U.S. Core Retail Sales in Focus!

Gold was closed at $1868.60 after placing a high of $1875.85 and a low of $1846.20. Gold extended its decline on Monday and reached its lowest level since May 17 amid the strength in the U.S. dollar. Yellow metal-faced heavy pressure and dropped to its lowest in a month as the speculations around the market started to get a pace that the Federal Reserve might present some timetable for tapering the asset purchases in its upcoming policy meeting scheduled later this week.

The U.S. Dollar Index that measures the greenback value against the basket of six major currencies remained flat near 90.50 handles. In contrast, the U.S. Treasury Yields on benchmark 10-year note staged a heavy recovery and reached above 1.50%, ultimately added strength to the U.S. dollar. The Federal Reserve officials have repeatedly said that the recent price hike will not last long and was temporary. They were encouraged by the difference between prompted demand from the reopening of the economy and supply chain lags. Chairman Jerome Powell is also expected to favor monetary measures and keep the monetary policies accommodative until 2023.

Speculation of tapering talks in upcoming policy meetings kept the U.S. dollar higher and gold metal under pressure on Monday. However, many analysts were still not expecting the central bank to start discussing scaling back its asset purchasing program until late August, when the annual conference in Jackso Hole, Wyoming, is scheduled. The coronavirus pandemic prompted central banks worldwide to introduce quantitative easing last year and cut interest rates. The U.S. Federal Reserve also followed the trend and started $80 billion in Treasury bond purchases and $40 billion in mortgage bond purchases. Fed also reduced its interest rates near zero at 0.25%, and it has been more than a year that the rates have been this low as the United States fighting with the pandemic.

Market participants are hopeful that the rising price pressure and inflation figures will force Federal Reserve to start talking about scaling back from easing measures to support the economy. If any hint about tapering or interest rate hike would be seen in the upcoming Fed policy meeting, then the U.S. dollar will see a massive spike in its value that could drive yellow metal further lower and vice versa.

According to Johns Hopkins University, the U.S. reached another milestone, as the death toll due to coronavirus approached 600,000 on Monday. The COVID-19 pandemic has taken more lives in the United States than in any other country in the world. However, the governments around the U.S. have started easing the social distancing rules and relaxing the mask requirement. Businesses have also fully reopened due to a steady decline in coronavirus cases and sustained progress in the vaccination campaign. This also helped the U.S. dollar gather strength and kept precious metal below the $1,900 level.

Gold Intraday Technical Level

Support Resistance

1851.25 1880.90

1833.90 1893.20

1821.60 1910.55

Pivot Point: 1863.55

Gold - XAU/USD - Technical Outlook

The precious metal gold is trading at a 1,867 level, exhibiting a bullish correction. On the 4 hour timeframe, gold has completed 38.2% Fibonacci correction level at 1,866 and 1,873 levels. The support continues to hold around 1,858 on the lower side, which marks a 23.6% Fibonacci retracement level. The MACD is holding in a selling zone, supporting strong bearish bias, along with the 50 periods EMA is extending resistance at 1,881 level. On Tuesday, the investor’s focus stays on the U.S. Retail Sales and Core Retail Sales data as these indicators typically drive price action in gold and the U.S. dollar. All the best!

Bullish Retracement in Play

The EUR/USD closed at $1.2106 after placing a high of $1.2196 and a low of $1.2092. EUR/USD currency pair extended its losses on Friday and dropped to its lowest since May 14 on the back of rising strength in the U.S. dollar. The EUR/USD currency pair faced pressure on Friday amid the rebound in the U.S. dollar that gathered strength after an upbeat U.S. CPI data release from the U.S. Labor Department. Another factor involved in the greenback strength on Friday was the latest report from the University of Michigan, which suggested increasing consumer confidence and pushed dollars higher that kept the EUR/USD pair under pressure.

The U.S. Dollar Index reached the 90.60 level on Friday as the U.S. Treasury yields rose and turned green after falling for six consecutive sessions. The discussions about easing bond purchases due to increasing inflationary pressures could further increase the yields on 10-year Treasuries. Furthermore, due to the economic boom in the U.S., the dollar also has an upside potential for the short-term that suggested further pressure over EUR/USD.

