Strengthening US Dollar Creates Pressure on Bitcoin and Other Assets
FXOpen
On Wednesday morning, the dollar index exceeded the high of April. The two following factors contributed to the strengthening of the USD:
→ Growing drama with public debt. Yesterday it became known that President Joe Biden and a senior Republican in Congress, Kevin McCarthy, are close to an agreement to raise the US national debt ceiling, but the decision has not yet been made. Goldman Sachs expects the US Treasury to run out June 8-13. And JPMorgan, Bank of America and Citigroup Inc executives say the damage to US business and the economy will begin long before a technical default. Investors see cash as a safe haven in case of default.
→ Strong retail sales data released yesterday. Core Retail Sales was +0.4%, while the values for the previous two months were negative.
The strengthening US dollar led to a fall in the exchange rate against the USD, to a decrease in the price of gold, as well as bitcoin.
As the bitcoin chart shows today, the price is gradually declining along the median line of the descending channel (shown in red). Level 27,300, which previously served as support, is now resisting (shown by the arrow). If the trend continues, the price of bitcoin may reach the lower line (1) of the ascending channel that has been in effect since the beginning of 2023.
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This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
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