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Week in Review

The Week in Review: Bitcoin Surges as Syrian War Looms

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Weekly Recap

Asset Current Value Weekly Change
S&P 500 2355 -0.30%
DAX 12225 -0.71%
WTI Crude Oil 52.23 2.78%
GOLD 1257.50 0.81%
Bitcoin 1090 10.10%
EUR/USD 1.0599 -0.53%

 

The second quarter started with a hectic week for global financial markets, as the central banks remained in the center of attention before the US missile attack in Syria took over the headlines. Stocks remained stable with a slight rotation between the main indices, as the previously strong DAX and Eurostoxx 50 were among the weaker benchmarks during the period. The Fed’s and the ECB’s meeting minutes were the most anticipated announcements of the week (dwarfing even the expectations regarding the usually crucial US employment report), and the US Dollar came out as the strongest currency after the choppy period, as the Fed still seems to be the most committed to raising interest rate and tackling inflation.

Crude oil was among the winners of the period, despite the rally in the Dollar. Gold had a mixed week, as it finally topped $1260, but plunged back below the crucial resistance on Friday as stock markets recovered, possibly pointing to a more significant correction ahead. The Euro was very weak in the second half of the week, as the dovish comments from Mario Draghi cooled down expectations regarding an imminent monetary tightening in the Eurozone. The Pound also lost ground against its major peers although British equities were holding up well.

 

Gold Futures, 4-Hour Chart Analysis

Bitcoin and Litecoin dominated the cryptocurrency market, as the stellar weekend rise of Ripple was halted by a deep correction. Bitcoin rose back near the $1200 level just two weeks after testing the 880 level, while Litecoin hit $12.50 following a strong breakout from below the $4.50 zone. Ethereum traded sideways throughout the week above the $40 level, while Monero drifted lower after a failed rally attempt. Dash found support near the $60 level after rising 5-fold from $20 to $100 between the end of February and mid-March.

The UK provided a number of negative surprises on the economic front this week, as the manufacturing PMI, the construction PMI, manufacturing production, and industrial production all disappointed, with only the services segment showing strength. US and other European numbers were mixed, but remained mostly in line with the stable growth narrative. The ISM non-manufacturing PMI provided the biggest negative surprise, but it still shows robust growth in the sector. US initial jobless claims dipped lower after a worrying jump, although the employment report was mixed once again. Canada is still a bright spot globally, despite the weakness in the local real estate market.

Technical Corner

Range contraction was the name of the game for the most watched stock index in the world, as last week’s bounce stalled out near the upper boundary of the dominant technical pattern (a so-called Megaphone). The benchmark got stuck in a narrow interval towards the end of the week, and this phenomenon often precedes a significant move, as the “tension” in the market grows. The MACD also shows how compressed the recent days were for US stocks, as the indicator didn’t leave the neutral zone, and failed to give a meaningful signal in any direction.

S&P 500, 4-hour Chart

The S&P 500 finished the week right in the middle of the crucial 2350-2355 support/resistance zone that played a key role in recent weeks. The recent all-time high near the 2400 level is the most important resistance ahead, while the 2332 support could also be in play next week, should the index leave the current holding pattern on the downside. The financial sector that we have been monitoring recently also traded in a narrow range throughout the week, so the first few sessions could be critical next week.

Key Economic Releases of the Week

Day Country Release Actual Expected Previous
Monday AUSTRALIA Retail Sales (monthly) -0.10% 0.30% 0.40%
Monday UK Manufacturing PMI 54.2 55.1 54.6
Monday US ISM Manufacturing PMI 57.2 57 57.7
Tuesday AUSTRALIA RBA Rate Decision 1.50% 1.50% 1.50%
Tuesday UK Construction PMI 52.2 52.5 52.5
Tuesday CANADA Trade Balance -1 billion 0.7 billion 0.8 billion
Tuesday US Trade Balance -43.6 billion -46.7 bill -48.5 bill
Tuesday US Factory Orders (monthly) 1.00% 0.90% 1.2%
Wednesday UK Services PMI 55 53.5 53.3
Wednesday US ADP Employment Change 263,000 184,000 298,000
Wednesday US ISM Non-Manufacturing PMI 55.2 57 57.6
Wednesday US Crude Oil Inventories 1.6 millon -0.1 million 0.9 million
Wednesday US FOMC Meeting Minutes
Thursday GERMANY Factory Orders (monthly) 3.40% 3.50% -0.80%
Thursday EUROZONE ECB Meeting Accounts
Thursday CANADA Building Permits (monthly) -2.50% 5.40%
Thursday US Initial Jobless Claims (weekly) 234,000 251,000 258,000
Friday CANADA Employment Change 19,400 5,700 15,300
Friday CANADA Unemployment Rate 6.70% 6.70% 6.60%
Friday US Hourly Earnings 0.20% 0.20% 0.20%
Friday US Employment Change 98,000 175,000 235,000
Friday US Unemployment Rate 4.50% 4.70% 4.70%