On the data front, at 11:00 GMT, the German WPI in May surged to 1.7% against the expected 0.9% and supported the single currency Euro that further capped losses in EUR.USD pair. At 13:00 GMT, the Italian Quarterly Unemployment Rate declined to 10.4% against the projected 10.5% and supported Euro, limiting the downward momentum in EUR/USD pair.

On the U.S. front, at 19:00 GMT, the Prelim UoM Consumer Sentiment in June surged to 86.4 against the predicted 84.1 and supported the U.S. dollar that added further loss in EUR/USD currency pair. On the other hand, the Prelim UoM Inflation Expectations remained unchanged at 4.0%.

On the other hand, Euro remained under pressure as the cases of the Delta variant of the coronavirus first detected in India continued to surge in Europe. The rising number of infections urged Boris Johnson to postpone lifting all restrictions on June 21. This also weighed on the single currency Euro and added further downside pressure on EUR/USD pair. On June 16, the Federal Reserve will announce its monetary policy decision where the central bank is highly anticipated to maintain its current policy despite a sharp surge in the prices. Fed officials have repeatedly said that rising inflation would be temporary as it came in because of the prompted demand and supply chain lags. It means the chances that talks about tapering will be discussed during this meeting are very low.

EURUSD Intraday Technical Levels

Support Resistance

1.2104 1.2114

1.2099 1.2119

1.2094 1.2124

Pivot Point: 1.2109

EUR/USD - Technical Outlook

The EUR/USD pair is trading with a bullish bias at the 1.2139 level, facing immediate resistance at the 50% Fibonacci correction level of 1.2145. Bullish crossover of 1.2142 level exposes the EUR/USD price towards 61.8% Fibonacci retracement level of 1.2154. On the downside, the pair’s support stays at 1.2131 and 1.2116 levels. The 50 periods EMA suggests an upward trend in the EUR/USD pair and supports it at the 1.2124 level. The MACD has crossed over 0 levels, supporting a bullish trend in the EUR/USD pair. The pair’s support holds at 1.2131 and 1.2116 while the resistance stays at 1.2142 and 1.2154 levels. All the best!

Symmetrical Triangle Breakout

The BTC/USD was closed at $40,500 after placing a high of $40,732 and a low of $38,812. Bitcoin extended its gains for the second consecutive session and reached above $40,000 level. The U.S. billionaire hedge fund manager and a prominent legacy investor Paul Tudor Jones III believed that bitcoin was as sure as math. He wanted to have at least 5% of his portfolio in it. He doubled down his bitcoin support by insisting that it was reliable, secure, honest, and 100% certain. He has been vocally praising the leading cryptocurrency ever since the coronavirus pandemic broke out last year. He argued that buying bitcoin would ultimately protect him from the growing threat of inflation in the U.S. as the Fed has initiated radical measures to fight the financial consequences of the pandemic by printing excessive amounts of dollars. Bitcoin saw a price surge after these comments from Jones.

Meanwhile, the software firm MicroStrategy said it had completed its $500 million offerings of secure notes. The funds after accounting for discounts, expenses, and commissions will be used to purchase more Bitcoin. The secured notes are due in 2028, and they bear interest rates at an annual rate of 6.125%. This news also added strength to bitcoin prices. In addition, a Central American country, El Salvador, became the first country to adopt bitcoin as a legal tender last week. President Nayib Bukele praised the potential of the cryptocurrency and made it a remittance currency for Salvadorans overseas.

According to Reuters, the small transfers of bitcoin to El-Salvador jumped over four-fold in May from a year ago; however, they still represent a small amount compared to remittances sent in dollars. According to World Bank, El Salvador is heavily reliant on remittances as about$6 billion were transferred using traditional money in 2019, which accounted for about 5th of its GDP, the highest proportions in the world.

However, the Central American Bank of Economic Integration (CABEI) has said that it will work with El Salvador to implement BTC as its second legal tender. It will be done by creating a team in collaboration with El Salvador’s Ministry of Finance, the Central Reserve Bank of El Salvador, and its central bank. This news also added strength to the prices of bitcoin and pushed them on the upside.

