- April 8, 2021
- Posted by: Analysis Team
- Category: FOREX, Technical Analysis
The US dollar rose against other key currencies after the latest minutes by the Federal Open Market Commission (FOMC). In the meeting, the bank left its pandemic response tools like interest rates and quantitative easing unchanged as expected. In the minutes, the officials indicated that the current easy money policy would stay in place until the economy recovers. It won’t be adjusted based on forecasts. Therefore, with the unemployment rate currently at 6%, it will take a longer period for the bank to hike rates. Still, with bond yields rising, there is a possibility that the Fed will change its mind earlier.
Cryptocurrency prices declined sharply in the overnight session as US bond yields rose. Bitcoin declined by more than $1,500 to $56,260 while Ether and XRP dropped by more than 6% and 15%, respectively. Other altcoins like Litecoin, Bitcoin Cash, and Stellar, also declined. This performance happened as the US 10-year yield rose to 1.66% while the 30-year rose to 2.335%. The decline is also due to profit-taking since the currencies have rallied substantially in the past few days. Still, some analysts are optimistic about the coins, with Bloomberg economists saying that BTC could soar to $400,000.
The price of crude oil declined slightly even after encouraging inventories numbers. According to the Energy Information Administration (EIA), the number of inventories declined by more than 3.5 million barrels last week. This was a deeper decline after the previous week’s 876k. Earlier data by the American Petroleum Institute (API) showed that inventories fell by more than 2.6 million barrels. Elsewhere, the Canadian dollar declined even after relatively strong numbers. The Ivey PMI increased from 60 in February to 72.9 in the previous month.
The USD/CAD price rose to a high of 1.2635 in the overnight session. On the four-hour chart, the price moved above the 61.8% Fibonacci retracement level. It is also slightly above all moving averages and is slightly below the important resistance level at 1.2648, which was the highest level on March 30. The Relative Strength Index (RSI) has also been rising. Therefore, a break above this resistance level will mean that bulls have prevailed to push the pair higher.
The EUR/USD pair declined slightly in the overnight session. It is trading at 1.1870, which is slightly below this week’s high of 1.1915. This decline is partly because the pair tested the upper side of the descending channel on the daily chart. On the four-hour, the pair also formed an inverted hammer pattern, which is usually a sign of reversal. It is also slightly above the 15-day and 25-day moving averages. Therefore, the pair may keep falling, with the next key target being 1.1800.
The BTC/USD declined to a low of 55,526 in the overnight session. On the four-hour chart, this price was slightly below the important support at 56,000. It has also moved below the moving averages while the RSI is approaching the oversold level. The DeMarker has already moved to the oversold zone. Therefore, while the longer-term trend is bullish, there is a possibility that the pair will fall in the near term.