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Technical Analysis 31st May 2021: EURUSD, Gold and Bitcoin

This analysis was written at 9:20 am GMT +3, on 31.05.2021

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Market Recap

The pioneer cryptocurrency has been trying to break above the $40,000 resistance level, however, the Bulls haven’t been able to establish any kind of meaningful momentum to actually break above. After BTC’s inability to break above the mentioned level, the Bears took complete control of the instrument and began to push it lower, breaking through the 50-SMA (Simple Moving Average) on the 4-hour chart. From there, the instrument continued to move lower reaching the $33,000 support level. The overall direction, however,  continues to be the downside.

The first thing that should catch your eye when looking into the EURUSD graph is the massive spike lower, which broke through the 1.2160 support level, and the subsequent and almost equal rise higher. This all happened due to the positive figures coming from the US side with inflation numbers being well above what was expected, this caused the mentioned move. Since then, the instrument has been trading in a relatively tight consolidation just below the 1.2200 resistance level.

The bullishness of gold continues to be something to behold. The instrument has been moving ever higher since it bottomed out at $1,600. Since then, XAUUSD has moved higher breaching the $1,900 level as it aims to reclaim the lost levels above $2,000. Until then, the instrument seems to be content trading in a consolidation, with clear bullish bias, between $1,890 and $1,910, the latter being a strong resistance which the instrument is seeking to break.

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?

Whatever you choose to believe, you can react to it all on AltumFx. Go ahead and register a trading account right here if you don’t already have one.


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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