Aussie head and shoulders pattern points to sell-off
Cryptocurrency prices declined on Friday after receiving sharp criticism from Bank of Japan’s Haruhiko Kuroda. Bitcoin, the biggest cryptocurrency in the world, declined by 7% to around $35,500, while other altcoins like Ethereum and Ripple had sharper declines. In a statement, Kuroda warned about the volatility of cryptocurrencies and the fact that most of them were barely used as a means of settlement. He joins other respected people like Janet Yellen and Christine Lagarde to criticize the currencies. The People’s Bank of China (PBOC) has also criticized the currencies.
US stock futures jumped as investors cheered Joe Biden’s spending plans and the possibility of a new infrastructure deal. Media reports suggest that Joe Biden is set to unveil a $6 trillion spending package for the next fiscal year. That will be on top of the $2.1 trillion stimulus package that was passed in March. Also, there is a possibility that the president will get an infrastructure package after Republicans unveiled a $900 billion package. While the amount is lower than Biden’s proposal, analysts expect that the two sides will soon reach a compromise. The 10-year yield hovered above 1.60%, which is still lower than this year’s high of 1.74%.
The euro declined against the US dollar even after the relatively strong EU sentiment data. According to the European Commission, the services sentiment rose from 2.2 in April to 11.3 in March. In the same period, the industrial sentiment rose from 10.9 to 11.5 while consumer confidence rose from -8.1 to -5.1. These numbers show that businesses and individuals have responded well to European governments’ vaccine rollout. As a result, they will possibly boost their spending, which is a positive aspect for the European economy.
The EUR/USD pair declined to an intraday low of 1.2173, which was the lowest level since Tuesday. It also moved below the lower side of the ascending channel, which is a sign that bears are prevailing. Also, the price has dropped below the 25-day and 15-day moving average while the awesome oscillator is below the neutral level. Therefore, the pair may keep falling after the ongoing bearish breakout.
The ETH/USD pair declined to 2,495 amid the rout in the cryptocurrency sell-off. On the hourly chart, the pair managed to move below this week’s high of 2,892. It also moved to the 23.6% Fibonacci retracement level while the Relative Strength Index (RSI) and Bears power has dropped. Notably, the price is at the 23.6% retracement level and is forming an inverted head and shoulders pattern. Therefore, the pair may soon rebound during the America session or the weekend.
The AUD/USD pair declined to a low of 0.7716, which was substantially lower than this month’s high of 0.7892. On the four-hour chart, the pair is forming a large head and shoulders pattern. It is also slightly above the lower side of the rectangle channel and the short and longer-term moving averages. Therefore, the pair may be on the cusp of a major bearish breakout.