Week of 3/25/2018 Market Moving News

FOMC speeches will set the tone for the week. We are expecting USD to crash 1% or more tomorrow (Monday) 

 

This could be the breaking point for the S&P and even possibly the Dow

 

 

 

with FOMC speeches all week & GDP being published we may see some moment in the dollar 

 

 

As for Forex we see some great opportunities

EURJPY long (intraday type setup)
https://www.tradingview.com/chart/EURJPY/MUscO5YT-EURJPY-Long/

USDCAD short (intraweek setup)
https://www.tradingview.com/chart/USDCAD/SKv8FzvB-USDCAD-SHORT-overall/

USDJPY potential long (intraday setup)
https://www.tradingview.com/chart/USDJPY/gdO6NJC0-USDJPY-highly-active-potential-long/

AUDUSD double play. Shorting then longing (look at chart)
https://www.tradingview.com/chart/AUDUSD/T5AKBlCQ-AUDUSD-Major-Trend-Long-W-chart-Shorting-D-chart/

EURUSD keeping an eye out but not trading
https://www.tradingview.com/chart/EURUSD/9W0l7yu2-Not-trading-EURUSD-for-now/

 

Dollar Remains Slightly Lower after U.S. Jobs Report



Investing.com - The dollar remained slightly lower against the other major currencies on Monday after Friday’s U.S. jobs report tempered expectations for a faster rate of rate hikes by the Federal Reserve this year.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, was at 89.94 by 10:13 AM ET (14:13 GMT), down 0.13% for the day.

The U.S. economy added 313,000 jobs in February, the Labor Department reported Friday, but average hourly earnings rose by just 0.1%.

The strong jobs growth boosted risk appetite, while the slowdown in wage growth dampened expectations for four rate hikes by the Fed this year, a negative for the dollar, which tends to become more attractive to yield-seeking investors when borrowing costs rise.

The euro was little changed, with EUR/USD last at 1.2310 after rising as high as 1.2341 earlier.

Sterling pushed higher against the softer greenback, with USD/GBP climbing 0.27% to 1.3889.

The pound’s gains were held in check amid fears that an upcoming Brexit summit meeting later this month would fail to secure a transition arrangement.

Sterling was higher against the euro, with EUR/GBP down 0.2% to 0.8863.

Against the yen, the dollar was lower, with USD/JPY down 0.24% to 106.54.

Demand for the Japanese currency was boosted amid concerns over a cronyism scandal linked to the country’s prime minister and his wife involving the sale of public land. The safe haven yen tends to rise in times of market uncertainty.

Market Snapshot – Dollar Weakening Continues

The euro rose higher during the course of trading today as the dollar weakness assumed larger proportions during this period and we saw the dollar weaken all across the board. We are likely to see this weakening continue for the rest of the trading session as worries about the tariffs imposed by the US continued to dominate the headlines and weaken the dollar. Not only would these tariffs increase the domestic costs of cars and other items that use these metals, it would also lead to a large possibility of a trade war breaking out between the global economic powers and this is not good for any country for that matter. This has led the stock markets lower and this is likely to keep the dollar weak as well. Just when it looked as though the dollar would be able to make a major bullish run, we are seeing the euro about to close the week above the 1.2240 support region and this should help the bulls regain control.

In the crypto markets, the BTC prices have once again lost touch with the $11000 region and with the weekend closeby we can see the action begin to wind down in a slow and steady manner. The market is open during the weekends but we doubt whether the bulls would have the power to push the prices higher by too much over the weekend and this is likely to lead to consolidation and ranging for much of the weekend. The traders were hopeful that the bulls would be able to establish control atleast over the next few days but that has not happened so far and we believe that the price action is likely to be even more choppy in the coming days as the prices swing on either side of the larger range between the $10000 and the $12000 regions so far.

Market Snapshot – Traders Tread Cautiously on Hawkish Fed

Stocks Move Lower

The stock markets have been trading in a cautious manner over the last few days as the Fed has been more hawkish than what many would have expected it to be. The focus over the last 24 hours has been on the FOMC meeting minutes that were released yesterday. After some initial confusion over how it needed to be interpreted, the traders realised that the Fed meant business and that it could be possibly even 4 rate hikes during the course of the year depending on how the incoming data from the US pans out. This kind of hawkish language was not something that was expected at this stage from the Fed and this has led the dollar higher and put the pressure on the stock markets. The increase in interest rates could make taking loans a costly affair in the US and hence this is likely to affect the stock markets in the medium term. This is one of the reasons why the stocks are under pressure and the traders are trading carefully with the next bearish leg just around the corner.

