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Technical Analysis 3rd May 2021: EURUSD, Gold and Bitcoin

This analysis was written at 9:20 am GMT +3, on 03.05.2021

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


Market Recap

Over the weekend BTC had experienced enough bullish pressure to continue moving higher, it even broke above the $58,000 resistance. However, it quickly encountered the top barrier of the ascending channel we had previously mentioned in this brief. This resulted in a move back down towards the $56,000 support. Volatility continued to play its part in the price dynamics of the instrument as BTC is once again trying to break above $58,000 as of this writing.

After the EURUSD failed to break above the 1.2150 resistance level, the momentum that kept it there soon started to fade, allowing the Bears to take control of the instrument. EURUSD fell through the 50-SMA (Simple Moving Average) on the 4-hour chart as well as the 1.2050 support level that should have limited any downside moves. EURUSD reached the 100-SMA on the same timeframe, before the bearish momentum started to subside, but seems as if it still hasn’t finished its objective.

We’ve previously mentioned how Gold was unable to break above the $1,800 resistance level and was forced to fall back towards the $1,770 support level. However, despite the recent bearish move lower, the instrument has been able to keep sellers at bay. Despite the obvious increase in volatility in the markets, gold has been able to withstand many major movements in either direction as it currently trades between the 50- and 100-SMAs 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?

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 Gains Momentum 

Failing to properly break above the $58,500 resistance level, allowed Bitcoin Bears to drive the instrument lower. This led BTC to fall below the 200-SMA on the 4-hour chart, but quickly corrected higher. The move downwards reached $56,100 but the Bulls were quick on the draw and moved BTC back higher breaking through the $56,500 and $57,000 resistance levels.

The instrument is currently attempting to break above the $58,000 yet again, but it remains to be seen if the bullish momentum will allow that to happen. The presence of a major support near $56,800 will set the Bulls’ mind at ease to find additional momentum to the topside. The first major resistance on the upside is near the $58,500 level. A successful break above the $58,500 could set the pace for a strong rally. Should that happen, the first target for Bulls could be $60,000. The next key stop for them may possibly be $62,000.



The focus for the Bulls is to break above $58,500, if they should fail, BTC could correct lower once again. An initial support on the downside is near the $57,500 level. The first key support is near the $57,000 level and the trend line. A downside break below the trend line might call for a test of the $56,000 support and possibly the intersection between the 50- and 100-SMA on the 4-hour chart.

Current Market Sentiment: Cautiously Bullish

 

EURUSD Corrects To 1.2000

A new week and a new month has the EURUSD testing the intraday low of 1.2018 as the European Session kicks off. In doing so, the currency major pair fades the early Asian bounce off a one-week low as the USD continues to gain strength. Although holidays in China and Japan restrict market moves, comments from US Treasury Secretary Janet Yellen and Secretary of State Antony Blinken, not to forget Dallas Fed President Robert Kaplan, helps the US dollar index (DXY) to remain strong around 91.30, the highest since April 22.

While US Treasury Secretary Yellen terms Biden’s plan as much needed while pushing for his tax hike, Secretary of State Blinken shows readiness to keep a tab on China. Further, Fed’s Kaplan becomes the first among the policymakers to show readiness to discuss the tapering. The technical picture is also helping the narrative for a stronger USD as the RSI (Relative Strength Index) has broken below the 40-level, but not below the 30-level indicating that oversold conditions have still not been reached.

 


Traders will be on the lookout for the German Retail Sales for March, expected to recover from -9.0% to -3.1%, which might provide some new direction for the major currency. However, due note that despite the expected recovery in the figures, a disappointment in the figures will have a much adverse effect. Following that US PMIs for April and risk catalysts will be crucial for the EUR/USD pair trader to watch.

Current Market Sentiment: Waiting on Economic Events - Cautiously Bearish

 

Gold Remains Firm

Gold consolidates the latest two-day downtrend as the Asian session wasn’t all that active. That said, the yellow metal picked up bids towards refreshing the intraday high around $1,774 while flashing 0.30% gains on a day as of this writing. While the USD strength and risk-off mood could be the factor that drove the yellow metal to the southside, the recent gains seem to take clues from S&P 500 Futures, which have increased 0.40% on an intraday basis.

The risk-on mood in the markets have been getting their juice from the hopes of US stimulus and economic recovery in Asia, this comes despite the looming COVID-19 issues in Japan and India. However, market movements have been restricted due to the day off in China and Japan, coupled with a light calendar elsewhere. Furthermore, traders will be watching the US activity numbers for April, which will give them enough confirmation concerning the recent strong economic figures.



Looking at the resistance and support structure of gold, we can notice that the Bulls are trying to continue moving higher with the $1,777 in sight. However, this will be a tough level to crack since the risk-on mood is dampening any movements higher. Should the move to the topside continue to prove itself a dominant factor in this market, the instrument will face against the $1,780, which inturn will allow Bulls to reach $1,800 once again. Meanwhile, if the $1,777 proves to be the tough level it’s supposed to be, the Bears will be targeting $1,765 and the $1,755 by extension.

Current Market Sentiment: Consolidation


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