 

The Story of the Week: Quarterly Performance of Asset Classes

Performance of different asset classes in Q1, Source: Deutsche Bank

If you follow financial markets on a daily basis, it is sometimes inevitable that you lose track of the big picture. As the first quarter of 2017 ended last week, we take a look at the performance of the major global asset classes with the help of Deutsche Bank’s cheat sheet. Generally speaking, the quarter was quiet, as volatility remained tame, especially in the US where the Volatility Index (VIX) hit record lows, as the S&P 500 didn’t fall by 1% for more than a 100 trading days in a row.

Interestingly commodities are found on both ends of the performance chart, as Crude Oil was the worst performing asset thanks to the technical breakdown of the last week of March, while precious metals sit at the top of the list after a healthy rally. Emerging markets were also among the best places for investors in the quarter with the Brazilian Bovespa Index yielding more than 10%.  The Hang Seng (Hong Kong) and the DAX were the strongest major indices, but the FTSE and the main US benchmarks also performed well. Russian equities lagged their global counterparts as the weakness in oil coupled with the increasing political tensions weighed on the country’s assets.

Looking at currencies, the Dollar’s correction was the main theme of the quarter, as the greenback retreated a bit, off its multi-decade highs against the Pound and the Euro after the post-election euphoria faded away. Donald Trump’s first months in office were less significant to financial markets than most analysts expected, although the media-hype was constant. US indices hit all-time highs throughout the period as the global bull market turned 8 on the 6th of March.

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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Week in Review

Week in Review: Cryptocurrency Rally Short-Lived as Bitcoin Price Tests Critical Support

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The cryptocurrency market continued lower over the past seven days, as bitcoin and the major altcoins failed to nurture a modest rally attempt that, last week, seemed to indicate the end of a downtrend. In bitcoin’s defense, the largest cryptocurrency by market cap has successfully maintained the $6,000 support level for two weeks running, offering compelling evidence that a bullish reversal is still in the cards.

Equity markets were rattled midweek by an escalation of trade-war rhetoric by the Trump administration, which announced plans to tax an additional $200 billion in Chinese goods. Although China has vowed to respond, Beijing’s massive surplus with the United States will limit its ability to match Washington’s tariffs dollar for dollar.

Nevertheless, trade-war risks failed to deter U.S. equity markets as earnings optimism, positive economic data and developments on the corporate merger front lifted the benchmark indexes.

Cryptocurrencies Suffer Early-Week Selloff

The combined value of digital currencies fell by more than $20 billion Tuesday, a stark reversal from the weekend, when the market reached its highest level in three weeks. There was no immediate catalyst for the reversal, which suggests that a combination of technical trading and profit-taking played a role.

Bitcoin reached a high near $6,900 last Sunday before reversing all the way back down to around $6,150 four days later, according to CoinMarketCap. Despite the reversal, the bitcoin price has successfully defended $6,000 – a critical support that represents the break-even point for miners. Bitcoin’s continued defense of this level suggests that the bulls are rallying to keep prices from falling any further.

EOS ran into fresh controversy this week after its New York block producer shed light on the network’s RAM complications.

In a Sunday tweet, EOS New York, the network’s largest block producer, said the following:

“Some Block Producers crashed when RAM usage on EOS exceeded 1GB tonight. Either they only had 1GB or they did not configure their node to properly set it at 64GB. This is a violation of the regproducer agreement. EOS New York produced on schedule. We are still confirming details.”

EOS New York later clarified the issue: “Upon further investigation we learned that this is less a regproducer violation and more a failure to adjust a default configuration on a plugin in their producing node.”

New Crypto Bills from South Korea Expected

At least four South Korean lawmakers are looking to present new cryptocurrency legislation to the National Assembly this month in an effort to fast-track regulation of the digital asset class.

