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Market Overview

Weekly Forecast: Economic Data, Post-Consensus Wrap-Up and Zcash’s Gemini Listing

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It’s shaping up to be another active week in the financial markets, as currency and stock traders shift their attention to economic data and geopolitics. Cryptocurrency traders will be looking for clues about the direction of the market following a highly successful Consensus blockchain summit.

To get a better sense of what’s ahead, we encourage readers to go over latest Week in Review.

Consensus 2018: The Aftermath

The year’s biggest blockchain event was greeted positively by policymakers, academics and industry proponents. However, unlike the previous three years, Consensus failed to spark a sustained rally in cryptocurrency prices.

Though Consensus usually generates double-digit gains for bitcoin during the event, the bulk of the rally occurs long after the summit has taken place. Since 2015, post-Consensus gains have ranged between 78% and 138%. With this precedent in mind, traders will be closely monitoring market activity over the next few weeks to see if price action follows a similar trajectory.

In addition to Consensus, the blockchain industry is riding a wave of momentum tied to institutional adoption, innovation and sanguine comments from regulatory agencies. These stories have counterbalanced negative headlines concerning fraudulent ICOs and the massive carbon footprint of bitocin mining.

Zcash Lists on Gemini

The privacy-focused Zcash cryptocurrency has been cleared by U.S. regulators to be listed on the Gemini exchange. The exchange, which is led by Cameron and Tyler Winklevoss, began accepting ZEC deposits on Saturday with full trading expected to begin on Tuesday. ZEC values surged to two-and-a-half month highs following the news.

By listing on Gemini, Zcash could enjoy higher liquidity and become a front-runner in the launch of cryptocurrency derivatives products. That’s because Gemini provides pricing data to CBOE, which was the first regulated exchange to launch bitcoin futures. According to some analysts, the addition of Zcash could hasten the production of ZEC derivatives products.

Economic Calendar

Traders with exposure to stocks, currencies and commodities can expect a steady stream of market-moving events throughout the week.

Monday

Three members of the Federal Open Market Committee (FOMC) are scheduled to deliver speeches on Monday, including Raphael Bostic, Patrick Harker and Neel Kashkari. The Fed’s policy-setting board is widely expected to raise interest rates at its next meeting in June.

Fed fund futures prices imply two more rate hikes for 2018, with a third upward adjustment a strong possibility.

In terms of economic data, the Chicago Fed will release the national activity index at the start of New York trade.

Tuesday

The United Kingdom’s House of Commons will hold inflation report hearings on Tuesday. In North America, the U.S. Richmond Fed will release its monthly manufacturing survey for May.

Wednesday

Wednesday is the most active session of the week from a data perspective, with IHS Markit scheduled to release a deluge of PMI reports for Japan, Eurozone and United States.

The U.K. Office for National Statistics will release headline inflation figures, including the consumer price index and producer price index for the month of April.

In the United States, the Federal Reserve will release the FOMC meeting minutes for May.

Commodity traders will be keeping close tabs on weekly crude inventory data courtesy of the U.S. Energy Information Administration (EIA). Crude inventories are forecast to fall by nearly 1.8 million barrels in the week ended May 18.

Thursday

A meeting of the Eurogroup will be in the headlines in the second half of the week, although it is not expected to generate any strong signals about monetary policy. In terms of data, GfK will report on German consumer confidence and the U.K. government will issue its monthly report on retail sales.

The European Central Bank (ECB) will release the monetary policy meeting accounts of its most recent gathering, where officials voted to keep interest rates on hold.

The Fed’s William Dudley and Patrick Harker of the FOMC are also scheduled to deliver speeches.

Friday

Japanese inflation data and the latest GDP figures for the U.K. will headline the economic calendar on Friday. In the United States, a report on monthly durable goods orders will also make headlines.

Federal Reserve Chairman Jerome Powell will participate in a panel discussion on financial stability and central bank transparency in Stockholm, Sweden.

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 550 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

Pre-Market: Turkey Back in the Crosshairs Amid Sanction Threats

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The “red-bar-green-bar-madness” continues in global stock markets, as after yesterday’s rally, today the major markets are all in the red once again. Emerging market woes are still feeding the bearish narrative, with the Turkish Lira being back in the center of attention. The currency which enjoyed a three-day relief rally slid lower following threats regarding further retaliatory US sanctions, should turkey keep Pastor Brunson in custody.

