TGIF… and we are back to reviewing the week in Cryptos, Forex & Stocks. Just in case you are wondering why do I have get myself swamped with all 3 markets there is a good reason for it — well at least I think so! Forex is how I got into trading world 11 years ago where most of my trades were based on technical analysis, transitioning into Stocks was just natural & well an integral part of my current job at Tradealike. Cryptos are a passion for me since they quench my thirst for the technology aspect while at the same time complimenting my financial background & trading experience. OK, enough about me, before you get bored any further let’s get back to business. Cryptos continued to move higher after a brief consolidation, Greenback trampled it’s counterparts in the FX markets & US Stocks are still in the indecisive zone.
The Crazy Cryptoverse
If there is one word that could describe the nature of the #Cryptoverse — it would be speculative. I mean looking at the astronomical rise of the digital coins a few months ago followed by more than 50% drop & now the resurgence again basically had no fundamental factors contributing to the volatile price movements. Take for example the recent rebound which was attributed to the passing of the US tax deadline by some, others speculated about institutional investors getting in on the Cryptos, while still others foresaw an oversold position in the Alt.coins to have caused this short squeeze. Whatever the case maybe they did come back and I will just stick to reading the charts on a technical basis since that’s the only way I know how to trade.
Although the acceptance of the underlying Blockchain technology on which the Cryptos function has been much more widespread than the digital coins themselves; it bodes well for their acceptance nonetheless. A prime example of this was the Spanish bank BBVA, which became the first financial institution internationally to issue a loan using the Blockchain. ICOs continue to be launched at breath taking pace despite all the regulations & bans. And finally we have a new decentralized exchange AirSwap which launched on Wednesday & handled business worth $1M on Thursday. There were, however, some bad news as usual — where two exchanges Poloniex and OKEx, temporarily suspended ERC20 token deposits (based on Ethereum network) after a software bug was found in some of the ERC20 tokens. ERC20 tokens affected so far, according to reports: MESH, UGToken, SMT, SMART, MTC, FirstCoin, GG Token, CNY Token, and CNYTokenPlus.
Looking at the numbers how Cryptos fared this week— Total Marketcap appreciated to $417 billion from $382 billion at the time of writing with the BTC dominance dropping a little further to 37.5% from 38.0%. Below is a list of some of the key levels in the Top 5 Cryptos followed by some of the other News makers in the Cryptoverse this week.
BTC (MT neutral, ST bullish) — R1:$10000 R2:$12000 S1:$8400 S2:$7400
ETH (MT neutral, ST bullish) — R1:$700 R2:$800 S1:$600 S2:$535
XRP (MT neutral, ST bullish) — R1:$1.08 R2:$1.20 S1:$0.71 S2:$0.55
LTC (MT neutral, ST bullish) — R1:$175 R2:$195 S1:$137 S2:$110
BCH (MT neutral, ST bullish) — R1:$1625 R2: $1790 S1:$1150 S2:$930
USEFUL CRYPTO RESOURCES:
INFO GRAPHIC OF THE WEEK:
Greenback was on a roll this week breaking a year long downtrend as evident on the Dollar Index chart on the back of US 10 year yields touching 3.0% (first time since 2014) — although the yields had receded to 2.96% at the end of the week, they still are at elevated levels. The dollar run might get a new life with the FOMC rate decision & NFP numbers due next week. On top of that if the equities rollover, the safe haven cash flows would also benefit the mighty Dollar.
Looking at some of the major moves of the week apart from the fact that USD bulldozed its counterparts, was the Pound’s fall from grace. Worse than expected GDP numbers out of UK precipitated the massive decline with the pair hitting fresh lows of 1.3756. This might translate into a MT trend reversal & accelerate losses with the fallout from the BREXIT finally beginning to show up. The single currency Euro didn’t fear too well either hitting a weekly low of 1.2056 before a smallish technical rebound to end the day & week. The larger trend remains strongly bearish in Euro & the commodity currencies against the Greenback. Talking about commodity pairs (USDCAD, AUDUSD, NZDUSD) can’t seem to catch a break from the weakness against USD, while some technical rebounds might be seen in these pairs before important data releases later next week, USD seems to have a strangle hold for now.