Cryptos Hit by Losses

In the crypto world, we are seeing some all round losses with the BTC moving below the $10,000 region after scything through the strong support at the $10,400 region which had been holding up the prices till yesterday. The ETH prices have also dropped below the $800 region as of this writing and it can be said that these losses can be seen all around the markets. There have been no specific reasons that can be attributed to the drop but as the markets begin to mature, we have to try and see how the different markets and instruments operate in co-relation with each other in the short and medium term. The last couple of days has seen some solid strength in the dollar and the prospect of quick rate hikes in the US and this could be affecting the demand of the cryptocurrencies. The traders need to wait and see if there is a pattern emerging out of this.

 

Global Equities Struggle after Fed Report, Wall Street Reverses Lower

Global equities have sold off this morning. The Nikkei Index declined by more than a percent, and the Hang Seng fell nearly 1 and a half percent. European equities have also produced selling. French Consumer Price Index statistics were lackluster with a result of minus 0.1%. And a German Business Climate reading missed its estimate. Wall Street was positive most of Wednesday, but upon investors digesting the Federal Reserve’s Meeting Minutes the three major indexes experienced strong momentum downwards. Wall Street is expected to open with further headwinds per indicators coming from the Futures Markets.

U.S Dollar Reacts in Strong Fashion, Disappointing U.K Business Sentiment

Forex has provided pure fireworks the past day. The U.S Dollar became stronger late last night as investors began to react to the renewed prospects of a few interest rate hikes in the States. The Pound and Euro have been trading relatively calmly the past couple of hours, but remain below yesterday’s higher values. Second Estimate GDP results came from the U.K this morning and were slightly below expectations. And a Business Investment survey, also from Britain proved disappointing. The Yen has been slightly stronger as risk adverse trading dominated Asian equity markets today.

Near-Term Appears Vulnerable to Gold, Steady Decline and Headwinds

A strong reversal took place for Gold late on Wednesday. After initially gaining upon the Federal Reserve’s report, the precious metal began a steady decline and headwinds have continued. Gold is near 1321.00 U.S Dollars an ounce and looks vulnerable for the near term.

Canadian Retail Sales Statistics, Weekly Unemployment Numbers from the U.S

Crude Oil Inventories data will come from the U.S at 16:00 GMT and could provide insights for commodity traders.

  • 13:30 PM GMT Canada, Core Retail Sales
  • 13:30 PM GMT U.S, Unemployment Claims
  • 16:00 PM GMT U.S, Crude Oil Inventories

Stocks slip further as banks sink; Wells Fargo plunges

NEW YORK (AP) — U.S. stocks are slightly lower near midday Monday as banks and energy companies slip, but technology companies recover some of Friday's losses. Wells Fargo is sinking after the Federal Reserve hit the bank with new sanctions over a scandal that involved opening millions of phony consumer accounts. The market erased some of its early losses following a mid-morning report showing more evidence of economic strength in the U.S economy.

KEEPING SCORE: The Standard & Poor's 500 index lost 7 points, or 0.3 percent, to 2,754 as of 11:20 a.m. The Dow Jones industrial average was down 73 points, or 0.3 percent, to 25,449. Early on, it fell 355 points. The Nasdaq composite fell 4 points, or 0.1 percent, to 7,236. Technology companies recovered from sharp losses Friday, when investors were disappointed with earnings reports from Apple and Alphabet, the two most valuable companies on the market.

The Russell 2000 index of smaller-company stocks fell 6 points, or 0.4 percent, to 1,541.

The S&P 500 is down 4 percent from its latest record high, set January 26.

Investors are worried about evidence of rising inflation in the U.S. Increased inflation might push the Federal Reserve to raise interest rates more quickly, which could slow down economic growth by making it make it more expensive for people and businesses to borrow money. Rising bond yields are also making bonds more appealing to investors compared with stocks.