USD/TRY, 4-Hour Chart Analysis

The diplomatic troubles only add to the problems of the country, while also helping the rhetoric of the Turkish leadership that focuses on a western “attack” on the nation. With the vague budget plans in mind, the endgame for the Lira still seems ugly, even as at the current levels, strong Turkish companies can offer great bargains for a long-term investment portfolio.

DAX Index, 4-Hour Chart Analysis

The divergence between the US and the rest of the world seems to be getting wider by the day, as the Shanghai Composite closed on a fresh bear market low, while most of Asia is also stuck in short-term downtrends, while Europe is looking wounded too from a technical perspective. The main US indices, on the other hand, are still near their all-time highs, and today’s selloff is also just a small blip in the ongoing uptrend.

S&P 500, 4-Hour Chart Analysis

On a slightly negative note, the Nasdaq has been underperforming the broader market ever since Tencent’s earnings miss on Wednesday, and today, it’s also the worst performing benchmark on Wall Street in the wake of Nvidia’s (NVDA) lackluster guidance that came out yesterday after the closing bell.

Today’ session could still go either way in the US, as the overnight losses are moderate, and yesterday’s trade war optimism could still fuel a recovery in the worlds strongest stock market, even amid the deepening emerging market crisis.

Forex Markets Stable As Dollar Consolidates

Dollar Index (DXY), 4-Hour Chart Analysis

The Dollar is consolidating just below its recent 13-month highs, with the EUR/USD pair rebounding to 1.14, and the broader Dollar index settling down near 96.5. The reserve currency is still clearly in a rising trend, and as the short-term overbought momentum readings are almost cleared, the rally could soon continue, especially if risk-off sentiment remains dominant outside of the US.

Copper Futures, 4-Hour Chart Analysis

Commodities are virtually unchanged before the US open, with gold still hovering just above its 17-month low near the $1185 level, crude oil being stuck near $65 per barrel regarding the WTI contract, while copper trying to hold its ground after the recent key breakdown.

Dr. Copper is still signaling troubles ahead for China and the global economy, as although the commodity outperformed today, it’s clearly below the break-down level near $2.7, and the downtrend will likely continue in the coming weeks.

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 320 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

Say No to Currency Contagion

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Hi Everyone,

Once again the deteriorating relationship between the United States and Turkey is leading the news. The Lira is sliding again and it does seem to be bringing some of the other emerging market currencies with it.

As we’ve been saying throughout the week, it’s very possible that the declines in the crypto market earlier this week are due to a stronger US Dollar more than anything else.

As I’ve said before, in order to understand what’s happening in crypto, we must look at what’s happening in the rest of the economy as well. In this case, the US Dollar strength isn’t coming from Turkey, that’s just the catalyst.

The Greenback has been gaining ground since early April on the promise of higher interest rates in a strong economy. So far today, it doesn’t seem that the Lira’s slide is affecting the other major currencies though, nor has it touched crypto for the time being.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Currency Contagion
  • Looking at Metals
  • ETC Backwards

Please note: All data, figures & graphs are valid as of August 17th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Now that we’ve established the underlying theme and why the Dollar’s been surging, it seems that the situation has largely been contained. At the beginning of the week, the strong Dollar was taking out everything in its path. Today, the declines seem to be limited to the emerging markets.

In fact, of the major currencies, the USD is the worst performer today.

So even though the Dollar is rising against the Lira, Peso, and Rand…

… it doesn’t seem to be spilling over into other markets today.

Looking at Metals

Now that we’ve seen one of the biggest declines in the metals markets in recent history, it’s time to examine the long-term charts again.

Frankly, the weakness in metals still doesn’t make much sense to me. As we saw the Dollar strength earlier in the week, it did decline further but the declines seem disproportionate to the gains of the Buck.

Actually, what we’re seeing since 2011 is a precious metals market that’s been trending down.

The question is, has that dynamic come to a head?

