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Macroeconomics

Bitcoin Trend Analytics August 29BTC broke the key support last Friday. We mentioned last week the possibility of a lower consolidation range if the recovery is failed. Currently, BTC is testing the final bullish support, which is crucial to the sustainability of the upward movement. However, sustaining the movement around this level range requires a strong bullish spring to break up resistances, otherwise, bulls could lose their momentum. Breaking down this support will the price drop deeper. QT doubles in September. Fed lifts the upper limit of QT to 95 billion (60 billion treasury bonds + 35 billion MBS). The market is under the pressure of quick and massive liquidity drainage. The market expected interest rate hike in September: 50bp(39%),75bp(61%)
Short
by BitMidas
Sell EURAUD Idea for the medium-termIt's hard to see the Eurozone fall into a recession. Currently, New Zealand seems like it will be able to avoid the same recessionary risks as a result of a global economic slowdown. The pair has broken below a strong level of support turned resistance. The pair has bounced above this level since 2017. It's easy to see the pair move lower HEADWINDS TO THIS PLAY New Zealand retail sales disappointed this week showing that the country's economy may be slowing down. The country also has more exposure to China, which is struggling to buoy the economy as consumer spending and sentiment keeps falling. If China's economy continues to struggle despite current easing, I expect NZD to be weak. TAILWINDS TO THIS PLAY The Eurozone data for August showed PPIs, PMIs and sentiment from both businesses and consumers disappointed to the downside. This has pushed the EURUSD back to parity after a bounce. The Euro is back to parity and volumes show that traders are not as bearish as they were back in April. However, short positions for non-commercial traders have increased by 70K+ since end May. Eurozone recessionary worries as a result of high energy prices in the region are placing the Euro as a precarious position. I expect another leg down in the Euro to 0.93-0.95 region.
Short
by GrizzlyBearBee
1
JICPT| USDCNH is likely to test 7.01Hello everyone. USDCNH has been moving sideways for the past 3 months until the weaker-than-expected July economic data released this week. In addition, the unexpected rate cut to MLF gave a boost to the pair. The offshore Chinese currency fell sharply against the dollar by over 700 bps. Now, it pulled back from the previous high around 6.83. Technically, the all my moving averages are heading to the upside, with a quick retest of my long key MA. That may indicate that previous high is likely to be penetrated. By the measure move method, the upper range after the breakout is 7.01. The weaker Renminbi can help China's export, offsetting the impact of sluggish domestic demand. Companies and consumers are reluctant to take on more debt amid fresh Covid flare-ups. What do you think? Give me a like if you're with me.
Long
by JICPT
Between BlackRock and a TornadoThe connection between traditional finance and crypto is more closely linked than ever before as institutional demand for our treasured asset class rises rapidly. Last week we saw BlackRock, the world’s largest asset manager with approximately $8.5 billion under management, endorse bitcoin by offering a spot bitcoin private trust to their U.S-based investors. Being the largest asset manager in the world, it could be likely that all of their competitors will quickly follow suit to ensure they also offer the capability to their clients. To provide additional access, BlackRock also partnered with Coinbase to provide infrastructure for their institutional clients to invest in crypto assets. BlackRock’s industry leading portfolio management software, Aladdin, is used by over 200 of the world’s largest institutional investors and manages over $21 trillion in assets. Aladdin and Coinbase will combine forces to offer a seamless portfolio management system for crypto, with Coinbase handling the execution and custody of the assets whilst Aladdin will handle the portfolio management aspects all through the Aladdin interface. It could be argued this is a major step in proving the legitimacy of bitcoin, especially with BlackRock being the main influencer on ESG investing. It additionally showcases the demand for exposure to the asset from BlackRock’s institutional clients. Tornado Cash – the popular mixing service that enables on-chain privacy – came under heavy fire last week from governments globally. The US Treasury Department’s Office of Foreign Asset Control (OFAC) sanctioned the protocol – leading to any American using the site breaking sanction laws. The sanction was argued due to the allegedly high number of illicit funds being laundered through the protocol and to prevent hacker groups, such as the Lazarus Group, from