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Technical Analysis for Bitcoin, Euro vs U.S. dollar, and Gold for 18th August 2021

The Daily Cryptomenon

This analysis was written at 9:00 am GMT +3, on 18.08.2021

For todays important  economic announcements, visit our Economic Calendar.

The overall market continues to take into consideration the increased woes of COVID, especially with how the Delta Variant is increasing the number of infections worldwide. The markets continue to digest this news as the economic calendar of the day is bound to make some waves. The FOMC (Federal Open Market Committee) will be releasing its minutes, as this will have a major impact on the price of the USD and hence, on all other instruments.

With that said, let’s find out how the markets are doing on August 18th, 2021.

Bitcoin Breaks Support

Bitcoin price began to fall again after failing to break through the $48,000 resistance zone. BTC broke through the $46,500 support level and entered a short-term bearish zone. For some time, it has been consolidating above $45,500, but eventually the shorts had the upper hand. So it fell below the $45,000 USD support level and the 100-hour simple moving average. Bitcoin even spiked below $44,500 and traded as low as $44,258.

It’s now consolidating losses above $44,500. It even broke the 23.6% Fibonacci retracement level of the recent decline, falling from a high of $47,203 to a low of $44,258. On the other hand, the immediate resistance is around $45,000. The first major resistance is near $45,700 (recent breakout zone). On the hourly BTC/USD chart, the main downtrend line is also forming a resistance level near the $45,800. The trend line coincides with the 50% Fibonacci retracement level that recently fell from a high of $47,203 to a low of $44,258.

 

 


Breaking through the $45,700 and $45,800 resistance levels, BTC may rise to the level of $47,000 in the near future. Unless Bitcoin surpasses the resistance levels of $45,700 and $45,800, it may continue to fall to the $44,500 mark. The first major support level is now near the $44,200 area, and the next big support is around the $43,800 level. But if the price does not stay above $43,800, it may fall to the $40,000 support level.

Current Market Sentiment:Bearish


EURUSD Accelerates Its Decline

The EURUSD rose slightly in the middle of the week, but the currency pair is still in a very narrow trading corridor. At the time of writing, the EUR/USD was trading at 1.1721, which was down 0.11% on the day. Due to the increasing Delta mutation of the Coronavirus and its impact on the global economic recovery, investors remain cautious amidst mixed economic data, so the U.S. dollar is gaining traction.

The EU Industrial Production fell by 0.3% in June, compared to the market expectation of a 0.2 drop. Investors are going to be paying extra attention to the EU core inflation and US building permit data. In terms of trading information, the EURUSD was on the defensive for the third consecutive day, falling to the lowest level of 2021 during the Asian session on Wednesday. At the time of writing, sellers of this currency pair are aiming at the 1.1700 line.



The underlying currency pair continues to trade below the 20-DMA (Daily Moving Average), which is related to the slower MACD (Moving Average Convergence Divergence) and RSI (Relative Strength Index) lines, that are favouring sellers. However, the bottom line of the descending channel, which has been around 1.1685 since late June, will be testing further declines. Still, it is worth noting that a firm price below 1.1685 will make it easy to fall to the November 2020 low of around 1.1600.

Current Market Sentiment:Bearish


Gold Climbs to $1,800

The price of gold continues to fluctuate in the tight trade corridor due to concerns about the increasing Delta Variant of the Coronavirus and the strengthening of the U.S. dollar. Not to mention the geopolitical and financial uncertainty that has spread through the world. The higher value of the USD makes gold more profitable for holders of other currencies, hence we are seeing other instruments falling while gold remains stable. US retail sales fell more than expected, reflecting Fed Chairman Jerome Powell's comments on the unknown economic impact of the recent Coronavirus outbreak.

Investors are now reviewing the minutes of the Fed’s July meeting to understand the lay-off plan. The SPDR Gold Trust, the world's largest gold exchange-traded fund (ETF), reported on Tuesday that its holdings fell from 1,020.63 tons to 1,017.14 tons on Monday. Gold tracking orders refreshed the intraday high near $1,789 and rose by 0.13% today, on Wednesday morning. At the same time, the US dollar consolidated its recent gains before the FOMC agreement, while gold rejected the pessimistic momentum of the previous day.

 


The current situation in Kabul and the controversial information about the Fed’s next move also challenged the risk sentiment, which gives the safe haven yellow metal some cover. Looking ahead, COVID updates and central bank actions ahead of the FOMC meeting minutes will be crucial. In general, the overall risk-off mood will help gold, but only if the USD doesn’t attract further upside movements.

Current Market Sentiment:Consolidation


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