Cryptocurrencies and Forex Analysis March 7th: Delayed bullish confirmation in Gold
EURUSD, Daily timeframe
Yesterday, the euro gained more than 80 pips in positive direction and traded above 1.2400. This was the 4th consecutive day in a row of bullishness for the major pair. The developments we’ve placed on our watchlist are:
Price continues to push up to reach the immediate target and resistance level at 1.2500. This could be a temporary wall if price respects it and pulls back with a bearish day of at least 90 to 100 pips. Target would be the immediate support level at 1.2200.
There is also a probability that price breaks above the 1.2530 level and closes with a daily candle formation above it. This would be in agreement with the uptrend. Targets are: 1.2600 and 1.2650
A break below 1.2065 could drive more short-term weakness into the market with the euro dollar reaching out toward 1.1900 and 1.1700 levels. If no bullish trigger signals, no longs.
Gold, Daily timeframe
After the long-discussed pin bar that took shape on the 3rd of March (daily chart), yesterday the commodity made an impulse bullish price action of about 150 pips. This movement is in a reverse correlation with the dollar losing ground against the basket of major currencies.
The scenarios we’re monitoring are:
There could be a retest of the 1327.400 price area. You might ask yourself- what is there? This is the top of the daily bearish candle from the 5th of March. Upon a 4-hour bullish candle forming a bullish rejection, we could potentially go long. Target is 1357.30.
Gold could continue to move up without testing previous waters. We would know if during the European Session price action begins to pick up again. Targets is the above mentioned. Additionally, if price overcomes 1357.30 next target is 1400.00.
If price tanks below 1300.00, then we should reposition our stance and start outlining business levels to look for potential shorts. The target level we’d be interested in is 1260.00. No long trades in this scenario.
Bias: Neutral, 4-Hour timeframe
The cryptocurrency reacted from the immediate resistance level at $12,000. The good thing is that the market is motion. This is what we want as traders (or at least some of the requirements for a market to be focus of trader attention).
In line with the market flow, Bitcoin could continue to drop to reach for the immediate support level at $9,500. If it pushes back from it, then we could find ourselves in a tightly ranging market. That kind of pattern is not favorable. Be on the lookout for a breakout to either side of those levels.
If price probes and then closes the day below $9,500 then sentiment would be tilted to the bearish side. Target to aim for is the level at $5,800. As you can see, there is potential there. Make sure you also place stop losses on your positions (all of them regardless of the scenario involved).
A break and closure above $12,000 should not be seen as a confirmation of bullishness. As previously repeated on multiple occasions, the pivotal level we’re interested in is the market trading above $13,000. That market activity could introduce more positive price action with targets at $15, 500 and $17,000.
Bias: in consolidation, 4-Hour timeframe
Ether follows in the footsteps of Bitcoin and also managed to drop in price. The major difference between the markets is that usually Bitcoin draw more attention due to its higher levels of volatility. Volatility is another prerequisite for potential profit this time and it is tightly related to the magnitude of that profit. The higher the volatility – the more opportunities and the respective risk with it.
Price could continue to fall. Traders could also keep an eye on the rival cryptocurrency for a heads –up on the direction to follow (this is only from a short-term perspective until the correlation is positive). Immediate support level is located at $740 area.
If the $740 support level holds, this would become visible if the day closes with bullish rejection from it. Targets we could aim for are $860 resistance level. Next is $1000 and then comes $1,180.
A drop below $740 (and more importantly a bearish movement under it) could trigger more shorts and bring further bearishness. Next support level is $600. Traders should be careful not to open long trades if price action drops below $500 as well. Bias would be strictly negative.
Wishing you Happy and Successful Trading!
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