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Technical Analysis for Bitcoin, Euro vs U.S. dollar, and Gold for 31st May 2021

The Daily Cryptomenon

This analysis was written at 9:00 am GMT +3, on 31.05.2021

For todays important  economic announcements, visit our Economic Calendar.

The markets are more focused on what has happened on Friday with the PCE (Personal Consumption Expenditure) economic figure. The economic data showed major growth in the inflation metric which has given more of a risk-off sentiment which gave the EURUSD the negative pressure it has been showing, while positive pressure for the XAU. On the other hand, Bitcoin continues to feel the negative pressure as it Bears seek to push it below the $30,000 level.

With that said, let’s find out how the markets are doing on May 31st, 2021.


Bitcoin Bears are Back 

Bitcoin has repeatedly tried to break the resistance zone of $37,000, but to no avail. Before BTC corrected higher, the latest swing low was formed at around $33,650. It broke the resistance levels of $34,000 and $35,000. It also broke the 23.6% Fibonacci retracement level which connects the downward trend from a high of $40,417 to a low of $33,650. The price is now trying to break the resistance level of $36,000.

The hourly resistance of the BTCUSD pair is around $36,000. On the other hand, there is immediate resistance near $35,500. The first major resistance is near the $36,000 and the mentioned trend line. The next major resistance level is near $37,000, which is about 50% of the downtrend Fibonacci retracement level, falling from a high of $40,417 to a low of $33,650. Should the instrument be able to break, and close, above the $37,000 resistance level, this can open the door to sustainable growth.



The main obstacle for the police is around $40,000. If Bitcoin fails to break the resistance level of $36,000, there is a risk of a sustained downward move. Initial support for the downside is near $34,500. The first major support is close to the $34,000 level. If it falls below the $34,000 support level, the price will fall to the $32,000 support level in the next trading day. Further losses may pave the way for testing the $30,000 level.

Current Market Sentiment:Bearish


EURUSD Seeks Zone Above 1.2200

EUR/USD continued to rebound to 1.2205 on Friday, rising 0.07% on the day before Monday's European session. The major currency pairs fell to their lowest levels in the previous day and two weeks, and then rebounded from 1.2132 due to risky market sentiment that favored buying. The mood has been conducive to the buying with risk-on sentiment with the long weekend in the US and UK. The PCE price index (Basic Personal Consumption Expenditure) exacerbated the inflation problem and favored the US Dollar Index (DXY) on Friday.

As Biden extended the infrastructure spending negotiations to June, and China revealed uneven PMI data in a quiet period, the risk sentiment continued until Monday. Although the Sino-US dispute over the first phase of the trade agreement has shown headlines about Brexit testing market confidence, in the face of expectations for new momentum and a stable vaccine to support China’s economic recovery.


Although the European Central Bank (ECB) has relatively few disadvantages for inflation, a further increase in the preferred inflation indicator of the European Central Bank may put the EURUSD Bulls to the test. Since the market believes that the reflation fears are difficult to recover from and is unlikely to become overheated. At the same time, the preliminary value of the German Consolidated Consumer Price Index (HICP) is expected to rise from 2.1% in May to 2.4%, close to the European Central Bank’s target. In addition to the German data, traders in the euro/dollar pair can also engage in dialogue on the US economic recovery, spending plans, and Sino-US disputes.

Current Market Sentiment: Consolidation with Bearish Bias


Gold Looks at US PCE Data

The supply of gold began to climb from a low of $1,902.62 to a high of $1,910 this week, up about 0.4%, and kept the Bulls steadily higher in the next few trading days. The main focus of gold traders has been on the topic of inflation. Taking into account the key officials of the Federal Reserve, they have now publicly acknowledged the need to discuss the issue of reducing QE. Other signs of US economic growth, such as Friday’s wage data, may exacerbate the layoff controversy.

Meanwhile, China’s Purchasing Managers Index this week highlighted the growth story of the global economic recovery. Despite mixed results, the overall outlook for economic growth is good. In the first Asian session on Monday, they hovered around $1,903-04. Due to the weakness of the US dollar and the desire for safety markets have favored gold buyers. Gold rose to a high in early January for the fourth consecutive week last week. However, the precious metal Bulls have been lingering in the mixed catalyst recently.

 


Gold is still unwilling to rebound from its high level since it jumped to $1,912.80 in early January. The mixed information from the RSI (Relative Strength Index) and momentum indicators shows that traders are hesitant in the monthly upward channel. But please note that the two-week horizontal line near $1888, followed by the lower channel line and the 50 moving average line near $1886, are becoming the central theme of short-term gold sellers.

Current Market Sentiment:Consolidation with Bullish Bias


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