Bitcoin renews its bullishness

USD gains some ground in the FX market

The greenback regained some much-needed ground in the FX market yesterday. US sanctions on Iran could lead to further tensions in the Middle-East, higher oil prices and inflationary pressures in the US economy and tended to provide support for the USD. The Aussie remained relatively stable resisting the strengthening of the USD as the release of RBA’s August meeting minutes showed that RBA policymakers lean more on the hawkish side to bring inflation under control. We expect Aussie traders to keep a close eye on Australia’s July CPI rates tomorrow and a possibly hotter than expected report could provide support for AUD.

Bitcoin’s rally renewed

In maybe the most impressive move in the markets yesterday, Bitcoin renewed its rally rising above $80k. The crypto’s price rose 38% from its low point late June when it fell below $58k. Bitcoin’s rally was supported by renewed demand by ETFs, the market’s expectations for the crypto-friendly Clarity Act to pass US legislators and altering expectations for the US fiscal and monetary policy.

Mixed signals from US Equities

US equities seem to be behaving somewhat cautiously, with Nasdaq edging lower, S&P 500 remaining stable and Dow Jones gaining. Tensions in the US relationship with Iran, a partial renewal of the US tariffs war, oil prices that refuse to drop and the Fed’s intentions advise caution at the current stage. Focus is expected to be placed on NVIDIA’s earnings on Wednesday.

Gold’s rally maintained

Gold’s price tended to stabilise in today’s Asian session after hitting new three-month highs. A strengthening USD in the FX market failed to weigh on the precious metal’s price, blurring their negative correlation, yet further strength of the USD could start weighing on gold’s price. On the flip side, worries for a USD debasement could provide some support while expectations for inflation to remain high and provoke the Fed into a tougher, hawkish stance could weigh.

Other highlights for today

Today, get Germany’s Ifo indicators for August and from the US, August’s consumer confidence, July’s new home sales, August’s Richmond Fed Composite index, and the weekly API crude oil inventories figure, while Richmond Fed President Barkin speaks.

Charts to keep an eye out

XAU/USD’s rally seems to have been halted in todays’ Asian session, with the precious metal’s price being at $4650 per troy ounce currently. We maintain our bullish outlook, given that the upward trendline remains intact, yet once again warn for a possible correction lower, given that the RSI indicator remains above the reading of 70, implying a possible overbought position. Should the bulls maintain control, we may see XAU/USD aiming for the 4890 (R1) resistance line. If the bears take over we may see gold’s price breaking initially the 4550 (S1) support line continue to break also the prementioned upward trendline, in a first signal that the upward motion has been interrupted and continue to reach if not breach the 4275 (S2) level.

BTC/USD renewed its bullish tendencies as discussed in yesterday’s report, by breaking the 78200 (S1) resistance line, now turned into support. We maintain our bullish outlook for Bitcoin for the time being.  The RSI remains well above the reading of 70, highlighting an overbought position and the possibility of a correction lower. Should the bulls continue to lead Bitcoin’s price, we may see it breaking the 82900 (R1) resistance base and start aiming for the 86500 (R2) level. Should the bears take over, we may see the cryptocurrency breaking the 78200 (S1) line and aim for the 74200 (S2) support level.

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