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USD, Gold, Bitcoin

USD Struggles Amid Risk Aversion, BTC Loses Steam

The Euro to US Dollar (EUR/USD) exchange rate is experiencing a dip below 1.0850 in the early European trading hours this Friday due to an increased demand for the US Dollar. This is despite a sluggish performance from US Treasury bond yields, which are typically indicative of the Dollar’s strength. This downward pressure comes as investors adopt a cautious stance in the face of mid-tier EU and US data.

EURUSD Daily Chart

In the wake of Thursday’s uncertain market movements, the EUR/USD continued its lateral movement around the 1.0850 mark. Despite the lack of significant macroeconomic data releases, the pair maintains a bullish outlook. As such, the risk sentiment could be a major influencer of the EUR/USD’s performance as we approach the weekend.

USD Struggles Amid Uninspiring Macroeconomic Data

The US Dollar (USD) is struggling to maintain resilience against its competitors following disappointing macroeconomic data releases. Initial Jobless Claims have risen to 231,000 in the week ending November 11, up from 218,000. Additionally, Industrial Production contracted by 0.6% on a monthly basis in October, further weakening the Dollar.

As the US Treasury bond yields continue to fall, the USD is finding it difficult to find demand. The benchmark 10-year US yield is currently down by nearly 1% at around 4.4%.

The second half of the day will see October Housing Starts and Building Permits data in the US economic docket. However, market participants are likely to focus more on risk perception.

This situation could affect the currency markets by increasing volatility and uncertainty, potentially leading to a rise in safe-haven assets such as the Dollar.

GBP/USD Rebounds Despite Negative Retail Sales Data

The British Pound to US Dollar (GBP/USD) exchange rate is making a comeback, rising towards 1.2450 in European trading on Friday. Despite negative UK Retail Sales data putting pressure on the Pound Sterling, renewed US Dollar weakness and positive risk sentiment have provided a lifeline for the pair.

The GBP/USD pair closed virtually unchanged just above 1.2400 and has edged slightly higher in the European session on Friday. It is likely to encounter strong resistance at 1.2450, and technical buyers may step in once this level turns into support.

GBPUSD Daily Chart

British Pound / US Dollar

Gold Prices Eye $2,000 Amid Fed Pause Bets

Gold prices are testing an eight-day high near $1,990, building on the previous upsurge. Increased bets of a Federal Reserve pause have kept US Treasury bond yields undermined, buoying gold prices.

However, the resurgent United States Dollar (USD) could put a damper on the precious metal’s bullish momentum. This could potentially affect the currency market by increasing the appeal of gold as a safe-haven asset, leading to reduced demand for riskier currencies.

XAUUSD Daily Chart

XAUUSD Daily Chart

Bitcoin’s Value Declines Amidst Rising Selling Pressure

Bitcoin (BTC), the premier cryptocurrency, has seen a 4% drop in its value over the previous two days. This decrease is mainly due to increased selling pressure as traders take advantage of the profits made during last week’s surge. Despite the generally bearish trend, some cryptocurrencies like the new Bitcoin ETF Token (BTCETF) are defying the downward momentum. BTCETF, which is currently in its presale phase, is slowly nearing the $1 million funding goal.

BTCUSD DAILY CHART

BTCUSD DAILY CHART

Bitcoin’s Recent Surge Loses Steam

Following a recent surge, Bitcoin’s price has lost momentum and fallen below the $37,000 mark. As of the current trading session, the world’s largest cryptocurrency is priced at $36,400, wiping out most of the gains made during Wednesday’s surge.

The market’s trading volumes have experienced more than an 8% decline amidst this price instability, with approximately $26.1 billion worth of Bitcoin traded in the last 24 hours. This decrease suggests a possible shift in investor behavior towards a more cautious, watch-and-wait approach.

Technically speaking, Bitcoin is now trapped within a clear trading range between $35,000 and $38,000 on the 4-hour chart. The cryptocurrency’s price seems to be moving towards the lower end of this range, with investors anticipating a potential bullish bounce. However, if the current bearish momentum continues, Bitcoin might break through this range downwards, triggering a sharper decline.

Factors Behind Bitcoin’s Price Decline

Several factors have led to Bitcoin’s recent downturn. The initial enthusiasm over the potential approval of a spot Bitcoin ETF in the US has somewhat diminished as the SEC delayed decisions on some ETF filings. This delay suggests a possibly extended wait despite expectations of a breakthrough this month.

Additionally, the fraudulent regulatory filing related to an XPR trust earlier this week caused significant market turbulence. This incident ignited speculation about potential price manipulation and created a sense of caution among investors.

Finally, large-scale liquidations of leveraged futures positions have likely exacerbated the sell-off. Over $205 million in long positions were liquidated across exchanges in the past day, possibly affecting Bitcoin’s price. These combined factors have resulted in a challenging environment for Bitcoin, leading to increased volatility in recent days.

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Author

  • Zahari Rangelov

    Zahari Rangelov is an experienced professional Forex trader and trading mentor with knowledge in technical and fundamental analysis, medium-term trading strategies, risk management and diversification. He has been involved in the foreign exchange markets since 2005, when he opened his first live account in 2007. Currently, Zahari is the Head of Sales & Business Development at TraderFactor's London branch. He provides lectures during webinars and seminars for traders on topics such as; Psychology of market participants’ moods, Investments & speculation with different financial instruments and Automated Expert Advisors & signal providers. Zahari’s success lies in his application of research-backed techniques and practices that have helped him become a successful forex trader, a mentor to many traders, and a respected authority figure within the trading community.

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