WELLS FARGO PLUNGES: Wells Fargo dropped $4.65, or 7.3 percent, to $59.42. Late Friday the Fed said it will freeze Wells Fargo's assets at the level where they stood at the end of last year until it can demonstrate improved internal controls. The San Francisco bank also agreed to remove four directors from its board.

WAKING UP: The stock market has been unusually calm for more than a year. The combination of economic growth in the U.S. and other major economies, low interest rates, and support from central banks meant stocks could keep rising steadily without a lot of bumps along the way. Experts have been warning that that wouldn't last forever, and after big gains in the first three weeks of January, that stretch might be over.

Stocks haven't suffered a 5 percent drop since the two days after Britain voted to leave the European Union in June 2016. The market hasn't gone through a 10 percent drop since early 2016, when oil prices were plunging as investors worried about a drop in global growth that would hurt demand. U.S. crude hit a low of about $26 a barrel in February of that year.

SURVEY SAYS: Stocks recovered most of their early losses after a strong report for the service sector. The Institute for Supply Management released a survey that showed January was the best month for the service sector since 2005 as production, new orders, hiring and new export orders all grew faster in January. Private service companies dominate the U.S. economy and the ISM's index has showed growth every month for the eight years.

SWEETENED OFFER: Chipmaker Broadcom raised its offer for competitor Qualcomm to $121 billion in cash and stock, or $82 per share, and called the bid its best and final offer. It had offered $103 billion for Qualcomm, and that company says it will review the bid. Broadcom rose $6.27, or 2.7 percent, to $241.77 and Qualcomm dipped $1.77, or 2.7 percent, to $64.30.

ENERGY: Benchmark U.S. crude slid 43 cents to $65.11 a barrel in New York. Brent crude, used to price international oils, fell 25 cents to $68.33 a barrel in London.

Exxon Mobil lost $2.29, or 2.7 percent, to $82.24 and Chevron gave up 93 cents to $117.65. Both companies reported disappointing fourth-quarter results on Friday and are coming off their biggest losses in years.

BONDS: Bond prices fell slightly. The yield on the 10-year Treasury note rose to 2.85 percent from 2.84 percent.

CURRENCIES: The dollar fell to 110.11 yen from 110.28 yen. The euro slipped to $1.2417 from $1.2451.

BITCOIN WOES: Bitcoin prices and futures continued to sink. According to Coindesk, the price of bitcoin fell 9 percent to $7,437. It reached a high of almost $20,000 in December, and traded under $1,000 in early 2017. Many financial pros warn that bitcoin is in a speculative bubble that could burst anytime. On the CME, bitcoin futures plunged 14 percent to $7,385. They tumbled 13 percent to $7,370

AUD/USD and NZD/USD Fundamental Weekly Forecast – Australian Dollar: Trump Speech, Consumer Inflation Key Market Movers

Last week, the Australian Dollar surged against the U.S. Dollar, taking out the September 20 main top at .8102 and the September 8 main top at .8124 before stopping short of its May 4, 2015 main top at .8162 and a long-term 50% level at .8165. There wasn’t any major economic news from Australia last week. All of the price action was driven by a steep plunge in the U.S. Dollar. Higher commodity prices as a result of the weaker Greenback have also added further impetus to the Aussie strength.

The AUD/USD settled at .8108, up 0.0126 or +1.58%.

View photos
Weekly AUD/USD

The New Zealand Dollar finished the week sharply higher despite some strong mid-week volatility, triggered by weaker-than-expected quarterly inflation data. The rally was fueled by the weaker U.S. Dollar.

The NZD/USD settled at .7355, up 0.0082 or 1.12%.

View photos
Weekly NZD/USD

Last week, the New Zealand government reported that growth in its consumer prices unexpectedly slowed in the final quarter of 2017 as a sharp drop in the price of retail goods outweighed the effect of more expensive gasoline and air fares.

The consumer price index increased 0.1% from the previous quarter and 1.6% from a year earlier, Statistics New Zealand said Thursday, following a 0.5% rebound in the third quarter that brought the annual gain to 1.9% on year.

Economists were looking for a 0.4% increase from the previous quarter, and remain steady at 1.9% compared with the previous year.