laundering stolen crypto funds. Dutch authorities arrested one of the protocol’s developers and have stated they will take further action against DAOs that may enable money laundering. Could this be the start of the war on Decentralised Finance (DeFi)? The implications of being linked to, or seen facilitating on-chain activity, with a wallet in connection with Tornado Cash have also prompted “decentralised” protocols to ban addresses from using their services to remain compliant with regulatory bodies. Due to the transparency and accessibility of crypto, any individual can send anything to any wallet address, with the owner unable to stop their wallet from receiving transactions. The banning of Tornado Cash sparked an onslaught of withdrawals from the protocol to famous personas’ wallets, such as Jimmy Fallon and Dave Chappelle, leading to them having broken sanctions laws and being punishable for up to 30 years in prison… technically speaking. Aave, the popular lending and borrowing protocol, banned the wallet of the founder of Tron, Justin Sun, as he was sent funds from Tornado Cash by the same unknown entity. The act of Aave banning wallet addresses has created a stir in the crypto community, with many individuals doubting how decentralised these protocols actually are with their ability to intervene and ban wallet addresses. Some commentators have argued the act of government submission completely contradicts the ethos of crypto and DeFi. Coin Centre, the crypto privacy advocacy group, has stated they will challenge the sanction as it “exceeds statutory authority”. Ever since crypto began, nation-states using crypto for their own benefit was seen as the final boss before global adoption. Last week Iran funded an import worth $10 million using crypto. Their usage has been instigated due to them being the second most sanctioned country in the world behind Russia – limiting their ability to trade with other nations using the existing banking systems. One of the country’s ministers also stated that “By the end of September, the use of cryptocurrencies and smart contracts will be widely used in foreign trade with target countries.” The increased usage of crypto from states like Iran could be seen as a double-edged sword. It demonstrates the key tenets of sovereignty and impartiality where every individual should have the right to transfer value. However, depending on your geopolitical preference it could be deemed only useful by those not accepted into the system and arguably the wrong people. This use case increasing in prevalence could also give further credence to governments to ban and regulate crypto with the argument and trump card of national security. Conversely, Ukraine has used crypto to raise well in excess of $100 million in donations to aid their fight against Russia – which would likely be viewed as a positive by the same people who condemn its usage by Iran. As with any technology, the usage and the users define its morality, despite the technology always remaining impartial. When analysing price action, these developments have not had a major impact on the price of bitcoin. From a technical perspective, bitcoin is positioned between a rock and a hard place in an ascending channel, with the $24,500 level proving hard to crack. The 100-Day moving average is also hovering at this level. A higher timeframe close above this level could be a strong indicator that the rally could continue with the next target likely being the $28,000 level where 2021 yearly candle opened and where we consolidated over summer 2021. Rejection from here could see us retest lower levels and the 200-week moving average that is situated around $23,000. However, with fear and greed reaching the highest levels seen in the past 4 months and Dogecoin and Shiba Inu pumping hard, these are telltale signs that an interim market top may be forming. The S&P 500 is also touching some strong resistance around the $4,300 level and with even further institutional involvement and intertwined portfolio management systems, rejection from this level could be the catalyst for a return to lower levels – with crypto potentially taking the hardest hit.
by Coinrule
GBPNZD-- Final position taken; 3 of 4 ideas currently activeHey guys, I recently entered into 2 long term trading positions on GBPNZD. And, as I usually do, I took a couple scalping positions as I monitored the market waiting for those two positions to initiate. You can find the other publishings down below in the related ideas section. Also, this is a scalp trade in my opinion, which I discussed my thoughts on these types of positions on one of those other publishings i just mentioned, so be sure to check that out if it sounds interesting to you. Like, comment, and subscribe to the channel for more content on foreign exchange, United States economics, and bitcoin trading ideas. As always, happy trading, and good luck!