Looking at the Dollar Index chart USD has made a clean technical breakout of the 91.00 level which we were following for the past few weeks. The MT trend reversal seems to be taking shape with the ST sentiment turning bullish moving in a channel. USDJPY, which is a benchmark for Dollar moves also stays bullish with the higher yield story but gains have been capped for now with the anemic equities to end the week.
RESISTANCE/SUPPORT PRICE LEVELS OF MAJOR FX PAIRS:
EURUSD (Euro, MT neutral, ST bearish) S3:1.1908 — S2:1.2023 — S1:1.2064 R1:1.2178 — R2:1.2251 — R3:1.2366
USDJPY (Yen, MT neutral, ST bullish) S3:108.56— S2:108.92— S1:109.14 — R1:109.49 — R2:109.64 — R3:109.99
GBPUSD (Pound, MT neutral, ST bullish) S3:1.3729— S2:1.3832 — S1:1.3873 — R1:1.3977 — R2:1.4040— R3:1.4144
USDCAD (Loonie, MT neutral, ST bullish) S3:1.2730— S2:1.2795 — S1:1.2834 — R1:1.2899 — R2:1.2925 — R3:1.2990
AUDUSD (Aussie, MT bearish, ST bearish ) S3:0.7479 — S2:0.7521 — S1:0.7538 — R1:0.7580 — R2:0.7606 — R3:0.7649
INFO GRAPHIC OF THE WEEK:
Busy week in the US equities with the earnings season in full swing with the big techs reporting earnings from Q1 and the good thing was that majority of the companies posted Earnings which beat expectations comfortably but the reaction to these earnings has been muted to say the least as reflected in the Major indices. Companies like Intel & Caterpillar issued cautious optimism with warnings of earning peaks which lead to sell offs in these big names dragging the market after initial knee jerk reaction of euphoria fizzled out.
Even the FAANG stocks’ better than expected earnings couldn’t lift the market as these Tech stocks rolled over on Friday. The most anticipated earnings were of social media giant Facebook which has been plagued with the recent data leaks scandal — and boy did it come back with a bang! It jumped more than 10% on earnings & upbeat guidance & revenue increase proving all the bears wrong who were painting an end of time story for FB.
Now for the worrisome part, the kind of rebound that was being expected after the earnings hasn’t shown up — as yet. The 10 year treasury yield hitting 3% is a major concern for the markets and with the US GDP showing continued strength, the FOMC might continue on the path of upward trajectory for the interest rates which all adds up to weaker Equities. There has been a big positive development, however, on the Geo political front with the Korean issue moving towards a possible resolution but than again this can very well be offset by the US-Iran nuclear deal fallout. So Let’s keep our fingers crossed… and let the market decide!
Looking at the S&P 500 chart below, we are back in the No Man’s territory with the index closing lower for the week albeit after creating a higher low — will third time be the charm? Also if you notice Friday’s close was on lower volume than the previous move up. The closing weekly numbers for the 3 Indices were as follows:
DOW (-0.90%), S&P 500 (-0.20%), NASDAQ (-0.70%)
Finally, a little note about the IPOs priced & filed this week. ALZHEON, INC. (ALZH), SMARTSHEET INC. (SMAR), DOCUSIGN INC. (DOCU) & GOOSEHEAD INSURANCE, INC.(GSHD) priced their IPOs while EVO Payments (EVOP) filed for an IPO — The payments processor plans to raise up to $100M in the share offering.
INFO GRAPHIC OF THE WEEK:
USEFUL STOCK RESOURCES:
Before wrapping up the blog as usual, here’s an interesting fun fact from history this past week (#Investopedia):
April 25, 1991: The Business Cycle Dating Committee of the National Bureau of Economic Research declared that a recession had started the previous July. The recession was triggered by an oil price shock started by the Gulf War and lasted around 8 months.
Until next week, you can follow me on TradeAlike app (@Fakd) to receive real time alerts on Forex & Stocks. I also post my trade ideas, stats & news on a daily basis on Twitter & StockTwits — “Trade Nut” signing off!