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Asian Market Update – Thursday: Asian Markets Brush Off Trump Threats of Shutting Down US Government, Pulling From NAFTA

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The Big Question: Have Asian markets gotten used to Trump comments that would normally lead to market crash?

Also read: Trump Talks Up Border Wall as Congress Eyes Sept. 30 Budget Deadline

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Major equity markets in the Asia Pacific on Thursday brushed off a speech by US President Donald Trump that is full of risks that investors tend to avoid from a government closure in the US to withdrawal from a major trade deal.

Most major indexes in Asia Pacific were up in early trading, while the stock markets in Tokyo and Shanghai were down just slightly.

The Hong Kong Hang Seng Index edged up 0.37 percent to 27,485.87, though the gain was trimmed down from earlier in the morning when the index was slightly above the 27,600 levels.

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The Hong Kong Stock Exchange resumed trading on Thursday, after it was suspended on Wednesday due to a severe typhoon. There has been no reports so far as to how the halt impacted the market, but the gain on Thursday suggest investors were happy back at it.

In South Korea, the KOSPI Index was up 0.41 percent at 2,376.06. The gain came after the rogue leader in North Korea ordered on Wednesday its nuclear forces get ready for war any time.

Down under, the ASX 200 gained a modest 0.07 percent to 5,741 before midday.

In Japan, the Nikkei dropped about 0.35 percent to 19,368 before midday after it shot up higher in early hours of the Asian trading session.

In China, the Shanghai Composite Index was down 0.17 percent to 3,282.

The mixed performance, with most major Asian indexes up, suggests that investors in Asia did not really care too much about what Trump said or at least they didn’t let it affect their decisions.

During a speech in Phoenix, Arizona, Trump causally mentioned that he is willing to shut down the US government to get funds for a border wall between the US and Mexico and said that he will “probably” end up terminating the North America Free Trade Agreement.

Any of these comments, had it come from another more serious president, would have led to a catastrophe in markets not just in the US, but across the globe.

Here is what to watch out for: Let’s face it, not many people take Trump’s threats too seriously anymore, but the comments could exacerbate domestic political turmoil even within Trump’s Republican Party. This is important because the US lawmakers and Trump need to agree on a budget before the end of September to keep the US government open and negotiate a deal on raising the debt ceiling to keep the US from default. Watch how lawmakers respond to Trump’s comments.

Main Market Movers – Midday Asian Trading Session

Indexes Value at Midday Daily Change
Japan-Nikkei Stock Average 225 1,9368 -0.35%
China-Shanghai Composite Index 3,282 -0.17%
Australia-ASX 200 5741 0.07%
India-Mumbai Sensex 31,575 0.03%

Cryptocurrencies

Meanwhile, in the world of virtual currencies, trading seemed to be quite stable during the Asian trading session, with Bitcoin and Ethereum both down just slightly.

Bitcoin was down 0.12 percent before midday, trading at around $4100.

Ethereum was trading at around $315, down 0.31 percent.

Currencies

The Japanese yen dropped a slight 0.14 percent against the US dollar at Midday on Wednesday. The JPY/USD rate was at 0.009163.

The Chinese yuan remains unchanged against the dollar.

The Australian dollar is slightly down against the US dollar. AUD/USD was trading at 0.78990, down 0.05%.

Commodities

WTI Oil is unchanged for the day, trading at $48.35 per barrel.

Brent Crude gained 0.10 percent to $52.55 per barrel

Gold was down 0.08 percent to $1,289.38 an ounce

Business News across Asia

In China, top government officials have come out to reaffirm their support for Chinese company’s that invest overseas, after reports of China further cracking down on what officials believe to be “irrational investments.” China’s Ministry of Commerce on Thursday said it supports companies that want to expand overseas and ensure the process will be “stable and long-term.”

Though the government has repeatedly said it supports capable companies to investment in overseas assets, it has kept a tight leash on certain deals, including real estate, entertainment and sports teams in the US.

Take away: Those who worry about China buying up everything in their country can relax a bit, as the Chinese government is now keeping a close eye on this to ensure more capital stays within the country.

In Japan, traders are to a large extent keeping their eyes on the upcoming Fed meeting in Jackson Hole, Wyoming on Friday.

Take Away: In lack of major economic news out of Japan, the Jackson Hole meeting will be the dominant force driving both the JPYUSD rate and Japanese equities.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.2 stars on average, based on 21 rated postsFredrik Vold is an entrepreneur, financial writer, and technical analysis enthusiast. He has been working and traveling in Asia for several years, and is currently based out of Beijing, China. He mainly follows the stock and forex markets, and is always looking for the next great alternative investment opportunity.




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Analysis

Crypto Update: Encouraging Bounce before the Weekend

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The correction that started out in the major lagging altcoins and spread to the leaders of the market yesterday is weakening, with a nice rally today in early trading in most of the majors.  Although the segment is not out of the woods just yet, the bullish signs which have been present ever since the lows three weeks ago still persist.

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Bitcoin stayed clear of the key $9000-$9200 support zone, for now at least, which would be an ideal bottom for the correction, but as we noted long-term investors should accumulate the coin during the correction, as the short-term momentum is already back to neutral. The $10,000 level is still in the focus, while the next major resistance is found at $11,300 and the prior rally high near $11,750 is also ahead as an obstacle.

