The Daily Cryptomenon
This analysis was written at 9:00 am GMT +3, on 30.08.2021
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After Powell’s speech on Friday, in which he teased some tapering in their bond purchasing program as well as some increase in interest rates, markets are switching their focus from the speech and rhetoric to actual numbers in the form of NFP data. The US Non-Farm Payroll data, being released this Friday, will have a major impact on the market as whole as the FED is also waiting for some good news in the economy to warrant the increase in rates.
With that said, let’s find out how the markets are doing on August 30th, 2021.
Bitcoin Stalls at Major Resistance
Bitcoin price (BTC) has struggled to break the $50,000 mark for the past 2 weeks. After the price had dropped below $29,000, BTC is up by nearly 75% in less than a month. Since then, the BTC price has remained stable in the $5,000 range, allowing many altcoins to exceed their All Time Highs (ATHs).The overall market is still showing bullish signs as many investors are anticipating a push over $50,000 to happen fairly soon. As the BTC price has risen over the last month, each top it reached, became less parabolic.
This BTC price action has formed a curved top along with a curved bottom over the past 35 days. The end of this formation is within a week, and BTC is expected to have a major breakout sometime before that. It's hard to tell if it's a bullish or a bearish pattern, but we can use each curve as a guide. Throughout this uptrend, the BTC price remains bullish on the 20-day moving average.
This mentioned Moving Average prevented Bitcoin from starting a downtrend while the Bulls bought aggressively whenever a price touched it. We can use this moving average as a good guide to see if BTC continues to be bullish or enters a bearish state. If the Bulls fail to break out of the key resistance area and break below the curve, BTC should be expected to break below this moving average. The BTC price will be in a confirmed downtrend and we expect a drop from $ 42,000 to $ 44,700.
Current Market Sentiment:Cautiously Bearish
EURUSD Teases 1.1800 on FED Optimism
EUR/USD is showing slight gains around 1.1800 after an optimistic end of the trading week, as investors head towards the European session on Monday. The major currency pair cheered Federal Reserve Chairman Jerome Powell’s Jackson Hole speech to remind the Bulls but a sluggish session seems to challenge the upside momentum as of late.
The power of Powell's pun could not be diminished as the Fed chief teased tapering on Friday but managed to rekindle risk sentiment. In addition, comments such as “We will carefully assess the incoming data and emerging risks” provide markets with additional confirmation that monetary policy is in place, at least for the time being. Asia data / events, coronavirus risk appetite and a volatile geopolitical front could also be cited as extra filters to the north.
The Consumer Price Index (HICP), the main indicator of the strength of the bloc's inflation, further increased the pair's trade barriers. Elsewhere, Hurricane Ida and the US-China tensions, coupled with the Western dislike for the Taliban’s ruling in Afghanistan, also challenge the EUR/USD bulls due to the US dollar’s safe-haven status. However, there have been mixed signals from US President Joe Biden criticizing Beijing for interfering with investigations into the origins of the virus and for not blaming the Taliban for the latest attack on Kabul.
Current Market Sentiment:Bullish
Gold Focuses Friday’s NFP
Gold hovers around $1,815, rebounding from two-week highs ahead of Monday's European session. At the same time, gold prices strengthened on Friday after the speech of Fed Chairman Powell in Jackson Hole. The gold sellers might have cheered multi-day high levels to take quick gains amid mixed catalysts and cautious sentiment ahead of the crucial US Nonfarm Payrolls (NFP), up for publishing on Friday.
Although the US Dollar Index (DXY) refreshed a two-week low, Gold dropped around 0.08% intraday by the press time as market sentiment dwindled due to the coronavirus and geopolitical headlines. Also problematic for traders may be that Fed Chairman Powell will focus on the upcoming data, especially the employment data, ahead of the key employment report for August.
In the future, a light economic calendar and mixed catalysts may continue to worry gold traders, possibly continuing the latest consolidation, but Bulls may remain encouraging as the Fed focuses on tapering and rate hikes. However, it all depends on Friday's US employment data, which should support Powell's cautious optimism and provide hope for gold buyers.
Current Market Sentiment:Cautiously Bullish
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