- Research Analyst at FXTM, Lukman Otunuga, comments on the trading week and Bitcoin
I find it remarkable and somewhat frightening how, no matter how much Bitcoin is pummeled by sellers, it simply bounces back even stronger.
The most talked about cryptocurrency marched to a record high above $8000 on Friday, just five days after it sharply tumbled 29%. Bulls are always hungry for an opportunity to make a move, and this was delivered in the form of renewed ambiguity around the SegWit2X fork.
With Bitcoin appreciating over 700% year-to-date (YTD), and the cryptocurrency frequently hitting record highs, bulls are clearly in control. The price action is extremely bullish, especially when considering how the $8000 resistance has already been breached. Will Bitcoin hit $10000 before year end? This is the question every investor is asking.
Dollar slips on renewed political jitters
The Dollar sulked into Friday’s trading session under pressure following reports that U.S. Special Counsel Robert Mueller had subpoenaed Donald Trump’s election campaign for more documents relating to Russia.
Investor jitters over the report have clearly overshadowed the passing of yesterday’s tax bill through Congress, and this has been reflected in the Dollar’s bearish price action. With renewed political uncertainty likely to weigh on the Dollar, further downside may be on the cards.
Taking a look at the technical picture, the Dollar Index is turning bearish on the daily charts. A breakdown below 93.50 may encourage a further decline towards 93.00.
Currency spotlight – EURUSD
This has been a positive trading week for the Euro as it found ample support from stronger than expected German and Italian Q3 GDP data.
The EURUSD sprinted towards 1.1850 on the back of rising optimism over the European economy, while a vulnerable Dollar complimented the upside.
Although the Euro has roared back to life this week, the technical picture on the daily charts remains somewhat bearish below 1.1850.
While prices have breached the 1.1730 level, bulls need to secure a solid weekly close above 1.1850 to pressure the daily bearish setup. Sustained weakness below 1.1850 may encourage a further decline back towards 1.1730 and 1.1680. Alternatively, a breakout above this level should open a path higher towards 1.1920.
Commodity spotlight – Gold
Gold modestly appreciated during Friday’s trading session thanks to a depressed US Dollar.
This has been a volatile trading week for the yellow metal as bulls and bears continue to battle for dominance. Prices sharply appreciated to a three-week high at $1289 mid-week, before sliding into losses after positive US economic data fortified expectations of a Fed rate hike in December.
While investor caution and geopolitical tensions may support Gold bulls, bears remain inspired by the mounting expectations of higher US interest rates.
It is becoming increasingly clear that a catalyst is needed for the next major move. Technical traders will continue to pay attention to how prices react around the pivotal $1280 level. A weekly close above $1280 may encourage a further incline back towards $1289 and $1300, respectively. A failure to stay above$1280 may open a path back towards $1267.