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Analysis

Trade Recommendation: EURUSD

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The price bounced from the uptrend line and 1.19500 support level. RSI confirmed price reversal. We have buy opportunity. If the market breaks the downtrend line and moves above the local swing high, it will be a confirmation of further upward movement. Pending orders for buy should be placed at 1.19800 level. Stop orders must be at 1.19400 level. Profit target should be at 1.20500 level. Don’t risk more than 3% from your deposit in this trade.

Market: EURUSD
Buy: 1.19800
Stop: 1.19400
Profit Targets: 1.20500

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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3.3 stars on average, based on 44 rated postsDmitriy Lavrov is a professional trader, technical analyst and money manager with 10 years trading experience. The main covered markets are Forex, Commodity, Cryptocurrency. Provides personal education for those who are interested in profitable trading. Entries in TOP 10 among TradingView authors.




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Analysis

Forex Update: A Good Time to Accumulate Euros

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On our August 31 Forex Update, we revealed how the Euro is looking strong against major currencies such as the British Pound (EUR/GBP), Japanese Yen (EUR/JPY), and the Canadian Dollar (EUR/CAD). Widening our scope, we discovered that the Euro is also doing well against other major currencies. Other than its recent struggles against the US Dollar (EUR/USD), we can say, with conviction, that the Fiber is one of 2018’s top performers.

In this article, we review EUR’s performance against the Australian Dollar (EUR/AUD) and New Zealand Dollar (EUR/NZD) to show why it may be a good time to accumulate Euros.

Euro/Australian Dollar Analysis

The EUR/AUD pair dropped to as low as 1.16033 in August 2012. This concluded the long bear run that saw the 45.06% devaluation of the Euro against the Australian Dollar from the 2008 high of 2.11197. While the drop may look depressing to long-term investors, seasoned traders pray for plummets like this. They know that fortunes are made by investing when markets crash.

So far, EUR/AUD is rewarding those who bought the crash.

Monthly chart of EUR/AUD

Those who bought the bottom are now up by close to 30%. More importantly, it appears that their investments may be about to significantly grow. EUR/AUD has just broken out of a large ascending triangle pattern on the monthly chart.

In addition, the monthly RSI is threatening to break out from its own symmetrical triangle pattern. From the looks of it, the breakout can happen anytime.

With EUR/AUD reversing its trend, you have one very good reason to accumulate Euros.

Euro/New Zealand Dollar Analysis

The EUR/NZD pair suffered an even longer bear run than the EUR/AUD pair. After posting a high of 2.57906 in February 2009, EUR/NZD went into a long downtrend. The correction drove the pair to as low as 1.38792 in April 2015. In over six years, the Euro lost over 46% of its value against the New Zealand Dollar.

Then again, there are those who make a very good living by buying the bottom. This is risky business. However, a fundamentally strong currency like the Euro is likely to bounce back hard after losing almost half of its value.

Monthly chart of EUR/NZD

If you bought the bottom, you would be in the green by over 26%. If not, well, it’s not too late. As you can see, EUR/NZD has just broken out of an inverse head and shoulders pattern on the monthly chart. This structure is one of the best if not the best reversal pattern in technical analysis.

On top of that, you can see that the monthly RSI is already in an uptrend. It’s been generating a series of higher highs and higher lows for some time now. This is a great signal telling us that bulls have taken control of the market.

With this breakout, EUR/NZD has just launched a new uptrend. This is another very good reason to accumulate Euros.

Bottom Line

Other than its struggles against the mighty greenback, it appears that the Euro is performing brilliantly against other major currencies. Recently, it managed to reverse its trend against the Australian Dollar and the New Zealand Dollar. In addition to its rosy outlook against the British Pound, Japanese Yen, and Canadian Dollar, we believe that now is a good time to accumulate Euros.

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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3.6 stars on average, based on 236 rated postsKiril is a financial professional with 4+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




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Analysis

ETFs: What Is The SEC  Really Thinking?

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As a veteran Wall Street type, I was not surprised at Thursday’s SEC announcement on the VanEck-SolidX Bitcoin ETF.  Once again they gave a “no decision”. This pushes the deadline back to December 29, 2018. Don’t be surprised if New Year’s Eve comes and goes and nothing happens before the SEC is forced into a action by the end of February.

Back in August, when the first delay was announced, crypto investors’ reaction was swift and painful.  On Thursday, after a temporary hiccup, prices took a surprisingly positive turn. If we are to believe for just a moment that crypto prices act rationally (or just occasionally) then comes two obvious questions, are crypto ETFs good or bad? Secondly why can’t the SEC come up with an answer?

