Cryptocurrencies and Forex Analysis May 11th: Bitcoin and Ether actively moving!
EURUSD, Daily timeframe
Yesterday, the euro appreciated about 80 pips. Currently, price is trying to overcome the area at 1.1900. The trend is still bullish so depending on Friday’s price action we may actually have a signal. The scenarios on our watch list are:
The euro continues to gain value against its dollar counterpart. If the pair makes another bullish day with at least 90-100 pips, this could mean a rejection of the support level at 1.1900. Going forward into next week, there could be opportunities for going long. Target level is the resistance at 1.2500.
If the week finishes below 1.1900 then bias would be tilted to the negative side. No long trades should be attempted prior to a signal candle on the daily timeframe. Price could retrace toward the support level at 1.1700. Next level is the farthest support at 1.1500.
The support area at 1.1500 is a pivotal level that is to be carefully observed. Should the euro drop below that price and close on a daily timeframe that would suggest a lot more weakness is to come into the market. From that level, the market would be back into a downtrend and we’d be looking for suitable places to go short only.
Gold, Daily timeframe
Finally, gold is now out of consolidation mode. On Thursday, the precious metal sprang to action and gained more than 80 pips. The market continues to move up. The daily timeframe chart shows that the market is trading back into the range located between the 1300.00 support level and the upper band located at 1350.00. The scenarios we’ve outlined are:
In order to gain perspective of where the market is heading, traders could always consult the USD index which shows how the dollar performs against the basket of major currencies. If the basket starts to appreciate against the dollar, chances increase that gold will appreciate as well. Target level is the resistance at 1350.00.
This scenarios considers a potential retest of the support at 1300.00. A drop would be a worrying sign for those positions that are already long. One way to aid a situation where you’re already in a long trade and price goes down for a retest is to have a stop loss that is reasonably wide so that price a breathing space to move.
If gold collapses below 1300.00 with a bearish candle, then we’d have to reposition our stance. From that point on, trades would be short only and our goal would be to look for appropriate places to short the market. Potential is significant in this scenario as well. Target level 1260.00
Bias: Bearish, Daily timeframe
There is a clear reaction from the resistance level at $9,500. Bitcoin is heading for a bearish week. Not only that if the day continues to be negative, traders might witness a bearish engulfment. It would be best to plan our trades before Monday comes in with levels and alternative courses of action that the market might undertake. The scenarios monitored are:
Further weakness could take place next week, if the market closes in red. Traders have to remember that the trend dominating Bitcoin is currently a down trend. Consequently, we’d be looking to go short. Target level is the support at $5,800.
If the market returns beyond $9,500 and closes the week with bullishness, this could be a signal that retracement levels in the north are likely to be tested. Depending on risk appetite, traders may opt for a long trade. Just make sure that you’ve attached a stop loss in case the market reacts adversely. Retracement levels that could be tested are $10,000, $12,000 and $13,000.
If price gets hammered below the farthest support level at $5,800, make no mistake- more interest on the short side could pile into the market. Market flow would point toward the red and as traders our job is to maximize our chances for success. Thus, we’d be looking to go short the market. Target level could be the starting point of the market.
Bias: Bearish, 4-Hour timeframe
Good news- ether is no long consolidating! The market is trading lower and price is actively moving south. As long as there is direction and volatility to the market, there will be opportunities we could take advantage of. The trend is very much a Down Trend so curentyl market flow is on our side. The scenarios we’ve mapped out are:
More bearishness could come into the market. This would be in line with the established trend. As you can see, Ether has respected the resistance at $740 and now the market is plummeting and trading around 680. Next level where price may find a support is $600. If the week closes below it, then Ether could test the farthest support area at $360.
Provided price bounces from the support at $600, we’d have to wait. If a bullish daily rejection candle pushes back from that level to close at least around the $650s price, then we could see more upward movement toward precious retracements. These are $740, $860 and $1,000.
Full recovery from the bear trend would be price trading above $1,000. For more conservative traders, that level would be the resistance at $1,180. This is the level where opportunities would be open to the upside. There is no cap to prices Ether could reach to as far as the upside is concerned.
Wishing you Happy and Successful Trading!
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