Weekly Price Analysis #41 - Week 7 - 2019
Welcome Vaultorians, to another weekly analysis on the movements of bitcoin and gold!
BTC/USD - Can Bitcoin’s Uptrend Continue?
Bitcoin is now trading at $3,577, a ~6 percent increase since last week’s update.
The leading crypto broke out of the falling wedge last Friday, pumped until hitting resistance at $3,700, and has since been consolidating around $3,550 — at the 0.382 Fibonacci level.
Despite the pump, selling pressure remains high with the price gradually moving downwards as buyers begin to lose the battle. This is shown on the chart with a series of lower highs and lower lows as every bullish candle is quickly countered by selling pressure.
If we are to see a continuation of the recent uptrend, then price really needs to stay above the 0.5 fibonacci retracement level, at which point we could expect another move up to face resistance at $3,700.
If support around the 0.5 fibonacci level is broken, which sits around $3,520, then we are likely to head lower and test support levels at the 0.618 level ($3,474). If this occurs, then selling is likely get stronger as the market realises that although last Friday’s big green candle might have lifted the fear out of the market temporarily, it hasn’t altered the overall trend.
On the way down, we could expect support at the $3,450 - $3,470 region, at $3,400, and then down at the $3,350 region.
XAU/USD - Gold Finds Strength at New Support
Gold is currently trading at $1,315 — an increase of ~0.5 percent since this time last week.
The week has been one of consolidation, with price fighting to establish a strong hold above support at the $1,306 level, before it can make a break towards strong resistance at the $1,325 level.
In the fundamentals this week, political events have continued to help boost safe haven demand for gold. After a slight dip on Wednesday, the price rebounded on Thursday as the dollar edged lower against the Euro following a weaker than expected US retail sales report. Gold was further buoyed by more uncertain developments in the political dramas of Brexit, the US-China deal and Trump’s bitter standoff with congress over the border wall with Mexico.
As of Friday morning, the price of gold is continuing to inch upwards, and we can see that the price has bounced off the the lower trend line of an ascending channel that has been forming on the daily chart over the past few weeks. This pattern would suggest that once resistance at $1,325 is out the way, the next key resistance will be $1,350.
This bullish case is weakened by strength in the dollar — as measured by the U.S. Dollar Index (DXY) which tracks the dollar’s movement against a basket of major currencies. If the DXY weakens, we are likely to see more upside in gold, but continued strength in the dollar could see gold retreat to support at $1,306, and then potentially at $1,295.
Disclaimer: This content is for educational purposes only and does not constitute financial advice. It is very important to do your own analysis before making any investment.