It’s that time of the week when I look at the all my notes of the past week & try to make sense of it all and more importantly make sense of it for you. A quick note before I move forward – just started a new Telegram group by the name of Cryptos.Forex.Stocks where you can join using this link if you have any questions related to theses topics. Moving on the business order of the day… Cryptos continued to weaken, Equities showing signs of lethargy while the Greenback takes a breather from the bull run.
The Crazy Cryptoverse
The digital coins remained subdued & under pressure all week with most people fearing further losses before an actual bottom hits. Bad news is technical picture still bearish however at the time of the writing this there was a bounce in Bitcoin and the Alt.coins – how sustainable is the bounce will probably be known in the coming days. The bounce of BTC from the significant technical support level of $5800 to $6500 suggests the cryptos might be in search of a bottom – again time will tell if turns out to be the case. June has been a major milestone for Cryptos with quite a few Mainnets going live – you can read All about it in my recent article.
Looking at the Bitcoin hourly chart above you can see the significant bounce I was talking about earlier with which the crypto kingpin has landed in the neutral bias resistance zone ($6300-$6500). Clearing of this zone convincingly would be first sign towards bottoming however rejection here could extend the chopping bearish consolidation but price will remain supported as long as the support @ $5800 is not penetrated. The CCI30 Crypto index value sits @ 5334.69 from 5396.40 last week with falls of 64.70% and 27.94% for YTD and MTD respectively at the time of writing. The MarketCap for Cryptos however improved marginally to 256.8 billion this week from $253.1 billion last week with that bounce yet the BTC dominance climbed to 42.7%
Time to give you a doze of what mattered in the Cryptoverse last week:
- Tron Celebrates Its Independence from Ethereum on 06/25 moving to Genesis block
- Alibaba Offshoot Trials First Blockchain Remittance to Philippines, Plans Global Expansion
- Facebook allows cryptocurrencies to once again be advertised, while keeping its ban on the promotion of ICOs and binary options
- Zcash Successfully Activates Overwinter, the First ZEC Hard Fork
- TaTaTu Hosts the World’s Third-Largest ICO, Earns Over $500 Million
- Binance Launches First-Ever Fiat-Crypto Exchange in Uganda
- Huobi Partners With JD Cloud to Explore Blockchain Tech Applications
Look at the exponential growth of ICOs in the last 5 years with this info graphic
The most liquid markets in the Financial world saw a tug of war between the USD & its counterparts with technical rebounds taking shape in the Majors. Next week is heavy on the Economic calendar with a sleuth of economic data headed our way. The most important will be the FOMC minutes, NFP release & Trade balance out of U.S., employment numbers from Canada & RBA cash rate decision from Australia. Needless to say we will be seeing some volatility in the USD crosses.
Looking at the Dollar index chart the 93.20 level continues to provide a strong support with the bounces off this level. A bullish channel is taking shape with the index standing tall just below the previous high of 95.53 a penetration of which would target 96.30. A rejection here would extend the consolidation but as long as the confluence of the support & bullish trend line holds the price level should stay constructive to the upside. Significant moves were seen in EURUSD which bounced from a low if 1.1527 reached earlier to close @ 1.1682 while GBPUSD which bounced from a low of 1.3055 to close @ 1.3200. USDCAD finally seems to be carving a temporary top after extended choppiness this week closing @ 1.3132 after hitting a high of 1.3385 earlier.
The following info graphic shows you the biggest FX remittances by U.S immigrants to their home countries:
A few News makers from the FX markets to end the section:
- Emerging-market currencies’ bad run continues, with India’s rupee falling to an all-time low against the US dollar
- The slump in the Yuan is igniting fears over China’s economy, as policy makers seem less willing to halt the currency’s decline amid the trade battle with the U.S. The yuan slipped to a fresh six-month low against the dollar, as the central bank allowed the the biggest one-day weakening in the currency in percentage terms since January 2017.
- Iran is planning to establish a secondary market for foreign exchange to help get around a dollar shortage that has hurt trade and is likely to worsen as U.S. sanctions resume. According to Iranian Central Bank Governor Valiollah Seif, the market will allow exporters of non-oil commodities to sell their foreign currency earnings to importers of consumer products.
Global equities continued to plummet amid growing Trade tension concerns while the U.S equities wavered between hope & despair closing on a positive note on Friday but with a weekly loss. While the U.S. government tried to downplay the trade tensions the investors sentiment will remain jittery at best going forward. EU, China & Canada have all responded with their counter tariff moves in response to the U.S onslaught. Of course this does not bode well for the global economy which is already teetering from a slowing China whose stocks have plunged more than 20% from the January high thus officially entering a bear market.
Taking a look at the S&P 500 Index the bullish trend line that we were seeing holding off last week has caved to a corrective move downwards with a bearish channel taking shape. A wider range of 2680 (support) & 2790 (resistance) is in place. The whole rebound from April this year would look threatened if this support caves however a rebound may extend the consolidation within this range. Looking at the weekly numbers from the Major global Indices were all flashing Red:
U.S. — DJIA (-1.26%), S&P500 (-1.33%), NASDAQ (-2.37%),
Europe — FTSE100 (-0.59%), DAX (-2.18%), CAC 40 (-1.19%)
Asia — Nikkei 225 (-0.94%), BSE Sensex (-0.75%), Shanghai 50(-4.02%)
The info graphic below shows you why OPEC members never agree on Oil Prices
Here’s what mattered in the Equity markets last week:
- Ebang Communication, one of the largest Bitcoin (BTC) mining hardware manufacturers in China, has filed an application for an initial public offering (IPO) with the Hong Kong Stock Exchange (HKEX) today, June 25.
- Copart will be joining the S&P 500 prior to the open on July 2. The provider of online auction and vehicle marketing services will replace Dr Pepper Snapple, which is in the process of merging with Keurig Green Mountain and will no longer be eligible for inclusion in the S&P 500 following that transaction.
- The debt load for U.S. corporations has reached a record $6.3T, according to S&P Global, as Wall Street investors brace for a stricter rate environment even as cash hoarding reaches a peak. The good news is that U.S. companies have a record $2.1T in cash to service that debt, however most of that cash is in the hands of a few giant corporations.
- BJ’s Wholesale Club has priced its IPO at $17 per share, the upper end of a previously indicated $15-$17 range. While the company said it sold 37.5M shares, raising net proceeds of $637.5M, with 126.3M shares outstanding, the warehouse club chain is valued at $2.15B. BJ’s, which competes against Costco (NASDAQ:COST) and Walmart (WMT), started trading on the NYSE on Thursday under ticker symbol “BJ.”
And finally a couple of fun facts for you from last week in history (#Investopedia):
June 27, 1871: The New Currency Act established the yen as the official currency of Japan, modeling the European system and modernizing the economy. It was brought about by the Meiji Restoration, in which Tokugawa shoguns were removed to modernize Japan.
June 26, 1934: U.S President Franklin D. Roosevelt signs the Federal Credit Union Act with the purpose of making credit available via a national system of cooperative and nonprofit credit unions.
Time to wrap it up folks with this comic depicting China’s woes. Happy Trading!