BTC/USD Intraday Technical Levels

Support Resistance

39297.4 41217.4

38094.7 41934.7

37377.4 43137.4

Pivot Point: 40014.7

**

BTC/USD - Technical Outlook**

On Tuesday, the BTC/USD price continues trading with a bullish bias at the 40,268 level after violating the downward trendline and symmetrical triangle resistance level of 40,403 level. For the moment, Bitcoin is gaining support at 39,120 level along with a resistance of 42,058 level. The MACD has crossed over 0 (crossover point), demonstrating solid bullish bias among investors. The 50 periods EMA also supports an upward movement in the BTC/USD pair and the Three White Soldiers candlestick pattern. Bitcoin’s resistance stays at 42,058 and 45,706 levels today. All the best!

Three Black Crows Pattern Driving Sell!

Gold prices were closed at $1879.60 after placing a high of $1906.20 and a low of $1876.10. On Friday, gold prices edged above $1900 during early trading hours on the back of a pullback in dollar and lower bond yields after the U.S. inflation data suggested that the rise in inflation was inadequate to change the easy monetary policy of the Federal Reserve. However, the yellow metal could not enjoy its movement above the 1,900 level and started to drop after the U.S. economic data came upfront. Later, the U.S. dollar gathered strength against its rival currencies and moved higher. The DXY turned green on Friday after the U.S. Treasury yields on the benchmark 10-year note pulled back from the 3-months lowest level and turned green after six days of losses.

The U.S. Dollar Index that measures the greenback value against the basket of six major currencies rose and reached the $90.60 level. The strong comeback in the U.S. dollar came in after the U.S. Treasury yields on Friday broke their bearish streak of 6 days and gave strength to the dollar that ultimately dragged gold prices downward. On the data front, at 19:00 GMT, the Prelim UoM Consumer Sentiment in June rose to 86.4 against the projected 84.1 and supported the U.S. dollar that added further loss in the yellow metal; the Prelim UoM Inflation Expectations remained flat at 4.0%.

As the world's largest economy rebounds strongly from the coronavirus pandemic, U.S. inflation has jumped to its highest rate since 2008. In May, the CPI surged to 5% at an annual rate, up from the previous 4.2%, and recorded the highest level since2008. As per the U.S. Bureau of Labor and Statistics, U.S. inflation had steadily climbed since the start of this year when it was at 1.4%.

In recent weeks, the U.S. Dollar Index has fluctuated as traders were unsure if the inflationary pressure could force the FED's Open Market Committee into an earlier tapering of the stimulus as the economy reopened after the pandemic. However, the repeated comments from Fed officials insisted that inflation would be transitory and calmed the concerns. Whereas, the market was also anticipating that Fed might be close to giving hints on the timing for decreasing its asset-purchase program.

On the other hand, on Friday, at G7 Summit, Beijing's top diplomat condemned the small circle diplomacy of Washington. At the same time, the U.S. administration of Je Biden also maintained a firm line against China. Meanwhile, they were also hoping to rally allies to counter Beijing's trade, human rights, and technology.

In response to this, China's top diplomat hit back against the claims by the U.S. administration and urged the U.S. to resolve its human rights violations, and warned them not to utilize the human rights issue as a pretext to interfere in the internal affairs of other countries arbitrarily. The rising tensions between both countries kept the safe-haven demand from the U.S. dollar high that weighed on the precious metal as both share a negative correlation.

Gold Intraday Technical Level

Support Resistance

1873.95 1878.45

1872.35 1881..35

1869.45 1882.95

Pivot Point: 1876.85

Gold - XAU/USD - Technical Outlook

On Monday, the yellow metal gold is trading with a strong bearish bias at 1,864, disrupting the symmetrical triangle pattern. The triangle pattern supported gold around 1,876 levels, and now the same level is working as resistance for gold. Gold's next support holds around 1,855 level on the lower side, and break out of this level exposes gold towards 1,843 level. On the higher side, gold's resistance stays at 1,876 level today. The bearish bias remains dominant today. All the best!

Euro Enters Oversold Region!

The EUR/USD closed at $1.2106 after placing a high of $1.2196 and a low of $1.2092. EUR/USD currency pair extended its losses on Friday and dropped to its lowest since May 14 on the back of rising strength in the U.S. dollar. The EUR/USD currency pair faced pressure on Friday amid the rebound in the U.S. dollar that gathered strength after an upbeat U.S. CPI data release from the U.S. Labor Department. Another factor involved in the greenback strength on Friday was the latest report from the University of Michigan, which suggested an increase in consumer confidence and pushed dollars higher that kept the EUR/USD pair under pressure.

