CoinDesk Report:
On Monday, July 8th, the US Dollar Index rose to 104.95, while the Euro/USD fell to 1.0826. In the French elections, left-wing forces surged unexpectedly, defeating the far-right, with Marine Le Pen’s National Rally failing to meet expectations in parliamentary votes. Over the weekend, the German government transferred 700 bitcoins, causing Bitcoin to plummet to $55,500 at the Asian market open, triggering renewed panic.
French Elections and German Government Actions Trigger Euro and Bitcoin Sell-Off
According to The Economist, the 2024 French election opinion polls have shocked observers, suggesting Jean-Luc Mélenchon’s left-wing La France Insoumise could win the most seats in Sunday’s second round of parliamentary voting.
Preliminary results show La France Insoumise securing at least 174 seats. Next is President Macron’s centrist alliance, Ensemble, with 146 seats, still well below the 289 needed for a majority in the lower house.
Meanwhile, Le Pen’s party slipped to third place, gaining 142 seats, a significant increase from the previous parliamentary session.
Exit polls indicate a hung parliament in the final round of the French parliamentary elections, leading to some euro sell-offs. The Euro/USD fell 0.11% on the day, trading at 1.0826.
Following the continued sale of 1,800 bitcoins last week, blockchain analyst Embers monitored as the German government’s address received another 700 bitcoins, valued around $40.47 million.
Reportedly held by a certain asset management entity, these funds are expected to be dispersed to centralized exchanges like Coinbase, Kraken, and Bitstamp upon receipt.
The Asian market opening on Monday saw Bitcoin experience a short-term decline, bottoming out at $55,532.
“Dovish” Non-Farm Limits Dollar Futures Market Betting on 40 Basis Point Rate Cut
US non-farm payrolls increased by 206,000, exceeding the expected 190,000, though April and May figures were revised down to 108,000 and 218,000, respectively.
Average hourly earnings (AHE) year-on-year fell from 4.1% to 3.9%, meeting expectations, while the unemployment rate rose from 4% to 4.1%.
On Wednesday, the Federal Open Market Committee (FOMC) released minutes from its June meeting, revealing that while most participants view current policies as highly restrictive, they have opened the door to rate hikes. Policymakers acknowledged economic cooling and may respond to unexpected weakness.
According to the Chicago Mercantile Exchange’s Fed Watch tool, there is a 70% probability of a 25 basis point rate cut by the Fed in September, up from 66% on Thursday.
December 2024 federal funds rate futures contracts imply a 40 basis point easing by year-end.
USD Technical Analysis
FPMarkets analyst Aaron Hill noted that while the monthly chart for the US Dollar Index shows a long-term uptrend, short-term space indicates limited support or resistance. Therefore, clearing out buy orders from the 50-day Simple Moving Average (SMA) at 105.12 and daily support at 105.04 is crucial. Importantly, clearing buy orders from this area will tilt the technical pendulum towards bearishness, targeting the 200-day SMA at 104.49, followed closely by support at 104.09.
Short-term trends on the H1 chart also suggest further exploration of deeper levels after breaking resistance at 105.13, benefiting from the upper boundary of a short-term descending wedge starting from the high of 106.04. The next downward support target on H1 can be seen at 104.73, with a breakthrough exposing H1 support at 104.37, shared with the 200-day SMA.
With the absence of daily support around 105 this week and technical evidence of lower support levels on both daily and H1 charts, sellers may continue to dominate, targeting H1 supports at 104.73 and 104.37.
Gold Technical Analysis
FXStreet analyst Christian Borjon Valencia stated that gold prices decisively broke through the head and shoulders neckline, rising to around $2390, indicating bullish dominance with potential for further upside.
The bullish trend of the Relative Strength Index (RSI) suggests momentum favors buyers. Closing above the June 21st high of $2368 could open doors to higher trading ranges between $2370 and $2400, with buyers eyeing higher prices.
A break above $2400 would surpass this year’s high of $2450, challenging $2500 next.
On the other hand, if sellers push spot prices below $2350, further downside targets may be $2300. A breach of this support level would highlight the demand zone at the May 3rd low of $2277, followed by the March 21st high of $2222.
Bitcoin Technical Analysis
Aaron noted that Bitcoin saw its fourth consecutive weekly decline, showing early signs of a long-term downtrend within the weekly timeframe, as last week’s new low hit $53,412, the lowest since late February. However, the structure on the weekly chart suggests a potential rebound. Support lies at $56,796, with channel support near the low of $60,717, recently welcoming price movements. If bears retreat here and bulls act, a possible bullish flag pattern could still be seen, drawn from the high of $60,717 and the cryptocurrency’s all-time high of $73,845. Yet, considering recent downward momentum, further downside risks remain, possibly revealing subsequent sell-offs seeking another layer of support at $51,948.
On Thursday, trendline support was broken, starting from the low of $26,665. It’s noteworthy that the price trend has also fallen below the 50-day SMA of $64,758, though the market has not yet seen the unit fall below the 200-day SMA of $51,698. Despite bearish signals, Friday closed at $54,678 with a 100% forecast rate and accompanied by a 38.2% Fibonacci retracement rate. Below this, the decision point area of $50,601 to $53,015 should be monitored, followed by another layer of support at $48,007.
This week, on the selling side, the market outlines early downward trends through price structures and trendline support on daily and H1 timeframes. However, sellers must contend with heavyweight supports at $56,796 and $54,678 on weekly and daily timeframes, respectively. Also of note is that if these levels are breached, the daily decision point area of $50,601 to $53,015 is nearby, containing the aforementioned next layer of weekly support at $51,948 and the 200-day SMA at $51,698.
Therefore, sellers may be hesitant to commit until at least current support levels are exhausted, potentially triggering a rebound this week.
