of $1777 to flex their muscles towards the August 16 low of $1770.
Further south, if the downward trend intensifies, the psychological support of $1,750 may come into play. On the other hand, the daily closing above the 21-day moving average is crucial for gold to resume its recovery momentum from its 5-month low. Then the bulls will fight the bearish 50-DMA at $1,795. However, only a sustained break above the $1800 mark could negate the near-term downside bias.
Current Market Sentiment:Consolidation
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