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Technical Analysis 2nd April 2021: EURUSD, Gold and Bitcoin

This analysis was written at 9:20 am GMT +3, on 02.04.2021


Market Recap

There’s no holding bitcoin back as the instrument has continued to show it’s bullish side, especially with the latest move higher that saw it battle against the $60,000 psychological resistance. Despite the move higher, the momentum was still not enough to break above the mentioned level and has since fallen back slightly towards $59,500. The RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence) are both showing bullish overall behaviour, but it would seem that the momentum is just not here for a major break upwards.

We’re somewhat glad that the sense of Deja vu that we had yesterday was wrong as the EURUSD was able to bounce off the 1.1700 support and continued to move higher reaching 1.1785 as a high before encountering some resistance. This move higher is much needed, but does it have the necessary strength behind it to really turn the tide on the negativity that the EURUSD has been witnessing, we’ll find out today. The instrument is currently battling against the mentioned resistance as well as the 50- SMA (Simple Moving Average) on the 4-hour chart, which might be acting as a moving resistance to keep the instrument pressured.

The bullish momentum on gold continues to make its presence known, as the instrumenty has managed to continue moving higher, breaking through the $1,720 resistance as well as the 50- and 100-SMAs on the 4-hour chart. The move higher is a much needed breath of fresh air for the yellow metal as it zeros in on the first level of meaningful resistance at $1,740. In order for the Bulls to establish a decent enough foothold above all the negativity, they need to break above $1,740 as well as the 200-SMA on the 4-hour chart.

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 Attempts Move Above $60,000

After a handful of attempts on breaking the $60,000 psychological resistance, BTC has still not given up. The last time a break above $60,000 was attempted, the instrument fell towards $50,000. Since then, the upward move from that support has carried enough momentum to break through several resistance levels and is once again face to face with the mentioned resistance. Should the Bulls properly manage to break above $60,000, a new wave of upward movement can be expected to happen.

This is backed up by technical indicators, RSI and MACD. The former is currently printing around the 60-level, however it seems to be printing on a consolidation phase without much deviation from there, this suggests that the $60,000 is a very important resistance and breaking higher would mean a move into overbullish territory. MACD is almost in the same boat, as the MAs are printing above the midline, however the histogram is very close to the midline that shows a lack of momentum, yet there’s enough bullishness to keep the instrument afloat.



The risk lies with the Bulls, if they are unable to effectively break above the $60,000 resistance, the Bears will more than likely become emboldened. This could lead to a downside correction, however, it wouldn't be as massive as last time, with many proper supports waiting for the Bears on the downside, their commitment to driving the instrument lower will be tested, especially against the $57,000 level.

Current Market Sentiment: Cautious

 

EURUSD Below 1.1800 Ahead of NFP

Today’s going to be a weird day for the common currency. The EURUSD is facing the lack of liquidity as banks take the day off because of Good Friday, all the while the U.S. NFP (Non-Farm Payroll) is on the agenda. This lack of liquidity accompanied by a tier 1 economic print will have a major effect on the instrument, so investors will mostly likely to be on sidelines and not react to any movement in the NFP especially since they could be taken way out of proportion due to the lack of liquidity.

Despite the lack of liquidity in the days leading up to Good Friday, as many investors decide to close up their positions ahead of the long weekend, the instrument has managed to climb a solid 70 pips higher. The stronger than expected U.S. Manufacturing PMI (Purchasing Managers’ Index) as well as Biden’s infrastructure plan, helped the stock index market to rally higher, which put a dent in the U.S. Treasuries. This in turn gave the instrument the needed bullish momentum to climb.



The whole risk sentiment in the market seems to be changing especially with the upbeat economic data from the U.S., this allowed the EURUSD to climb the way it did. It also helps that the Eurozone Manufacturing PMI came in better than expected, which just goes to show that slowly but surely we will see the economy of the world back on its feet. That’s not to say that the Eurozone is out of the woods just yet, as the upside remains limited especially with the instrument facing off against the 50-SMA on the 4-hour chart and the ongoing virus concerns in the continent.

Current Market Sentiment: Cautiously Bullish

 

Gold Finds Bullish Pressure

Usually when there’s a risk-on sentiment in the market, gold would be experiencing some bearish pressure as the safe-haven instrument would be bought. However, with the U.S. treasury yields playing a more active role in the direction of the yellow metal, it’s not curious to see the instrument back on the upside. The movement in the instrument can be seen breaking through the 50- and 100- SMA on the 4-hour chart reaching the $1,730 level, yet the instrument has still not stalled.

We can expect the instrument to find some consolidation today on account of Easter Holiday, meaning that most investors will either sit on the sidelines or get out of their positions hoping that the movements in the markets are too volatile on account of the low liquidity that usually happens during holidays. Back to gold’s bullish behaviour, it should be noted that despite the current bullish momentum seen, the $1,735 level is acting as a close resistance for the instrument, and will try to keep a lid on any major moves higher. Breaking higher will expose the $1,760 and $1,765 levels to the Bulls eyes.



The Bulls will always try to keep the party moving higher, with an ultimate goal around $1,800 followed closely by $1,815. However, that all depends on whether or not the instrument will be able to break above $1,765. On the flip side, if the instrument was to lose the bullish momentum and break below $1,720 and the 50-SMA on the 4-hour chart, then the Bears will be looking to move below $1,700 once again which the Bulls will be seeking to defend.

Current Market Sentiment: Cautiously Bullish


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