The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 25.06.2021
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The market is waiting for some pretty important data from the US. The PCE (Personal Consumption Expenditure) is the preferred indicator of inflation by the Fed, as a strong figure there would give the Fed the needed ammunition to start increasing rates. This has forced most of the instruments to consolidate their trading for Friday as EURUSD and Gold are consolidating their movements as neither has had any significant movement since yesterday. Bitcoin, however, has found enough bullish momentum to break above the recent resistance at $34,500 as Bulls seek for a more sustained rally higher.
With that said, let’s find out how the markets are doing on June 25th, 2021.
Bitcoin Aims for Larger Rally
Bitcoin formed a foundation above the $32,000 area and started another surge. Bitcoin broke through the $33,500 resistance level, the 100-hour simple moving average, and entered the positive zone. On the hourly chart of BTC, the main downtrend line was broken, and the resistance was near $33,500. The current trading price of the currency pair is much higher than $34,000 USD and the 100-hour moving average.
It is currently trading above the 76.4% Fibonacci retracement level of the downtrend from the high of $36,200 to the area of $28,850. It shows many positive signs and may continue to climb to the $36,200 level above $36,000. The main resistance is now around $37,000. Any further progress may push the price to the $38,000 area.
If Bitcoin fails to break the resistance level of $36,200 or $37,000, a downward correction may occur. The immediate downside support is near $34,500, with some additional support seen around $34,000. The key support level is forming near the $33,500 mark and the 100-hour moving average. Breaking below the 100-hour moving average may further fall to the $32,000 area in the following trading day.
Current Market Sentiment:Cautiously Bullish
EURUSD Looks at PCE Inflation
The EUR/USD rebounded for the second consecutive day, rising 0.08% to 1.1940 before European session on Friday. As the Bulls attack the main exponential moving average (EMA), the common currency pair is being driven by bullish market sentiment and the USD's fall. However, it should be noted that the monthly results are the FED’s preferred inflation indicator, Personal Consumption Expenditure (PCE). The dollar remains unchanged until the key data is released. In doing so, the U.S. dollar ignored the three-day upward trend in U.S. bond yields.
Despite the low cost and lack of details, US President Joe Biden (Joe Biden) can still provide the promised impetus, which initially helped market sentiment. Subsequently, the German diplomat Peter Almaier made a comment that the trade relations between the EU and the United States have improved after years of differences. Almaier demonstrated the opportunity to resolve the dispute and expressed the hope that the United States and the European Union (EU) can resolve their differences on the issue of steel and aluminum tariffs before the end of the year.
At the same time, the Fed's cancellation of pandemic measures against major banks and concerns about the Delta Variant of COVID-19 may test risk sentiment. In addition, Australia's lack of important dates/events and local restrictions, as well as the EU's refusal to meet with Russian leader Vladimir Putin, also challenge the bullish sentiment. In addition to the mixed catalysts and data from the United States, feedback from Fed politicians is also critical to providing new impetus.
Current Market Sentiment:Consolidation
Gold Consolidated Ahead of PCE Data
As the US dollar is generally moderate and Asian stock markets are mixed, gold once again tried to rebound from the $1,790 supply area to $1,795.00 and bottomed out. Rising interest rates and a series of pessimistic economic data from U.S. risks continue to point to a fall in the price of gold as a "death cross" is confirmed on the daily chart.
Now focus on the key inflation data from the US PCE, which may support the Fed's radical shift. In addition, the update of the US stimulus plan has also received close attention. In the afternoon, it reversed the previous day's high of $1,788. At the time of writing, XAU/USD is down 0.2% per day to $1,775. BEA will release its PCE inflation report for the month of May on Friday, and a major market reaction may push XAU/USD out of the weekly range.
At the beginning of the meeting, St. Louis Fed President James Brad said that inflation may be higher than expected, adding that policymakers should be aware of new inflation risks in the coming months. A stronger PCE price index may end the week for the dollar on a solid foundation.
Current Market Sentiment:Consolidation
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