- Bitcoin (BTCUSD) hit a new all-time high overnight yet bulls are yet to crack the 20k level. Given the significance of this psychological round number we may find that volatility picks up around this key level before breaking higher.
- It was a volatile session for US indices due to month-end flows, where asset managers need to rebalance their portfolios by month-end. A bearish engulfing day appeared on the S&P 500 (US500) and Dow Jones (US30) whilst the Nasdaq 100 (USTEC) saw a mid-session recovery to close flat for the day.
- President-elect Joe Biden continued to build out his cabinet and confirmed his nomination for former Fed Governor Janet Yellen as Treasury Secretary.
Today’s Calendar Events (Times are GMT+11 Sydney)
- No change of policy is expected at today’s RBA meeting.
- PMI readings today are final revisions so are not expected to provide volatile reactions, unless we see a significant revision to the flash PMI reads.
- ISM manufacturing PMI is the main event overnight, with a better than expected number likely to support US equities (or weigh on them if the number comes in weaker than expected).
Bitcoin (BTCUSD): Bulls To Take it Above 20k?
- A new record high was achieved overnight yet bulls are yet to conquer 20k.
- A bullish gap has appeared over the weekend, so the bias remains bullish above 18,125. Whilst Bitcoin is traded seven days a week our CFD is based on the futures contract which is closed over the weekend, so these gap levels remain important.
- A clear break above 20k assumes bullish continuation. Given the volatility of bitcoin we would keep an open upside target.
USD/JPY: Prices Are Coiling Up
- When prices coil up it usually means we are approaching a burst of volatility. Which direction it breaks out is yet to be seen, however the bullish engulfing candle suggests an upside break could be on the cards.
- Support has been found at 104 and the rising trendline.
- A break above yesterday’s high (and the descending trendline) assumes bullish continuation.
EURO STOXX 50 (STOXX50): Resistance Confirmed at 3500
- The STOXX50 has broken its bullish trendline and confirmed resistance at 3,500.
- A bearish divergence had formed with price action ahead of the break of the trendline.
- A bearish outside candle formed in the latter stage of the session. A break beneath the bearish engulfing low assumes bearish continuation.
- Whilst prices remain beneath 3500 the bias is for a run towards the 3460 and 3440 lows.
USD/SEK: Removed from watchlist. A bullish outside day and failed break below 8.478 support warns of a bear-trap.
USD/NOK: Removed from watchlist. A bullish outside day and failed break below 8.8046 support warns of a bear-trap.
USD/CNH: Trend Remains Firmly Bearish
AUD/CAD: Removed from watchlist. A bearish outside day and failed break above 0.9594 resistance warns of a bull-trap.
GBP/AUD: Removed from watchlist. Momentum has turned higher before it broke beneath key support around 1.8000.
EUR/GBP: 0.9000 remains pivotal and held as resistance overnight. The bias remain bearish beneath this key level and bullish with a break above it.
GBP/CHF: The bias remains bearish below 1.2200 resistance.