The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 30.07.2021
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The market is experiencing a new-found source of bullishness, especially with the economic, political, and health backdrop. The economic point of view comes from the latest news on the Fed decision and its continued fallout. Politically, because of the current US-China talks and the major sweep China is doing against all companies, a bigger rift is taking place. Health-wise, even though the Delta Variant is still causing untold havoc, the optimism coming from the fact that we’re close to the end of the tunnel, is allowing the market to breath a bit more easily.
With that said, let’s find out how the markets are doing on July 30th, 2021.
Bitcoin Consolidates at $40,000
In the past two days, the price of Bitcoin basically stayed on the same level, $40,000. Then suddenly, this flagship cryptocurrency broke the $40,000 mark, just a week after its fall beneath a low of $30,000; which is the level we'd seen earlier this week. The main catalyst for this massive jump was the rumours that claimed Amazon will accept Bitcoin and other cryptocurrencies as payments. However, when the retail giant denied such plans, the positive momentum automatically disappeared. The benchmark cryptocurrency was revised towards $36,000 and then rebounded to above $40,000.
The current trading price of BTC is around $40,000, and the overall market outlook remains quite optimistic. Soon enough, Bitcoin might gradually climb to above $40,000, which can also trigger another bullish run towards the $44,000 level, but we're not sure when that day might be. Additionally, there has been talk suggesting that the global payment company PayPal will launch merchant services in the UK as part of its expansion plan. According to a few reports, the cryptocurrency trading on Wednesday was very exciting. And PayPal CEO, Dan Schulman, announced that the UK will be the next place to expand its encryption services.
The Moving Average Convergence Divergence (MACD) indicator shows that even if the Bulls stagnate above $40,000, they'd still have an advantage. Nevertheless, given that the MACD has just crossed the midline, and since the divergence between the moving averages confirms the bullish statement, it’s still necessary to proceed with caution and await the confirmation of a breakthrough well-above the average.
Current Market Sentiment:Consolidating Gains
EURUSD Reaches 1.1900 and Corrects
The euro/dollar fell to an intraday low at around 1.1879, and dropped by 0.05% the day before Friday's European session. The major currency pairs showed a four-day run-up before reaching their monthly highs on July 6. The sentiment dragged the safe-haven assets below the US dollar and triggered DXY to rebound from next month's low. In parallel, US President, Joe Biden recently persuaded the White House staff to get vaccinated or agree to a regular Covid testing, since the daily infection rate in the United States is the highest since February.
Yet, the situation in Japan is even worse. As the government plans to occupy more prefectures in emergency situations after registering more than 10,000 cases per day for the first time. It's worth noting that the latest coronavirus data from Australia and the United Kingdom are slightly simpler. This doesn't provide an improvement to the Covid Delta distortion problem, though. In other news, the US Dollar Index (DXY) has also benefited from the Fed’s deflationary concerns, since the PCE index (Personal Consumption Expenditure) has recently risen higher.
On the other hand, the Vice President of the European Central Bank (ECB), Luis de Guindos along with the European Central Bank Strategy Meeting report, both support a slight increase in inflation. However, they remain cautiously optimistic about the development of growth in the Eurozone, which gives the EURUSD the boost it needs. However, US data and risk factors are becoming increasingly important to keep up with the new dynamics.
Current Market Sentiment:Bullish
Gold Continues to Rise
After testing a two-week high of around $1,840 on Thursday, gold's level fell on Friday. Due to the weakening of the U.S. dollar and the Federal Reserve, prices rose for the third time in a row. The United States admits that it may end its monetary policy support due to the pandemic. Optimism about increased demand in India in the second half of the year also contributed to this growth, and the Asian session put pressure on the bullish momentum of precious metals.
The higher dollar value makes it easier for holders of other currencies to obtain gold. The US Treasury bond yield was 1.25% and the loss was 1.32%, which may push up the price of gold in the near future. Gold remained defensive near $1830, when it closed in the Asian session on Friday. Due to risky market sentiment, gold broke through 200-DMA for the first time since mid-July the day before. However, concerns about the growing Delta Covid option and expectations of the Fed's preferred inflation indicator pose challenges for buyers.
The yellow metal has jumped to a multi-day high and put additional pressure on the Fed to curb fears of reinflation. In any case, the pessimistic GDP data and cold housing data in the second quarter seemed to influence Jerome Powell & Co. The price of gold failed to break its monthly high. Don't forget the Fibonacci retracement level that has been below 50% after the crash in June, which will play a huge role in keeping any negative pressure in check.
Current Market Sentiment:Cautiously Bullish
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