The fun thing about the way down is that eventually, you run into a lower barrier at the production cost. Meaning, if the price to mine a metal is higher than the price to sell it, miners will stop mining, which generally tends to drive up the price.

A quick look at the mining costs of all three of the above does seem to indicate that those prices are quite close or even already passed.

A Crypto of its own

It’s good to see the rebound taking hold in the crypto markets despite the emerging currencies continuing to sell-off today. This is a positive indication that crypto is less sensitive to the moves of the Dollar but under extreme circumstances still is susceptible.

One thing that seems to be sticking out like a sore thumb is Ethereum Classic. In this graph, we can see that ETC (white line) has been acting out since mid-June and simply hasn’t been following the rest of the market.

This type of go-it-alone price action is typical when prices are moving up, but we almost never see it when prices are declining.

One of the reasons might be due to the listing of ETC on Coinbase. A new door to this crypto could mean new money flowing in. This could be worth keeping an eye on in the next few days. I’m eager to see how long it will take to fall back in line with the other cryptos or if it increases in market share following the listing.

Wishing you a fantastic weekend!

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Best regards,
Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: @MatiGreenspan | Twitter: @MatiGreenspan | LinkedIn: MatiGreenspan | Facebook:MatiGreenspan

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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Market Overview

Market Update: U.S. Stocks Surge Ahead of China Trade Talks; Bitcoin Eyes Bullish Reversal

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U.S. stocks surged on Thursday after a senior White House official confirmed that trade talks with China will resume later this month, sparking optimism that the world’s two largest superpowers can resolve a lingering tariff dispute.

Stocks Rebound

All of Wall Street’s major indexes put up firm gains on Thursday, with the Dow Jones Industrial Average surging 396.32 points, or 1.6%, to 25,558.73. Shares of Walmart Stores Inc. (WMT) surged more than 9% after reporting its best sales growth in a decade. Boeing Company (BA) and Caterpillar Inc. (CAT) each rose 4.4% and 3.2%, respectively.

The broader S&P 500 Index rose 0.8% to 2,840.69, with all 11 primary sectors reporting gains. The consumer staples category was among the best performers, rising 1.5%. Financials stocks added 1.3% as a whole.

The technology-driven Nasdaq Composite Index finished well off session highs, rising 0.5% to 7,806.52.

A measure of implied volatility known as the CBOE VIX declined on Thursday, partially offsetting the previous day’s sharp climb. The so-called “fear index” fell 9.5% to 13.25 on a scale of 1-100 where 20 represents the historic mean.

U.S.-China Trade Talks Back On

White House economic adviser Larry Kudlow confirmed Thursday that China will send an envoy to Washington later this month to re-start trade negotiations between the two countries. Although the talks are expected to be low-level, they mark important progress in a relationship that has quickly deteriorated.

“The Chinese government, in its totality, must not underestimate President Trump’s toughness and willingness to continue this battle to eliminate tariffs and nontariff barriers and quotas, to stop the theft of intellectual property and to stop the forced transfer of technology,” Kudlow told CNBC’s Squawk Box on Thursday.

U.S. tariffs targeting $50 billion worth of Chinese goods have been implemented so far. President Trump has warned Beijing that the next round of levies will be much larger.

Bitcoin Eyes Breakout

The cryptocurrency market stabilized on Thursday, with bitcoin eyeing a bullish reversal amid reports of a new bitcoin exchange-traded note (ETN) being offered in U.S. brokerage accounts.

According to Bloomberg, the Bitcoin Tracker One ETN will be available to U.S. traders under the ticker symbol CXBTF. The ETN has been publicly traded on Nasdaq Stockholm since 2015. Technically, the ETN will be quoted as a foreign debt in U.S. over-the-counter markets.

Bitcoin’s price reached a high of 6,476.70 on Bitfinex. The leading digital currency would consolidate at $6,380 for a gain of 1.1%. As Hacked reported earlier, BTC has crossed the 50-day moving average and appears poised for further gains amid a sharp rise in momentum.

The broader cryptocurrency market was valued at $206.2 billion Thursday afternoon, with most major assets reporting 24-hour losses. Ethereum Classic was a notable exception; the cryptocurrency spiked 18% after Coinbase Consumer confirmed full support for ETC listings.

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 550 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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