BTC/USD, 4-Hour Chart Analysis

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The early leaders of the rally, Litecoin and Ethereum Classic are once again showing strength and that could signal that the next leg higher already started. That said, with several coins still stuck in broader downtrends, investors should still expect a bumpy road, with the occasional volatile sell-off.

Litecoin got very close to the $180 support that we have been monitoring throughout the correction, but it quickly bounced above the $200 level again, as the broad bounce started after testing the previously dominant declining trendline. So far, the price action in the coin is consistent with a new uptrend and we still expect LTC to lead the market higher.

LTC/USD, 4-Hour Chart Analysis

Ethereum Showing Positive Signs Again

ETH/USD, 4-Hour Chart Analysis

After yesterday’s early signs of relative strength, the second largest coin is now clearly showing evidence of accumulation, as it quickly recovered above the $845 level following the selloff after the US close. The coin established a new support near $780, and as the MACD is close to providing a bullish cross, it might signal the bottom of the correction.

Despite the bullish price action across the board, even in the recently lagging XRP and IOTA, the correction could still continue, but we still advise traders and investors to look for entry points as we expect the recovery to continue, although traders should still use smaller positions in the relatively weaker coins.

Stay tuned for our detailed technical analysis later on today.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 111 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Analysis

Technical Analysis: Correction Continues but Coins Remain Stable

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It’s been another mixed session for cryptocurrency investors as judging by only the price action, the segment suffered losses across the board, but comparing the current sell-off to the January plunge reveals that the majors are much more resilient this time around.

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The largest digital currencies are holding on to most of the gains of the recent weeks, and the price action near the crucial support zones is also encouraging. With all that said, the correction is not over yet, and further losses are still in the cards, but barring a substantial change in price action, the coins will likely continue the rally.

BTC/USD, 4-Hour Chart Analysis

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Bitcoin has been trading around the key $10,000 level all day long, and, so far, a clear break-down has been averted. The short-term momentum indicators are now in neutral territory regarding the most valuable coin, and that could mean that a bottom is close, and investors should already add to their holdings here. Further strong support is found between $9000 and $9200, while targets are ahead at $11,300, $13,000, and $14,250.

XMR/USDT, 4-Hour Chart Analysis

Correlation between the majors has increased during the sell-off, but there are still clear outperformers and laggards, adding to the bullish case. Monero remains among the strongest coins from a technical perspective, trading right at the lower boundary of the bullish consolidation pattern, with the $280 price level holding up for now. The coin faces strong resistance near $300 and $335, but we expect the uptrend to continue with the next target being ahead at $400, while further support is found at $240.

(more…)

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 111 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Altcoins

Crypto Correction Deepens With Bitcoin Falling Below $10,000

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Cryptocurrencies hastened their decline on Thursday, with the total market cap falling to its lowest level in over a week as bitcoin and the major altcoins backtracked.

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Fresh Selloff Hits Crypto Market

Ninety-two of the top 100 cryptocurrencies tracked by CoinMarketCap were trading lower Thursday afternoon. The combined market capitalization for all coins fell 6% to $430 billion, the lowest since Feb. 13.

Bitcoin broke below $10,000 for the first time in nearly a week, and was last seen trading at $9.891. Even with the decline, bitcoin is maintaining its bullish outlook insofar as prices hold above the technically important $9,000-$9,200 region. Although downside is expected to persist in the short term, a bounce back toward $11,000 is expected. This is confirmed by the oversold Relative Strength Index (RSI), which also points to a rebound.

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As the following chart illustrates, the value of bitcoin peaked near $11,800 earlier this week before the recent bout of profit-taking took hold.

Ethereum, the world’s no. 2 cryptocurrency by market cap, fell below $800 for the first time in almost two weeks. At the time of writing, one ether was worth around $793, which represents a decline of 4% from the previous close.

Like bitcoin, ether is also grappling with oversold levels. However, the recent low is much shallower than the one Ethereum experienced in early February when prices fell toward $550.

Meanwhile, Litecoin tumbled to a session low of $188.73, more than offsetting a 50% gain earlier in the week. At the time of writing, the coin was down 6.5% at $192.59.

Elsewhere in the market, Ripple plunged nearly 9% to $0.93, while bitcoin cash fell fell nearly 8% to $1,210.

No Immediate Catalyst for the Decline

Like previous corrective phases, there was no immediate catalyst for the market’s sharp reversal, a sign that technical traders were largely responsible for the downshift. Since peaking above $518 billion on Saturday, the crypto market has declined 17%, all but reversing the previous week’s sharp rally.

On the regulatory front, the French government just announced it will be cracking down on unregulated cryptocurrency trading. In a statement issued by Autorite des Marches Financiers (AMF), the nation’s financial market watchdog, regulators said they had noticed a growing trend in unregulated futures and derivatives trading involving cryptocurrency.

“The AMF concludes that a cash-settled cryptocurrency contract may qualify as a derivative, irrespective of the legal qualification of a cryptocurrency,” the AMF said in the statement, as reported by CCN. “As a result, online platforms which offer cryptocurrency derivatives fall within the scope of MiFID 2 and must therefore comply with the authorisation, conduct of business rules, and the EMIR trade reporting obligation to a trade repository.”

MiFID stands for Markets in Financial Instruments Directive, a harmonized regulatory framework for the European Union’s financial markets. MiFID 2 was launched earlier this year to provide more transparency on traders and go after non-compliance more aggressively.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 162 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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