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Analysis

Euro Hits 2-Year High as Market Calls Draghi’s Bluff

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Friday Market Recap

Asset Current Value Daily Change
S&P 500 2470 -0.01%
DAX 12334 -0.89%
WTI Crude Oil 46.49 -0.92%
GOLD 1249.00 0.24%
Bitcoin 2751 11.81%
EUR/USD 1.1638 0.05%

The most important trend in financial markets continued yesterday and today in early trading as the Euro hit yet another new high compared to the US Dollar, rising to levels not seen since 2015. The common currency dipped briefly after the ECB’s monetary meeting, but later surged back and extended its rally above 1.16, delivering another blow to European equities. The DAX and the Euro Stoxx 50 both declined substantially from their short-term highs from Thursday. US markets are on the other side of the trade, as all major indices remained strong and hit more new all-time highs.

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The DAX pushed lower by the Euro rally, 4-Hour Chart Analysis

Currency markets are dominated by the weakness of the USD, as the Yen and the Great British Pound also gained ground on the Greenback, with the broader Dollar index also falling to a 12-month low. Commodities are also active, with oil retreating after a multi day rally, while Gold benefiting from the weakness of the Dollar and getting close to $1250. Industrial commodities are also higher, helped by the gains in China, and the decline in US yields. We expect a calm US session after the busy week, as trading volumes are already declining and volatility is back near all-time lows in stocks.

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The Dollar Index still in a crucial downtrend, 4-Hour Chart Analysis

Cryptocurrencies

The crypto market possibly hit short-term top after the news that miners locked in the BIP 91 protocol upgrade and Bitcoin jumped above $2750 this morning. The other relatively strong major, Dash, also surged higher and spiked above $200 after two weeks before dipping back below the key level. Ethereum failed to join the party, as it still consolidates its epic rebound off the $135 level that it hit on Sunday. NEM, Monero, and Litecoin were also among the stronger currencies, while ETC and Ripple remained weaker. Small cap coins outperformed ETH since yesterday, led by the likes of Stratis, Bitshares, and Antshares. The weekend might bring a less volatile consolidation after the huge moves, despite the hurdles that are still present before August 1, the big day for BTC.

Bitcoin, 4-Hour Chart Analysis

Technical Picture

The NASDAQ breached its all-time high after last week’s break-out from the “flash-crash” correction pattern, and it’s now consolidating near the new high. The short-term picture is overbought suggesting more corrective action in the coming days, but the long-term trend is clearly bullish, and as long as the Dollar remains under pressure, US equities should continue to experience strong tailwind. Primary support is found at 5800, while the 6000 level is ahead as a possible resistance.

NASDAQ 100 Futures, 4-Hour Chart Analysis

Key Economic Releases on Friday

Time, CET Country Release Actual Expected Previous
10:30 UK Public Sector Borrowing 6.3 bill 4.3 bill 6.4 bill
14:30 CANADA CPI Index -0.1% -0.1% 0.1%
14:30 CANADA Core Retail Sales -0.1% 0.0% 1.5%

Key Economic Releases on Monday

Time, CET Country Release Expected Previous
2:30 JAPAN Manufacturig PMI 52.4
9:30 GERMANY Manufacturig PMI 59.6
9:30 GERMANY Services PMI 54.0
10:00 EUROZONE Manufacturig PMI 57.4
10:00 EUROZONE Services PMI 55.4
14:30 CANADA Wholesale Sales 1.0%
16:00 US Existing Home Sales 5.62 mill

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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Analysis

Long-Term Cryptocurrency Analysis: Broad Correction Enters Next Phase

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The overbought BTC-led correction that has been the dominating technical process in the cryptocurrency segment in the last month or so continued in earnest today, amid the intensifying regulatory steps concerning the sector. The three-week-long consolidation that followed the initial mini-crash concluded with a sharp sell-off overnight rearranging the long-term charts, while likely kicking off another volatile period.

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While most of the crash lows held up today in early trading in the majors, especially in the case of the late leaders like Ethereum and NEO, some of the relatively weaker coins are already trading below the December minimums. We expect most of the majors to follow Dash and LTC, the weakest of the largest coins, lower and trade below the previous lows, as sentiment will likely swing to a bearish extreme.

The $11,300 level has been in the center of attention throughout the session today and the most valuable coin experienced heavy trading around the level as expected. As the daily MACD is still in neutral territory, the coin could be in for another leg lower, but after the 40% correction and the rather lengthy consolidation, investors could be looking for entry points during the move near the key support levels at $10,000, $9000, and the stronger levels at $8200 and $7700.

