FiboGroup Market Analysis 2018

[Day_Trade_Ideas]

It will be interesting to see if we can get above 0.80. For the past 2 years we have been in mostly a sideways / slight uptrend. As long as we hold above the important longer term support at 7640/30 it is a positive sign for bulls. It might be worth getting long in these areas, but with pretty tight stops around the 7590 area. A break below 7590 (& weekly close below for confirmation) is a sell signal for next week targeting 7560/55, 7530, and 7505/00.

Supporting chart for reference.

 

[fibogroup.com]

Bitcoin has been stuck in a tight trading range for more than 2 weeks, unable to make any progress on the back of negative publicity and the threat by some governments to heavily regulate the crypto currency.


Some are even calling the currency a fraud and say once this situation is exposed, bitcoin could become worthless, leaving investors holding the bag and 100% out of pocket.


But even after all of these threats, Bitcoin has managed to find strong support between the $5,600 and $6,000 price mark which goes to show that not all investors believe that it is headed for a doomsday situation.


Daniel Worsley Chief Operating Officer of LocalCoinSwap is one of those names who believe the negativity surrounding bitcoin is overdone and it has withstood all the above.


He now believes it is possible that this tight trading range over the last couple of weeks is the calm before the storm and the currency may be gearing up for another massive bull run like we witnessed last year we means there could be some serious gains in store.


“There is no other network that has been as battle tested as the Bitcoin blockchain,” says Mr Worsley.


“It has resisted serious adversaries, and coordinated attacks designed to disrupt its functioning. It has survived all assaults. It wouldn't surprise me at all to see the price above $20,000 USD this year. He added.


Mr Worsley also noted that some good news will clearly offset the negativity and this should be the spark for the predicted bull run.


Especially given the amount of negative press which is now priced in, and investor expectation of another bull run, it will only take a couple of positive developments to set off the train.” He said.

 

[fibogroup.com]

Gold has once again shown its preference as a safe haven after Comments earlier today by US President Donald Trump that a military strike in Syria could come at any time.

The US President has vowed to hit Syria with a round of missiles for the Chemical weapons attack it made on its own people, which killed at least 40 people including children.

The confrontation has been made worse after Russia threatened to shoot down any missiles that the US fires as well as attack the bases from where the missiles were launched. This many say could lead to an all-out war between the cold war foes and gold would benefit immensely from such a situation.

“Both yellow and ‘black’ golds [oil] are currently finding support from heightened fear among investors that the U.S. and its allies may soon launch a military strike against Syria,” said Fawad Razaqzada, technical analyst with Forex.com.

Gold has been unable to significantly break through the $1,350 mark for the last year as each time it has tried, there has been strong resistance but this may be the atalyst for a clean break to send the price much higher

“Gold looks like it is about to finally break out after spending months in consolidation. A close above the bearish trend line at $1350/55 area could be the trigger,” Mr Razaqzada said.

Oil also hit it’s highest level in 3 years as the possibility of war in the Mediterranean see threatens to severely disrupt supplies from the region.

 

[fibogroup.com]

The oil price has pulled back today after hitting a 3 year high in yesterday’s trading session but the drop is seen as temporary as the US gears for missile strikes against Syria after the former launched a chemical attack against it’s own people..

The Majority of Oil supplies come from the middle east where Syria is located and even before this event the US was threatening to re-impose sanctions against Iran for their alleged Nuclear Weapons program which would drastically cut the amount of supplies from the region.

Now with a potential war in the making, analysts predict that the price of oil will be dictated by the size of the conflict and how many countries get involved.

If the conflict is contained to Syria the oil price may not have much further to go, but if it should spill over the borders or Iranian facilities are targeted the potential for oil to soar past $100 is a real possibility.

"We're at the pivot point. It's a binary outcome. If it's a pinprick in Syria, we've seen the price gains. We'll sell off afterwards. If Iranian assets, in particular in Syria, get hit, it's a game changer," said John Kilduff, energy analyst and founder of Again Capital.

"If this is all contained to Syria we've probably seen the bulk of the rise. The issue you get into is if there's a strike on Iranian assets in Syria, a direct hit on Saudi, or a scenario where the Saudis and Israelis team up to take it to Iran directly, that's where you get into triple-digit oil price land," he added.

