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Asian Market Update – Tuesday: Cryptocurrency prices consolidate after strong rally

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Bitcoin

The Big Question: When can we expect the next short-term bitcoin rally?

Prices of cryptocurrencies pointed lower overnight during the Asian trading session on Tuesday, showing typical signs of a technical consolidation before the next leg up.

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At midday in Asia, bitcoin was down 2.27 percent to $5,615. The loss in the price of bitcoin on Tuesday did not even get close to erasing the strong gains made in the past few days since, when bitcoin surged through the $5,000 mark and continued to rally all the way to about $5,850.

The price of ethereum also saw a loss of 1.5 percent loss to $328 at around midday in Asia. Ethereum has performed steadily following the protocol upgrade deployed on Monday, known as the Byzantium hard fork. Tuesday’s fall, though pretty steep, is still smaller than the single-day loss seen on Sunday ahead of the hard fork, when the virtual currency dropped to near the $316 level.

Litecoin on Tuesday saw the biggest loss, trading down 4.66 percent to $61.62. However, litecoin remains above the $60 mark after surging past that on Saturday.

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Though losses in the price of the three major cryptocurrencies were far away from erasing the solid gains from the past a few days, talks of wether bitcoin has reached a level where correction is inevitable, have emerged.

Main Market Movers – Mid-day Asian Trading Session

Indexes Value at Midday Daily Change
Japan- Nikkei 225 21,260 0.03%
China-Shanghai Composite Index 3,380 0.06%
China-CSI 300 3,921 0.09%
South Korea-KOSPI 2,486 0.26%
Hong Kong –Hang Seng 28,734 0.15%
Australia-ASX 200 5,893 0.80%

Major Asian equity markets traded slightly higher during Tuesday morning trading, but gains in the main indexes on Tuesday were much smaller than in previous days, showing signs of a weakening rally in Asian stocks.

In China, the Shanghai Composite Index was up 0.06 percent to about 3,380 before midday. The CSI 300 Index, which tracks the 300 largest companies listed in Shanghai and Shenzhen, was up 0.09 percent to 3,921 before midday.

In Hong Kong, the Hang Seng Index edged up 0.15 percent to around 28,734 before midday.

In Japan, the Nikkei 225 was up 0.03 percent to around 21,260.

In South Korea, the Kospi gained a slight 0.26 percent to around 2,486 shortly before midday.

Down Under, the ASX 200 also added 0.8 percent to around 5,893. Aussie stocks saw the biggest gains among major Asian indexes on Tuesday.

The minor gains on Tuesday followed much stronger gains made on Monday in Asian stock markets, boosted by better-than-expected inflation data out of China. China’s consumer price index grew 1.6 percent year-on-year in September, slowing from August’s 1.8 percent, and remained below the 2-percent mark for an eighth straight month.

Currencies

The Japanese yen gained 0.1 percent the US dollar at midday Tuesday to 112.07 per dollar.

The Chinese yuan lost 0.17 percent against the US dollar, to 6.6010 per dollar.

The Australian dollar lost 0.04 percent on the dollar, changing hands at 1.2740 per US dollar at midday.

Commodities

WTI Oil was down 0.23 percent to $51.78 per barrel.

Brent Crude lost 0.16 percent to $57.80 per barrel.

Gold was down 0.08 percent to $1,293 an ounce.

Business News across Asia

In Japan: A data-falsifying scandal for one of the largest steel producers in the country – Kobe Steel is still brewing, as new media reports pointed out on Tuesday, the company has been faking data for more than a decade.

Take away: The company is likely to face further scrutiny and losses in value, after about $1.8 billion was knocked off its market value last week. Losses may also spread to other Japanese companies in the similar industries if the market starts to speculate that this is a widespread practice among Japanese industrial companies.

In China, news reports on Tuesday suggest that Chinese companies – PetroChina and Sinopec – are offering to buy up to 5 percent of Saudi Arabia’s Aramco, per Reuters.

Take away: This would give China a say in the world’s largest oil producer, which has been mulling to issue a record-setting IPO that could raise as much as $100 billion.

Featured image from Pixabay.

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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4.3 stars on average, based on 32 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 closely follows stocks, forex and cryptocurrencies, and is always looking for the next great alternative investment opportunity.




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Market Overview

Market Update: Geopolitical Tensions Trigger Rush to Safe Havens as Gold Spikes to 10-Day High

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Investors were on high alert Thursday after President Trump called off a planned summit with North Korea next month, The subsequent haven rush sent gold prices to ten-day highs and the yen to its best levels in almost two weeks.

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Gold Spikes

Gold prices jumped more than 1% as demand for riskier assets faded in the wake of geopolitical unrest between the United States and North Korea. August bullion prices gained 1.2% to trade near $1,310 a troy ounce on the Comex division of the New York Mercantile Exchange.

Silver prices surged 28 cents, or 1.7%, to $16.69 a troy ounce.

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Thursday gains helped gold recoup from a massive slide earlier in the month as traders began pricing a fourth interest rate hike by the Federal Reserve this year. The U.S. dollar surged to five month highs, reducing gold’s investment appeal in the eyes of international traders.

Bullion has spent the better part of 2018 valued above $1,300, though the bulls have been unable to make a definitive break above $1,350.

Yen Strengthens Across the Board

Asia’s favorite haven currency rose across the board on Thursday, as carnage in emerging markets added to geopolitical uncertainty.

The yen rose more than half a percent against the dollar, sending USD/JPY to a session low of 109.00. The pair traded as high as 111.37 earlier in the week.

