El Salvador news sends the price of Bitcoin sharply higher
Bitcoin staged a large price recovery on the cryptocurrency market this week after El Salvador announced that Bitcoin would soon be accepted as legal tender in the South American nation. Bitcoin had a rocky start to the trading week and dropped towards the $31,000 support level after President Donald Trump called Bitcoin a scam, and Elon Musk posted more bearish Tweets surrounding Bitcoin. The BTCUSD pair rallied back towards the $38,000 resistance level, as traders and investors immediately bought the number digital asset over the news the El Salvador news, which was seen as a sign of more widespread adoption of cryptocurrencies.
- The BTCUSD pair is only bearish while trading below the $36,000 level, key support is found at the $35,000 and $33,000 levels.
- The BTCUSD pair only bullish while trading above the $36,000 level, buyers may test towards the $40,000 and $45,000 resistance levels.
The June US Consumer Price Index report came in at its highest level since 2008 this week, as year-on-year inflation hit five percent in the United States. Monthly US CPI also rose more than economists had been expecting, with a 0.6 percent increase, while CPI excluding food and energy posted a 0.7 percent increase. The market reaction saw the US dollar losing ground and the price of gold advancing back towards the $1,900 resistance level. Broader financial markets remained trapped in a narrow trading range for most of the week, as many market commentators speculated that this could be due to the FOMC policy meeting next week.
- XAUUSD is only bullish while trading above the $1,880 level, key resistance is found at the $1,912 and $1,940 levels.
- XAUUSD is only bearish while trading below the $1,880 level, key support is located at the $1,855 and $1,840 levels.
The Canadian dollar moved lower against the US dollar this week after the Bank of Canada kept interest rates and monthly asset purchases unchanged. The USDCAD pair pushed higher as the central bank largely kept to script, and delayed bulls expectations of a rate increase next month. Bank of Canada policy makers noted that the global economy is strengthening and that they expect CPI inflation to remains around 3 percent over the summer. The Canadian dollar has been one of the top performing currencies this year due to rising oil prices and the fact that the Bank of Canada was one of the first major central banks to taper asset purchases.
- The USDCAD pair is only bearish while trading below the 1.2160 level, key support is found at the 1.2000 and 1.1860 levels.
- The USDCAD pair is only bullish while trading above the 1.2160 level, buyers may test towards the 1.2200 and 1.2260 resistance levels.
The euro currency remains entrenched in range bound conditions this week as the European Central Bank raised its inflation forecasts, but kept asset purchases unchanged. The central bank said that they expected greater inflationary pressure in the eurozone economy over the coming months. The ECB kept the pace of bond buying unchanged, although many analysts speculated that during the August meeting the ECB may start to slow the pace of bond purchases. Most of the euro crosses, such as EURGBP, EURJPY, and EURCAD remained trapped in tight price ranges, although the EURUSD pair started to weaken towards the end of the trading week.
- The EURUSD pair is only bearish while trading below the 1.2100 level, key support is found at the 1.2050 and 1.2000 levels.
- If the EURUSD pair trades above the 1.2100 level, buyers may test towards the 1.2200 and 1.2300 resistance levels.