The focus today was on cryptocurrencies, where the sell-off intensified amid a crackdown in China. The Chinese central bank announced that it has reminded local banks and payment providers that engaging in crypto-related transactions is prohibited. This comes at a time where cryptocurrencies are facing increased regulatory scrutiny around the world.
Bitcoin bounced of the 200 DMA once again, but a test of the psychologically important $30,000 support level appears to be only a matter of time. Bitcoin bulls will need this level to hold, as a clear break below it could pave the way for a deeper correction towards $20k.
Ethereum is facing renewed pressure too, and ETH/USD broke today below the rising trendline from the December 2020 low, as well as the April 2021 low. A daily close below $1900 could spell trouble for the cryptocurrency, and the next notable support level would then lie at $1545. Imminent resistance is noted at $2054, while heavier resistance can be expected in the zone between $2275 and $2305.
Stock markets saw a sharp reversal today. While inflation concerns remain present, investors appear to be less nervous and see the Federal Reserve changing its course gradually, rather than ending its ultra-loose monetary policy abruptly. Value stocks were in demand, while the technology sector continued to underperform.
The US500 bounced off the 4316 support level, and the daily close above 4193/96 signals that the index could soon test the recent all-time high.
The US2000 index jumped as well, although the index is still facing heavy resistance in form of the falling trendline from the June high, followed by resistance at 2301 points. Should the index clear both obstacles, an extension of the recovery rally towards 2350 points might follow quickly.
Meanwhile, the British Pound managed to regain some ground today. While a spike in new COVID-19 cases has caused some concern about a delayed lifting of the remaining restrictions, the UK economy remains on track for a strong recovery in 2021, and this will keep the Pound in demand.
GBP/USD bounced back after briefly falling below 1.38 support. Traders will be closely watching the resistance zone between 1.4010 and 1.4035, as a breakout could pave the way for a short squeeze that could push the currency pair back towards 1.42.
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US stimulus stalemate weighs on all markets; Oil perilously perched on the Covid curve; Traders sell the earnings news. Without stimulus, gold gets no bounce.