Coin World reported on Friday (June 28) that the US dollar index fell to 105.88, despite a slight rebound, as dovish Fed officials were willing to support another interest rate hike ahead of the release of the US PCE. Gold sounded the horn for a counterattack at $2,327, but caution is still needed in case of unexpected PCE data. Wall Street funds flowed back into Bitcoin spot ETFs, stimulating a rebound in the coin price to $61,700.
The Third Plenary Session of the 20th Central Committee of the Communist Party of China will be held on July 15. Two former defense ministers have been expelled from the party.
The long-delayed Third Plenary Session of the 20th Central Committee of the Communist Party of China has finally been scheduled to be held in Beijing from July 15 to 18. According to the official media Xinhua News Agency, at a meeting of the Central Political Bureau yesterday, the party heard a report on the solicitation of opinions on the draft of the “Central Committee’s Decision on Further Comprehensively Deepening Reform and Advancing China’s Modernization” within and outside the party, and decided to modify the draft based on the opinions discussed at the meeting and submit it to the Third Plenary Session of the 20th Central Committee for deliberation.
The theme of this meeting is “Further Comprehensively Deepening Reform and Advancing China’s Modernization”. Prior to this, the Central Political Bureau held a meeting on June 27 to discuss deepening reform and modernization issues.
The meeting emphasized that the overall goal of further comprehensively deepening reform is to continue to improve and develop the socialist system with Chinese characteristics, and promote the modernization of the national governance system and governance capabilities. By 2035, a high-level socialist market economy system will be fully established, the socialist system with Chinese characteristics will be more perfect, the modernization of the national governance system and governance capabilities will be basically achieved, and the socialist modernization will be basically realized, laying a solid foundation for building a socialist modernized country in the middle of this century.
BBC Chinese website pointed out that since the Third Plenary Session of the 19th Central Committee is unrelated to economic reforms, this conference may become the first conference in China in the past 10 years to focus on economic reforms. China is currently facing internal and external pressures, and whether the Third Plenary Session of the 20th Central Committee will bring about a breakthrough reform like the Third Plenary Session of the 11th Central Committee 46 years ago is a matter of concern.
According to CCTV News on Thursday, the Central Political Bureau of the Communist Party of China reviewed and approved the report of the Central Military Commission on the review results and handling opinions of Wei Fenghe, and decided to give Wei Fenghe the punishment of expulsion from the party and terminate his qualification as a delegate to the 20th National Congress of the Communist Party of China.
On the same day, the Central Political Bureau of the Communist Party of China reviewed and approved the report of the Central Military Commission on the review results and handling opinions of Li Shangfu, and decided to give Li Shangfu the punishment of expulsion from the party and terminate his qualification as a delegate to the 20th National Congress of the Communist Party of China.
The official status of former Foreign Minister Qin Gang and former Defense Minister Li Shangfu has not been officially determined. Whether this plenary session will revoke their central committee membership and announce more details has also been a focus of attention.
Fed hawkish officials, GDP, and initial jobless claims data are coming.
Michelle Bowman, a member of the Federal Reserve Board of Governors, said on Thursday that although the current Fed policy should be sufficient to bring inflation back to target levels, if inflation data proves difficult to sustain, the Fed should not be unwilling to consider further interest rate cuts.
“If inflation does not ease, I am still willing to raise interest rates again,” she said. “The Fed has not reached the point where it can consider cutting interest rates. If the inflation rate approaches 2%, it may eventually cut interest rates. The lack of new banks being established will create financial problems. The economy is strong, but the activity is slowing down.”
She continued, “I am concerned about the decrease in the number of banks in the United States. The upward risk of inflation still exists. I expect only moderate progress in lowering the inflation rate this year. The loose financial environment may push up inflation. I am cautious about future changes in Fed interest rates.”
For the week ending June 21, initial jobless claims in the United States were better than expected, with 233,000 new claims, lower than the forecasted 236,000 and slightly lower than the previous week’s 238,000. The four-week average of initial jobless claims rose to 236,000 but remained below the continuous average.
