Yellen commentary hits the latest US dollar recovery

Greenback reverses

The US dollar index gave back a sizable portion of its recent gains this week after the new US Treasury Secretary Janet Yellen called for more US policy stimulus to get the US economy back on track. Yellen testified before US Congress this week and talked-up the benefits of quickly implementing President Biden’s $1.9 trillion packages. The greenback also started to slide after Joe Biden was inaugurated as President of the United States. Global equity markets posted strong gains this week on the prospect of improved Sino-US relations under the Biden administration and the increased likelihood of the new COVID-19 relief package being passed into law.

• The S&P 500 is only bullish while trading above the 6,480 level, key resistance is found at the 6,880 and 7,000 levels.
• The S&P 500 is only bearish while trading below the 6,480 level, key support is located at the 6,310 and 6,270 levels.

Bitcoin correction

Bitcoin staged a big correction on the cryptocurrency market this week as traders booked profits amidst bearish comments over crypto regulations. New US Treasury Secretary Janet Yellen said the cryptocurrencies need to be curtailed and that the digital currencies are being used by terrorists. Bitcoin did not sell-off dramatically after Yellen’s comment, however, traders and investors were clearly shocked and the BTCUSD pair began to edge lower. On-chain data this week showed that small wallets were selling their cryptocurrencies to so-called whales, who largely ignored the correction and continued to accumulate the top crypto.

• The BTCUSD pair is only bearish while trading below the $34,000 level, key support is found at the $30,000 and $28,000 levels.
• The BTCUSD pair is only bullish while trading above the $34,000 level, buyers may test towards the $38,000 and $40,000 resistance levels.

ECB hawks

The European Central Bank kept interest rates on hold this week and struck a more hawkish tone towards the European economy than expected. The euro currency and European equity markets received a boost after the ECB Governing Council noted that downside risks were “less pronounced”. The European Central Bank also notably remarked that lessoning bond buying was an option if the EU economy started to improve. ECB President Christine Lagarde also failed to mention the strength of the euro currency as some analysts had been expecting.

• The EURUSD is only bearish while trading below the 1.2160 level, key support is found at the 1.2110 and 1.2060 levels.
• The EURUSD is only bullish while trading above the 1.2160 level, buyers may test towards the 1.2200 and 1.2260 resistance levels.

Ethereum fades

Ethereum stole the headlines in the altcoin space this week after the second-largest cryptocurrency rallied to a new all-time price high. Ethereum started the trading week in spectacular fashion and quickly rallied towards above the $1,400 resistance level, hitting $1,440. Ethereum started to reverse lower as fresh buying interest dried-up above the $1,400 level, while on-chain data showed that small wallets were starting to book profits. The ETHUSD pair also reversed as the BTCUSD pair suffered a major decline towards the $30,000 level, causing other top cryptos, like Ethereum, to reverse lower.

• The ETHUSD  pair is only bearish while trading below the $1070.00 level, key support is found at the $870.00 and $650.00 levels.
• If the ETHUSD pair trades above the $1,070.00 level, buyers may test towards the $1,340.00 and $1,440.00 resistance levels.