Draghi: U.S. Weak Dollar Raise Questions

ECB President Draghi addresses a news conference at the ECB headquarters in Frankfurt

Early Investors are making 50,000% returns on ICOs

Early investment is paying off big time

The average return on the S&P is 10%. Over the last year bitcoin has seen unprecedented returns of 1000%. But savvy cryptocurrency investors are investing in ICOs and making ROIs as high as 50,000%. Stop and think about that for a moment. That means for a $100 investment in early 2017 you could have netted $50,000. Not too shabby for a year of trading.

ICOs (Initial Coin Offerings) are a relatively recent phenomenon where investors exchange cryptocurrency (usually Ethereum) for a stake in an early stage project. This sort of early stage investing has traditionally been highly regulated. Cryptocurrency has provided a way around these regulations. Rather than having to wait to invest until companies grow large enough to IPO and hit the stock market, ICOs let you get in at the ground floor.

Banned in some countries

Not every market is thrilled with ICOs thumbing their noses at regulation. China and South Korea both banned ICOs earlier this year and the United States is beginning to crack down on ICOs that violate security laws. Despite this, many investors are optimistic about the early stage investing opportunities that ICOs provide.

Imagine if you could get in on Facebook when it started back in 2004. Or Google just as it was raising its early rounds? ICOs make this a reality.

Top returns of 2017

2017 saw some incredible returns for investors in ICOs. Some of the leaders of the pack are listed below:

Komodo

  • ROI: $100 in their ICO = $14,151 today
  • One-liner: Privacy focussed ethereum
  • Why it matters: Komodo is yet another platform for creating applications on the blockchain. The twist is it’s focus on ICOs. It allows anyone to seamlessly create their own blockchain, issue tokens, and ICO. It’s built off a zcash fork so unlike ethereum it offers anonymous usage and transactions.

Ark

  • ROI: $100 in their ICO = $36,600 today
  • One-liner: Lets blockchains communicate with other blockchains.
  • Why it matters: There are many cases for businesses to create and maintain their own blockchain. Ark aims to allow easy communication between different blockchains. Rather than having a bunch of independent data stores and platforms with Ark there is the potential for a network. The need for this network will likely increase as more and more blockchains are created.

Spectrecoin

  • Return: $100 in their ICO = $50,834 today
  • One-liner: Privacy focused cryptocurrency
  • Why it matters: Privacy focussed cryptocurrencies like Monero and Zcash have been getting a lot of attention lately. Spectrecoins claim to fame is that it provides network privacy by running within the TOR network.

The average returns of ICOs outpace bitcoin

The top ICOs of 2017 offer thousand % returns on investment - but what about the average return? Are ICO returns simply a matter of luck?

An analysis of 232 ICOs by Mangrove Capital partners concluding that:

“If one had invested blindly in every ICO, including the significant number of ICOs that failed, this would have delivered a 13.2x return.” [http://www.mangrove.vc/ico-report2017]

At a rate of 1,320% ROI, ICOs beat out even bitcoin’s prodigious rise over the last year.

Unfortunately as ICOs gain popularity as a fundraising mechanism more and more projects seek to take advantage of them. In November, cryptocurrency startup ‘Confido’ raised $375,000 in an ICO before disappearing without a trace. Others like Tezos, which raised 232 million earlier this year, are embroiled in multiple lawsuits with investors demanding their money back. The lack of regulation in this space has lead to a wild west where anything can happen. Investors should be prepared to do their research and approach all potential investments with skepticism.

This space is just getting started

2017 has been a watershed year for cryptocurrency. But the trend is just getting started.

There are a few positive indicators that ICOs are here to stay:

  1. The number of ICOs is increasing at an exponential rate.

According to Smith & Crown, there are 190 ICOs planned for next month and more are listed every day. This is a massive increase from the handful of ICOs that launched in 2016.

2. The amount of money entering this space is trending upwards

* Totals raised are based on data from Smith and Crown and reported by companies.

Despite a brief dip in July and August, ICO investment has recovered and shows signs of increasing exponentially.

3. Barriers to entry in this space are still high, but decreasing steadily

Right now investing in ICOs has a moderately high barrier to entry. You must hold ethereum, which many investors are only just learning about. You have to learn how to interpret white papers and must be technical enough to understand how your EC20 tokens will be stored. If you want to trade on an early exchange like Etherdelta, be prepared to learn how to use metamask and manually manage your own ethereum transactions.

