The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 22.04.2021
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The market remains in its risk-off mood as it gears up to face against the ECB later on today. Bitcoin has continued to battle against the Bears as the instrument falls back towards $51,300 before encountering enough bullish corrective pressure to rise back higher. On the EURUSD side, many catalysts are going to be bombarding the common currency as major volatility can be expected to happen on this instrument. Gold remains with the bullish pressure as it tries to move higher facing against $1,800.
With that said, let’s find out how the markets are doing on April 22nd, 2021.
Bitcoin Remains at Risk
Bitcoin recovered higher above the $56,000 level, but the Bulls failed to gain strength. BTC topped near the $56,400 level and it failed to clear the 100 hourly simple moving average. A high was formed near $56,404 and the price resumed its decline. It broke the $55,400 support and revisited the $53,500 support zone. A low is formed near $53,300 and the price is now consolidating losses. An immediate resistance is near the $56,000 level.
Moreover, there’s a new declining channel forming with resistance near $55,750 on the hourly chart of the instrument. The channel resistance is close to the 76.4% Fib retracement level of the recent decline from the $56,404 high to $53,670 low. Above the channel resistance, the main range resistance is near the $57,500 level. A successful break above the channel resistance and then a follow up move above $57,500 is must to start a fresh rally.
If bitcoin fails to clear the $55,050 and $55,500 resistance levels, it could correct lower. An immediate support on the downside is near the $54,000 level. The first key support is near the $53,500 level and the channel lower trend line. Any more losses may possibly call for a downside break towards the $51,000 and $50,000 levels.
Current Market Sentiment: Bearish
EURUSD Eyes ECB
The European session is about to get underway as we observe the EURUSD trimming its intraday gains even as the latest pullback to 1.2040 tests the Bulls. The recent drop observed in many currencies, not just in the EURUSD, can be attributed to the USD bounce, however, traders remain optimistic ahead of the key European Central Bank (ECB) event. The reason could be traced from the previous day’s Bank of Canada (BOC) monetary policy meeting as well as Dutch bullish bias.
After the BOC’s 25% tapering of weekly bond purchase, Dutch central banker Klaas Knot has the reason to reiterate his firm support for dialing back some of the easy money. However, ECB President Christine Lagarde and Vice President Luis de Guindos could confront the move amid cautious optimism. However, please note that hints of any tapering off in bond purchases will be watched closely in June, as the ECB is expected to maintain the status quo.
The ECB will be the most likely event that rocks the boat on the EURUSD, however, other US figures on weekly Jobless Claims and monthly data on housing, as well as Chicago Fed National Activity Index, should also be given importance while forecasting near-term EURUSD moves.
Current Market Sentiment: Consolidation
Gold Continues to Move Higher
Gold reverses the latest pullback moves from multi-day top while taking rounds to $1,794 ahead of Thursday’s European session. Even so, the yellow metal stays inside a bearish chart pattern, rising wedge, on the hourly formation. Not only the bearish formation but the downbeat MACD (Moving Average Convergence Divergence) conditions and the commodity’s indecisive moves around the two-month high also back the odds of the pullback.
However, a clear break of $1,788 becomes necessary to confirm the wedge formation and aim for levels marked during April 14-15 around $1,750-49. During the fall, a seven-day-old support line and an area comprising 200-HMA, respectively around $1,770 and $1,760, can offer intermediate stops. Meanwhile, an upside clearance of $1,800 will defy the bearish chart formation, which in turn highlights late February tops near $1,816 on the gold buyer’s radar.
Looking at the support and resistance, we can notice that gold needs to crack this critical resistance at $1798-1800 to unleash the additional upside. Any movement higher, the $1,805 will be challenging the Bulls’ commitment to the upside, as eyes remain fixated at $1,811. On the flip side, the $1,792 is likely to limit the immediate downside to the instrument while Bears will be looking for continued move lower towards $1,790.
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