Bitcoin, BTC / USD, FED, PBOC, Iron Ore, Crude Oil, USD / CHF – Talking Points
- Bitcoin has recovered from weekend losses, but risk appetite remains low
- Price increases cloud the growth prospects and push down industrial metals
- With a quiet week of data ahead, central bank speakers will be the focus
Bitcoin broke below the psychological 20,000 mark over the weekend. It reached a low of 17,599 on Saturday before recovering more than 20,000 on Sunday. On Monday, the price jumped above and below 20,000 several times.
Risk assets have undermined their prices as central banks around the world tighten monetary conditions to fight inflation.
This shrinking stance has raised fears of recession and it has become clear that the Fed is likely to lead the US economy to a slowdown to keep runaway prices in check.
On Saturday, Christopher Waller, Governor of the Federal Reserve said he would support another 75 basis point increase at the July meeting of the Federal Open Market Committee (FOMC).
Stock markets remain under pressure and APAC stock markets were a mixed case after a similar Wall Street lead on Friday. Futures markets point to a slightly positive start to the North American cash session.
The Peoples’ Bank of China (PBOC) has left its 1- and 5-year loan prime rates unchanged as expected today.
The bank has made it clear that it prefers a mitigating bias, but there are serious concerns about the economic outlook for mainland China, with restrictions still weighing heavily.
It caused more than 10% iron ore tank on the Dalian Commodity Exchange (DCE) on Monday. It is also lower on the Singapore Exchange (SGX), but to a lesser extent.
Other steel products also experience large losses. A number of Australian mining stocks are significantly lower as a result.
Crude oil was unable to hold a rally early Monday and continues to wane near Friday’s close. Concerns about global growth and fears of demand destruction continue to undermine it. Gold is steady near US $ 1,844 per ounce.
The Swiss franc was the best currency to start the week after last week’s surprise increase of 50 basis points from the Swiss National Bank (SNB). The US dollar is on the back foot for now.
If we look at the calendar, it’s a bit light compared to last week’s central bank action. The focus for today will be ECB, BoE and Fed speakers. ECB President Christine Lagarde is likely to keep the spotlight.
The complete economic calendar can be viewed here.
BTC / USD Technical Analysis
BTC / USD remains below a declining trend line. Nearby support may be at the lows seen at the end of 2020, at 17,575 and 16,520.
At the top, resistance could be at the recent high of 22,945 or a break point of 25350.
Graph creviewed in TradingView
— Written by Daniel McCarthy, strategist for techlives.in
To contact Daniel, use the comments section below or @DanMcCathyFX on Twitter