The yen has benefited from a sharp selloff in emerging market currencies, with the Turkish lira and Argentinian peso among the hardest hit. These countries are heavily influenced by the U.S. dollar because the bulk of their foreign funding is denominated in the greenback.

Despite its recent pullback, the dollar is up 3.3% over the past month.

Crypto Woes Continue

The cryptocurrency market touched fresh six-week lows Thursday, as the combination of regulatory risks and South Korean exchange uncertainty weighed on prices.

Crypto assets have lost a combined $50 billion in value since Sunday, with the total market cap bottoming near $320 billion earlier in the day. At the time of writing, the total market was worth $338 billion, according to data provided by CoinMarketCap.

All major altcoins were up compared with 24 hours ago, with EOS leading the rally. The digital currency was up more than 10% by late afternoon EST to trade at $1219.

Ripple XRP rose more than 4% to $0.635. Bitcoin cash rebounded more than 3% to $1,058.

Bitcoin traded relatively flat after hitting fresh lows. It was last valued at $7,585.

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 412 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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Analysis

Stocks Suffer Hit as Trump Cancels Summit, Turkey Hikes Rate

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After yesterday’s late-day bounce, stocks got close to their two-week lows yet again today in early trading, as risk assets got sold across the board after Donald Trump canceled the much-awaited summit with North Korea’s Kim Dong Un. Safe haven assets spiked higher on the news, with gold getting back above $1300, and the Japanese Yen also gaining significant ground on its peers.

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NASDAQ 100 Futures, 4-Hour Chart Analysis

US equities are still not in a terrible short-term position, as the key support levels are holding up, and the trading range is intact, but most European indices gave back all of this month’ s gains, and the cracks on the synchronized global growth narrative are clear.

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Emerging markets are still under pressure, even as the Turkish central bank finally did what we have been expecting, raising its benchmark rate by 3% after an emergency meeting yesterday, but for now, it seems that the this might have been too little too late.

USD/TRY (Turkish Lira), 4-Hour Chart Analysis

The Lira recovered more than 8% off its intraday lows, but today the currency has been plunging again, and it is still dangerously close to its all-time low, and a run on the Lira is still not out of the question. Mr. Erdogan told the Turkish citizens not to exchange their Lira to foreign currency, but the President might need more than “verbal capital controls” to stop the collapse.

Dovish Fed Minutes Cause Slight Dollar Pullback

Dollar Index, Daily Chart Analysis

The US Dollar is lower compared to the Euro, the Pound, and the Yen today, even as the Greenback gained ground against the Canadian Dollar. While the Yen’s advance is due to the risk-off sentiment, the Dollar’s broad pullback started after the release of the FOMC meeting minutes yesterday, as the central bank expressed that it would allow inflation to overshoot the 2% target temporarily.

US 2-Year Yield, Daily Chart Analysis

This caused a drop in Treasury yields across the yield curve, as investors removed their rate hike bets. The 2-year yield briefly hit a level not seen since mid-April, while the 10-year yield got back to the key 3% level. The European Central Bank also released its minutes today, and the bank also cited downside economic risk, capping the dip in the Dollar and helping the pullback in yields.

Featured image from 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 256 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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Market Overview

Markets on Edge as President Trump Cancels North Korea Meeting

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U.S. President Donald Trump has called off a highly anticipated meeting with North Korea, citing “anger and open hostility” from Pyongyang.

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Strained Diplomacy

President Trump was scheduled to meet Kim Jong-un in Singapore on June 12 to advance a preliminary peace agreement between North Korea and South Korea. The Trump administration pledged peace and economic cooperation with the North Korean regime if it agreed to relinquish its nuclear arsenal.

Pyongyang took a combative stance last week in response to joint military drills between the United States and South Korea, a move it regarded as “provocative military disturbances.” North Korea’s rhetoric grew more threatening this week after the country’s senior envoy to the U.S. threatened America with an “appalling tragedy that it has never experienced nor imagined.”

In a letter to North Korean leader Kim Jong-un, Trump said: “I felt a wonderful dialogue was building up between you and me, and ultimately, it is only that dialogue that matters. Some day I look very much forward to meeting you.”

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White House officials said Thursday that the meeting could still be revived, though no further details were provided.

Markets React

U.S. stocks declined sharply in the wake of President Trump’s announcement, with Dow industrials falling more than 260 points. The blue-chip index was down 191 points, or 0.8%, at 11:31 a.m. ET.  Meanwhile, the large-cap S&P 500 Index fell 0.6% and the Nasdaq slipped 0.5%.

Gold, a preferred safe haven for investors, shot up to more than one-week highs Thursday morning. The August futures contract rose $15.50, or 1.2%, to $1,310.30 a troy ounce on the Comex division of the New York Mercantile Exchange.

Silver futures advanced 24 cents, or 1.5%, to $16.65 a troy ounce.

Oil prices continued lower in the wake of a shock inventory report on Wednesday from the U.S. Energy Information Administration (EIA). The EIA said crude stockpiles surged 5.8 million barrels in the latest week, confounding expectations of a 1.9 million-barrel drop.

U.S. West Texas Intermediate (WTI) futures were down 66 cents, or 0.9%, at $71.18 a barrel Thursday. Brent crude, the international futures contract, declined 67 cents, or 0.8%, to $79.13 a barrel.

In economic data, U.S. jobless claims rose unexpectedly last week, though the underlying picture continued to point to a tightening labor market. The number of Americans filing for first-time unemployment benefits rose 11,000 to a seasonally adjusted 234,000 in the week ended May 19.

The National Association of Realtors also reported a bigger than expected drop in U.S. existing home sales for April. Sales of previously-owned homes declined 2.5% to a seasonally adjusted annual rate of 5.46 million.

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 412 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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