As Hacked reported last month, the proposed bills seek to regulate digital currency exchanges and beef up anti-money laundering and know-your-customer guidelines. According to the Korea Times, the new bills may also provide reprieve to initial coin offerings (ICOs), a segment of the market that was banned last fall.

It is not clear whether the bills will be signed into law during the National Assembly session, which runs from July 13 to 26.

Nasdaq Notches New Record High

Wall Street’s major indexes overcame a volatile Wednesday session to finish firmly higher for the week. Technology shares continued to outperform the broader market, sending the Nasdaq Composite Index to fresh records.

On Friday, a trio of U.S. banks reported second-quarter earnings. J.P. Morgan Chase & Co (JPM) and Citigroup Inc. (C) posted earnings that were higher than expected, while Wells Fargo & Co (WFC) saw its profits sink.

The trio of bank earnings traditionally mark the unofficial start to Wall Street’s corporate earnings season. Analysts are forecasting per-share earnings growth of 20% for S&P 500 companies when measured year-over-year.

The Week Ahead

Crypto traders are in need of direction following the latest reversal. While predicting the future is always a challenge, market participants can expect subdued markets insofar as trading volumes remain thin. As Hacked previously reported, bitcoin typically requires 24-hour trade volumes of at least $4 billion to generate a sustained rally.

Hacked will be on high alert for regulatory developments in South Korea and India over the next seven days. South Korea’s National Assembly session continues next week. In India, a special cryptocurrency panel is expected to present government regulators with a draft bill any day now.

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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4.6 stars on average, based on 498 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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Week in Review

Week in Review: Cryptocurrency Market Breaks Downtrend as Bitcoin Price Jumps 12%

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It was another week of dramatic moves for cryptocurrencies. This time, price action was to the upside as bitcoin and the major altcoins rebounded from year-to-date lows. The gains snapped a three-week downtrend in the market. It was only the second weekly advance since early May.

In conventional markets, U.S. stocks returned to strength in a holiday-shortened week even as the Trump administration moved forward with its plan to tax Chinese goods at the border.

Cryptocurrencies Recover

Negative psychology toward cryptocurrencies showed signs of abating this week, as capital flowed back into the market after a two-month fire sale wiped $200 billion off coin values.

Cryptocurrencies tallied $33 billion this week , reaching a total of $267.5 billion on Friday, according to CoinMarketCap. The market peaked around $277 billion just two days earlier.

Bitcoin was the biggest positive influence on overall prices; the largest cryptocurrency by market capitalization surged more than 12% week-on-week, reaching a high of around $6,670.

Ethereum jumped 14% over the past seven days, reaching $473 on Friday. Bitcoin cash also added double-digits percentage-wise, rising more than 10% to $729.

Cardano was the biggest percentage gainer among the top-ten coins. ADA coin surged more than 24% to $0.142.

India Implements Banking Ban on Cryptos

An edict by the Reserve Bank of India (RBI) preventing state-regulated financial institutions from serving cryptocurrency exchanges and their users went into force this week.

India’s Supreme Court upheld the RBI’s banking ban in a hearing Tuesday after several exchanges challenged its legality. That being said, India’s government should be receiving a new draft bill very shortly, according to Department of Economic Affairs secretary Subash Chandra Garg. The bill is being put together by a sub-committee tasked with evaluating the central bank’s banking ban.

Zebpay, India’s largest cryptocurrency exchange by trading volume, announced Wednesday that it was pausing fiat deposit and withdrawal services.

Some market participants are attempting to circumnavigate the ban by converting Indian rupees into cryptocurrencies. This will enable them to fund their accounts on digital currency exchanges that facilitate crypto-to-crypto transactions.

Trade War Begins

President Donald Trump’s trade war with China was underway Friday as Washington imposed 25% tariffs on $34 billion worth of Chinese imports. In doing so, the Trump administration is enacting a plan to push back against China’s unfair trade practices, as well as theft of U.S. intellectual property. The tariffs mostly impact Chinese aerospace, IT and medical equipment.

China’s Ministry of Finance announced Friday it has enacted retaliatory tariffs of 25% on some U.S. goods.

President Trump has threatened to impose tariffs on up to $500 billion of Chinese imports unless Beijing adopts fairer trade practices. The president has also made it clear that additional levies are coming if China retaliates with its own tariffs.

Despite the announcement, U.S. stocks opened in positive territory Friday following a solid reading of June nonfarm payrolls. U.S. employers added 213,000 workers to payrolls last month, well ahead  of expectations for 195,000, the Labor Department reported Friday.