We will likely see more interest and activity in this space as these barriers to entry are broken down in the following year.

How can you invest?

So you’re a cryptocurrency investor. You hold bitcoin, some altcoins and are ready to take a step into the wider world of ICO investing. Here’s how you can start:

1. Obtain ethereum.

Some ICOs accept bitcoin or other cryptocurrencies but ethereum is by far the

most widely accepted crytocurrency when it comes to ICO investing. It’s also the currency of choice for trading for ICO tokens once they hit an exchange.

2. Research. Research. Research.

Unlike IPOs which require rigorous screening, there is very little regulatory work required for a company to ICO. At the very least you should look into who the founders are, how much traction they have, and what sort of token they are offering. Some ICOs are targeting investors with Google ads or awarding bonus tokens for investing within a limited time window. There is nothing wrong with good marketing tactics (they can indicate a good team) but recognize when they are being used against you.

3. Only invest what you can afford to lose.

ICOs are an extremely high risk investment. You should only invest discretionary

income and they should be a small part of your overall investment strategy. Billionaire investor Mark Cuban recommends investing no more than 10% in bitcoin. Treat ICOs with even more caution. The majority of startups fail, even well funded ones, so be prepared to lose what you invest, even if the landscape is optimistic.

Facebook’s Mark Zuckerberg Resolution: “Give People the Power” via Cryptocurrency

Mark Zuckerberg, founder, chairman, and CEO of social media platform Facebook, has posted his annual challenge. It’s often a look back at major events, taking stock of the year, and appraising what’s ahead. This year, he ended his note with a pointed call to “take power from centralized systems” by employing uses for “encryption and cryptocurrency.”

 

Zuckerberg Gets Reflective

Mark Zuckerberg believes a great challenge, perhaps the most important, facing tech companies is centralization versus decentralization. Before getting to the meat of his annual statement, however, Mr. Zuckerberg reflected on the obstacles facing his company. “Every year I take on a personal challenge to learn something new,” Mr. Zuckerberg posted 4 January 2018 just before 8am PST.

He continued, recalling how challenging himself in this manner began in 2009 during the Great Recession. Facebook had yet to turn a profit, and Mr. Zuckerberg, 33, remembers it being “a serious year, and I wore a tie every day as a reminder.”

Facebook's Mark Zuckerberg Resolution: “Give People the Power” via Cryptocurrency

Facebook started from Mr. Zuckerberg’s Harvard dorm room in early 2004. It quickly expanded due to popularity, and by later the following year had millions of members. As of 2017’s final quarter, the social network boasted over two billion registered users. The site ranks third both in the US and globally, behind Google and Youtube respectively.

“The world feels anxious and divided,” he wrote, “and Facebook has a lot of work to do.” Acknowledging the company’s limitations, Mr. Zuckerberg went on to explain “we currently make too many errors enforcing our policies and preventing misuse of our tools.”

Facebook's Mark Zuckerberg Resolution: “Give People the Power” via Cryptocurrency

Decentralization versus Centralization

For Mr. Zuckerberg, “one of the most interesting questions in technology right now is about centralization vs decentralization,” he began. “A lot of us got into technology because we believe it can be a decentralizing force that puts more power in people’s hands. (The first four words of Facebook’s mission have always been ‘give people the power’).”

Reports daily about his and other technology-based companies potentially cooperating with authorities, helping them to gather large nets of personal information, have taken a toll on the average person’s confidence in using such sites.

Indeed, Mr. Zuckerberg notes “many people have lost faith in that promise. With the rise of a small number of big tech companies — and governments using technology to watch their citizens — many people now believe technology only centralizes power rather than decentralizes it,” he lamented.

Facebook's Mark Zuckerberg Resolution: “Give People the Power” via CryptocurrencyAs a possible answer to centralization, he ends his statement with a provocative call to “counter-trends.” Through “encryption and cryptocurrency,” which can “take power from centralized systems and put it back into people’s hands,” Mr. Zuckerberg is “interested to go deeper and study the positive and negative aspects of these technologies, and how best to use them in our services.”

It’s difficult to know exactly what he’s getting at, but a platform such as Facebook embracing any cryptocurrency, or creating its own, would be a dramatic market entrant. This appears to be one of the few statements Mr. Zuckerberg has made on cryptocurrency. Loads of rumors have spread through the ecosystem for years about his possible involvement in this or that project or coin. None of them have been formally confirmed.