Russia has vowed to back Syria in the conflict and has vowed to shoot down any missiles that are launched against the country as well as take out the bases where they came from.

Seeing as the missiles would be launched from a US ship it means that the Russians are prepared to attack the American military who would respond with alarming force creating an all-out war and we would see oil prices soar to highs that haven’t been seen in many years.

 

[fibogroup.com]

Analysts are highly divided on the future direction of the oil price which had jumped over 10 percent in the last 2 weeks before pulling back in the last 2 days as political tensions in the middle east ease.

The attack by US forces and their allies last week against Syria’s chemical weapons sites threatened to ignite an even bigger war with Syria’s allies such as Russia and Iran which sent the oil price to 3 year highs.

Now that things have calmed down and the US and UK governments are on record as saying the attack on Syria is a one-off strike, some say there are not many factors left to support the current prices of oil and a reversal is in the making.

Even the expected reintroduction of sanctions against Iran and the trouble brewing in Venezuela may not be enough to prop up the oil price.

The sanctions could destabilize the region further, but we struggle to accept a narrative that the market had been expecting big gains in Iranian output over the next several years anyway.” Noted analysts from Barclays.

“Moreover, the ongoing losses from Venezuela are also broadly accepted by most analysts. “Therefore, it is worth suggesting that in both of these countries, a dire scenario may already be priced in,” they added.

Analysts from Goldman Sachs however see things differently, and expect the re-introduction of sanctions against Iran will have a profound effect on the oil price and even if sanctions remain off the table the oil is still likely to push higher,

"The risk to Iranian supply has a very wide spectrum of possibilities. Even if President Trump doesn't sign the May 12 sanctions waiver, the end result could be just a redirection of oil flows," analysts from Goldman Sachs noted”,

“With about 200,000 barrels a day lost. However, if the nuclear deal collapses, there could be 1 million barrels a day of Iranian oil lost from the market” they added.

 

[fibogroup.com]

The Australian dollar can’t seem to find a direction in today’s trading session after yesterday’s losses following the latest minutes from the Reserve Bank of Australia where the central bank reiterated that any rate hikes are a long way off.

While the RBA agree that the next move in rates will be up and not down, inflationary pressures and disappointing wage growth are likely to keep their hands tied for some time.

“Low growth in labor costs in combination with strong competition in the retail sector suggested that inflation would remain low for some time,” they noted.

To some this means rates are likely to remain the same well into the future, maybe for a period of up to 2 years or there is even an outside chance that rates will be cut.

“While consensus and the market have pushed back their expectation for RBA rate hikes, we don’t think they have done enough, and we continue to see the RBA on hold until late 2019,” noted analysts from Morgan Stanley.

“With limited prospects for wage and inflation pressures, the RBA will be in no rush to hike rates, and we even see a risk of a cut if softness in the housing market accelerates and broadens.” they added.

Other analysts however disagree, and believe the RBA will eventually have to overlook the underperforming wage figures and concentrate on other areas of the economy such as commodity price.

Also, they believe it is important that Australia doesn’t fall behind other major economic countries such as the US, Canada and Great Britain who are currently in the process of lifting rates.

"Australia is benefiting from the global upswing not only through increased foreign demand, but also through rising commodity prices, which support the Australian terms-of-trade," says Esther Reichelt, an analyst at Commerzbank

"As we expect market speculation for interest rate hikes to increase during the course of the year, we expect the Australian dollar to appreciate slowly in the upcoming quarters." he added

 

[fibogroup.com]

After hitting a high of almost $1.44 against the US dollar last week the British pound has made a stunning reversal and has slumped down below the $1.40 mark and the way things are looking, we may not have seen the bottom yet.

The turning point for the British currency began last week with numerous releases of disappointing economic data but it was comments from Bank of England Governor Mark Carney about the central banks futureplans for interest rates the really piled pressure on the pound

“I don’t want to get too focused on the precise timing, it is more about the general path. The biggest set of economic decisions over the course of the next few years are going to be taken in the Brexit negotiations and whatever deal we end up with. And then we will adjust to the impact of those decisions in order to keep the economy on a stable path,” noted Governor Carney.

