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Technical Analysis for Bitcoin, Euro vs U.S. dollar, and Gold for 28th July 2021

The Daily Cryptomenon

This analysis was written at 9:00 am GMT +3, on 28.07.2021

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The growing optimism in the market is something to really take into consideration, as several factors are bound to darken the mood of many traders. The first one has to do with the increasing cases of COVID-19 as the latest wave is hitting many countries and expanding both infection and death tolls. The other issue emerges from the Event Risk of the day, which comes in the form of a FOMC meeting. The FED will be delivering their verdict on what the next step in US Monetary Policy is, as well as Jerome Powell’s speech that is bound to shake the market up.

With that said, let’s find out how the markets are doing on July 28th, 2021.

Bitcoin Aims for $44,000

Bitcoin prices rose sharply after the correction on Tuesday. The instrument had retreated from $40,000 to $37,000 in 24 hours before climbing back up. There's also some talk as a report by City A.M is suggesting that Amazon is discussing the integration of BTC as a payment method. The media quoted an anonymous insider saying that the process is almost complete. In addition, Amazon also intends to add other cryptocurrencies, such as Ethereum. However, the retail giant issued a statement on Tuesday denying any news.

This gossip caused Bitcoin to crash while testing the $36,000 support level. Other cryptocurrencies also bled to death, with Ethereum falling to $2,100 and Ripple retesting the support level of $0.62. The trading price of the flagship cryptocurrency is slightly higher than $40,000, and its direct advantage is limited to the simple moving average (SMA) of 200. Before the Bulls can plan to resume the next $48,000 race, Bitcoin needs to break above the $44,000. The path of the least resistance is moving upward, especially when the Moving Average Convergence Divergence (MACD) strengthens above the midline.

 

 


The large difference between the 12-day EMA and the 26-day EMA highlights the prevailing bullish control. On the one hand, this shows that buyers are aggressive and that bullish price movements are not disturbed. On the other hand, overbought conditions may lead to a correction as shorts try to push down prices. The key to the uptrend is to break the 200 SMA, which will strengthen the buyers.

Current Market Sentiment:Bullish


EURUSD Focus on FED Verdict

EUR/USD still maintained a slight trend, rising to 1.1825 for the third consecutive day before European time on Wednesday. Earlier this week, major currency pairs confirmed the bullish chart, and as the market prepares for the US Federal Open Market Committee (FOMC), the bullish momentum is increasing. Mixed data from the United States and the recent increase in concerns about variants of the coronavirus have weighed on the USD. On Tuesday, U.S. durable goods and residential orders fell below expectations in June and May, respectively, due to a significant increase in the Fed’s updated record interest rate.

The US Centers for Disease Control and Prevention (CDC) is editing the masking mission, while the critical status of the Australian coronavirus infection, and New South Wales (NSW) updating their 16-month high of daily cases, are testing the resolve of the EURUSD bulls. In addition, China's suppression of technology stocks and licences and the Sino-US conflict also affected market sentiment, trying to protect the dollar bulls but failed to do so ahead of the FED. After confirming the bullish declining wedge pattern on the daily chart, the US dollar rebounded for the third consecutive day on Wednesday.



The MACD histogram also showed the strongest bullish signal since the end of April, supporting the breakout. However, 21DMA is testing the currency pair's near-term upside at 1.1820, and the breakthrough will target a new monthly high of 1.1900. At the same time, the destructiveness of the pullback action decreases until it breaks below the previous resistance level around 1.1780. Should that fail, the price will continue to move lower, reaching 1.1750.

Current Market Sentiment:Waiting Risk Event


Gold Battles $1,800 Ahead of FED

Gold (XAU/USD) successfully repeated the Fed’s previous suspension in Asian morning trading on Wednesday and consolidated the previous day’s rebound in a narrow range around $1,800. Caution seems to be affecting commodity prices everywhere. Although U.S. durable goods and residential construction orders were lower than expected in June and May, respectively, the significant upward correction of records allowed the Fed's hawks to gain a foothold again.

COVID-19 news is also playing a major role in deciding the next path of the precious metal with the CDC working on the authorization of masks, and Australia’s premier state of coronavirus infection, and New South Wales (NSW), is preparing to update its 16-month maximum daily number of cases. In addition, the United Kingdom reported the highest death toll since the 17th. Although the risk-off mood puts a safe-haven bid under the US dollar, the Bulls are cautious ahead of the key US Federal Open Market Committee (FOMC) verdict.

 


The 100-DMA protects gold buyers, as does the bullish momentum line, but the bullish pullback in the MACD histogram indicates that buyers are experiencing difficulties along the way. Another test for the gold Bulls is from the beginning of May to the 200-DMA horizontal line, which is close to $1,815 and $1,821 in turn. It is worth noting that the monthly high of $1,835 and the May 10 high of $1,845 have created additional resistance in the north.

Current Market Sentiment:Waiting Risk Event


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