Donald Trump became the first US president to be impeached twice after the House officially cast their votes. He is only one of three US president to be impeached although, as of yet, none were actually removed from office. Republican leader Mitch McConnel said the senate trial will “begin next week”. Democrat leader Chuck Schumer said it will be “after the 19th” which would indicate Wednesday at the earliest. If so, Democrats will rule the senate and likely remove Trump from office, even though Joe Biden is inaugurated on Wednesday. Yet the move could prevent Trump him running for office in future. So, it all comes down to what date the senate trial is held as to whether Trump will be removed from office or not.

Volatility was mostly contained overnight. But this was almost expected given the lack of market-moving calendar events scheduled. US CPI remained at 1.6% YoY, but even if it did rise there’s no expectations for the Fed to respond as they will allow inflation to rise above 2% and not change rates.

The US dollar was the strongest major, yet trade remained mostly within Tuesday’s range on the dollar index. Commodities were mostly lower upon the stronger greenback, but again, volatility (or lack of) made it a non-event.

Cryptocurrencies enjoyed most of the action with bitcoin (BTCUSD) breaking to a new cycle high and gaining 7.5% by the close. Ethereum (ETHUSD) and XRP (XRPUSD) were also higher by 4.6% and 3.2% respectively.

Today’s Calendar Events (Times are GMT+11 Sydney)

Indices and AUD pairs could be sensitive to China’s trade balance data. A rise in exports would generally be bullish as it shows international demand for Chinese products. Conversely, weaker exports could be bearish for these assets – as long as the numbers catch traders by surprise with a large deviation relative to expectations or prior numbers.

Bitcoin (BTCUSD): Correction Over?

Bitcoin produced a bullish engulfing day yesterday, which is also part of a 3-bar bullish reversal (morning star reversal). The 10-day eMA continues to provide dynamic support on the daily chart, and the corrective low appears to be at 30,256.

Switching to the one-hour chart shows that a higher low has formed at 32,270 and prices have now broken to a new cycle high to suggest a bullish trend is underway. Of course, we won’t know for certain if this is the beginning of a new trend or simply part of a complex correction until prices break higher. But trend traders will no doubt take notice of its potential to retest and break to new highs.

• The bias remains bullish above the 34,000 swing low. A break beneath this level strongly suggests bitcoin remains within a complex correction.
• Bulls could seek bullish setups upon a retracement towards the 10-20-period eMA’s.
• The 138.2% and 161.8% Fibonacci projection ratios land around the 42,000 record high, making it a viable target for bulls.

EUR/USD: 1.2130 Support Remains Key

EUR/USD traded to its highest level since April 2018 earlier this month. Yet a bearish hammer and bearish pinbar appeared on the weekly chart at the highs to warn of a potential correction, which is now underway to favour bears.

We can see on the hourly chart that a strong bearish trend developed once its broke its bullish trendline. And whilst prices found support at 1.2130 before bouncing higher, bearish momentum has returned once more and brings the 1.2130 support level back into focus. And as RSI is not yet oversold, we see potential for support to break.

• The bias is bearish with a break beneath 1.2130 support. Yet if this level holds, bulls can consider bullish setups above this key level.
• Next major support is around the 1.2060 lows, making it a viable target for bears.

DAX 30 (DE30): Compression Just Below Record Highs

The daily chart remains in an established uptrend and the 10-day eMA is providing dynamic support. Support has been found at the previous record high of 13,827 and two small candles at support show compression is underway. Specifically, we have seen two consecutives inside candles. The reason we like to see compression on candles is that it usually indicates volatility will return. And given the trend points higher, the bias is for a bullish breakout from compression.

• A break above yesterday’s high confirms a breakout form compression and assumes a retest (and hopefully break of) record highs.
• A break beneath 13,827 invalidates the bullish bias.