by Jamie Holmes
BTC-USD is currently up just over 1% on the BitStamp exchange today trading at $453.99, pushing higher above psychological resistance at $450. The US Dollar has weakened against currencies and commodities today as the Non-Farm Payroll, a major indicator of the health of the US labour market, came in below expectations at 160,000 versus the forecast of 200,000. A weak labour market reduces demand for the US Dollar and hence commodities like Bitcoin, oil and gold appreciate.
This sets up a bullish environment for the weekend with regards to BTC-USD as Non-Farm Payroll data normally still works its effects on the market up until Monday. The Bank of Japan monetary policy meeting minutes and Chinese trade data on Sunday could provide further fuel for bulls; weaker than expected trade performance from the Chinese economy will boost buying interest in BTC-USD. Any surprises from the Bank of Japan and a stance towards more stimulus could also provoke further bullish dominance.
The long-term technical outlook is illustrated below with the 4-hour price action and shows that the market is currently attempting a bullish breakout after trading below the Ichimoku cloud for some time. Another bullish indication is given by the Ichimoku cloud itself; the Kumo has changed colour from red to green and is starting to trend upwards. Furthermore, the market has closed higher than the most recent sell fractal at $449 indicating bullish momentum could intensify further. Immediate resistance is seen at $456.90, indicated on the chart, and further bullish confirmation will be given if the market manages to sustain above this level.
On the other hand, fractal support lies at $445.11 and a break below this level is required to validate a bearish outlook. Moreover, the conversion line is important to watch as it is offering minor support going forward. The conversion (blue) line is currently at $449.66 and a close below this level will give the first indication of a trend change. However, if the market continues to trend above the conversion line then a bullish outlook remains intact.
The MACD technical indicator also signals bullish momentum as the pink histogram bars are positive and the faster-moving average is trending above the slower-moving average. It seems as if the market is gearing up for another test of the critical $470 level.
The short-term outlook is illustrated below with the hourly price action and shows that bullish momentum will continue to carry BTC-USD higher over the short-term; first, the most recent fractal sell level at $451.95 has been broken and will now provide support going forward. Moreover, the Ichimoku cloud is trending upwards with a large gradient suggesting a strong upward move is in place. Similarly, the conversion and base lines are trending upward sharply.
A bearish outlook is only validated if there is a close below support provided by the conversion line currently at $452.20. Immediate resistance in the short-term is seen at $456 while fractal support is found at $449.41; a break below $449.41 would see a short-term correction and fading bullish dominance. The MACD also indicates bullish momentum over the short-term and doesn’t look like the market is overbought yet as the faster moving average has not moved too far away from the slower moving average.