As the tensions rise between US and China and Euro stocks are not showing signs of recovery, Gold is once again referred to as a safe haven to those who hedge their funds. With that being said, Bitcoin known as the digital Gold gained 2.71% and continues the climb towards 13K.
Despite technological gains in the US, Nasdaq +1.00%, SPX +0.27% today, US Dollar index is losing against other currencies, as the US Commerce Department delivered further restrictions on Huawei. As tensions between the two: US and China rise, so rises the VIX index and Gold price will rise accordingly.
From the technical point of view, Gold is now testing a dynamic resistance of August 12 and is about to break out as the impulse wave looks strong and there are other patterns that confirm the breakout and strength of the impulse. The climb might continue towards $2028 and $2064 if US and China officials do not kick off the negotiation process and show some development in regulating the “Trade War”.
Other indices you should be following to trace the development of Gold price is EUROSTOXX 50, Euronext 100 and DAX, as a major opposing currency to the US Dollar is currently Euro and if Europe shows well-grounded signs of recovery, then major investors would definitely bet on Euro.
As the article is being published, Euro is testing the resistance at $1.1910. EU Finance Ministers meeting, which will be held soon, will surely create some volatility until the US housing data is released. From the technical point of view, EURUSD should show another drop towards $1.1700 to complete the rectangle pattern.
The last impulse wave on an hourly chart is not strong but what it shows us here is that Euro investors have gained enough power to bring the Euro as close to the resistance as possible and surely, we will see some massive green or red candles. RSI indicates that Euro is overbought, so it should correct from this point slightly, though above the resistance and if the resistance is tested as support, definitely the climb will continue towards $1.2000 – 1.2040.
Bitcoin is above $12K, which led the crypto investors in the euphoria of high gains push the price towards $12500. Since Bitcoin is lately is correlated to Gold and is referred to as a digital safe-haven, the price gained amid Gold surge.
Bitcoin will most likely start the correction here if the dynamic resistance of August 6 is not broken. The bullish flag pattern fills hearts of crypto investors with confidence of seeing $13K, however investors might look into selling BTC to regain power for another jump, the best level for this would be $12100 and $12000.
The bullish flag on 15-minute chart provides a clear sign of another uptrend move towards $12500, though BTC must breakout from the dynamic resistance (the upper edge of the flag).
Last week we witnessed another shocking gain for Ethereum, where the alt gained 11.09%, though this week Ethereum lost only 1% in price, technicals say that the decline might continue towards $415-407. Both $415 and $407 are major supports and should give Ethereum a kick to show another jump. The price action of August 16 demonstrates exhaustion of bulls, the wave is not impulsive, hence correction should be expected. Though if Ethereum closes above $433 and breaks $440, bulls may support the uptrend and the alt amy continue the run towards the resistances ahead.
Keep an eye on the news, trace Economic data and US-China development, there are other fundamentals you definitely should check such as VIX, Fear and Greed, and other market sentiment data. Tomorrow is the CPI announcement day, so stay tuned and trace the data released by the UK, Canada, Eurozone, for commodities investors follow the Crude Oil Inventories which will be published tomorrow in the US as well as FOMC Meeting Minutes.