Cryptocurrencies and Forex Analysis May 30th: Gold tests resistance at 1300.00
EURUSD, Daily timeframe
The euro dollar has now reached the pivotal support level at 1.1500. This is the area which separates the bull trend from the bear one. Currently, we have focused on three different scenarios that could play out from that point on:
Price may tank below 1.1500. This would mark the beginning of a bear trend where we’d be looking for a re-positioning and places to go short only. Next target level is 1.1300.
If the support level at 1.1500 holds, we may see price testing it and then pushing off of it. It is absolutely obligatory to await a clear signal from the market that there is a valid rejection. If price closes above the resistance at 1.1700, then we may go long. Target level is 1.1900 and then should this level get surpassed, we’d be looking at 1.2200 as our next target level.
The area at 1.2200 if reached could serve as a major resistance. When you take a look at the daily timeframe, you will see, that 1.2200 has been respected four times as a resistance area by price. This means that we could map out a scenario where if price shows a clear rejection of that level (again on the daily horizon, we could go short).
Gold, Daily timeframe
The precious metal is currently trading around 1299.00. We saw the market reject the resistance at 1300.00. This level is pivotal to the market. And, it separates the bulls and positive bias from the bears and negative market bias. The alternatives we’re monitoring are the following:
Price continues a to drop steadily with increased activity around the ADP No-farm Employment Change and especially around the event we’ve been expecting this Friday, the NFP number coming out from the U.S. Next target level is the support at 1260.00.
We could also see a retest of the resistance level at 1300.00. In this case, it would be wiser to await a potential rejection of this point on either the 4-hour timeframe or a daily bearish candle formation. This would serve as a trigger to go short. See target level above.
This is a lower-probability scenario where if price recovers above 1310.00 we may see price reverting. The reason why this is a lower probability scenario comes from the general performance of the U.S dollar against the basket of major currencies. The dollar has clearly strengthened and the interest in the greenback has been at the expense of markets such as gold and major currencies.
Bias: Bearish, Daily timeframe
Bitcoin had a bullish day and is currently trading around $7,400. This price movement should not be seen as something more than it is. Simply a flash in the pan until specific levels are reached to tell us otherwise. The trend is bearish and we’d be looking for spots to go short until the market tells us a reversal has taken place:
With the dollar gaining against major currencies, we may see Bitcoin as an alternative market of interest. Friday is also a big day which may bring more weakness into the market. The trend is heavily influenced to the downside, and we’d be looking to go with the market flow. Next target level is still the support at $5,800.
There are two options for price to develop if it reaches the farthest support level area at $5,800. This will be a make or break time. Should price break through the support, then it would be a time to look a lot further south. The market may actually collapse below that level. Hold onto shorts and attempt no counter trend trades.
A full-fledged recovery would be Bitcoin advancing beyond the $13,000 resistance level and closing above it. This would be the point where traders could pull the trigger on actually buying the market. Potential beyond that level and for the market to gain a sizeable chunk of pips is significant. Just recall the performance of the market last year.
Bias: Bearish, Daily timeframe
Ether is attempting to test the immediate resistance level at $600. This is just one day of bullishness and until supported by at least 4-5 more bullish consecutive day of daily price action, market bias continues to be negative. The market developments we’re monitoring are the following:
If the market drops and rejects the $600 level, this could be another opportunitity to short the market and aim for the farthest support that the market has found so far at $360. If that support doesn’t hold, it would be in our best interest to continue holding onto short positions. The distance that the market could travel is to the very bottom.
It is possible that Ether continues to range between levels. The current state is exactly that- we’re witnessing consolidation of price where demand meets supply. Once has to outweigh the other in order to see the market moving. Consolidations are not favorable patterns (those that are tight provide little to no interest for us).
A recovery into positive bullish territory would be price advancing above the resistance d a$1,180. This would unlock opportunities for trading on the bull side. From that point beyond and up bulls would be in charge. Target is the peak at $1380.
Wishing you Happy and Successful Trading!
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