The next bank of England meeting is now shaping up to be a real blockbuster and before Carney’s comments the market had been pricing in a more than 90 percent chance that higher rates were coming next month but now the odds have fallen dramatically.

Also, affecting the pound today is reports that Theresa May’s plan regarding the Irish border will be overwhelmingly rejected by the European union when the 2 sides meet next month which threatens to throw the Brexit negotiations into turmoil.

Without the border question settled, talks of a trade agreement between the EU and Great Britain will come to a halt and this is likely to put further pressure on the pound.

“With UK economic growth lagging behind all other major economies, and the path of Brexit once more looking distinctly rocky said Rebecca O’Keeffe, head of investment at interactive investor.

“The sterling’s recent strength is in danger of reversing sharply, particularly if Prime Minister May’s position comes under further pressure,” she added.

 

[bigdolly]

Great, saw same thoughts in my broker's analysis? What type of trading analysis do you use fundamental or more technical approach.

 

[fibogroup.com]

It seems as if the market has finally woken up to the potential of the US dollar after the recent gains it racked up against most major currencies over the past week and we may see more gains as investors focus their attention on rates and higher returns.

The catalyst for the greenback’s strength has been the rise in treasury yields, which hit 3 percent for the first time in 4 years making the US dollar an attractive investment as a high yielding currency.

The second factor is the expectations that the US Federal Reserve will move more aggressively this year in raising interest rates this year which will only widen the interest rate gap difference between the US dollar and currencies such as the British pound, and the Euro.

The Euro in particular is extremely vulnerable to more losses against its US counterpart as interest rates remain at 0 which makes the latest interest rate decision from the ECB later today a make or break time for the European currency.

No changes in rates are expected from the record low of 0 percent but the following monetary statement will be closely watched by trader and if the European central bank doesn’t hint that there could be a chance of an interest rate hike or 2 this year we may see the Euro accelerate its recent losses.

'We're seeing cyclical fundamentals turn to favoring the U.S. and that is a recipe for the dollar to strengthen, and we think it continues for a while," said Ben Randol, Bank of America Merrill Lynch G-10 currency strategist.

"One thing that we've seen is relative central bank expectations, which were a catalyst for the euro higher at the beginning of the year, have reached cyclical limitations." He added.

The US dollar will likely receive a further boost on Friday with the release of GDP figures which are expected to hit the market above expectations and on the same day we will also see GDP numbers from Great Britain.

If this release fails to meet investor expectations the chances of a rate hike next month from the Bank of England will probably fall by the wayside and lead to a continuation of the downtrend for the pound we’ve recently witnessed against the greenback.

 

[fibogroup.com]

The British pound has finally found some support today on the back of a round of positive local data that brings to a halt the dramatic slide the currency has suffered over the past 2 weeks but a few analysts remain wary and predict that the pound will resume its downtrend.

The purchasing managers index for the construction industry (PMI) hit the market earlier today at 52.5 for the month of April, above expectations for a figure of 50.5 and well up from the previous month’s number of 50.5.

Some claim the news was to be expected because of severe weather experienced over winter cause an unusual amount of damage to homes and buildings which accounted for much of the new construction projects.

“A rebound in construction activity was pretty well inevitable after snowfall resulted in severe disruptions on site during March. House building led the way, with growth in April among the strongest seen over the past two-and-a-half years," said Tim Moore, associate director at IHS Markit.

A rebound in PMI figures will not offset the other disappointing data released to the market recently and will not be enough to sway the Bank of England’s anticipated decision to keep rates on hold When they announce their decision next week.

Brexit will once again be at the forefront of the pounds fortunes today as British prime Minister Theresa May meets with her cabinet to come up with a solution on the border issue between Northern Ireland and Ireland and with options running out, the chances of the UK remaining in the customs union are growing by the day.

If the talks do indeed head that way, Mrs May could face a revolt by members of her own cabinet which will lead to speculation of a hard Brexit which will surely further damage the pound.


"The pound has been under relentless downward pressure. The upturn in Brexit uncertainty surrounding the Customs Union debate is not helping” says Derek Halpenny, European head of global markets research at MUFG

“Today will be an important day in this debate with PM May holding a cabinet meeting to try and reach a consensus on an approach to border controls," he added.