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Technical Analysis 9th June 2021: EURUSD, Gold and Bitcoin

This analysis was written at 9:20 am GMT +3, on 09.06.2021

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


Market Recap

Bitcoin continues to trade on the lower end of the spectrum, as it broke below the $33,000 support level reaching $31,000 before finding enough bullish momentum to move above the mentioned support. The negativity that is surrounding this instrument doesn’t seem to be abating one bit, as the expected move here is leaning more towards downside. Technical indicators are confirming this scenario as they both are displaying weakening bullish momentum and strengthening bearish one.

After the failure to properly break above the 1.2200 resistance level, EURUSD began to drop lower, below the 100- and 50-SMA (Simple Moving Average) as the instrument consolidated its movement around the 1.2180 level. The momentum to the topside is fading rapidly as per the technical indicators. However, that doesn’t mean the bearish one is taking over as more consolidation can be expected out of the EURUSD.

The gold market is experiencing yet another bout of consolidation. After the instrument reached the high of $1,900, the sellers made their presence known and stopped any upward movement in its tracks forcing the instrument to consolidate right at the 50-SMA on the 4-hour chart. The technical indicators are confirming this story as they are printing at their respective midlines which points to neither bearish or bullish momentum.

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 is Under Pressure 

Bitcoin remained in the bearish zone below the $35,500 support zone and continued to fall, the bearish momentum did not stop there and continued to move lower breaking through the mentioned support level and remained below the 100-hour simple moving average. The price even broke the $32,000 support area, reaching $31,065 before the price started to correct upwards.

The price rebounded above the 23.6% Fibonacci retracement of the recent decline, which connected the high of $36,820 to a low of $31,065. The $34,000 level is currently the level to beat for Bulls after recently falling from a high of $36,820 to a low of $31,065. The 50% Fibonacci retracement level seems to be an obstacle. The first major resistance is near the $33,500, and the major resistance is near the $34,000 area. Prices above this area can test the 100-hour simple moving average.



If Bitcoin does not break the resistance level of $34,000, it may fall further, with the downside support located around $32,500. The first major support is near the $32,300 and the channel trend line. If it breaks below the channel support, the price may fall to $31,000. The basic support is around $30,000. If the Bulls fail to defend the $30,000 support area, there is a risk of a sharp decline which might increase further.

Current Market Sentiment:Bearish

 

EURUSD Consolidates

The sluggish price dynamic of the USD kept the EURUSD higher during the Asian session. The currency pair is taking a comprehensive trend, falling below 1.2200 about 15 points, however, at the time of writing, the EUR/USD is trading at 1.2184, an increase of 0.11%. The U.S. dollar index (DXY), which tracks the performance of the USD, hovered around the 90 mark as it restrained the gains in early Asian trading.

After the disappointing ADP data was released last week, the USD was under selling pressure. This weakened the prospect of the Fed withdrawing earlier than expected. Before the inflation data released on Thursday, market participants are avoiding any kind of positioning on the dollar. At the same time, the Biden administration voted to form a "strike team" to identify specific violations that are "eroding" the supply chain. Market uncertainty is pushing funds to the dollar as safe-haven bids continue to increase, which temporarily limits the dollar's decline.

 


On the other hand, the euro got some support from mixed economic data, and investors waited for the European Central Bank. Data show that the euro zone’s economic contraction was less than the initial estimate, while disappointing data from Germany showed that investor morale unexpectedly deteriorated in June, and industry and industrial production both declined in April. For now, the price dynamics will be focusing on ques from the USD as investors wait for the all important inflation print on Thursday.

Current Market Sentiment:Consolidation

 

Gold Consolidates

The price of gold is still in a very narrow trading range, with gains on the modest side. Prices are still under pressure due to rising U.S. dollar, ETF closures and weak consumer demand in India. Investors have now shifted their attention to the US Consumer Price Index (CPI) data, which may affect the Fed's monetary policy decisions. After several Fed officials made comments, people's expectations that the Fed will cut interest rates soon rose.

The exchange rate of the US dollar index (DXY) remained stable at 90.08, rising by 0.02 against a basket of six competing currencies. This is making the metal less attractive to foreign exchange holders, and investors have remained stable even though the market is shifted from the central bank to the US inflation data in anticipation of events in the next few days. Any further increases in the inflation rate, the first step that the Fed might take may be to reduce bond purchase.



Although the market is calm, currency volatility is at its lowest level in a year. With the release of the European Central Bank and the US Consumer Price Index, the market is preparing for Super Thursday, and the US dollar has almost withdrawn. This alleviates concerns about the imminent decline in monetary stimulus from the Federal Reserve, the US dollar should be curbed against the Federal Reserve, which is expected to keep gold prices near the recent high of $1,900.

Current Market Sentiment:Consolidation


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