The U.S. Dollar Index reached the 90.60 level on Friday as the U.S. Treasury yields rose and turned green after falling for six consecutive sessions. The discussions about easing bond purchases due to increasing inflationary pressures could further increase the yields on 10-year Treasuries. Furthermore, due to the economic boom in the U.S., the dollar also has an upside potential for the short-term that suggested further pressure over EUR/USD.

On the data front, at 11:00 GMT, the German WPI in May surged to 1.7% against the expected 0.9% and supported the single currency Euro that further capped losses in EUR.USD pair. At 13:00 GMT, the Italian Quarterly Unemployment Rate declined to 10.4% against the projected 10.5% and supported Euro, limiting the downward momentum in EUR/USD pair.

On the U.S. front, at 19:00 GMT, the Prelim UoM Consumer Sentiment in June surged to 86.4 against the predicted 84.1 and supported the U.S. dollar that added further loss in EUR/USD currency pair. On the other hand, the Prelim UoM Inflation Expectations remained unchanged at 4.0%.

On the other hand, Euro remained under pressure as the cases of the Delta variant of the coronavirus first detected in India continued to surge in Europe. The rising number of infections urged Boris Johnson to postpone lifting all restrictions on June 21. This also weighed on the single currency Euro and added further downside pressure on EUR/USD pair. On June 16, the Federal Reserve will announce its monetary policy decision where the central bank is highly anticipated to maintain its current policy despite a sharp surge in the prices. Fed officials have repeatedly said that rising inflation would be temporary as it came in because of the prompted demand and supply chain lags. It means the chances that talks about tapering will be discussed during this meeting are very low.

**

EURUSD Intraday Technical Levels**

Support Resistance

1.2104 1.2114

1.2099 1.2119

1.2094 1.2124

Pivot Point: 1.2109

EUR/USD - Technical Outlook

The technical side of the EUR/USD pair shows a dramatic selling trend as its prices fell from 1.2144 level to the double bottom support level of 1.2103 level. On the lower side, violation of the 1.2110 level can extend the selling trend until the support area of 1.2060 level. The EUR/USD has violated the symmetrical triangle pattern on the lower side, demonstrating strong selling biases in the EUR/USD pair on the four hourly timeframes. The MACD is still suggesting selling bias, but it’s currently in the oversold zone. This means the pair needs to show a little bit of bullish correction before breaking below the 1.2089 support level. Thus, the EUR/USD’s resistance holds around 1.2110 and 1.2144 levels while the support stays at 1.2060 levels today. All the best!

Downward Trendline Breakout

The BTC/USD was closed at $39,004.0 after placing a high of $39,021.1 and a low of $34,984.0. Bitcoin reached near $40,000 level on the weekend as the CEO of Tesla, Elon Musk, said that the company would resume its bitcoin transactions on one condition. The billionaire said that Tesla would restart allowing bitcoin transactions to confirm reasonable clean energy usage by miners and the positive trend. This reaction from Musk came in after the CEO of a South African asset manager Sygnia, said that the tweets of Musk on bitcoin prices were manipulating the market and should be investigated by the U.S. Securities and Exchange Commission.

The comments of Musk about cryptocurrencies on social media often send prices upside or downside, but they also appeared to have a bit immediate effect. On Sunday, bitcoin prices rose about 8% after Musk talked about resuming bitcoin transactions in his company on one condition of using clean, renewable energy. Furthermore, the latest dip in bitcoin prices has encouraged Canadian investors to take advantage of low prices, and hence, the demand for bitcoin has increased in Canada. Despite the steep market correction, the Canadian Bitcoin ETF added to its holdings and offered further evidence that market participants were capitalizing on heavily discounted prices.

According to Bybt data, the Purpose Bitcoin ETF has added about 285 BTC over the past seven days and nearly 2000 BTC since May 15. The Canadian Bitcoin ETF launched in February has accumulated 19,692 BTC, and the numbers are rising day by day. This news also supported the rising prices of BTC/USD.

On the other hand, the Investment Bank JPMorgan Chase has warned against a potential further decline in bitcoin prices. The bank said that it expects an oncoming bear market in the bitcoin. The analysts at the bank looked at the trend in bitcoin futures and warned that an unusual development reflected weak institutional demand for bitcoin at the moment. However, several people disagreed with the analysis, and BTC/USD kept rising for the day.

