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Technical Analysis 30th April 2021: EURUSD, Gold and Bitcoin

This analysis was written at 9:20 am GMT +3, on 30.04.2021

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Market Recap

We’ve mentioned how the bitcoin market was consolidating with a bit of a bearish bias, this turned out to be true as the instrument fell towards the 50-SMA (Simple Moving Average) on the 4-hour chart as expected. There, the Bulls refused to back down and forced the instrument to climb back higher, as the consolidation continues to be the main factor. The Bulls will be aiming to break above the $56,000 resistance level, as it would solidify their intent on revisiting the previous highs, but the mentioned needs to fall in order for that to happen.

EURUSD failed to break above the 1.2150 resistance level and corrected lower towards the 1.2100 support. The lack of follow through above the mentioned resistance have put a dent into the bullish momentum that the FOMC created on Wednesday and Thursday. Even though there is a lot of support on the downside, Bears will be looking to break through the 1.2100 support as a first level, which could strengthen their resolve to continue their downward move.

Gold couldn’t maintain the positive momentum from the FOMC event on Wednesday and that resulted in the instrument’s inability to break above $1,790. The lack of momentum caused the instrument to be mauled by the Bears as it fell below $1,770. This move lower spiked below $1,760, but the Bulls were able to keep things from escalating too far as gold trades around the 100-SMA on the 4-hour chart. Bears will be seeking to establish a foothold below $1,760 while the Bulls are seeking to defend it.

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 Sets Sights on $60,000

Bitcoin extended the bearish action significantly following the rejection at $56,000. Tentative support at $54,000 failed to stop the sellers’ advances, allowing the price to explore lower leeks around the 50-SMA on the 4-hour chart. Furthermore, it would seem that the pioneer cryptocurrency is trading in an ascending channel, when you combine the lower bound of the channel with the 50-SMA, it creates a strong enough support to test any kind of negative move on the instrument.

On the upside, bulls look forward to trading above the stubborn resistance at $55,500. Moreover, a step into the upper layer of the channel would trigger massive gains. Support at the middle boundary would be crucial to nurturing the uptrend toward $60,000. On the other hand, Bitcoin must also bring down the resistance at the 100 SMA to pave the way for the much-anticipated gains. However, due to the huge presence of sellers around the 55,000, the upswing to $60,000 might fail.



On the downside, Bitcoin is sitting on relatively weaker support areas. However, there might be enough buyers around the $49,000 which might give the instrument the needed stopping power for any drop in the instrument. If overhead pressure intensifies, Bitcoin will slice through this zone to explore lower price levels. Despite the bullish momentum being built, the presence of strong resistances on the top side along with the presence of sellers at those levels, it might lead to a reversal.

Current Market Sentiment:Bullish

 

EURUSD Falls To 1.2100

EUR/USD holds lower ground near 1.2117, keeping the previous day’s losses, as Friday’s European session gets ready to kick off. Although bond sellers kept the USD firmer, they were also exerting downside pressure on the currency major pair. Yet, the cautious sentiment ahead of preliminary Q1 GDP from Germany and Eurozone is preventing the quote from adding additional losses.

US 10-year Treasury yields showed another consecutive day of gains after Wednesday’s FOMC meeting tried to reject reflation fears, but could not. The bond bears recently seem to cheer hopes of a faster recovery in the US, portrayed by strong Q1 US GDP, as well as hopes of further stimulus from President Joe Biden's government. However, lack of clarity over the COVID-19 conditions, amid the Indian variant’s presence in France, as well as uneven vaccinations in the West, seem to limit the movements in the currency pair.

 


On the other hand, European policymakers await upside surprises from the initial GDP prints after strong inflation figures from the region’s growth engine Germany and upbeat sentiment figures for the bloc, published on Thursday. Given that, traders may divert from the US dollar moves should the data flash positive surprises. In a case of disappointment, matching the downbeat market consensus, EUR/USD traders may wait for second-tier US figures for clearer direction.

Current Market Sentiment:Wait-And-See Approach

 

Gold's Bearish Bias

After witnessing a trading day with both sellers and buyers active, gold is holding on to recent recovery gains amid a broadly subdued USD and higher Treasury yields. The recent figures concerning the US GDP gave Treasury Bulls a needed surge, especially when you combine that with the weekly jobless claims, which have hit pandemic lows.

However, the downside of the precious metal seems to be dulled as US President Joe Biden comes one step closer to finalizing his $1.8 trillion social stimulus package alongside his infrastructure spending plan. Furthermore, China’s official PMIs for April and the return of Japanese traders after Thursday’s off could soon recall momentum traders. In a case where Beijing keeps printing upbeat figures, the bullion may witness a corrective pullback, failures to do so, could keep the sellers in the driver’s seat.



Looking at the resistance support structure of the instrument, we’re seeing that the immediate support for XAU is around $1,765, as this was the previous week’s low. Failure of the Bulls to keep that level alive, the Bears will be targeting the $1,760 support, below with the $1,753 level will be a huge test to the Bulls as that breaking below it will empower the bearish momentum. On the up side, Bulls will be seeking a break above $1,770 which could provide the needed confidence for further upside movements. Above which, a cluster of resistances between $1,774 and $1,777 will test the Bulls commitment to the upside.

Current Market Sentiment:Bearish


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