Bitcoin Hurt by Big PPI Print
The left chart below shows BTCUSD's daily time frame. Its heiken ashi candle is red and inside of the weak area, between the lower blue and red bands. The daily stochastic is below 20 and indicative of bearish momentum. The right chart is BTCUSD's hourly time frame. The stochastic has turned down and the EMAs are threatening to cross bearishly (aqua ellipses). If they succeed, it will be negative for the cryptocurrency. However, if the hourly stochastic moves towards 20 and the EMAs develop angle and separation to the downside, there is a good chance of downwards momentum accelerating. Given Friday's strong consumer inflation numbers, today's PPI and core PPI have added fuel to the fire, coming in at 0.8% m/m and 0.7% m/m respectively. Both prints beat consensus convincingly and are likely to be dollar supportive. Given that the USD is the denominator of the BTCUSD ratio, this is likely to act as a further drag on the cryptocurrency.
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Russell Shor
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.
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