The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 20.04.2021
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The market is reacting to the uptick in the risk-on sentiment which is pushing risky assets that much higher. Bitcoin’s woes continue to pressure the instrument lower as it seems ready to break below $53,500 should the opportunity show itself for the Bears. EURUSD has broken above 1.2000 and continues towards 1.2100 as the sentiment in the market allows the Bulls to push the USD down and EUR higher. Gold, on the other hand, seems ready to consolidate after the failure to break above $1,790, however, Bulls remain hopeful for a movement higher.
With that said, let’s find out how the markets are doing on April 20th, 2021.
Bitcoin Resumes Decline
Bitcoin started a decent recovery wave above the $55,000 resistance zone, as it was able to break through minor resistance levels around $56,500 and $57,000. However, the Bulls were facing an upward hill and it seemed like they lacked the upward momentum to properly break higher which resulted in a massive drop back towards the $53,500 support level.
There is also a key declining channel forming with resistance near $56,000 on the hourly chart of BTC. If there is a downside break below the channel support at $54,000, there is a risk of a drop towards the $53,000 support zone. The next major support is near $52,000, where the bulls might take a stand.
If bitcoin remains stable above the $54,000 level, it could attempt an upside break. The first key resistance is near the channel trend line at $56,000. An upside break above the channel resistance could open the doors for a move towards the $57,500 resistance. The next major hurdle for the Bulls could be $58,000 or the 100 hourlysimple moving average. A close above the $57,500 and $58,000 levels must change the current bearish bias in the near term.
Current Market Sentiment: Bearish
EURUSD Breaks Above 1.2000
The EURUSD is advancing on the crucial 1.2100 barrier. The common currency has been surrounded with heavy bullish momentum, mainly due to the ongoing decline in the USD as well as new hopes of a roll out of vaccines in the EU. The risk-on sentiment that the markets have picked up is pushing the instrument higher as the greenback safe-haven appeal dims. This comes despite the current uptick in the US Treasury yields that failed to put a dent in the bearish momentum of the USD.
The growing economic optimism in the European nations has been boosting the appetite for riskie assets, which in turn is giving the EURUSD an added push higher. This is all due to the increase in the vaccination rate in the EU which is going to help open the continent and economy faster than previously expected. This optimism was reflected in the German Bund yields, which offered additional support for the EURUSD to continue the climb higher.
The focus has shifted towards the ECB (European Central Bank) Monetary Policy decision which is expected to be released on Thursday. Traders and market participants will be waiting for fresh impetus and direction, as they look for the best trading opportunity to rise. However, until then, the EURUSD will be subject to the price dynamics of the USD as well as any vaccine updates.
Current Market Sentiment: Bullish
Gold Bulls Remain Hopeful
The bullish momentum that gold had been exhibiting for the past week, especially how it started the current week, appears to be dissipating, especially after gold was unable to break above the $1,790 resistance level. Reaching that seven-month high had put the Bulls on the line to break above it or suffer a setback, unfortunately the momentum was not helping the instrument and fell lower. The main reason for the pullback can be attributed to the rise in US Treasury yields, which is offsetting the impact of the underperforming USD.
Furthermore, the $2.25 trillion infrastructure stimulus plan that US President Joe Biden is trying to push through the houses of Congress, is giving yields a push higher as buying interest seems to be revitalizing. Of course, with the COVID-19 vaccination increasing collaborating with the uptick in the US rates, all of which are pushing the price of the yellow metal lower.
Looking at the resistance support structure of Gold, we can notice that currently, the instrument is testing the minor support at $1,766. The pullback might have the needed follow through to break below that level with Bulls protecting the $1,761. This level is a very important level for Bulls to protect, otherwise there’ll be a move lower towards $1,754. Looking towards the topside, we can notice that $1,773 will be the level at which Bulls regain their strength enough to attempt another move above $1,780.
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