Another week comes to an end & as usual we have lots to talk about… the blood rush, the hype & the craziness subsides… well at least partially, since the Cryptos never stop. Let’s take a look at the broader picture at what happened in the financial markets last week.
The Crazy Cryptoverse
After a good April with the resurgence in the digital coins/assets most of them retreated from significant resistance levels to flip the biases mildly to the downside again on Friday, although it remains to be seen whether this is end of the current rebound or just another pull back before the next leg up. Failure of Bitcoin to penetrate the Psychological $10K barrier was the highlight of the price movements last week & will be the key level to watch going forward.
Looking the CCI30 Index fund we can see a nice bounce off the April lows & the MT bullish trend line is in tact as long as the support level around 5900 level holds. One thing that the Crypto investors should take comfort in is that the LT term Uptrend is secure & the ST break of the trend line in April is another healthy sign. The key level to watch would be that aforementioned support level.
Here are some of the key headlines from the Cryptoverse last week:
- Highly anticipated Casper update for Ehtereum was finally released
- Paycent added Dash support to its popular App
- Bloomberg launches Crypto Index
- Ethereum futures were launched on a UK trading platform
Let’s talk about the most liquid market of the world. The resurgence of the Greenback has been the headline but one thing that doesn’t fall in line is that the USD & Oil both rising in tandem since they have had an inverse relationship historically so when once goes up the other goes down. At some point this will fall back into place.
Looking at the Dollar Index (DXY) the recent meteoric rise in the Greenback seems primed for a pullback at this point to the support level around the 91.80 region but as long as this support level holds we should expect a bounce back to the to the 94.10 resistance level in the next leg up.
Looking at the USD Majors last week the biggest move came in USDCAD where it failed to penetrate the psychological barrier of 1.3000 & the subsequent impulsive fall from there confirms a temporary top is in place, the volatility expected to continue with the expectation of NAFTA news expected next week. EURUSD & GBPUSD stay firmly pegged in the bearish territory with technical rebounds on Friday while the commodity duo of AUDUSD & NZDUSD rebounded from their weekly lows as well. Direction determining USDJPY is consolidating below the psychological level of 110.00
The US equity markets staged a smart rebound with 7 days of consecutive gains to substantially subside the fears of an impending bear market. There were quite a few factors contributing this resurgence… Solid Q1 earnings with Techs leading the way, Oil’s surge giving a bump to the energy sector, muted inflation numbers meant less hawkish Federal Reserve on interest rate hikes & finally the VIX closing to its lowest since January 26th have all given a boost to the raging bulls who have once again taken control of the helm.
Looking at the S&P 500 chart it is clear, at least for now, that higher lows have started a new up-leg with the immediate support residing around 2685 which should act as rebound level as long as it holds. Also the 9EMA crossing the 20 & 50EMA is a healthy sign for the index to continue to grind higher.
The picture looks good in the ST but long the price action & Geo political risks would determine the LT direction going forward with the China-US trade war worries & the after shocks of the fallout from the Iran Nuclear deal. On the lighter side of things here is a comic about the sky rocketing prices of oil last week.
Before wrapping up the blog as usual, some interesting fun facts from history this past week (#Investopedia):
May 7, 1998: American automaker Chrysler merged with the German parent of Mercedes, Daimler-Benz to form DaimlerChrysler in a $36 billion deal. But the union was plagued by financial losses and less than a decade later Daimler sold its stake in Chrysler.
May 10, 1965: Warren Buffett gained a controlling interest in Berkshire Hathaway Inc., a struggling New England textile maker. While initially trying to maintain the company’s core business of textile, Buffett expanded the business into a sprawling conglomerate.
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(FX, Cryptos & Stocks), stats & news on a daily basis on Twitter & StockTwits — “Trade Nut” signing off!