The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 23.06.2021
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The Fed Testimony from yesterday showed Powell reiterating his stance on the current monetary policy and the current course of action that the FOMC has taken. This didn’t surprise the markets all that much as the EURUSD continued to trade albeit a bit higher while the gold consolidated the losses it had made over the course of a week. Bitcoin witnessed increased bullish presence as it managed to snap a sudden drop to $28,800 and rise back higher towards $34,500.
With that said, let’s find out how the markets are doing on June 23rd, 2021.
Bitcoin Finds Bullish Presence
Bitcoin traded at a monthly low of up to $28,800 on Tuesday, disappointing most investors. However, a sudden drop below $30,000 may allow new investors to take advantage of the lower entry price. At the time of writing, the leading cryptocurrency was able to move higher and above the $30,000 barrier and is asking for help over $34,500. Growth seems to be supported by short-term technical levels. Therefore, the path of least resistance seems to be pointing upwards based on a four-hour time frame.
At the time of writing, BTC changed hands slightly above $40,000, which is supported by the Relative Strength Index (RSI) on the 12-hour chart. Note that as the RSI rebounds from levels close to oversold, the Bulls gain momentum. Looking at the Moving Average Convergence Divergence (MACD) indicator, and after the recent decline, the technical tool slipped into the negative zone and triggered a large number of sell orders; however, as the recovery is in full swing, traders should watch the MACD to confirm whether the upward trend is appropriate.
Once the MACD line crosses the signal line, the crossover of the MACD line above the signal line is intended to consolidate the long presence in the market. On the other hand, Bitcoin must overcome the important obstacle of $36,000, as shown by the 50 simple moving average (SMA) on the 12-hour chart, in order to make a profit at $40,000. On the other hand, staying above $34,000 is important to reduce overall pressure. It also avoided a loss of $30,000.
Current Market Sentiment:Bullish
EURUSD Aims to Break Above 1.1950
The EURUSD remained low around 1.1920 and broke the two-day uptrend before European time on Wednesday, with an intraday drop of 0.14%. Before the key PMI data came out as well as the speeches from ECB (European Central Bank) speakers, the rebound of the US dollar put pressure on major currency pairs. The US dollar index (DXY) rose by 0.15% for the first time in a week during media reports, and market participants reconsidered their approach.
Fed Chairman Jerome Powell reiterated his commitment to loose monetary policy, citing the employment scenario where the lack of consensus among Fed policymakers seems to test the market’s optimism about China’s indirect threat to US warships on both sides of the strait and its inability to import the United States. The goods agreed in the first phase of the agreement are used to measure risk appetite and reduce the supply of asylum to below the U.S. dollar. In addition, the struggle between Australia and China and concerns about the impossibility of peace between the United States and Iran have exacerbated market concerns.
A speech from ECB Vice President Louis De Guindos will provide immediate guidance for EUR/USD traders. After that, the U.S. Purchasing Managers Index and the Fed's speech will be the key. Although unlike the Federal Reserve, the European Central Bank faces less risk of monetary policy adjustments, economic indicators will continue to weaken. It is recommended to keep the flow of funds relaxed, which in turn may resemble a long position. However, the strong U.S. Purchasing Managers Index combined with the optimistic outlook of federal agencies may put pressure on the EUR/USD.
Current Market Sentiment:Correcting
Gold Consolidates
So far, on Wednesday, the price of gold has risen slightly, hoping to recover the position above $1780. The Fed Chairman said that gold prices ignore the overall rise in the U.S. dollar and are supported by weak government bond yields. Powell's aggressive remarks and inflation concerns have been downplayed. The renewed tensions across the US-Sino and President Joe Biden's continued disagreement over infrastructure stimulus measures remain bullish on gold prices.
The return of the Asian coronavirus cases has also contributed to an attractive hiding place, namely gold. Looking ahead, given the general market sentiment before the announcement of the US Markit PMI, the price of gold will continue to rise. The price of gold fell at the end of trading on Tuesday, but fell from its low as the dollar rebounded.
At the time of writing, the XAU/USD exchange rate fell by 0.37%, hovering between lows of $1,772.39 and $1,790.20. As the U.S. dollar fell to 91.60, the support structure determined by the DXY on April 15, gold is consolidating the bottom of its recent decline of more than $1,900. As the market corrected the interest rate hike and completed the emergency bond purchase ahead of schedule, traders managed to transfer and reposition, which led to currency fluctuations.
Current Market Sentiment:Consolidation
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