Cryptocurrencies and Forex Analysis March 8th: Cryptos are shaken with weakness
EURUSD, Daily timeframe
The euro closed just a few pips above opening price yesterday. This pretty much left the pair where it was the day before. The trend is bullish but we need certain criteria met before initiating new trades.
The pair could be signaling a temporary weakness. If the day starts falling and forms a bearish engulfment pattern, traders could close any long positions if in place. The retracement could go as long as the support at 1.2200.
Should price react from the immediate support level at 1.2200, we’d have to wait for a trigger candle to form. This should be on the daily timeframe and of at least 80-90 pips. Targets above are 1.2530 and 1.2600.
We should be aware of the probability of deeper retracements. These could have the following outreach: 1.2065, 1.1900 and as far as 1.1500.
Gold, Daily timeframe
On Wednesday, the precious metal dropped a whopping 150 pips. When you read the tape on the daily timeframe, you could now see that unclarity has been brought to the picture. With yesterday’s price action, there is now inconsistency of daily candles.
It could be a smart choice to await today’s ECB interest rate decision to come out and see how the safe haven responds. Only after the day closes- if we see a recovery beyond 1340.00 we could proceed. If price action continues to be fuzzy, stay put.
Should price close the day above 1340.10 daily candle, then we could continue to look for targets at the following levels: 1350.00 and 1400.00.
A drop below the support level at 1300.00 could bring opportunities for short positions. If this scenario develops then the target would be located at 1260.00.
Bias: Neutral, 4-Hour timeframe
Weakness in Bitcoin is getting more serious. This could open up more opportunities for traders as all we need is to be on the right side of price action. All we need is levels and a specific price reaction from the market off of those levels.
Currently, Bitcoin is at the very support level at $9500. Should the day close below that support, then traders would have a green light to go short. Next immediate support level is at the far $5,800.
Should price break through the support at $5,800 this could mean more bearish price action is to follow. This could also become a long-term trade depending on market conditions and the event that influenced the reaction itself.
A Recovery into bull mode would be considered price breaking and closing above the resistance at $13,000. As you can see, there is plenty of distance to be travelled to that point. Target above is $17,000.
Bias: in consolidation, 4-Hour timeframe
Ether followed the example of Bitcoin and dropped in price to trade toward the $700 level. The good news is that the market is moving. This is a much needed ingredient for profit potential. The scenarios that we’re looking at are:
Price continues to fall until it reaches the support at $600. This is that level that draws a line in the sand. If price drops below it, and the day closes underneath, the re could be much more weakness following. Hold onto a short position until you see signs of reversals.
Price could bounce off of the support at $600 and that could offer a chance to go long. Make sure that a trade is based on a trigger candle reacting from a level of confluence- in this case the $600 level. Targets above are $860 and $1000.
Only a recovery above $1,180 could serve as a price action evidence that bulls are back and strong. It is only after that we could consider attempting long-term bullish positions. Price target is 1300 but then be aware that bulls could extend much further.
Wishing you Happy and Successful Trading!
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