Investors are currently piling funds into the greenback with the risk of virus mutants developing and spread to other geopolitical areas.
Recent price actions reveal dollars bull has propelled are holding sway as a confirmation above such level kept the bears gasping for support based on today’s intra-day chart.
Currency traders anticipate Wednesday’s close far below such level might indicate another sign sellers still call the shots even if a small jump occurs above the threshold.
A strong booster for the greenback, the 10-year Treasury yield at the timing of writing this report, was trading around its lowest levels since mid-March, thereby suggesting investors are relatively showing more interests to riskier assets amid the unprecedented stimulus packages in play as the benchmark yield asset range momentarily, following its retreat from a 14-month high at the end of last month.
In addition, recent candlesticks price patterns point to a piece of mounting evidence that U.S dollar bulls seem to be exhausted with the U.S Federal Reserve stance on an ultra-low interest rate policy amid rising inflation that appeared to have led to declines in U.S. yields and the greenback this month.
Although dollar bulls, a day ago have recently halted the previous six trading sessions, sellers’ pressure still remain with an inflation-fear-induced surge in Treasury yields triggering capital flights in the U.S Treasury bond market in spite of recent solid U.S. economic data.
There is a minor resistance level between 52500 and the 54K area. There has been some hesitation but nothing significant enough to make any adjustments. If price can clear this area over the next day or two, a test of 57K and a potential break out are within reason. This is especially so since a higher high is favored in such an environment.
What if the 54K area holds price back? We would then be looking at a lower high formation (sort of what the stock market looks like right now). This would be a bearish sign and if it is followed by a break of a candle low (either the 48K area or a low of a new candle that is not on the chart at the moment) that would be a new sell signal.
In the case of a sell signal, we might exit early which can result in a break even or small loss trade. Usually we are purposely slow to react because of the amount of noise in these situations.. Along with that, our risk is defined so even if we get caught in a broader pull back, we get stopped out for the amount we were comfortable risking from the onset of the trade.
If the lower high develops, it could be another hint toward Bitcoin being in a broader Wave 4 consolidation which we have been anticipating for some time. For our strategy, confirmation will not come until the 37K support is compromised. If Bitcoin confirms that scenario, we will adjust our expectations for our long and short term strategies. For example, our swing trade strategy would require more conservative profit target expectations.
A broad Wave 4 does not mean Bitcoin goes into a bear market, but it can be a tough market to trade, very similar to Gold which I keep referring to as an example. If you would like to learn more about how our strategies work, visit https://greenbridgeinvesting.com/pricing