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Technical Analysis – Charts of The Week

XBT/USD – Chart shows viable long positions above the Major Pivot point at $42585, targeting the key resistance at $44900 and then test of the resistance zone at $47325 to $48000. Alternatively, if prices drop again below the key support level at $41075 then short positions first targeting the support zone at 37600 to $36800.

XBT/USD

  • Resistance Zone: $47325 to $48000
  • Key Resistance Level: $44900
  • Major Pivot Point: $42585
  • Key Support Level: $41075
  • Support Zone: $37600 to $36800
  • Last Analysis Date: Blue Vertical Lines
  • 200 Day EMA – Green Line
  • 50 Day EMA – Red Line

Trade Insights – XBT/USD – Chart shows viable long positions above the Major Pivot point at $42585, targeting the key resistance at $44900 and then test of the resistance zone at $47325 to $48000.

Alternatively, if prices drop again below the key support level at $41075 then short positions first targeting the support zone at 37600 to $36800.

XBT/USD Daily Chart

Chart Analysis:

Directional bias: 2 Weeks XBT/USD

The Blue Vertical lines on the chart indicate our previous analysis dates on XBT/USD pair. Bitcoin is showing a bearish trend and has been declining since 7th September when the price touched its recent peak at $52961. The drop on the day was hard as prices dropped by all most $10,000 and triggered a downside correction. This correction in the XBT/USD pair continued throughout September and at the time of the analysis, the prices are just sitting above the Key support level of $41075.

The chart shows that the major Pivot is at $42585. The buyers need to move prices above this crucial point for any stronger recovery in the prices. Once the prices are above the Pivot then Bulls can target the first major resistance level at $44900 which is also the point where prices dropped on 24th September after a false breakout/recovery. A close above the key resistance could spark a reversal to test the Resistance Zone at $47325 to $48000 - the actual resistance cluster on the chart where sellers take control.

As it appears on the chart, the pair is trading well below the 50-Day EMA and just around the 200-day EMA lines indicating there are chances of recovery from this point on. However, if the XBT/USD pair continues to move south then the downward channel will keep the prices within their ceiling and floor limits. Apparently, buyers are attempting to break through the ceiling limit of the channel that is also around the Pivot on the chart at this point.  

If prices continue to stay below the Major Pivot at $42585 then the pair can retest the first major support level at $41075. Once this key support is broken with a strong red candle, then prices can quickly drop to touch the support zone at $37600 to $36800. If this support is broken too then we will have a full downtrend that can take the prices back to the $30000 Supply zone and at this stage, it seems this event has a low probability.

The prices were dropped below RSI 50 level, are moving upwards to test the downward resistance line drawn connecting the peaks of July and September. RSI is seemingly losing its pace towards the bearish zone.

Fundamental Overview: From the look of it, there are signs that the big investors are selling their Cryptos and that means a short-term bearish outlook for Bitcoin. Over the last month, the BTC has lost 13% in value since the news about the China Ban. On the other hand, EI Salvador has made Crypto a legal tender. Verifone has also brought Bitcoin payments to thousands of merchants across the US. Interestingly, BitPay is one of the leading crypto payments processors in the world and with over 30,000 bitcoin transactions processed every month. AMC theatres is also now accepting payments in cryptocurrencies. Likewise, many other companies and are now considering if they can start accepting BTC payments for the goods and services which they offer.

USD/JPY

  • Resistance Zone: 112.00 to 112.15
  • Key Support: 110.75
  • Support Zone: 109.65 to 109.45
  • Last Analysis Date: Blue Vertical Lines
  • 200 Day EMA – Green Line
  • 50 Day EMA – Red Line

Trade Insights – The USD/JPY chart shows Viable Short positions below the Resistance Zone at 112.15, targeting the first major support at 111.20 and then the Key support level at 100.75.

USD/JPY Daily Chart

Chart Analysis: 

Directional bias: 1 Week USD/JPY

USD/JPY pair has charged through all our past resistance zones and has peaked out at 112.00 which is a fresh 18 month high. Looking back, after our last analysis on 1st September the pair continued to move downwards and eventually touched the trough at 109.13. After consolidation, the USD/JPY prices have moved up to register heft gains of more than 250 pips by Wednesday this week. There are chances that the prices could continue to rise. However, being a news-driven market in the shorter term, it seems a small correction is due now and the pair could drop to test the first support at 111.23. After, this the next Key support level is at 100.75.

The pair is trading well above the 50-day EMA and the 200-day EMA level confirming a strong Bullish trend. However, in the shorter term, the chart indicates the USD/JPY is looming into an overbought category.

Fundamental Overview: The prime cause behind the upward jump in the USD/JPY pair is the hawkish view of the Federal Reserve that is expected to begin tapering by as early as November 2021. This will reduce the liquidity in the market and interest rates will start to rise from here on. DXY index has broken the crucial resistance level which was keeping the dollar below 93.20. As of now the Dollar is trading at 94.26 and showing a sign of a temporary correction.

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Disclaimer

The information provided is of a general nature and is not intended to be personalised financial advice. The information provided is not intended to be a substitute for professional advice. You may seek appropriate personalised financial advice from a qualified professional to suit your individual circumstances.

Trading in Rockfort Markets derivative products may not be suitable for everyone as derivative products may be considered as high risk. Please ensure that you understand the risks involved. A Product Disclosure Statement can be obtained here and should be considered before trading with us.

Vishal R

September 30, 2021

  • Reading time: 6 mins
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