Meanwhile, the President of the European Central Bank, Christine Lagarde, shared her views about making bitcoin legal tender by El Salvadore. She assured that the policy of the central bank on bitcoin and other cryptocurrencies has not changed. She also stated that having a dual tender in a particular economy could raise difficult issues. Lagarde said that the move from El-Salvadore had not changed Central Bank’s approach towards crypto assets.

BTC/USD Intraday Technical Levels

Support Resistance

36318.1 40355.4

33632.6 41706.8

32281.1 44392.5

Pivot Point: 37669.7

BTC/USD - Technical Outlook

On Monday, the BTC/USD price continues trading with a bullish bias at 39,268 level after violating the downward trendline resistance level of 36,953 level. For the moment, Bitcoin is gaining support at 38,120 level along with a resistance of 40,486 level. The MACD has crossed over 0 (crossover point), demonstrating solid bullish bias among investors. The 50 periods EMA also supports an upward movement in the BTC/USD pair and the Three White Soldiers candlestick pattern. Bitcoin’s resistance stays at 40,486 and 41,706 levels today. All the best!

Prelim UoM Consumer Sentiment in Focus!

The precious metal edged higher and ended its day green after declining in the early trading hours. During European trading hours, the yellow metal remained under pressure and dropped below the $1872 level. However, gold retreated and gathered strength against the U.S. dollar on Thursday during late trading hours after the release of U.S. inflation data.

The U.S. inflation jumped to its highest level since 2008 in May as the world’s largest economy was rebounding strongly from the pandemic crisis. According to the U.S. Bureau of Labor Statistics, the CPI rose in May at an annual rate of 5%, up from April’s 4.2%. Since January, inflation has been steadily rising when it was at 1.4%.

Markets in the U.S. have seen a surge in the fears of rising prices with investors concerning that pent-up demand and the disruptions in the supply chain would create inflationary pressures. Hence they forced central bankers at the Federal Reserve to decrease their stimulus program. However, after the release of better-than-expected data, the U.S. stock rallied and weighed on the greenback. The traders projected that the inflationary push would be temporary; this will allow Fed to put off tapering a bond-buying policy that has been pumping up money to the global markets.

The U.S. Dollar Index that measures the greenback value against the basket of six major currencies fell on Thursday and continued its bearish momentum to reach 89.99 level. On the other hand, the benchmark Treasury yield on a 10-year note extended its slide for the 4th consecutive session and fell sharply on Thursday to reach 1.43%. At 17:30 GMT, the Consumer Price Index from May surged by 0.6% against the forecasted 0.4% and supported the U.S. dollar. The Core CPI from May also rose by 0.7% against the expected 0.5% and supported the U.S. dollar. The Jobless Claims from last week surged to 376K against the expected 370K and weighed on the U.S. dollar. At 23:00 GMT, the Federal Budget Balance dropped to -132.0B against the expected -245.0B and weighed on the U.S. dollar.

The continued economic recovery from the post-pandemic boosted demand pushed the U.S. consumer prices in May to the highest level since 2008. Whereas, the weekly jobless claims also fell to their lowest level in nearly 15 months but came in high against the predicted figure and weighed on the U.S. dollar that pushed gold higher.

Gold Intraday Technical Level

Support Resistance

1889.30 1901.70

1883.10 1907.90

1876.90 1914.10

Pivot Point: 1895.50

Gold - XAU/USD - Technical Outlook

On Friday, the precious metal gold is trading with a bullish bias at 1,899, having crossover above the downward trendline. On the 4- hour timeframe, the downward trendline was extending solid resistance to gold at 1,897 level, and this same level is now working as a support for gold. Gold’s immediate resistance stays at the 1,903 level, and a bullish breakout of this level exposes gold’s prices towards the next resistance area of 1,910 and 1,916. The MACD is closing histograms over 0 levels that’s supporting buying trend in gold. The 50 periods EMA is also keeping an upward trend in gold. After CPI figures yesterday, the focus shifts to the UoM Consumer Sentiment as this typically drives excellent price action in the market. Good luck!

European Manufacturing Production Ahead!

