Last Chart Art of 2021 and today we’re checking two top dogs in their space: Cable (GBP/USD) and Bitcoin (BTC/USD)!
Will Cable bears see the bounce as another selling opportunity? And with bitcoin testing a crucial area of technical interest, will the selling end or will the downtrend continue in 2022?
GBP/USD: Daily
Cable bears must’ve loved 2021 because after two failed attempts to break above 1.4200 earlier in the year, it’s been a one-way ride lower since May.
The move lower how been pretty choppy though, which actually has been a pretty good thing for shorter-term traders to actively take profits with every dip, add to shorts on every bounce.
And today it looks like another potential trading opportunity may be in the works as the bulls have bulls have taken GBP/USD up from the recent 1.3200 lows, now testing the 1.3500 major psychological level.
With the pair now entering previous broken swing low territory (and with stochastic signaling overbought conditions), we’re throwing GBP/USD on the watchlist as a potential longer-term short play as this area up to the falling 200 simple moving average may draw in both counter-trend profit takers and longer-term bears if bearish reversal patterns appear in the new year.
BTC/USD: Daily
Bitcoin and the rest of the crypto space have been feeling the pain since topping out in November, with BTC/USD falling more than 30% since hitting $69,000, now trading around $47,000.
This pullback is not an unusual market move for the king of crypto, and relative to previous big dips, it’s actually quite tame (we saw a 55% dip earlier in May). So, the odds are that the recent uptrend still hasn’t been invalidated, and that there may be technical bulls eyeing the dip as a potential buying opportunity.
On the daily chart above, we can see that the market is now testing a rising ‘lows’ pattern and the 200 simple moving average. These area tend to draw in technical traders, which is likely why we’re seeing a battle for direction between $46,000 – $50,000.
Considering that there is a quasi-bullish divergence pattern between price and stochastic marked above also in play and that the current trend is higher, odds favor the bulls at the moment and that a sustained break above $50,000 is the area to watch before considering a long position.
Of course, if we see a sustained break below $46,000, then that arguably invalidates the current trend, which could draw in more sellers in the short to medium term.
