The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 21.05.2021
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The market is shifting focus from the Fed Minutes that came out on Wednesday to the PMI figures from the US and Eurozone later on today. Traders will be poised and waiting with their trades in accordance to how the figures come out. EURUSD and Gold are very susceptible to those gyrations in the markets, as they both seem to be trading at their top levels with the bullish momentum waning.
Bitcoin, on the other hand, continues to be dealt a bad hand especially with how major banks are jumping on the Anti-BTC Rant, which is forcing the instrument to battle against more downside pressure. However, the technical indicators might be saving grace for the instrument as they show some upside to what’s happening.
With that said, let’s find out how the markets are doing on May 21st, 2021.
Bitcoin Shows Consolidation
Bitcoin’s price is fundamental at $40,000 so the Bulls lack the momentum to expand profits to $50,000 and barricade them down, eliminating all downward threats. The flagship cryptocurrency is trading slightly above $40,000 as the Bulls are adamant in pushing to break above the ceiling of the descending parallel channel. With $40,000 assured support, the Bulls' focus will inevitably shift to break barriers at $43,000 at $47,000.
Primarily Bitcoin was in a Bear playground this week. However, the rally above $40,000 shows that investors are expecting higher profits in the days ahead. According to MACD (Moving Average Convergence Divergence), BTC is in the hands of the Bulls. The massive bullish signal occurs after the MACD line (blue) is crossed above the signal line. It is worth noting that such a move implies that traders should consider holding or raising their bets. Therefore, the path of least resistance is up, at least in the short term.
On the flip side, the RSI (Relative Strength Index) has started to level slightly above 40 and below the centre line after stalling, showing that buying pressure is not strong enough to keep the Bitcoin trend afloat. The upper bound of the descending channel also increases the credibility of the apparent downward pressure. Hence, it must be broken to pave the way for profit towards $50,000. Traders should also expect delays of $43,000 and $47,000, respectively.
Current Market Sentiment:Neutral
EURUSD Climbs Back to 1.2235
The EUR/USD moved higher to 1.2230, up 0.05% for the day, and gets ready to begin the European session on Friday. On Thursday, the U.S. jobless claims fell from a forecast of 450,000 and earlier readings of 478,000 to 444,000 for the week ending May 14. The readings were also lower when compared to the four-week average of 504,750 from 535,250 previously.
Press secretary Jen Psaki said the trend towards declining jobless claims is clear and is helping traders ignore Dallas Fed chairman Robert Kaplan, a non-voting member of the US Federal Reserve, as he reiterated the need to reduce it. The risky sentiment also hinted at efforts by the United States and Egypt to negotiate peace between Israel and Palestine, as well as the recent drop in coronavirus (COVID-19) numbers in Asia.
China and the Pacific states appear to be influencing the price, not to mention market fears of further bearish activity in May, which in turn will keep the currency Bulls in check. The evolving US economic sentiment, the surge in vaccines, as well as the preliminary May PMI readings from Germany, Eurozone, are important for traders in the US as they keep an eye out for all these issues.
Current Market Sentiment:Neutral
Gold Traders Brace for PMIs
Gold drops intraday losses after its reversal by 0.05% from $1,870 to $1,876 at the time of the pre-European session release. Gold appears to be a reminder of the positive sentiment on Thursday before the major Eurozone PMI releases UK and US were released after a light calendar and dead news over Asia. While the stock futures are setting the mood, they are seeing slight gains while the US dollar index remains depressed, which in turn helps gold prices.
Rolling preliminary PMI readings for May will be key for gold traders as markets await a strong rebound in the Eurozone, aided by the recent surge in vaccines. The dollar fell and held near multi-month lows as a rebound in risk distracted investors from the safe haven currency from the minutes of the last monetary policy meetings of the US Federal Reserve. The minutes showed that several lawmakers said discussions about phasing out government bond purchases were appropriate "sometime" as the economic recovery continues to pick up.
Looking ahead, the focus is now on preliminary PMI data for May in the US. The service sector will lead profits in Europe, aided by an improved vaccination schedule and a gradual relaxation of vaccination restrictions in the Eurozone.
Current Market Sentiment:Neutral - Bullish Bias
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