The EUR/USD closed at $1.2169 after placing a high of $1.2195 and a low of $1.2142. EUR/USD currency pair remained lower for the day amid the unchanged monetary policy from the European Central Bank and higher than expected U.S. CPI data. ECB held its June policy meeting on Thursday and decided to leave the interest rates and ease unchanged. They said that they would continue providing their support to the economy through different programs. Whereas, the President of ECB, Christine Lagarde, offered mixed remarks and suggested that price pressures were subdued and that it would be too early to start discussing tapering.

On Thursday, the central bank provided no signal about when it might start declining its stimulus program. The bank also revealed its expectations that inflation might remain below its target in the foreseeable future. According to Christine Lagarde, inflation has been rising over the few months, mainly on the back of base effects, increase in energy prices, and transitory factors. Inflation is likely to rise further in the second half of the year until the temporary factors start fading out. This forced ECB to remain supportive of the economy as a retreat could accelerate a concerning rise in borrowing costs and affect the recovery.

On the data front, at 10:30 GMT, the French Final Private Payrolls for the quarter surged to 0.5% against the expected 0.3% and supported the single currency Euro. At 11:45 GMT, the French Industrial Production in April dropped to -0.1% against the expected 0.5% and weighed on the Euro and added loss in EUR/USD pair. At 13:00GMT, the Italian Industrial Production surged to 1.8% against the projected 0.3% and supported Euro that further caped upside in EUR/USD.

From the U.S. side, at 17:30 GMT, the Consumer Price Index from May rose to 0.6% against the anticipated 0.4% and supported the U.S. dollar and added further downward momentum in EUR/USD. The Core CPI from May also surged to 0.7% against the predicted 0.5%, supported the U.S. dollar, and pushed EUR/USD higher. The Unemployment Claims from last week soared to 376K against the estimated 370K and weighed on the U.S. dollar. At 23:00 GMT, the Federal Budget Balance declined to -132.0B against the estimated -245.0B and weighed on the U.S. dollar, limiting the further decline in EUR/USD.

The U.S. dollar also remained stressed on Thursday despite the better-than-expected U.S. inflation data. The U.S. Bureau of Labor and Statistics published that CPI climbed to 5% in May every year from April’s 4.2 and supported the U.S. dollar. However, the weekly jobless claims made by the Americans showed a hike during last week and weighed on the greenback. The U.S. dollar Index remained red for the day and dropped below 90 levels amid the sharp decline in U.S. benchmark Treasury yields, which fell to 1.47%. Despite the weak U.S. dollar for the day, the currency pair EUR/USD remained depressed throughout Thursday amid ECB policy results.

EURUSD Intraday Technical Levels

Support Resistance

1.2159 1.2208

1.2140 1.2238

1.2110 1.2256

Pivot Point: 1.2189

EUR/USD - Technical Outlook

The technical side of the EUR/USD pair remains primarily unchanged as the pair maintains a narrow trading range of 1.2215 – 1.2170 level. On the 4-hour timeframe, the EUR/USD pair has closed a symmetrical triangle pattern that’s suggesting indecision among traders. The EUR/USD pair crosses over 50 periods EMA, suggesting odds of a bullish trend continuation. The MACD indicator is tossing above and below zero, demonstrating neutral sentiment among the traders. The EUR/USD’s immediate resistance stays at 1.2215 and 1.2258 levels along with a support level of 1.2170 and 1.2140 level. All the best!

50 EMA Set to Underpin Bitcoin Price

The BTC/USD was closed at $36,649.2 after placing a high of $37,933.0 and a low of $36,559.0. Bitcoin came under pressure on Thursday and gave up a minor portion of its profits earned the previous day after the world’s most influential banking regulator, the Bank for International Settlements (BIS), came in front.

The Basel Committee from BIS proposed that banks with bitcoin exposure must set aside enough capital to cover losses on many bitcoin holdings in full. This step would prevent the widescale use of cryptocurrency by big lenders. The Basel Committee, comprised of members from the world’s leading financial centers, has proposed splitting crypto assets into two groups: those eligible for treatment under the existing framework and the others that are not eligible. According to the announcement, bitcoin and similar cryptocurrencies will fall into the second category as they pose additional and higher risks.