On Thursday, the US Gross Domestic Product (GDP) met expectations, with a slight revision from the initial estimate of 1.3% to 1.4%. In addition, the first-quarter core personal consumption expenditure (PCE) rose slightly to 3.7% month-on-month, lower than the expected 3.6%. After Thursday’s close, the upcoming presidential debate will be closely watched as investors anticipate policy implications from the candidates.
USD technical analysis
FXStreet analyst Joshua Gibson said that Thursday’s limited decline kept the US dollar index in a short-term bullish position, with the index trading above the 200-hour exponential moving average (EMA) at 105.58.
The US dollar index hit a two-month high this week, breaking through 106.10 and rising along a bumpy channel.
Gold technical analysis
FXEmpire analyst Bruce Powers stated that gold gave mixed signals but is still in a corrective downtrend. This week, gold triggered a weekly bearish reversal as it fell below the previous week’s low of $2,307. In addition, a daily bearish flag was triggered yesterday, resulting in a weak close for gold at the lower quarter of the daily trading range. However, there was no follow-through selling today. Instead, gold rebounded above Wednesday’s high of $2,324 and retested the resistance level near the 20-day moving average of $2,328 and the downtrend line.
Another trendline and the 50-day moving average mark higher potential resistance near $2,339. Nevertheless, gold may continue to pull back until it rebounds above the volatility high of $2,369. The high point of this week, along with the 50-day moving average, will provide lower price levels for the upside after the week ends. If gold can break through the volatility high of $2,369, it will be able to continue its strength from there. The overall outlook is still bullish, and the current pullback should eventually resolve the upside issue on its own. Whether it will decline first remains to be seen.
The clear decline below the week’s low of $2,294 indicates that the pullback will continue. The support levels of recent lows at $2,287 and $2,277 will be challenged. The first downside target is the 61.8% Fibonacci retracement level at $2,262. If that level is broken downward, we may see a rapid decline in gold to the area near the 78.6% Fibonacci retracement level of $2,211. This level marks a potential support zone that originated from a resistance zone during the upward movement in March. Please note that the upward trendline that has indicated support in the past passes through this support zone.
Alternatively, as seen in the market, gold fell below key levels but continued to decline slowly. After breaking through the support level, gold experienced a bullish reversal. The relative strength index (RSI) momentum oscillator has three trendlines and a potential double bottom. Although this is a minor indicator, the breakout of this line and double bottom provides evidence of improving demand for gold.
Bitcoin technical analysis
CoinTelegraph pointed out that Bitcoin’s recovery is consistent with the recovery of funds flowing into US Bitcoin spot ETFs. As of June 26, the value of Bitcoin managed by these funds was approximately $52.61 billion, higher than the $47 billion at the beginning of May.
Data from Farside Investors shows that after these investment products experienced net outflows for seven consecutive days, the net inflow of funds into Bitcoin spot ETFs turned positive in the past two days, with net inflows of $31 million and $21.3 million on June 25 and 26, respectively.
At the same time, one of the first issuers of Bitcoin spot ETFs in the United States, VanEck, has applied for the issuance of a new Solana ETF. VanEck also submitted an application for the first Ether ETF in 2021, which may indicate a broader trend as recently approved Bitcoin and Ether spot ETFs pave the way for the launch of more crypto ETFs in the United States.
This development highlights the increasing acceptance and adoption of Bitcoin and other cryptocurrencies in the traditional financial sector, which helps to increase the valuation of the cryptocurrency market.
From a technical perspective, the current cryptocurrency market rally is part of a rebound that began at the confluence of major support levels at $2.172 trillion, which consists of the midpoint of the downward parallel channel and a major support level.
The total market capitalization of the cryptocurrency market reached $2.23 trillion, breaking through the upper limit of the channel during Thursday’s recovery, indicating a breakout from the downtrend.
According to the rules of this technical pattern, the cryptocurrency market may rise to the region of $2.56 trillion, surrounded by the upper end of the downward channel. Before achieving this target, the total market capitalization must overcome the congestion between $2.30 trillion and $2.35 trillion, where all major EMAs are located.
