KVB Market Analysis | 26 August: Bitcoin (BTC) Breaks Out Above $60,000, Faces Resistance at $72,000

Product: XAU/USD

Prediction: Increase

Fundamental Analysis: 

Markets stay risk averse in Asian trading so far last Friday, as they keenly await US Federal Reserve (Fed) Chair Jerome Powell‘s Jackson Hole appearance for fresh hints on the central bank’s interest-rate path, especially with traders pricing in aggressive Fed rate cuts on signs of loosening labor market conditions. Risk-off flows boost the haven demand for the US government bonds, weighing on the Treasury bond yields across the curve and thus, dragging the USD lower.

Technical Analysis: 

The short-term technical outlook for Gold price remains in favor of buyers so long as the triangle resistance-turned-support, now at $2,470, holds. Note that Gold price yielded a symmetrical triangle breakout last week while the 14-day Relative Strength Index (RSI) points north above 50. These technical indicators suggest that the bullish potential remains well in place for Gold price. On the upside, should Gold buyers recapture the record high of $2,532, the next relevant topside target is seen at the $2,550 level. Acceptance above the latter could challenge the $2,600 round level en-route to the triangle target, measured at $2,660. 

Product: EUR/USD

Prediction: Decrease

Fundamental Analysis: 

EUR/USD halted its multi-day rebound and came under renewed downside pressure following Wednesdays YTD peaks past 1.1170, all against the backdrop of the resurgence of some bid bias in the US Dollar (USD). Indeed, the Greenback rebounded from recent 2024 lows in the sub-101.00 zone (August 21), as indicated by the US Dollar Index (DXY), in response to some loss of momentum in the risk complex after investors assessed the FOMC Minutes, which left the possibility of a rate cut by the Fed in September open. Contributing to the daily rebound in the US Dollar, US yields also managed to gather extra steam, advancing markedly across various maturity periods.

Technical Analysis: 

Further north, EUR/USD is expected to challenge its 2024 high of 1.1174 (August 21), followed by the 1.1200 round mark and the 2023 top of 1.1275 (July 18). The pair's next downward target is the weekly low of 1.0881 (August 8), prior to the key 200-day SMA at 1.0846, and the weekly low of 1.0777 (August 1). Down from here comes the June bottom of 1.0666 (June 26), before the May low of 1.0649 (May 1).

Product: USD/JPY

Prediction: Decrease

Fundamental Analysis: 

The Japanese Yen (JPY) gains ground against the US Dollar (USD) on Thursday. This upside occurred as Japans Gross Domestic Product (GDP) growth for the second quarter surpassed expectations, supporting the argument for a potential near-term interest rate hike by the Bank of Japan (BoJ). Japanese Economy Minister Yoshitaka Shindo stated that the economy is anticipated to recover gradually as wages and income improve. Shindo also added that the government will collaborate closely with the Bank of Japan to implement flexible macroeconomic policies.

Technical Analysis: 

After printing a long-legged doji, the USD/JPY aims higher yet is shy of clearing Wednesdays high of 146.90, keeping the pair range bound. Momentum favors sellers, with the Relative Strength Index (RSI) standing bearish. However, buyers are gathering momentum as the RSI aims up. For a bullish continuation, the USD/JPY needs to crack the Tenkan-Sen at 146.92. Once cleared, the next resistance would be 147.00, followed by the latest cycle high reached on August 15 at 149.39. If those levels are broken, buyers could re-test the 150.00 figure. On the other hand, the ongoing downtrend could resume once sellers drag prices below the August 21 low of 144.45. In that outcome, the USD/JPY could dive toward the August 5 swing low of 141.69.

Product: BTC/USD

Prediction: Increase

Fundamental Analysis: 

Bitcoin (BTC) traded above $60,000 on Friday, gaining more than 4% this week so far, but fluctuating within a range between $57,000 and $62,000 for the last 15 days. On-chain data shows contradicting signs, with institutions accumulating Bitcoin while some whales are selling. Additionally, the US spot Bitcoin ETFs recorded inflows this week, and continued Mt.Gox fund movements could bring volatility in Bitcoin's price in the coming days.

Technical Analysis: 

Bitcoin has achieved a “minor breakout” to reach its highest level since Aug. 1. From the technical perspective, the breakout is a “minor positive” and bodes well for bitcoin to see further upside in the next three to five days. While the crypto could rally to challenge $69,500 in the coming days, it would be difficult for it to break above $72,000 mark that has capped bitcoins performance over the past five months.

Market Analysis Disclaimer: 

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