Gold edges up and bitcoin roar back towards $40,000 (With Trading Strategy)

Gold rose on Friday as U.S. President-elect Joe Biden unveiled a massive stimulus plan, while U.S. Federal Reserve Chair Jerome Powell's commitment to keep monetary policy dovish further boosted the metal's appeal.

The spot gold rose 0.34% to 1852.16 per ounce by 15:50(GMT+8).

Biden unveiled a $1.9 trillion stimulus package proposal on Thursday designed to jump-start the economy and speed up the U.S. response to the coronavirus pandemic.

President-elect Joe Biden on Thursday unveiled the details of a $1.9 trillion coronavirus rescue package designed to support households and businesses through the pandemic.

The proposal, called the American Rescue Plan, includes several familiar stimulus measures in the hope the additional fiscal support will sustain U.S. families and firms until the Covid-19 vaccine is widely available.

Here's what Biden calls for:

1. Direct payments of $1,400 to most Americans, bringing the total relief to $2,000, including December's $600 payments

2. Increasing the federal, per-week unemployment benefit to $400 and extending it through the end of September

3. Increasing the federal minimum wage to $15 per hour

4. Extending the eviction and foreclosure moratoriums until the end of September

5. $350 billion in state and local government aid

6. $170 billion for K-12 schools and institutions of higher education

7. $50 billion toward Covid-19 testing

8. $20 billion toward a national vaccine program in partnership with states, localities and tribes

9. Making the Child Tax Credit fully refundable for the year and increasing the credit to $3,000 per child ($3,600 for a child under age 6)

The plan is the first of two major spending initiatives Biden will seek in the first few months of his presidency, according to senior Biden officials.

The second bill, expected in February, will tackle the president-elect's longer-term goals of creating jobs, reforming infrastructure, combating climate change and advancing racial equity.

With the U.S. economy still far from its inflation and employment goals it is too early for the Federal Reserve to discuss changing its monthly bond purchases, Powell said on Thursday.

The number of Americans filing first-time applications for unemployment benefits urged last week, confirming a weakening in labor market conditions with a worsening COVID-19 pandemic.  

America will be in uncharted territory when the U.S. Senate meets as soon as next week for the second impeachment trial of Donald Trump, after the House of Representatives impeached Trump on Wednesday on charges of incitement one week after his supporters rampaged in the Capitol.   

The price of the top cryptocurrency hit an all-time high of nearly $42,000 less than a week ago before quickly falling back to around $30,000 -- more than a 20% plunge. But it has roared back in recent days and is once again trading just shy of $40,000.

The bitcoin fell 1.03% $38361.0 by 15:50(GMT+8).

The drastic shifts illustrate just how volatile bitcoin has become, and suggests that bitcoin (XBT) investors hold on tight for what could be a bumpy, if ultimately profitable, rise.

"The only thing I can expect for sure is volatility," said David Yermack, a professor of finance at New York University Stern School of Business. "From day one, this has been a risky investment for people."

Bitcoin has seen both astronomical growth over the last decade and major selloffs at various points in between. Although many bulls point to its past performance as a sign that the cryptocurrency will continue to surge in the future, that might not happen, according to Yermack.

"It's a purely speculative asset," he said, adding that while bitcoin has grown in popularity, it's still not considered a mainstream investment, meaning that many have little information about the asset.

Trading Strategy (source: Trading Central)

Pivot: 1857.00

Our preference: short positions below 1857.00 with targets at 1836.00 & 1827.00 in extension.

Alternative scenario: above 1857.00 look for further upside with 1864.00 & 1871.00 as targets.

Comment: as long as the resistance at 1857.00 is not surpassed, the risk of the break below 1836.00 remains high.

Supports and resistances:

1871.00

1864.00

1857.00

1851.00 Last

1836.00

1827.00

1815.00

Our pivot point stands at 38718.

Our preference: the downside prevails as long as 38718 is resistance.

Alternative scenario: above 38718, look for 39704 and 40292.

Comment: the RSI is below 50. The MACD is below its signal line and negative. The configuration is negative. Moreover, the price stands below its 20 and 50 period moving average (respectively at 38825 and 38813). Finally, the Bitcoin / Dollar is trading below its lower Bollinger band (standing at 37842).

Supports and resistances:

40292 **

39704 *

38718 **

38330

37791 last

36398

35817 **

Guideline for Trading Central strategy 

Trend chart reading guideline

1. First look at the time period in the upper left corner of the chart: ·30MIN and 1H chart shows the trading suggestions for intraday ·Daily chart shows the market trend analysis in next 2-3 days

2. The blue horizontal line on the chart marks the pivot: pivot indicates the reversal of the market. When the price is above the pivot, it indicates an upward trend, when the price is below the pivot , it indicates a downward trend. When the price breaks through the pivot, the trend is reversed.

3. The red and blue thin curves in the Candlestick chart chart are technical indicators: Red line is MA20+Bollinger bands, Blue line is MA50. under the Candlestick chart chart are also the technical indicators: Blue line is RSI, Red line is 9MA;

4. The green horizontal line is the resistance level for a price increase, and is also the profit target for long orders; the red horizontal line is the support level for a price decrease, and is also the profit target for short orders.

How to use TC strategy？

1.[Pivot] is the reversal line of the market trend. When the price up the pivot line which means in Bullish, you can open a long position or Buy. on the contrary, when the price under pivot line which means in bearish. You ‘d better make short positions or Sell. 

2. [our preference] is the main trading suggestion for your reference. You can exit your trading refer to this target or close positions before it.

3. [Alternative scenario] is the plan B for your reference. 

4. [Comment] is the technical analysis of market trends and technical support for trading strategies. 

5. [Supports and resistance] Supports are levels where the price tend to find support as it falls.

Resistances are levels where the price tend to find resistance as it rises. So, exit before the trend reverse.