by Bobbyusesfib
Does it make too much sense?The daily NASDAQ hasn't fallen below the 900d MA since the Great Recession. Leading up to the Great Recession, there were 2 traps on the NASDAQ (one pushed the 0.38 fib and the other pushed the 0.5). When the second trap hit the 0.5 fib level, the NASDAQ crashed. In other words, it bounced off the 900d twice before capitulation set in. The current market saw the NASDAQ break through the 0.38 level (assuming because of market aggression and the fact that the dollar is inflated) and it reached the intersection of the 100d and 200d MAs earlier this year, and now it's approaching the 0.5 level again. The economy is chalked.... The economy was saved during COVID via a bubble. Print and hand out money to keep things going (probably necessary). But the Fed didn't react quick enough with the rate increases, especially once everyone realized our "leaders" had no clue what they were talking about related to COVID. So, the bubble grew. Oh, and Ukraine, China, etc.... I have a chart on my page that overlays the inflation rate over time and unemployment rate over time. Every time the inflation rate spiked, unemployment follows on a lag. So, I'm expecting unemployment to increase in the coming months, and this lines up well with the movements described above. I mean, we're already in one, but our government is either that far gone or that stupid... idk which is worse. So, there are so many things that say the crash is coming, but does it make too much sense? TVC:NDQ NASDAQ:NDX
TVC:NDQShort
by Feech37
2
Descending trendline of highs meets the golden pocket Simple technical observation, the trend line of SPY's highs this year will cross the 0.618 Fibonacci resistance on August 31st, just in time for September which doesn't have the best track record historically. Macroeconomic considerations: Russia's still invading Ukraine, China's puffing its chest at Taiwan, U.S. and China both have their own respective housing crises, and Germany (along with a lot of Europe) is still dealing with an energy crisis as a result of the Russia-Ukraine war. Inflation flattened out this past month, but also did so for 3 straight months in 2008's subprime mortgage crisis. If I forgot some significantly bullish macroeconomic factors, please post them in the comments. My candle colors are shaded by my indicator that repaints candles to represent RSI levels. For individual candles, white wicks are bullish and black wicks are bearish.
AMEX:SPYShort
by EffyewMoney
Bitcoin Trend Analytics August 11 - pumped by a good figureCPI was much lower than expected, which fueled a strong bull run for all markets except the USDX. BTC bounced from the short-term support and gathered the strength to challenge the resistance above. According to the strength of the triangle, the resistance today diverts to $24860.73-$24597.35. This resistance has become weak and easily broken. Short-term bullish support arrived at $22775.99, which was broken yesterday and then flipped and diverted to $22977.50. Breakout on the triangle resistance at 24k will open up more space above. The drop in CPI has triggered a positive expectation of slowing the pace of interest rate hikes, however, the decision is not revealed yet. We should wait for the Fed’s final decision around Sep 21-22.
Long
by BitMidas
So, I looked at the CNY (Chinese Yuan or Juan) more, and..Check out my most recent publishing(s) referring to this particular exchange rate in the "Related Ideas" section below if your interested in the USDCNY. I took a closer look at my in-depth analysis over the weekend and felt as though it needed some adjustments (additions*) + further complication.. but its for the better.. hear me out. Ive been spending the last month or so, and will be spending as much time as necessary to catch up and become more and more familiar with what's appearing to become an even more disastrous real estate market than what we know to be the worst recorded event (in relativity) in capitalism history. ("the 2008 financial crisis") This event could be worse, simply due to the fact that China is so powerful.. (which is good for us; the money managers!) As a trader, its important to consider the recent upturn regarding political and socioeconomic gossip. IYKYK There is plenty of public and freely available information on how to approach any market using fundamental risk management. Save this, be patient, and ask questions. Happy trading, and good luck!
