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Technical Analysis for Bitcoin, Euro vs U.S. dollar, and Gold for 21st June 2021

The Daily Cryptomenon

This analysis was written at 9:00 am GMT +3, on 21.06.2021

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The markets are still reeling from the FOMC hawkish tone. Markets are seeing a new side from the FOMC which is optimistic about the future of the US Economy, which in turn is allowing for more positive moves from the USD against everything else. Just by looking at the EURUSD and Gold, we can notice just how the strength of the USD has been driving prices ever lower. Bitcoin is also seeing the strength of the USD, but it has a chance of reaching higher towards the $40,000, but needs to break above certain levels first.

With that said, let’s find out how the markets are doing on June 21st, 2021.


Bitcoin To Recover to $40,000?

Bitcoin fell from more than $40,000 over the weekend. The expected support of $36,000 could not prevent the loss as Bitcoin extended its bearish leg to $33,000. The Bulls began to establish a rebound, as BTC managed to claw its way towards the $36,000 mark. However, the Bulls found that this level was just too intense for them which laid the foundation for a continued retreat. At the time of writing, and due to the call for a rebound, Bitcoin was trading at $34,000.

The Relative Strength Index (RSI) showed on the four-hour chart that the drop to $33,000 put Bitcoin in an oversold zone. The tool reflects the rebound very well, but it is difficult to maintain the trend. Rising above the midline, it is currently showing a short-term downtrend, in other words, an uptrend. On the other hand, the Moving Average Convergence Divergence (MACD) may turn bullish in the next trading day. 



The trend momentum tool is in the negative zone, but the MACD may rise above the signal line to send a buy signal. MACD's entry into the positive zone intensified the upward trend and may push Bitcoin to the $40,000 mark. It must remain above $31,000 and $30,000 respectively to avoid another plunge. On the other hand, the $36,000 mark must be broken so that the Bulls can focus on gains above $40,000.

Current Market Sentiment:Bearish


EURUSD Focuses on ECB Lagarde

EUR/USD set an intraday low of 1.1850 before the European session on Monday, and could not withstand the pullback in early Asian trading. The bullishness of the USD ignored the US Treasury yields as well as the risk-off mood that seems to be in the market at the moment. In the background, The St. Louis Federal Reserve System (FRS) Chairman James Bullard predicts that by 2021 and 2022, the Core PCE will be 3.0% and 2.5%, respectively, which supports the contraction that will begin next year.

 

Although Bullard is not a voting member, his comments reflect the FOMC's dot-plot and heighten concerns about interest rate hikes. In addition, Reuters released the latest news about infrastructure spending negotiations in the U.S. Senate over the weekend, noting that the plan “has the support of the U.S. Senate but continues to discuss how to fund it on Sunday.


The ECB’s (European Central Bank) President Christine Lagarde’s recent comments concerning discussions about the Bank’s interest rate hike and monetary policy adjustments may also be related to the recent decline in the euro/dollar exchange rate. Looking ahead, the ECB’s remarks will be closely watched since markets are looking for some fresh impetus as Lagarde may provide clues for future monetary policy measures

Current Market Sentiment:Bearish


Gold Focuses on US Yield Curve

Goldpushed back its intraday gains, from a daily high of approximately $1,777 to the most recent $1,773.50, rising 0.53% overnight, before Monday's European session. Although the U.S. The Federal Reserve (FED) is increasingly likely to adjust its monetary policy, which seems to be affecting the U.S. Treasury yields. The current consolidation of the precious metal seems to be a combination of the increase in yields as well as the expected future strength of the U.S. dollar.

After the chairman of the St. Louis Fed reiterated his bullish sentiment, today’s speech by the chairman of the New York Fed, John C. Williams, will become the key to trading gold. Fed Chairman Louis James Bullard said that the Fed’s trend of accelerating monetary policy tightening is a “natural” response to economic growth, especially to faster-than-expected inflation. 

 


Therefore, in a week with relatively calm data, the focus will be on the shorter end of the U.S. yield curve, which is good for the U.S. dollar, which may help push the price of gold below the key weekly support level, while the opposite trend line ends. The Bulls will be focusing on the April price and May high and November's horizontal structure low of $1,760, as they seek to protect, while the Bears will be looking for a continued break lower.

Current Market Sentiment: Bearish


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