The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 30.04.2021
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As the week and month draws to a close, the markets seem to be adopting a wait-and-see approach amid month end flows. The recent figures from the US and the upcoming ones from the EU, will keep traders on the edge of their seats. Bitcoin’s recent movements have been somewhat erratic as the bearish bias takes over, but the Bulls still have some tricks up their sleeves as a move higher over the weekend could be in the books.
EURUSD is adopting a clear wait-and-see approach after the recent optimistic figures from the US concerning GDP, while traders wait for the German and Eurozone GDP figures as well. However, with the month end flows expect the market to be somewhat subdued until after the weekend. Gold is facing increased bearish bias as the US Treasury yields have started to surge for the second straight day, and this usually means added negative pressure on the non-yielding metal.
With that said, let’s find out how the markets are doing on April 30th, 2021.
Bitcoin Sets Sights on $60,000
Bitcoin extended the bearish action significantly following the rejection at $56,000. Tentative support at $54,000 failed to stop the sellers’ advances, allowing the price to explore lower leeks around the 50-SMA on the 4-hour chart. Furthermore, it would seem that the pioneer cryptocurrency is trading in an ascending channel, when you combine the lower bound of the channel with the 50-SMA, it creates a strong enough support to test any kind of negative move on the instrument.
On the upside, bulls look forward to trading above the stubborn resistance at $55,500. Moreover, a step into the upper layer of the channel would trigger massive gains. Support at the middle boundary would be crucial to nurturing the uptrend toward $60,000. On the other hand, Bitcoin must also bring down the resistance at the 100 SMA to pave the way for the much-anticipated gains. However, due to the huge presence of sellers around the 55,000, the upswing to $60,000 might fail.
On the downside, Bitcoin is sitting on relatively weaker support areas. However, there might be enough buyers around the $49,000 which might give the instrument the needed stopping power for any drop in the instrument. If overhead pressure intensifies, Bitcoin will slice through this zone to explore lower price levels. Despite the bullish momentum being built, the presence of strong resistances on the top side along with the presence of sellers at those levels, it might lead to a reversal.
Current Market Sentiment:Bullish
EURUSD Falls To 1.2100
EUR/USD holds lower ground near 1.2117, keeping the previous day’s losses, as Friday’s European session gets ready to kick off. Although bond sellers kept the USD firmer, they were also exerting downside pressure on the currency major pair. Yet, the cautious sentiment ahead of preliminary Q1 GDP from Germany and Eurozone is preventing the quote from adding additional losses.
US 10-year Treasury yields showed another consecutive day of gains after Wednesday’s FOMC meeting tried to reject reflation fears, but could not. The bond bears recently seem to cheer hopes of a faster recovery in the US, portrayed by strong Q1 US GDP, as well as hopes of further stimulus from President Joe Biden's government. However, lack of clarity over the COVID-19 conditions, amid the Indian variant’s presence in France, as well as uneven vaccinations in the West, seem to limit the movements in the currency pair.
On the other hand, European policymakers await upside surprises from the initial GDP prints after strong inflation figures from the region’s growth engine Germany and upbeat sentiment figures for the bloc, published on Thursday. Given that, traders may divert from the US dollar moves should the data flash positive surprises. In a case of disappointment, matching the downbeat market consensus, EUR/USD traders may wait for second-tier US figures for clearer direction.
Current Market Sentiment:Wait-And-See Approach
Gold's Bearish Bias
After witnessing a trading day with both sellers and buyers active, gold is holding on to recent recovery gains amid a broadly subdued USD and higher Treasury yields. The recent figures concerning the US GDP gave Treasury Bulls a needed surge, especially when you combine that with the weekly jobless claims, which have hit pandemic lows.
However, the downside of the precious metal seems to be dulled as US President Joe Biden comes one step closer to finalizing his $1.8 trillion social stimulus package alongside his infrastructure spending plan. Furthermore, China’s official PMIs for April and the return of Japanese traders after Thursday’s off could soon recall momentum traders. In a case where Beijing keeps printing upbeat figures, the bullion may witness a corrective pullback, failures to do so, could keep the sellers in the driver’s seat.
Looking at the resistance support structure of the instrument, we’re seeing that the immediate support for XAU is around $1,765, as this was the previous week’s low. Failure of the Bulls to keep that level alive, the Bears will be targeting the $1,760 support, below with the $1,753 level will be a huge test to the Bulls as that breaking below it will empower the bearish momentum. On the up side, Bulls will be seeking a break above $1,770 which could provide the needed confidence for further upside movements. Above which, a cluster of resistances between $1,774 and $1,777 will test the Bulls commitment to the upside.
Current Market Sentiment:Bearish
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