by Bobbyusesfib
AT&T - Future Growth and DividendsAT&T (NYSE:T) shares recently fell by approximately 10% after the firm released its second-quarter earnings. Despite better-than-expected earnings per share and revenue, excitement was muted by cash flow issues. Following the current drop, AT&T's stock yields around 7.3 percent. Furthermore, AT&T is dirt cheap again, trading at approximately 7.4 times forward EPS expectations. The market may be overreacting because the most recent earnings report was strong, and the cash flow decrease is most likely a one-time occurrence. AT&T Financials Furthermore, the corporation has set a clear strategy for future growth over the next several years. Furthermore, AT&T is recession-proof and may profit from a management shuffle. AT&T's downside looks to be limited, and the stock is appealing in this environment. Multiple growth and other factors might cause AT&T's stock price to rise significantly from here while also paying a sizable dividend. AT&T announced non-GAAP earnings per share of $0.65, above average projections by $0.03. Revenue of $29.6 billion was also $130 million more than expected. During the quarter, the business added over 800,000 postpaid phone net adds and over 300,000 AT&T Fiber net adds. While AT&T raised its mobile service revenue forecast to 4.5-5 percent, it lowered its free cash flow forecast to the $14 billion range. The headline statistics for AT&T are impressive, but the cash flow drop is depressing. Cashflows are being impacted by heavy expenditures in 5G and working capital requirements. However, inflation is most likely a role, and when the economy recovers, AT&T's cash flow problems may be resolved rapidly. AT&T's figures were pretty strong. Revenues from standalone companies were $29.7 billion, up 2% from $26 billion in the same period last year. Adjusted EBITDA increased by $175 million, or 1.7 percent, year on year. In the most recent quarter, standalone adjusted EPS climbed by 1 cent to 65 cents. Perhaps most critically, AT&T's core Wireless Service expanded by 4.6 percent year on year and is expected to rise similarly in 2022 and 2023. In addition, we observe certain FCF remarks implying that the decline in FCF is a transient event. While AT&T's performance have remained excellent, and the company has demonstrated persistence in exceeding consensus analyst predictions in recent quarters, this has not prevented the stock from underperforming its competitors. AT&T's stock has underperformed the market, falling nearly 32% in the previous five years. AT&T's nearest competition, Verizon (VZ), is up marginally over the same time period. T-Mobile US (TMUS) is also higher, while Comcast (CMCSA) has destroyed the competition over the previous five years. If we extend the picture further, we see that AT&T's is down by around one-third during the last 10 years. How much longer will shareholders have to wait for a genuine management revamp? For many years, AT&T's management has done nothing useful with the corporation. For decades, AT&T's stock has been worse than dead money, and it currently trades at the same price it did in 1996. AT&T has become extremely inefficient and has devolved into a bureaucracy that must be changed fast. AT&T requires new management to restore order and return the firm to growth and profitability. AT&T's previous regime, which we don't want. We'd like an expert. We are looking for someone who will offer a unique perspective and creativity to AT&T. We need someone to turn AT&T around and bring the firm back on track. A management revamp would likely be welcomed by the market. High Dividend Yield Furthermore, with its extremely low forward P/E multiple of 7.4, AT&T might experience a slight multiple expansion, resulting in a much higher stock price as time goes on. Even a P/E multiple of nine times, as Verizon has, would result in an increase of around 18% for AT&T. If the company's P/E multiple rises to 10, its share price will grow by around 30%. also,  because of the dividend and the potential for numerous expansions. We recommend owning AT&T
NYSE:TLong
by EQTSHARES
DUOL Overview and Prediction In the most recent two-quarters, DUOL has sold off ahead of earnings and then rebounded sharply after reporting earnings beats. Coming into this quarter price action is reversed. DUOL has experienced a strong rally from a quarter ago, clocking in over a 50% gain from the lows of their Q1 2022 earnings in May. This bullish short-term momentum might just be stomped out by this quarter's earnings. The technical picture for DUOL is somewhat poor, especially in recent trading days. The support trend line has held nicely with three consecutive touches and rebounds. However, with a major event coming up (earnings on 8/4), DUOL may slide well below this support trend line and revisit support zones at/around 84.8, 75.4, and 66.55. The recent bull run makes me increasingly confident in this thesis, as earnings would have to be out of this world positive for any substantial upside gain in my opinion. Fundamentally, DUOL appears weak. Simply put, Duolingo is overvalued and generates negative profits. There are way too many macroeconomic/geopolitical issues for tech and growth to perform well (at least for the coming 2-3 years). The idea that DUOL, an IPO with no earnings and expected revenue for this year at 267 mil should be valued anywhere near 4 billion dollars seems a bit foolish. Duolingo's weak technical and fundamental health combined with an unprecedentedly problematic global macro picture prompt me to predict the following: It is a matter of time until this stock falls and eventually forms new lows. It may not be this quarter's earnings that trigger DUOl's stock to move lower, but it will happen eventually... unprofitable growth is the wrong place to be in this environment. As always this is not meant to be trading advice. Good luck!
