Let’s start off with reviewing the financial markets briefly before discussing the bigger & more meaningful moves. Cryptos which have had a meaningful rebound recently slipped a little bit this week but generally held up above support levels over the lows. Bitcoin, the Crypto kingpin, however, has given up the most gains & lacks conviction with the recent up move. I am saying this since general sentiment in the Crypto markets is defined by the price movements in Bitcoin. BitcoinCash & Ripple saw the biggest gains among the top digital coins. There was apparently no catalyst behind Ripple, but BitcoinCash has been gaining significantly on the back of the upcoming hard fork on November 15. Keep an eye out for that. Let’s look at the chart (hourly) for Bitcoin to get some insight. As long as the support zone of $6380-$6430 holds, BTC should stay constructive.
Moving on to a couple of interesting developments in the Cryptoverse which caught my attention this week. Hoping to cover more on these projects going forward.
VersaVault – A Canadian Fintech startup, VersaBank, which had launched their flagship product in January 2018 has announced that the “digital vault” has come out of beta testing and is ready for deployment. This digital vault offers secure storage for all your digital assets on servers spread across the globe in different geographical locations. Also the “online only bank” would neither be able to access the vault or know the contents of this storage. Technical specifications or the actual date of release have not been released yet. Lichtenstein’s Bank of Europe had announced a similar Cryptocurrency cold storage of funds earlier in the year.
MultiVAC – A scaling focused blockchain platform has claimed that it has successfully implemented the “sharding” solution more popularly known for its inclusion in the Ethereum 2.0 upgrade (Serenity). Sharding is a technology which basically splits the workload in a blockchain to different nodes simultaneously thus offering higher scalability. MultiVAC reported 30,784 transactions per second (TPS) using 64 shards or 533 TPS/shard.
U.S stocks ended the week on a high note although tech sector looked anemic on growth concerns. October was a brutal month for the U.S markets, keeping up to its reputation. The trajectory moving forward will be determined by FOMC rate hikes, Earnings & Growth prospects specially in the tech sector. However, the alarming story was the price fall in Oil which dropped to below $60/barrel falling the most in 34 years – down 21.8% from its four-year high on October 3. It is now officially in the bearish territory. There were numerous factors which precipitated this move. Slowing global economy with soaring U.S production (11.6M bbl/day) and a temporary reprieve from U.S sanctions to some of the biggest buyers of Iranian Oil have caused an Oil glut. Long-term, I remain strongly bearish on the commodity as the world continues to move towards sustainable & renewable technologies. A look at Oil’s chart before moving on. While a technical rebound back up to $64.00 is still a possibility, the strong declining momentum dictates for further losses.
Finally let’s talk about some Forex moves. U.S Federal Reserve (FOMC) held the interest rate @ 2.25% in its latest meeting but stays on track for another rate hike in December. This keeps FOMC ahead of the curve of all the major Central banks thus giving the Greenback its inherent strength which is evident from Dollar Index chart below. Euro & Canadian Dollar were the weakest among its counterparts while Pound Sterling held up well against the USD onslaught with the expectation of a BREXIT deal by November 22. The spike in USDCAD was partly attributed to the differing policy stances of the respective central banks & partly due to the massive fall in Oil which has a direction co-relation with the pair.
The Index is moving nicely in a bullish channel with higher lows in place. The bullish momentum will remain sustained as long as the immediate support @ 95.50 holds. Below this level it would enter the consolidation phase. The breakdown of the strong support @ 93.50 would signal a bearish bias. For now Dollar is the King! Next week watch for employment numbers from AUS & UK, Retail & CPI data out of US and EUR region GDP & CPI fill the economic calendar.
Signing off here is something on the lighter side of things. Seems like the decision is unanimous!