Never Say Yes

Let’s start with the easy question first: what’s up with the SEC?  Having dealt with this teflon organization for over 30 years, their actions with regard to VanEck-SolidX are the same pattern they have followed forever.  Practically never do they approve anything. Instead they provide two choices: reject or delay. By delaying the VanEck-SolidX application they are accepting the ETF concept in principle but laying out objections that must be corrected.

The result of this regulatory song and dance, don’t expect a decision until the last minute. The reason is that the main issues are not likely to be resolved in time. In fact, I doubt that the ETF proposal gets approval for perhaps as much as another year.  Here is why.

SEC Speak: Obfuscation

According to Jake Chervinsky, attorney for VanEck, the SEC asks “18 multiple part questions covering seven pages.” He adds: “It’s not encouraging to see the SEC ask if the bitcoin futures markets are “of significant size” despite having already concluded last month that they’re not.”

This is a tactic in obfuscation that the SEC loves when an applicant has not provided an adequate response.  In this case there is no objective answer to how liquid a market must be to meet the measure of significance.  Moreover, there is little or nothing that can be done in the short run to create greater liquidity.

The SEC is a political body as much as any agency of the Federal Government.  In raising the issue of liquidity, they can stand behind their role of protecting the public without at the same time hindering public access to a class of assets, even at current depressed levels, is worth $200 billion, more or less.

The SEC Is Right With Their Delays

Does the crypto world really benefit, as this stage of its evolution, by fostering a group of ETFs?  The argument in favor says that this is the way to simply and safely offer the individual investor a way to participate in a diversified portfolio of crypto.  That sounds noble – or is it just something that makes lots of money for those who create them?

But so far, at least from the viewpoint of the SEC, ETF applicants have not created a more secure domain.  More importantly, even if this were not the case, what does the investor gain from investing in a diversified list of crypto when Bitcoin overshadows about every other altcoin?

With nothing against those that believe in the benefits of ETFs, the benefits in current terms is far better for the ETF sponsor that it is for the investor.

Looking just at the math, an individual investor could be just as well off buying Bitcoin, Bitcoin Cash, Ripple, Ethereum and EOS. Admittedly, it is somewhat more complicated finding a place to buy and store Ripple, but with this small portfolio, you cover 75% of the entire crypto asset class. If security is an issue simply go to  blockgeeks.com/cryptocurrency-safe/ and select from a list of hardware wallets.

So whether the SEC gives their approval of VanEck-SolidX in December or February might make a difference if this were 2020 or sometime thereafter.  As for now, it really isn’t critical to the mass acceptance of crypto.

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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4.4 stars on average, based on 105 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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Analysis

Stocks Pull Back From Highs as Pound Plunges

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After yesterday’s record-breaking session, US stocks once again broadly opened at all-time highs, even as the momentum of the global rally waned. Chinese stocks kick-started the day by extending their relief rally off their 4-year lows and Europe also ticked higher, although the major indices couldn’t hold on to their early gains. Since the US open stocks are drifting lower, but with no major events scheduled for today, a calm afternoon session is likely on Wall Street.

GBP/USD, 4-Hour Chart Analysis

The slight weakness came on the heels of the weaker than expected European flash Manufacturing and Services PMIs, while Theresa May’s Brexit ultimatum also weighed on local equities. The Great British Pound fell sharply on the news too, erasing yesterday’s lofty gains and briefly getting close to the 1.30 level, as the Dollar rallied across the board.

NASDAQ 100 Futures, 4-Hour Chart Analysis

The Nasdaq has been lagging the Dow and the S&P 500 from a short-term perspective and the tech benchmark is once again leading the way lower today. The worse than expected guidance by Micron (MU) from yesterday is weighing on the segment and the market-leading tech giants are also weaker than average.

10-year US Treasury Yield, 4-Hour Chart Analysis

All eyes are still on the bond market, as Treasury yields are near multi-year highs concerning almost all maturities, and with the 10-year yield being very close to signal a trend change in the multi-decade structural downtrend.

While next week’s rate hike by the Fed is near certain, the outlook for the next year will likely be crucial, and given the positive US economic trends and the trade wars’ contained impact, the market’s rate hike expectations are rising across the curve.

Futures and Option Expiries Lead to Choppy Trading

Today is an important day for futures and options traders, as the quarterly contracts are expiring across asset classes, and that has a huge effect on stock and commodity markets as well, with high volumes and volatile trading especially around the key strike prices. Strong trends are rare on these sessions and day-traders should be cautious of sudden volatile spikes in even the most traded assets.

Copper, 4-Hour Chart Analysis

Commodities already experienced volatile swings throughout the day, with especially gold being tossed around the $1200 level that has been in the center of attention in the past weeks. Shorts in copper have been squeezed heavily before the end of the week, with the crucial metal surging above key support with the rally in Chinese stocks, while WTI crude oil retreated from a more than two-month high above the $71 per barrel level as the Dollar rallied.

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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4.6 stars on average, based on 350 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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