NASDAQ:DUOLShort
by Gooby_Trades
The Return of the Golden BullThe Return of the Golden Bull Technical Analysis - Gold has been in a 2 year consolidation, after a 7 year uptrend of over 90% from 2018 to 2020. - Price Action is contracting on a monthly basis, within a bullish pennant. - After an intermediate bear trend of 3 months, Gold is at a massive horizontal support, coming from the 2011 High. - Gold is also right above the rising trendline from the march 2021 low and above the falling trendline from the august 2020 high. - This might be a multi year buying opportunity for Gold, it is hard to put a price target on it, but I would assume around 4000$ could be achieved, if everything goes as expected. Fundamental Analysis - There is also a point to be made for gold, fundamentally. - We are at record inflation, tightening into slowing economic conditions. - Bonds are loosing massively, as are equities and Bitcoin. - Gold has been holding up rather well, despite the US10Y and the DXY rising relentlessly. - In my opinion this is an indicator, that Gold is still the true safe hafen asset to investors, in case of monetary debasement and simultaneously worsening economic conditions. Enter the trade - I am waiting for a short term trend change, as we are currently below the 5, 10, 20, and 50 day moving averages. - I want to see Gold above a rising 5dma, crossing the 10dma. - I am also looking for a weekly close above 1877$. - Gold has been awfully hard to trade in the past months, due to extremely choppy action, often giving daily buy and sell signals on the RSC Trend Trading Indicator, right after each other, so I will be cautious. This is not financial advice, I wish you good luck trading. Cheers Tom
TVC:GOLDLong
by Cyranus
2
The Merge Trade Ethereum’s rise from the ashes over the past two weeks has demonstrated why you should not underestimate bear market rallies. Prior to its explosive surge, covering over 50% in a week, the second largest crypto asset was tracking bitcoin’s moves closely. Now it appears to be the one leading the rest of the market and showcases the market’s shift to a more risk-on stance. Last week saw the second week of inflows to Ethereum crypto funds, investors predominantly being institutional investors, totalling $5 million. This is a major shift compared to the past three months where there were 11 consecutive weeks of outflows. The catalyst for Ethereum’s upside is assumed to be the news relating to the Ethereum Merge which includes the transition from a proof-of-work to a proof-of-stake consensus mechanism. A timeline was spoken during an open developer call, detailing the Merge could be expected September 19th. The Merge will result in Ethereum becoming deflationary due to annual issuance being slashed by 90%. This increasingly supports the narrative that ether is a growing store of value. Investors have caught onto this prospect, leading to the asset being argued undervalued as future supply is diminished. Overall, the market’s strength has been impressive, especially considering the higher-than-expected 9.1% CPI data prompting potentially further future rate hikes from the Federal Reserve. However, something to keep in mind is the ferocity of bear market rallies being created by short sellers getting squeezed. This leads to them being forced to buy back their short positions to prevent further losses causing further buying pressure and resulting in another cycle of short sellers buying back. Last week centralised exchanges recorded their lowest trade volumes since December 2020, leading to order book liquidity being thin and volatility being heightened - creating the perfect storm for a short squeeze. On Monday, Ethereum’s move to over $1,600 saw liquidations of nearly $500 million within a 24-hour period. However, Ethereum has increasing competition to be the chain leading the pack, in terms of global crypto adoption. In relation to active addresses, Solana has also been dominating the battle for layer one supremacy. In June, Solana registered 32.23 million active addresses compared to Ethereum’s 12.93 million. Over the past several weeks we have been seeing the question: How will crypto attract 1 billion users over the coming years? This has been answered with crypto-native phones – the first to be announced was Solana’s Saga followed by Polygon and HTC. These devices will be specifically designed to interact with decentralised applications, with the user experience of dealing with self-custody wallets and signing for transactions being substantially improved. Additionally, the current app store high fee infrastructure which disincentives developers to build apps will be overhauled with Solana’s Mobile Stack. This could lead to improved decentralised applications with further use cases, better refinement and increased accessibility - causing more people to participate in crypto. From a technical perspective, Ethereum has