Bitcoin, BTC/USD, Crude Oil, RBA, Technical Outlook – Talking Points
- Bitcoin prices gain as markets shift to risk-on tone after US markets start Q4
- The Reserve Bank of Australia looks ready to deliver its last 50-bps cycle hike
- BTC/USD primed to attack key technical levels as prices and RSI move higher
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Tuesday’s Asia-Pacific Outlook
Wall Street stock indexes moved higher overnight, the US Dollar dropped and risk assets like Bitcoin moved higher. The Institute for Supply Management’s latest purchasing managers’ index (PMI) for the United States manufacturing sector showed that prices paid by firms bell in September. The ISM’s prices paid index crossed the wires at 51.7, down from 52.5 in August. That suggests easing inflation pressures that may weigh on Fed rate hike bets.
The benchmark S&P 500 closed 2.59% higher, led by its energy sector, which posted an impressive 5.81% gain. WTI crude and Brent crude oil prices rose after rumors of a possible OPEC+ production cut circulated around markets. The oil cartel meets in Vienna later this week when it is speculated that the group will announce a 1 million barrel per day (bpd) production cut.
The Reserve Bank of Australia’s interest rate decision is due to cross the wires at 03:30 UTC. The consensus expects a 50-basis point rate hike at today’s meeting, according to a Bloomberg survey of economists. Cash rate futures are pricing in a 62% chance that will happen. However, after this meeting, expectations start to lean towards smaller rate hikes, which could weigh on the Aussie Dollar as the Fed appears relatively hawkish and earlier in its hiking cycle.
Elsewhere, Chinese markets are mostly closed for the National Day Golden Week holiday. The USD’s risk-on decline is a welcome development for China, given that the offshore Yuan is vulnerable during this period. The majority of bank forecasters see the Yuan continuing to weaken throughout the rest of the year despite China’s recent measures to control the currency’s slide. South Korea is set to report PMI data for September.
Bitcoin Technical Outlook
Bitcoin prices joined the overnight rally, with BTC/USD gaining around 2.5%. A zone of support around 18,000 to 19,000 has supported prices since June. A break higher may occur as the Relative Strength Index (RSI) approaches its center line on the daily timeframe. A break higher would target the 20,000 psychological level and the 50- and 100-day Simple Moving Averages.
BTC/USD Daily Chart
Chart created with TradingView
— Written by Thomas Westwater, Analyst for DailyFX.com
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