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Technical Analysis for Bitcoin, Euro vs U.S. dollar, and Gold for 22nd June 2021

The Daily Cryptomenon

This analysis was written at 9:00 am GMT +3, on 22.06.2021

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The market has been trying to understand the latest decision of the FOMC, however, now the focus shifts from FOMC to the testimony by Jerome Powell. All eyes will be on what he says concerning the dot plot and where the US economy stands. The EURUSD and Gold have both suffered great losses ahead of Powell’s testimony and there seems to be more of the downside waiting for these two instruments. Bitcoin has also suffered the same fate as that of the other fiat currencies as the bearish pressure has forced it to drop towards the $30,000.

With that said, let’s find out how the markets are doing on June 22nd, 2021.


Bitcoin Looks at Recovery

Bitcoin struggled to stay above the $33,000 area and continued to fall. BTC broke through the $32,500 and $32,000 support levels and entered the bearish zone. The price even fell below the $31,500 mark, well below the 100-hour single moving average. Its trading price is only $31,310, and it has recently begun to correct upwards.

Bitcoin has now rebounded above the resistance levels of $32,000 and $32,500, and has also broken through the 23.6% Fibonacci retracement level that has recently fallen from a high of $36,170 to a low of $31,310. Upside resistance is near $33,800 (recent breakout zone). The 50% Fibonacci retracement level of the recent decline from a high of $36,170 to a low of $31,310 is also near $33,800. The level of $35,000 and the 100-hour simple moving average. An important downtrend line has also been formed on the hourly chart of the BTC/USD currency pair, with resistance at around $35,100.

 



Therefore, Bitcoin Bulls may face major resistance levels near the $35,000 area and the 100-hour SMA. The positive side is $36,200; so, if Bitcoin fails to break through the $33,800 resistance or trend line resistance, it can continue to fall. The immediate downside support is around $32,000; the next big support is around $31,500. A break below $31,500 may open the door to new losses. In this case, the price can even test $30,000.

Current Market Sentiment:Bearish


EURUSD Above 1.1900 Ahead of Powell

The EURUSD rebounded from the intraday low, pushing the daily decline to 0.07%, reaching near 1.1910 before the European session on Tuesday. Due to the mixed momentum in Asia and the weakened market sentiment, major currency pairs consolidated the strong rebound from the level of early April. The easing of optimism about the global economic recovery and the easing of concerns about Fed supporting recent rate hikes.

The ability of Fed officials to persuade traders that the current monetary policy does not have direct risks on Monday stimulated market sentiment. Market sentiment weighed on the US dollar index (DXY) because there was a lack of important catalysts before the prepared speech by Fed Chairman Jerome Powell. It’s worth noting that European Central Bank President Christine Lagarde's refusal to gradually reduce bond purchases also benefits buyers of the EURUSD currency pair. Federal Reserve Chairman Jerome Powell believes that inflation risks are temporary, and according to the comments that have been published, this won’t pose any major problems for the current monetary policy.


It’s worth noting that news about US-China trade relations have also come. This will add vitality to the couple recently. In an article by Bloomberg, the first phase of the agreement was threatened because Beijing was unable to import previously agreed goods from the United States, and China's "Global Times" regarded the Sino-US negotiations as a hacking attack. Powell's cautious mood before testifying served as an additional catalyst, and stock futures and U.S. Treasury bonds played a role in this situation. With DXY taking a short breath, returns are still uncertain and it’s difficult to maintain earlier daily gains.

Current Market Sentiment:Bearish


Gold Focuses on Powell Testimony

As the Bulls rested before attempting to recover to the 100-day moving average (DMA) of $1,794, gold stopped the rebound and consolidated below $1,790 in Monday's trading range. At the same time, the Bulls  continued to advance, as they were supported by falling U.S. Treasury yields and optimism about President Joe Biden’s infrastructure spending plans. At the same time, market optimism is also affecting the attractiveness of gold.

The testimony of Federal Reserve Chairman Jerome Powell looks for new signs of monetary policy. Powell said in the testimony text published in early Asian trading, “The Fed will do everything possible to support the economy until the recovery is complete. Gold, the Fed’s decisively restrictive tone has stifled the inflation risk premium. Analysts at TD Securities said that although the FOMC maintains its inflation Forecast, it has also made two leaps towards 2023: it shows that the response function has changed, making its confidence in the average inflation target questioned.”

 

 


“The Fed is never behind schedule, which eliminates the direct motivation to buy gold.” Analysts added: “Given that gold is already rolling like a speed bump on the track, slowing down speculation and physical flows, a sustained rollback may have more room to start. Unfortunately for the gold Bulls, the potential for inflation is the potential for inflation. The trend will continue for several months, which also stifles the direct momentum to buy gold.”

Current Market Sentiment: Bearish


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