broken out from the month-long range of $1,050 to $1,250 and is facing resistance around $1,600. The true test will be penetrating the $1,700 key level that marked the summer 2021 lows. The 100-day moving average also looms around $1,900 and will be another test if there is sufficient demand to outweigh the uncertain macroeconomic environment and continue on our upward trajectory. If rejected from this level the move could be rendered a bearish retest of our once strong support and we could retrace lower back into an area of demand. News of Tesla liquidating some of their bitcoin position is not helping the bulls. Their earnings report detailed they sold 75% of their bitcoin holdings during Q2, totalling $936 million, at an average price of approximately $29,000. However, Musk emphasised this is not an indication of bitcoin's fragility but rather Tesla improving its liquidity in light of Covid shutdowns in China and other economic factors.   Reaching the fabled $1 Trillion total crypto market cap level is a strong indication of the resilience of the sector. $1 Trillion is also the market cap of silver, and when compared showcases how small crypto is relative to other asset classes. There are many bullish catalysts on the horizon for crypto, the Ethereum Merge, the Bitcoin Halving and crypto native mobile devices potentially accelerating global adoption to 1 billion users and beyond. Will these tailwinds be able to fight the macroeconomic headwinds of the likely incoming increased interest rates and recession? The past week has shown promising signs, but the real test will be if bitcoin can reclaim and hold the 200-week moving average - continuing to make higher lows. If you are long-term bullish on the space the reverse clause of whatever is ahead should be appreciated. Rejection and a return to lower prices meaning more time to accumulate at lower valuations, or more positively, the market recovering and portfolio values appreciating.
by Coinrule
AUD/NZD in profit trade idea updateAUD/NZD Fundamental, Technical, and Signal ( NZD fundamentals and events, click link ) *AUD events will be the drivers during trade. AUD Previous Important Economic Events: - Consumer Confidence and Confidence Change ( Both actuals below forecast and previous supporting consumers low enthusiasm to spend in the future. ) - Business Confidence ( Below forecast and previous supporting businesses expectations of higher earnings ) - Unemployment Rate ( Lower than forecast and previous. Employment increase due to higher cost of living outweighing income, credit and savings accounts ) AUD Upcoming Important Economic Events: - S&P Global Manufacturing and Services PMI Flash ( Manufacturing Forecast 56—.2 lower than previous — Services Forecast 52.3—.3 lower than previous. ) - Year over Year Inflation Rate ( Forecast 6.2%, 1.1% higher than previous. ) - Quarter over Quarter inflation rate ( 1.8%, .3% lower than previous. Short term inflation is cooling ) - Month over Month Retail Sales ( .9% previous ) - Quarter over Quarter PPI ( 1.6% previous ) Sentiment: Neutral - Consumers and businesses are losing faith in spending and growth ( both result from higher prices for goods and services. Depleting credit, checking, savings accounts and income resources causing consumers to apply for jobs to earn additional income increasing AUD employment numbers. The RBA addressing inflation with hawkish interest rate hikes, lowering short term QoQ Inflation rates. ....................................................................................................................................... Technical Analysis ( Click link for more signals )
Short
by charrison4300
DXY Daily TA Cautiously BullishDXY Daily cautiously bullish. Recommended ratio: 75% DXY, 25% Cash. *Demand for USD continues as global recessionary fears amplify and tighter monetary policy pushes investors to short term Treasuries (Yield Curve inversion). The Euro is maintaining parity with the USD for the third consecutive day as Italy's Prime Minister Mario Draghi submitted an offer to resign today . Interestingly, as DXY continues pushing higher to reach levels last seen in 2002 (taking liquidity from Cryptos, Equities and Commodities), markets are currently reacting favorably to Fed Governor Christopher Waller's remarks today about how the markets are "getting a bit ahead of themselves" regarding inflation and that the job market is healthy enough to continue economic expansion. Waller also mentioned that though 75bps is all but guaranteed, he is waiting on June retail sales data ( scheduled for release tomorrow 07/14/2022 at 830am EST ) and housing starts/building permit data ( scheduled for release 07/19/22 at 830am EST ) to determine if demand is still so high that it warrants a full 100bps or more rate hike on 07/27/22. DXY has only traded above $108 in three other periods: 1967-1973 (two recessions 69-70 and 73-75, Nixon "nixed" the Bretton Woods Agreement and Gold Standard in attempt to stimulate the economy and ring in inflation, the third and fourth Arab/Israeli wars, 1973 oil crisis and stock market crash); 1981-1986 (one recession 81-82 after short rate-hike induced recession in 1980, Cold War fears pushed investors to DXY as Russia tested nuclear weapons in Kazakhstan, Iranian Revolution prompted 1979 energy crisis, Fed tightened monetary policy to bring down inflation, stock market only crashed 81-82 and rallied from 83-87); and the only period where CPI was relatively low (below 3.67%) and DXY was above 108 was 2000-2002 (short recession in 2001, Y2K, Dot-Com bubble popped, 9/11). That said, history shows that financial markets mostly tumble and the economy enters a recession as DXY rallies above 108; using this pattern one can surmise that if DXY continues to rip higher, markets may go lower.* Price is currently trending up at $108.63 as it technically tests $108 resistance. Parabolic SAR flips bearish at $106.20, this margin is neutral at the moment. RSI is currently trending up at 76 after bouncing at 73, the next resistance is at 82. Stochastic is currently in the process of crossing over bearish as it trends sideways at 97 in the 'bullish autobahn zone'. MACD remains bullish and is currently trending up at 1.25 as it tests 1.24 resistance with no signs of peak formation; the next support is at 0.64 and resistance at 1.92. ADX is currently trending up at 42 with no signs of peak formation as Price continues to push higher, this is bullish. If Price is able to defend support at $108 then the next likely target is a retest of $115 resistance for the first time since February 2002. However, if Price is rejected here at $108 and breaks down, the next likely target is a retest of the 50 MA at around $103 support . Mental Stop Loss: (two consecutive closes below) $108.
TVC:DXY
by dailytaguy
Cash Isn't Trash? Ray Dalio, legendary investor and founder of the world’s largest hedge fund Bridgewater Associates, coined the term “cash is trash”. However, arguably over the past 8 months cash has weathered the economic storm the best, with the dollar being the strongest among the major currencies. This week we saw examples of multiple fiat currencies taking severe hits against the dollar. The Dollar Currency Index (DXY), which measures the strength of the dollar relative to six other currencies, reached its highest level since 2002 this week. The Turkish Lira was reported to have experienced annual inflation of 78.6% – the highest in 24 years resulting in a 3% decline against the dollar. Europe’s continued energy crisis has resulted in the euro also approaching parity with the dollar, with a 3.5% fortnight decline as investors seek safety. Argentinians have been trying to escape the Argentinian peso by swapping into Tether (USDT) as their economic minister was replaced by a candidate perceived to be less concerned with their 60% inflation. When denominated in Argentinian pesos, this drove the price of USDT up by over 12% from before the replacement. However, it is not all good news for Tether. USDT’s market capitalisation has taken a hit over the past two months, falling from $83 billion, at the beginning of May, by 19% to $66 billion. Meanwhile, Circle’s USD Coin (USDC) continues to make new all-time highs in market capitalization reaching $55 billion this week – suggesting we may have a stablecoin flippening on the horizon. Increasing energy costs combined with the declining bitcoin price has led miners to attempt to strengthen their balance sheets throughout the second quarter of 2022. In aggregate, miners sold more than the amount they mined in May and Core Scientific, who was the largest publicly traded bitcoin miner in terms of bitcoin holdings, released news this week that they have sold 7,202 bitcoin during June. This sale has reduced their holdings by 79% to cover debt repayments and invest in their infrastructure. Bitfarms also sold 3,000 BTC in June – reducing their holdings by 47%. Compass Mining was also reported to have lost one of its facilities due to not making electricity payments and hosting fees to its facility owner. Bitcoin miners are the most susceptible to the asset’s price swings with their revenue and profit margins being derived from bitcoin’s price. During a bull market, miners’ objective is to hold as much bitcoin as possible – increasing the value of their asset base and enabling them to raise additional finance. This incentive is even greater for publicly-traded miners as the value of their shares can also increase in tandem as their balance sheet grows. During bull markets, this acts as a positive and mitigates new coins entering the market acting as sell-side liquidity – prolonging the bull market and resulting in potentially higher valuations for bitcoin and thus the miner’s balance sheets. Conversely, when bitcoin is declining