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BTC/USD, Daily Chart Analysis

As Ethereum is in a different part of its cycle the long-term momentum readings are still overbought, and that could mean a more protracted correction for the second largest coin. That said, following a multi-month consolidation like the one in Ethereum before, we still expect the token to outperform BTC from a long-term technical standpoint. ETH is now below the short-term trendline, and it’s likely to dip below $1000, and the prior top at $850. Further key levels are found at $740, $625, $575, and near $500.

ETH/USD, Daily Chart Analysis

Let’s see the outlook for the other major altcoins after today’s bloodbath.

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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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Analysis

Crypto Update: Chinese Crackdown Triggers Next Leg of Correction

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The cryptocurrency segment is crashing again, with double-digit losses across the board, and with several coins shedding around 30% in one day amid the widespread and heavy selling. The sell-off was triggered by reports on a new set of measures by the Chinese authorities limiting crypto trading, which added to the still looming South Korea related regulation worries. Bitcoin tested the mini-crash lows at $11,300 today in early trading, dipping slightly below that level before a strong bounce started.

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The most valuable coin is now between two crucial support/resistance lines, with the other ahead at $13,000, and as the downtrend is entering its more mature phase the $10,000 and $9,200 levels could come in play, with a possible dip to the support zone near $7,650.

BTC/USD, Daily Chart Analysis

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Interestingly, the coin is still hovering within the daily range of the crash of December 22nd, and that points to a very active and volatile period ahead near the low at $11,300, as automatic orders will likely get triggered on both sides of the market.

The short-term setup is bearish, and although it’s possible that the primary support level will hold, odds still favor another leg lower, following the exponential run-up at the end of last year that pushed sentiment into bullish extremes.

BTC/USD, 4-Hour Chart Analysis

Altcoins

(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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Analysis

Music: One Overlooked Use Case

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So far in this year, Ethereum has been the crypto star appreciating over 80% to a recent record of $1402. All this suggests that more and more applications are being created. We know this by the demand for Ether, the gas that drives the Ethereum network.

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The reason behind the explosion of Ether demand was confirmed by Ethereum co founder Steven Nerayoff in a CNBC interview where he claimed the number of Ethereum projects today is more than 10 times year ago levels.

One of those areas is the music business and there are several names appearing on the ICO list to add to your research agenda.

Why The Music Business Needs Help

Music may live forever but the business side has been in trouble for a long while. Over the last decade there have been only three years when the global value of music sales increased. The combination of digital music and outright pirating through peer-to-peer sharing has much to do with the long-term trend.

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Throughout the world there are 69 copyright and royalty societies given the responsibility of documenting, collecting and distributing music royalties. That means collecting a few pennies whenever a song is played on the radio, Internet or anywhere else. Four of the largest of these is in the US, followed by Japan, Germany and Britain. Their operations are truly byzantine.

Experts in the music-publishing field confirm the time between music usage and royalty payment can run close to 24 months. Even then not all royalties are distributed. According to my sources, there are often millions of dollars collected by royalty authorities everywhere that never make it to the entitled recipients. That sort of practice borders on criminal behavior but copyright and royalty societies operate in a sub-rosa manner making it difficult to understand their policies.

In the past just 4 major record labels controlled over 80% of the industry. These giants could afford a full time legal department to pursue royalty issues dominated the music industry. Today, however, independent labels represent almost one-third of the market. This means less democracy in the business with the young independent artist at a particular disadvantage.

Of course, musicians aren’t the only group of artists loosing out on their pay. There are writers, poets and painters that go largely unprotected.

The music business is just easier to track because it has more data. Yet in spite of all the information, the music industry is widely recognized for its lack of transparency. Blockchain technology has the ability to disrupt long-standing industry practices.

ICOs To The Rescue

The number of Ethereum based white knights is starting to appear on the horizon promising to rattle the industry and hopefully restore some democracy on behalf of the independent artist.

One simple business model comes from a startup SingularDTV who is attempting to build their ecosystem on top of Ethereum. Here is the basic value added proposal.

SingularDTV tokenizes the artist work. In doing so the artist is turning their music into a financial asset. Anyone who buys into an artist’s token owns a share of the creation and its income stream. The more people consume an artist creation, the higher goes the token price.

Only time will show if SingularDTV succeeds with this model. The consequence of this model is how it eliminates many of the middlemen and nefarious influences in the industry. Instead of singing on a street corner for bread, an artist could raise money upfront without relying on an advance from a record label.

According to SingularDTV, distributing content via blockchain would allow artists to skirt streaming platforms like Spotify to earn royalties on their own terms. Now that is true democracy.

SingularDTV may stand out a bit in the news due its recent ICO success in raising $8 million but they aren’t the only player in the music game. Names like Voise recently raised $1 million as well as Soundchain, Blokur and Opus to name a few.

I am no longer a registered investment advisor, which means I don’t go around making investment recommendations. So I will only suggest this group to put on your list of late night reading. Next time, I will take a closer look at more of these names.

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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