The Week Ahead

Cryptocurrency prices recovered this week, but the jury is still out on whether the latest uptrend is sustainable or merely a reflection of extreme oversold conditions. Price action over the next two days could provide important clues about what to expect next week.

In conventional markets, trade tensions between the U.S. and China will remain in focus after both nations imposed tariffs on one another. Investors will also monitor trade developments between the U.S. and European Union, as well as speculation over the future of the North American Free Trade Agreement (NAFTA).

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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4.6 stars on average, based on 498 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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Week in Review

Week in Review: Cryptocurrencies Reach New Lows for the Year as Bitcoin Breaks Below $6,000

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The cryptocurrency market on Friday reached new lows for the year, as bitcoin made a definitive break below the psychologically significant $6,000 level. The major altcoins led by Ethereum, Ripple and bitcoin cash also headed for fresh declines as bear-market headwinds continued to sway price action.

While investors have been unable to find reprieve in prices, they should take solace in the fact that the cryptocurrency market appears to be making progress in terms of regulation and institutional adoption. Case in point: South Korea and Malta have taken definitive steps to bolster their domestic crypto industries.

Crypto Bear Market Hits New Low

A week of relative calm for cryptocurrencies came to an abrupt end on Friday, as the market plunged to its lowest levels since November.

The breakdown appears to be have been driven by technical trading as bitcoin found acceptance below a key support zone. Comprising more than 43% of the market, bitcoin’s decline dragged altcoins along for the ride. The market capitalization fell below $233 billion, exceeding last week’s swing low of around $237 billion.

Bitcoin fell sharply below $6,000 but was spared a new low for the year after the market defended the $5,800 level. Last weekend, the largest cryptocurrency by market cap bottomed around $5,755 on major exchanges.

Over the past seven days, bitcoin has fallen nearly 7%. The remainder of the top-ten cryptocurrencies (with the exception of Tether’s USDT stablecoin) recorded double-digit losses over the past seven days.

EOS has lost roughly half its value over the past four weeks amid a difficult transition to the newly launched mainnet. Meanwhile, Ethereum can be had for around $410, its biggest discount since April.

Ripple XRP is trading at its lowest level of the year. Bitcoin cash is currently valued at its lowest since early April.

Regulatory Clarity

South Korea and Malta this week laid out important regulatory guidelines for digital currency exchanges, ICOs and other blockchain-based companies.

The Maltese government passed three separate blockchain-based initiatives on Tuesday aimed at strengthening regulation and encouraging crypto-market development. The tiny Mediterranean nation has been dubbed ‘blockchain island‘ for its favorable policies toward the emerging sector.

The approved bills include the Virtual Financial Assets Act, the Innovative Technology Arrangements and Services Act and the Malta Digital Innovation Authority.

Meanwhile, South Korea announced new guidelines to government cryptocurrency exchanges in the wake of multiple cyber attacks earlier this month. The new rules, which are aimed at strengthening anti-money laundering and know-your-customer guidelines, bring digital currency exchanges outside the realm of “communication vendors” and into the arena of regulated financial institutions.

Stocks and Volatility

Volatility made a stunning return to Wall Street Monday as concerns over a global trade war ignited a panic sale in equities.

The CBOE Volatility Index, also known as the VIX, surged more than 25% to its highest level in three-and-a-half months. Vol would test new intraday highs later in the week.

Stocks managed to recover some lost ground after President Trump’s trade team convinced markets they will not be singling out China in their battle against intellectual property theft. A report by The Wall Street Journal last weekend suggested the White House was planning to bar Chinese investors from owning a stake in U.S. technology companies.

The Week Ahead

For cryptocurrencies, the search for an elusive bottom continues this week as bitcoin and the major altcoins struggle to regain their footing. Perpetually low trade volumes and the lack of new buyers could make this a difficult task.

In conventional markets, economic data will be in the spotlight as the U.S. Labor Department unveils its monthly jobs report. Equity traders are also gearing up for corporate earnings season, which is scheduled to get underway in a few weeks’ time.

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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2 votes, average: 5.00 out of 52 votes, average: 5.00 out of 52 votes, average: 5.00 out of 52 votes, average: 5.00 out of 52 votes, average: 5.00 out of 5 (2 votes, average: 5.00 out of 5)
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4.6 stars on average, based on 498 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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