during a bear market, miners’ safest and most sustainable option is to sell their rewards for cash to pay debt repayments and operational expenses. They may also sell the bitcoin held in their treasuries, as seen over the past quarter, to ensure they have sufficient liquidity. During bear markets, this acts as additional selling pressure dampening price further and prolonging the decline as miners capitulate. The decreased demand for mining equipment, that miners classify as assets on their balance sheets, also causes them to suffer. Some miners utilise their equipment as collateral to access additional financing. When the demand and value of the equipment declines, they are required to post additional collateral to back their loans. This is a problem for participants who do not have access to additional cash – driving them to sell their assets, in most cases the bitcoin held in their treasuries. Alternatively, they can become increasingly levered and take on more debt with less attractive terms to pay off previous debt. It is reported there is $4 billion worth of these equipment-backed loans demonstrating the fragility of the industry if prices continue to fall. These factors appear to have contributed to the decline we have seen over the past quarter leading to bitcoin’s worst-performing quarter since 2011. The main question is whether miners will have sufficient income and cash reserves to survive further downside. The demise of less financially sound miners could lead to the consolidation of the industry. The most capitalised may survive and acquire the smaller entities whilst their valuations are reduced. In the long run, this could prove to be a benefit, leading to more financially strong miners potentially holding increased amounts of coins – further limiting additional coins from being sold on the market by retaining more of their rewards. Bitcoin’s hash rate, the total computing power dedicated to bitcoin mining, reached a new all time high of 237 EH/s in June, since then it has declined by approximately 15%. Bitcoin’s difficulty adjustment, a measurement of how hard miners need to compete for block rewards and is derived from the hash rate, dropped by 1.41% over the past two weeks and declined 2.35% the two weeks before that, suggesting mining activity is on the decline. Reviewing this could provide a good gauge of overall miner participation and some insight into the health of Bitcoin’s mining infrastructure. The miners’ short term move to cash may prove to be the wisest decision to survive these pessimistic times. However, over the long-run the trajectory of bitcoin’s price has demonstrated it is the superior asset in growing and preserving wealth. The next Bitcoin halving, less than two years away, will also affect the economics of mining. Miners will seek lower energy costs, increased efficiency of their machines and a higher bitcoin price to outweigh the lower block rewards. Until we see some strength in the price of bitcoin, maybe cash isn’t trash.
TVC:DXY
by Coinrule
Factors currently influencing the CHF and opportunitiesThe Swiss Franc has seen some crazy moves since April. In the last quarter, we saw the CHF weaken on the onset of the Russian invasion. Then the SNB raised rates by whooping 50 bps for the first time in years. This led the Swiss government bond yields to spike with USDCHF weakened in days. Since then, speculators have pulled back rate hike bets in the face of an economic growth slowdown in Europe. with the Swiss 2 year bond yields back below 0%. So what does this mean for Swiss Franc crosses? USDCHF I expect the currency to weaken against the USD as traders bet that the Fed will maintain their tightening policy until inflation is below their 2% target. AUDCHF The RBA is also on a tightening cycle with the RBA expected to hike rates further to the end of 2022. In addition to this, the Australian economy seems to be resilient with data coming out of the country being strong. China's PBOC and CCP support for the economy is expected to provide support for the Aussie. CADCHF The oil linked Loonie is having support from higher energy prices and a BoC that is also on a rate hiking cycle. Technically speaking, the pair has gone back above the 100Day moving average and I expect it to test the cluster resistance level 0.769xx from 2014-2019 Other pairs that are interesting are: CHFJPY Major risk to short-selling the pair is that bond yield differentials are expected to remain high hence JPY strength looks like a long shot for Q3 NZDJPY Recovery of the Chinese economy is going to support the commodity-linked Kiwi. However, strength of the pair is not expected to be higher than that of the AUDCHF Summary CHF weakness brings a lot of opportunities. However, it's important to note that tailrisk to these trades exist. In the current environment, FX volatility is high and could wipe you out. Be safe out there
Long
by GrizzlyBearBee
3