The Daily Cryptomenon
14th January 2021
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This analysis was written at 9:00 am GMT +3, on 14.1.2020
Bitcoin has been able to continue its recovery higher as it attempts to break above the $38,000 resistance level. While the EURUSD and XAUUSD are both facing added bearish pressure that is coming from the recent CNN report that President-Elect Joe Biden is planning to roll-out a bigger-than-expected stimulus package worth almost $2 trillion.
With that said, let’s find out how the markets are doing on January 14th, 2021.
Market Recap
Bitcoin’s volatility continues to play a huge part in the markets as the Cryptocurrency seemed to be heading south for the winter. However the support level at $32,500 stopped it’s descent and helped it bounce back higher towards $38,000. The bullish behavior is quite evident as the instrument broke above the 100-SMA (Simple Moving Average) on the 2-hour chart, moreover, the RSI (Relative Strength Index) has managed to move above the 50 level to print around the 63 level.
A massive rejection happened yesterday on the EURUSD. We had expressed how the bearish pressure that we’ve been seeing on the instrument is going to keep mounting, and that sellers are waiting for any topside correction to force the instrument lower. EURUSD found massive resistance at 1.2220 forcing it to break back lower through the 1.2175 and reaching 1.2140, which is the current major support. It’s all up to that level to keep things in check and not lead to further downward pressures.
Another attempt higher by Gold resulted in another move lower as the precious metal attempted to move above the 1,865 resistance level. However, the current bearish pressure that is accompanying the yellow metal disapproved such a move and forced the instrument back down towards 1,827. Currently, the major support lies at 1,816, meaning that there is still room for the instrument to fall, however, with RSI printing so close to the oversold zone, we might see some consolidation for the most part.
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Bitcoin Recovers Some More
Bitcoin managed to establish a solid support level at $32,500 as it started a fresh bullish move from there. The move was strong enough that it allowed BTC to surpass the $34,000 and $35,000 resistance levels to move into a positive zone. The Bulls gained strength when there was a break above a key bearish trend line with resistance near $34,300. The instrument consolidated above the trend line before it climbed above the $36,000 resistance level.
There was a strong wave and the price was able to clear the $37,000 level as well. The price traded as high as $38,195 as it currently consolidates its gain between the 100-SMA on the 2-hour chart and the resistance level at $38,000. Bitcoin’s price is clearly showing positive signs and it seems like it could continue rising towards the $38,800 resistance level. The next key resistance is at $39,200, above which the price could retest $40,000.
If Bitcoin, for some reason or another, starts a downside correction, the $36,000 zone is likely to act as a massive strong support. The next support is near the $35,250 level. A downside break below the $35,200 and $35,000 support levels may possibly push the price back into a bearish zone in the near term.
Current Market Sentiment:Consolidation with Bullish Bias.
EURUSD Fails to Break Resistance
After failing to break above the 1.2220, the EURUSD found itself succumbing to the bearish pressure that followed. The instrument fell massively towards 1.2140 support level as it seems to be consolidating the losses around that level. Furthermore, the downward pressure remains to be strong as the RSI prints around the 40 level indicating that there is still enough room to the downside without fear of becoming oversold.
The main reason behind this massive drop is the current political background in the U.S. It seems that the US dollar and Treasury yields are cheering, since there were reports that President-elect Joe Biden is considering a bigger-than-expected stimulus package of about $2 trillion which is bound to be positive for both of these instruments. Looking ahead, the ECB minutes and US weekly jobs data could influence the currency pair ahead of Powell’s speech.
We expressed that further advance in EURUSD is not ruled out but a clear break of 1.2250 is unlikely. While the currency pair did move higher initially, it dropped sharply after touching 1.2222 (overnight low of 1.2138). Despite the relatively rapid decline, downward momentum has barely improved and the outlook for today is mixed. Overall, EUR is likely to consolidate and trade within a 1.2130/1.2205 range.
Current Market Sentiment: Mixed with Bearish Bias.
Gold Faces More Downward Pressure
Gold (XAU/USD) is licking its wounds after tumbling $20 in a quick move earlier in the Asian trades. Reports show that a bigger-than-expected US stimulus plan worth $2 trillion is due to be announced by President-elect Joe Biden knocking-off the US Treasuries, fuelling a rebound in the US dollar and Treasury yields. The expectations of a higher US fiscal stimulus plan are likely to keep the bounce in the Treasury yields intact. Therefore, the risks remain skewed to the downside in the precious metal leading up to the US weekly jobs data and the Fed Chair Powell’s speech. Although a bounce cannot be ruled out after the sharp move to the downside.
Technical indicators are showing that gold is seeing major support at 1,836 which coincides with the lower bound of the Bollinger Bands, giving it some significance. Should the mentioned level fail to keep things in check, this could put the $1,825 support at risk.
On the flip side, immediate resistance is seen around $1,842, where a dense cluster of hurdles is lined up. The buyers will then target the $1850 barrier, where the Fibonacci 23.6% one-day lies. Further up, a relevant barrier at $1,853 is likely to be a tough nut to crack for the XAU Bulls. Any higher is going to be an uphill task for the Bulls, with multiple strong hurdles in the way towards the $1860 level.
Current Market Sentiment: Waiting on News.
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