The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 28.04.2021
For todays important economic announcements, visit our Economic Calendar.
The market is gearing up for one volatile day especially with Chrisitne Lagarde’s speech followed by the event risk of the day, the FOMC Rate Decision. The market will be looking very closely at what the Fed will be saying as it’s almost a certainty that they will be keeping monetary policy unchanged.
Bitcoin has recently found some bullish momentum as it attempted to break above $56,000. However, with heavy resistance and decreasing momentum, we could be seeing some lower movements to regain some strength. EURUSD and Gold are both trading lower as the recent hike in demand for US Treasuries has allowed the USD to rise against all other counterparties. Not to mention the Fed event later on today, we can expect some consolidation and limited trading ahead of the event risk.
With that said, let’s find out how the markets are doing on April 28th, 2021.
Bitcoin Seeks $65,000
Bitcoin has been consistent with the recovery from the recent dip to $47,000. The slide from $65,000 was an alarm for many investors but if the Bulls are able to reclaim the position above $60,000, that could provide enough momentum and affirm that Bitcoin has enough movement to the topside, possibly enough to set a new all-time high. However, before even reaching these new highs, the instrument must break through the cluster of resistances between $55,000 and $60,000.
There are technical indicators that are helping the bullish case, specifically the MACD (Moving Average Convergence Divergence). The indicator has recently crossed from the negative to the positive territory as well as the MAs are pointing higher, with the histogram clearly in the green zone. All of this points to bullish pressure on BTC. Furthermore, the RSI is still showing upside momentum as it remains underneath the overbought levels.
The recent breakout from a falling wedge formation on the 4-hour chart is important to keep in mind. Usually, when this formation happens, one can expect a breakout before the lines meet. This breakout tends to have a price target measured from the wedge’s highest to the lowest point. In other words, the ongoing uptrend could hit levels close to $60,000 before continuing with the next phase of the journey to $65,000.
Current Market Sentiment:Bullish
EURUSD Remains Supported Ahead of FOMC
EUR/USD is holding the lower ground below 1.2100 but remains well above the 50-SMA support at 1.2050 ahead of ECB President Lagarde’s speech and the all-important FOMC decision later on in the day. As the Treasury yields continue to rise, propped up by increase in demand, the USD is also tracking higher, which is adding pressure on the major currency pair.
The growing COVID concerns in emerging economies, as well as doubts over US President Joe Biden’s $2.25 trillion infrastructure stimulus package, not to mention the cautious sentiment around the global stocks, are underpinning the greenback’s safe-haven demand. On the EUR side of the story, the euro remains uninspired by the German government’s upward revision to the economy’s 2021 growth forecasts, as surging COVID cases outweigh.
From a technical point of view, an ascending support line from March 31, near 1.2065 will test the short-term EURUSD declines ahead of the key 50-SMA level near 1.2050. Alternatively, an upside clearance of the stated resistance line close to 1.2115 should successfully cross the monthly top of 1.2120 before directing the run-up towards the 1.2200 thresholds.
Current Market Sentiment:Cautious Bearish
Gold Bears Cheer Break Below $1,780
The precious metal has succumbed to the bearish pressure as it falls, breaking below the 50-SMA on the 4-hour chart. In doing so, the bright metal justifies the previous day’s downside break of an ascending support line from March 31. Also, supporting the gold sellers are the bearish MACD signals. Now, the traders’ eyes are focusing on the Fed's decision for fresh direction.
The Fed is expected to remain focused on it’s current monetary policy, although it could acknowledge improving economic outlook amid successful vaccination campaigns. However, other factors might be influencing the yellow metal such as the recent surge in the USD after US Treasury yields have increased, thanks to the US consumer confidence uptick.
Moving on, gold is likely to benefit from the USD declines and anticipated recovery in trading sentiment. However, any further worsening of the COVID situation in Asia may propel the USD and drag the bright metal. From the technical perspective, both the RSI and MACD are both showing some consolidation in the future of this instrument. RSI is currently printing right at the midline (50), while the MACD is showing signs of conversion between the MAs and histogram.
Current Market Sentiment:Cautiously Bullish
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