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Brent crude, EUR/USD and Bitcoin all advanced into the new week, what to expect next?


MongiIG

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Brent crude price hit their highest level in two months and moved toward the yearly high; the EUR/USD advanced ahead of the ECB meeting and Bitcoin showed a preliminary sign of bottoming out and a likely bullish trend reversal.

1654049084657.pngSource: Bloomberg
 
Hebe Chen | Market Analyst, Melbourne | Publication date: Wednesday 01 June 2022 

The risk-back-on sentiment advanced into the new week as the market turned a new page and put aside fears about recession and tighter monetary policy. Stocks in Asia unanimously advanced on Monday after Wall Street had its best week since November 2020.

The commodity market was also boosted by demand as China eased some virus curbs to roll out a raft of measures to support its lockdown-strapped economy. The next big event could come as soon as today with Australia’s March quarter gross domestic product data to be released. It is anticipated to grow at 0.6%, or 2.9% on a year-over-year basis during a time overshadowed by the omicron wave and heavy flooding on the east coast.

Brent crude oil

This week, Brent crude hit its highest level in two months as the European Union (EU) met to discuss further sanctions against Russia and better alternative sources for oil and gas.

At the moment there are more tailwinds to the energy market, including the persistent fear of war, a brighter economic outlook, and a softer dollar.

Based on the daily chart, Brent crude oil prices have successfully breached a massive resistance level for the fourth try and now move towards the gap left from the March hike. Should this zone of resistance be filled, the price is ready to challenge the year's peak. Support can be found from the previous pressure level near $114 followed by the psychological $110 level.

1654049329329.JPGSource: TradingView

EUR/USD

European bonds tumbled this week after Germany reported hotter-than-expected inflation numbers at 7.9%. The new print comes ten days before a crucial ECB meeting where officials are set to confirm plans to raise interest rates in July. Boosted by the prospect of a rate rise in more than a decade, the EUR/USD jumped up more than 4% over the past two weeks.

Currently, the price is following the ascending trend line, connected from the past two weeks low. A clear and convincing break above the 50-day simple moving average will likely send the price to the next challenge level around 1.079 before moving close to 100-day moving averages. On the flip side, the price should find the support at 1.0724 if a short-term breath occurs, as suggested by the RSI indicator.

1654049344434.JPGSource: TradingView

Bitcoin

The risk-on rally across the equity market has spilled over into the cryptocurrency world. Bitcoin added more than 8% last week, the most in two weeks and is currently trading above $31k.

According to the daily chart, a clear break-out and a likely bullish trend reversal can be seen as a preliminary sign of bottoming out. The next major resistance area is critical for the medium-term trend as failure around it would bring the price back to the current trend line. The imminent pressure level, which comes from the January low, is expected to release intense selling pressures at around $33082. Once this hurdle can be clear, a long-overdue rally for the most popular coin should be on the cards.

1654049376272.JPGSource: TradingView

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