Gold is set up for a retracement as RSI sets lower highs while price action climbs. This is a clear bearish divergence chart pattern which is usually followed by a fall in the price of the asset. Gold has yet to see some significant retracement since the bull run began and it could be approaching soon.
The Dollar has hit a support level and has been rejected upward after bears from CPI data. EUR/USD is consolidating at a key support area
We could argue the market is trading sideways in anticipation of the BoJ announcement which comes on Wednesday. This may have major implications on the entire market as the largest holder of US debt begins shifting its policy which has been ultra-dovish in recent years.
Bitcoin hit resistance at $21,400 and we are expecting it to fall to support at $20,000 in the near term.
In today’s DIFX Analytics, we’re going to look into the following assets:
Bitcoin hit resistance and may pullback down short term
Bitcoin broke the upward trend on RSI as it consolidated around the $21,000 area. We can expect some downside moves to $20,000 – $20,400 before the bullish trend continues.
Keep an eye on RSI on the 4-hour as it should fall and traders should watch to see the reaction to a 50 reading.
Dollar hitting support
The Dollar seems to have rejected the support level at $101.78. We should see some upside moves in the Index toward $102.98 in the short term.
Fundamentals have been quite bearish for the Dollar with cooling inflation and jobs data supportive of lower interest rates. However, technical indicators are pointing to some upside moves before we see the Dollar bear trend continue.
Euro may decline
EUR/USD hit resistance and has seen some consolidation since rejecting the $1.087 area. RSI is falling toward the 50 reading on the 4-hour chart.
We can expect the pair to drop to $1.075 in the short term. This can be considered a pullback and not a reversal yet,
Dollar shorts are still controlling the market with CPI data signaling the Fed will hike rates by 25 basis points instead of 50 basis points.
Gold signaling reversal
There is a clear bearish divergence on the technicals for Gold. If RSI can break the support trend line to the downside, we could see bears enter the market.
The asset has been trending up for quite some time with no substantial retracement. Fundamentals have pushed the asset up but technically, we see some pullback occurring in the near term.
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