We’ve Never Been This Low

Hi Everyone,

Thousands of protesters. The government on the verge of terminating all Supreme Court Justices who do not bow to the current government. Europe and the United States issuing a warning not to proceed with such anti-democratic measures. You’d think we’re talking about a third world country. Nope.

This is happening in the heart of the free world, in Poland.

For one thing, it’s good to see the people of Poland on their feet and protesting these changes. Though the fact that there are only thousands of protesters and not more is a little worrying.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

Dollar Sinking

OPEC IMF & UKUS

Bit-fork Ahead?

Please note: All data, figures & graphs are valid as of July 24th. All trading carries risk. Only risk capital you can afford to lose.

Market Overview

This week in the markets has started much like the last one has ended, eerily quiet.

The VIX volatility index closed out on Friday at a new all time record low of 9.36. This graph from Bloomberg shows the “fear index” since inception. We’ve simply never been this low before.

European and U.S. stock markets pulled back a bit on Friday, but Asia is mixed so far this week.

Meanwhile, the U.S. Dollar continues to sink into oblivion. Since the beginning of the year, it’s down almost 8.8%. Let’s take a look at the long term chart.

It’s not just Trump sinking it either. The ramp up that we see on the left side of the chart was a move made largely in hopes that the Fed would be raising their interest rates. Now that the interest rate expectations seem to be slowing, the Buck is losing momentum and starting to fall.

Busy Day Ahead

With plenty of headline events on the agenda today it’s difficult to tell just which ones will have a heavy impact on the markets. The London dispatch to Washington DC could have some effect on the Pound as they seek to establish a framework for post-brexit U.S.-U.K. relations.

The IMF will also have the spotlight for a bit when they announce their global growth forecasts. The International Monetary Fund is probably the most qualified organization to make such predictions about the global economy. An upbeat report today could definitely have an effect on investors moods.

… but the thing that I’m watching most closely is the OPEC meeting in Russia. In particular, we want to hear about Nigeria and Libya. These two countries were exempt from the current production cuts since they’re just recovering from some rough geopolitics.

So now that they’ve more or less brought their production levels back to normal many will be expecting them to join in and put a maximum limit on themselves.

Over the past year, the price of oil has been relatively stable between $40 and $55. The sharp pullback at the end of last week (white circle) was rather dangerous but if OPEC and friends pull off a stunning show today they could try and coax the sticky black stuff back towards the middle of its range.

Trouble Ahead

Judging from the price of bitcoin over the past few days it almost looks like the trouble is behind us but judging from online forums and signals coming from the various mining pools we may yet see more turbulence ahead.

At this point, it looks like a total meltdown of the network may have been avoided as the SegWit solution is almost certain to be implemented shortly. The feeling is that many who are signaling for SegWit are actually supporting SegWit2x and that we could very well be headed for a hard fork by the end of the year.

At this point, we need to consider the technical analysis as well as the fundamentals. At this point, there’s a wide range of about $1200 between the two blue lines. The price is between it’s all time high, just shy of $3000, and the low point of the pullback that ended last Sunday.

Let’s have an awesome week!

This content is provided for information and educational purposes only and should not be considered to be a 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.

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