According to the proposal by Basel Committee, the risk weighting of 1250% for Bitcoin, Ethereum, and other cryptocurrencies. This risk would require banks to hold capital equivalent to the face value of the exposure. The Committee is accepting responses from stakeholders with a deadline for submission on September 10. Despite repeated warnings from central banks worldwide that investors in the cryptocurrency must be ready to lose all their money, El Salvador became the world’s first country to adopt bitcoin as legal tender. The major economies like the U.S. and China have adopted a stricter approach to developing their own central bank digital currencies. The Basel Committee stated that bank exposures to crypto-assets were limited. If capital requirements are not introduced, their continued growth could increase risks to global financial stability from cyber attacks, fraud, money laundering, and terrorist finance.

On the other hand, China expanded its bitcoin mining ban as two Chinese provinces named Qinghai and Xinjiang took steps towards limiting bitcoin mining. The miners in the provinces reported that they were ordered not to start any new mining projects as all existing mining projects have also stopped. This news also added weight to bitcoin prices and added in its losses on Thursday.

BTC/USD Intraday Technical Levels

Support Resistance

36161.2 37535.2

35673.1 38421.1

34787.2 38909.2

Pivot Point: 37047.1

BTC/USD - Technical Outlook

On Friday, the BTC/USD pair is trading with a slightly bullish bias at 37,115 level. Bitcoin tested the strong resistance level of 38,120 level extended by a downward trendline on the 4-hourly timeframe. Bitcoin is still likely to face resistance at the 38,120 level, and a bullish breakout exposes the pair’s price towards the next resistance area of 40,405 triple top level. Speaking about Bitcoin’s support, the 50 EMA level is underpinning the BTC around 35,906 level. Bearish crossover of this level exposes Bitcoin price towards next support level of 33,210 level. All the best!

U.S. Inflation Figures in Limelight!

Gold extended its loss for the second consecutive session and dropped below the $1900 level. However, gold remained in a tight range during the session as investors were looking ahead to the U.S. inflation data that could change the stance of the monetary policy set by the Federal Reserve. The U.S. Treasury Yield on the 10-year note fell sharply on Wednesday and reached 1.47%, its lowest level since May 07.

The U.S. Dollar Index that measures the greenback value against the basket of six major currencies, remained depressed throughout the day. It managed to recover all of its daily losses and even shifted its movement on the opposite side. The U.S. dollar dropped during the early trading hours on Wednesday but managed to recover and turned its movement upside with minor gains. Despite remained under consolidation, the U.S. dollar ended its day above the $90.15 level and added weight on precious metal prices.

The decline in U.S. Treasury yield for the second consecutive session came in after traders positioned themselves for inflation data scheduled to release on Thursday. The strong demand at a mid-day auction pushed the benchmark 10-year yield lower for the first time since May 07, below 1.49%. The declining demand for treasury yield could also be attributed to a breakdown in talks between U.S. President Joe Biden and a Republican Senator on infrastructure spending. Since there was no deal secured or negotiations were continued, and a later deal is a projector, then it means less future Treasury issuance, hence lower yields for the day.

The rising demand after the economy has reopened from the pandemic-induced lockdowns might continue to push up inflation. However, many economists have predicted that the price surges could be temporary.

Markets were moving under the notion that the CPI report on Thursday will come in better than expected and push the Federal Reserve to step back from its ultra-loose monetary policy. These expectations were driving the prices of the U.S. dollar higher and gold lower. However, the Federal Reserve officials have repeatedly said that the price pressures were temporary and would fade away.

Gold is considered an inflation hedge, and it tends to surge in value after central banks and governments around the world introduce massive stimulus measures. Now that economies have started recovering from the losses incurred due to the pandemic crisis, the Fed's expectations might start tapering increased and weighed on the yellow metal prices.

Gold Intraday Technical Level

Support Resistance

1884.33 1905.64

1874.47 1916.87

1863.24 1926.84

Pivot point: 1895.67

Gold - XAU/USD - Technical Outlook

Gold traded sideways in between a narrow trading range of 1,896 – 1,881 level. Lately, the symmetrical triangle pattern supported the metal and kept its trading within a narrow trading range. However, the strong dollar is pushing gold prices lower. As we can see, the yellow metal gold has violated the symmetrical triangle pattern on the 4-hourly timeframe, and now it's heading lower towards the next support area of 1,881 level. Continuation of a bearish trend and break out of the immediate support level of 1,881 level extends the selling trend until the next support level of 1,869 and 1,855. Gold's resistance continues to hold around 1,896 and 1,903 levels today. Let's keep an eye on the U.S. CPI figures, as these can trigger a sharp movement in gold. All the best!