Dancing With the Devil: ‘Cashing Out’ Cryptos Into Fiat Not So Easy

Bitcoin and other cryptocurrency assets are precious and some of them have grown over 1300 percent in value this year. Although, with the price on exchanges being higher than ever before its now a bit more difficult for those who want to ‘cash out’ or make significantly large purchases without being watched by the prying eyes of tax collectors and governments.

Also read: Russian Regulators Draft Law to Restrict Crypto Mining, Payments, and Token Sales

Buying That Lambo May Not Be So Easy

Lately across social media and forums, you can find posts written by individuals who have ‘cashed out.’ Maybe they bought a luxury car like a Lambo, paid off their mortgage, or cleared their student loans with cryptocurrency gains. However some of conversations online concerning how to cash out detail how difficult it is without being watched, or being stopped by the third party payment processors.

Dancing With the Devil: 'Cashing Out' Cryptos Into Fiat Not So Easy
With cryptos so valuable, many people think that they can casually buy a Lambo these days.

For instance exchanges like Coinbase, Bitstamp, Kraken, and many others require a good amount of verification to revert bitcoins to fiat or vice versa. And just because you are approved it doesn’t mean you’ll be able to throw US$100,000 worth of BTC down on an exchange and expect to have the funds sent to your bank account without issue. The exchange may cancel the process even after the sale has been made. Furthermore, on the bank side, your financial institution may also stop you from cashing out large sums or freeze your account.

Typically in the U.S. and many other regions, anything between $5,000-10,000 deposits and withdrawals are monitored for money laundering and tax evasion. In essence, if you want to exit back to fiat using an online exchange to process $5-10K, you have to trust all the third parties will execute the deal as promised. Also if it’s a regulated, exchange trades in amounts mentioned earlier are likely monitored.

Two-Way Bitcoin ATMs and Taking It to the Streets With Localbitcoins

Then maybe you say to yourself, “well I could sell my funds to a two-way BTM.” Well, most of the two-way bitcoin automated teller machines only allow users to sell $200-500 per day. At that rate to cash out $10,000 worth of bitcoin, you would have to visit the BTM for twenty days straight and pay a 7-10 percent fee as well. Another talking point that always enters the conversation is those who believe it’s simple to use Localbitcoins to cash their BTC into fiat. In some areas of the world it’s easy to do this, but in countries like the U.S., they are arresting large Localbitcoins sellers for illegal money transmission and other charges.

Dancing With the Devil: 'Cashing Out' Cryptos Into Fiat Not So Easy
Selling bitcoin on the streets also has risks.

Further, it takes quite a bit of time and well-executed trades to become a trusted trader on the peer-to-peer platform. Much like eBay, it’s not easy to build robust reputation immediately. Lastly, if you choose to try and get direct cash for your BTC from Localbitcoins traders in person, you have to be completely comfortable with the deal and your surroundings. There have been many instances of street traders being robbed or scammed during a trade.

‘Someday Neo, You Won’t Have To’

It’s true many cryptocurrency enthusiasts have been able to cash out using the methods mentioned above, but there are always risks involved with converting back to fiat. Some people don’t care as they’ve done nothing ‘wrong’ and have no problem shelling out 33 percent for capital gains or other taxes involved. Also, there are many different ways people have found to be a reliable way to sell large amounts of cryptocurrencies as well. This includes people who know someone at an exchange, someone who is friendly with a miner or big over-the-counter (OTC) dealers.

Dancing With the Devil: 'Cashing Out' Cryptos Into Fiat Not So Easy
Some people believe they won’t have to ‘cash out’ into fiat.

Lastly, there are cryptocurrency advocates who just don’t care about the difficulties presented when going back to fiat. These people have the firm belief that digital assets like bitcoin, ethereum, and a few anonymous coins just might be the world’s dominating currencies. The “someday I won’t have to” exit back to fiat people exist in significant number and believe the renminbi, dollar, euro, and yen are doomed.

Do you think it’s difficult to exit back into fiat? Do you think you will never go back to nation state-issued currencies? Let us know about your experiences selling large sums of cryptos and exit strategies in the comments below.