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Technical Analysis 10th June 2021: EURUSD, Gold and Bitcoin

This analysis was written at 9:20 am GMT +3, on 10.06.2021

For today's important Economic Announcements please check the Economic Calendar


Market Recap

After experiencing extreme negative pressure, bitcoin was able to find enough support around the $31,000 level to rise back higher. The instrument was able to continue moving higher to break above the $36,000 level reaching the $37,700 level before the momentum seemed to stop. By breaking higher, the instrument has managed to break above the 50- and 100-SMAs (Simple Moving Average) on the 4-hour chart, but barely managed to stay above them as BTC attempts to stay afloat.

EURUSD experienced a mixed bag of movement as it attempted to break above the 1.2200 level, even managing to do so, but only temporarily. The instrument found enough bullish momentum to break through the 50- and 100-SMA, however that was extremely short lived as the bearish pressure quickly thwarted any movement higher and pushed EURUSD back to the downside sending the instrument towards the 1.2160. Currently the 1.2150, which coincides with the 200-SMA, is holding any kind of downward movement in check.

The yellow metal continues to trade in a somewhat consolidatory manner, however, it’s obvious that the instrument is on a downward trajectory. Despite attempting to break above the 50-SMA on the 4-hour chart, the instrument wasn’t able to find the needed momentum to move higher, resulting in a more downward pressure, however that was muted as well. Currently the instrument is simply trading below the 100-SMA with the $1,880 acting as a short term support.

What’s the strategy you’re going to use when it comes to trading these markets? Will we see more of the same type of trading? Or will there be a break of the norm?

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Bitcoin to Target $40,000 

Bitcoin prices rebounded from the weekly support level of $31,000, allowing more buyers to exit the sidelines and lend their support to the $40,000 rebound. This move caused Bitcoin to rise by 13% in 24 hours, and jointly promoted the growth of the entire cryptocurrency market. Polkadot is among the best performing crypto assets with 15% double-digit return. During the same period, Kusama rose 25.5% to $516, while Monero rose 14% to $277.

The MACD (Moving Average Convergence Divergence) has flipped from the bearish to the bullish direction which gives strength to the recent recovery in BTC from $31,000 to $37,000. When the MACD line moves above the signal line, a buy signal appears. Note that a break in the positive zone (above the zero line) may encourage more investors to enter the market, adding that the SuperTrend indicator has also become bullish due to buy signals, indicating a reversal after a fairly low start of the week. The indicator moves below the price and changes its color from red to green. It’s worth noting that SuperTrend takes into account market fluctuations and follows the trend of assets.



A buy signal implies a general upward direction; therefore, investors should consider holding long positions. On the other hand, the RSI (Relative Strength Index) shows that the bullish momentum for support has faded. A correction may be made before the RSI hits the overbought area. Moving to the centerline indicates that the Bears are getting stronger. The 100 SMA and 50 SMA support must be protected to avoid other supports at $33,000 and $31,000 respectively.

Current Market Sentiment:Bullish

 

EURUSD Facing Negative Pressure

EUR/USD closed at a weekly gain of around 1.2165 and fell 0.10% the day before the European Super Thursday trading session. Increasing market concerns about the European Central Bank and the US Consumer Price Index (CPI) get mixed with the US-China negotiations as well as Brexit Talks, not to mention that the leaked G7 statement put pressure on major currency pairs at press time. Given the ambiguous game of inflation expectations in the United States and the early signals of the price list, the market divergence around today's CPI is even greater.

According to data from the St. Louis Institute, the US CPI is said to show a six-day downward trend at the end of Wednesday’s forecast. At the same time, the precursor to inflation has fallen sharply to its lowest level since April 20. In contrast, the latest data from the Core Personal Expenditure Price Index (PCE), the Fed’s preferred inflation indicator, has shown a strong record of inflation. The lack of synchronization between the US Federal Reserve System's (FED) policy during periods of rising inflation and the associated risks faced by the world's largest economy is weakening market sentiment before the release of key data.

 


On the other hand, the gap between the boards of the European Central Bank (ECB) has become less interesting, even if the German-led group supports the reduction in QE (Quantitative Easing) measures. In addition, regional fundamentals still need to justify the continued recovery from the pandemic, which in turn reduces the importance of the current European Central Bank, which is expected to keep the key interest rate unchanged.

Current Market Sentiment:Wait-And-See

 

Gold at Risk Ahead of US Inflation

Gold weakened for the third consecutive day on Thursday, testing the key 21-DMA support level of $1,883 before US inflation and the European Central Bank's major policy decisions. At the same time, the European Central Bank can signal the end of emergency asset purchases without changing its basic policies. The results of these two key events are likely to have a major impact on the financial market and the economy.

The price trend of the US dollar will fluctuate the price of gold. The decision of the European Central Bank is expected to be made at 11:45 GMT, and the US inflation data will be released at 12:30 GMT. So far, its trading price is between $1,887.43 and $1,899.07. The US dollar fell slightly on Wednesday, mainly focusing on the central bank and US inflationary pressures. The European Central Bank meeting and the upcoming US CPI will be the focus before the Fed announces the results next week.



Both the European Central Bank and the US CPI are scheduled to be announced on Super Thursday, and investors are holding a wait-and-see attitude towards major currencies. In fact, according to the DBCVIX USD Volatility Index, this is the worst volatility in foreign exchange transactions in more than a year.

Current Market Sentiment:Wait-And-See


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