EOS, Ethereum and Ripple’s XRP – Daily Tech Analysis – 29/05/20

EOS

EOS rose by 1.67% on Thursday. Following on from a 2.49% gain on Wednesday, EOS ended the day at $2.6146.

A bearish start to the day saw EOS fall to a late morning intraday low $2.5202 before making a move.

EOS fell through the first major support level at $2.5245 before rallying to a final hour intraday high $2.6269.

EOS broke through the first major resistance level at $2.5935 and the second major resistance level at $2.6181 before pulling back.

The pullback saw EOS fall back through the second major resistance level.

At the time of writing, EOS was up by 1.56% to $2.6555. A mixed start to the day saw EOS rise from a low $2.6146 to an early morning high $2.6747.

EOS broke through the first major resistance level at $2.6543 early on.

EOS/USD 29/05/20 Daily Chart

For the day ahead

EOS would need to hold above the first major resistance level at $2.6543 to bring the second major resistance level at $2.6939 into play.

Support from the broader market would be needed, however, for EOS to break out from the morning high $2.6747.

Barring an extended crypto rally, resistance at $2.70 would likely leave EOS short of the second major resistance level.

Failure to hold above the first major resistance level could see EOS hit reverse.

A fall through the morning low $2.6146 to sub-$2.60 levels would bring the first major support level at $2.5476 into play.

Barring an extended crypto sell-off, however, EOS should steer clear of sub-$2.60 levels on the day.

Looking at the Technical Indicators

Major Support Level: $2.5476

Major Resistance Level: $2.6543

23.6% FIB Retracement Level: $6.62

38% FIB Retracement Level: $9.76

62% FIB Retracement Level: $14.82

Ethereum

Ethereum rallied by 5.77% on Thursday. Following on from a 3.75% gain on Wednesday, Ethereum ended the day at $220.44.

A bearish start to the day saw Ethereum fall to a late morning intraday low $204.50 before making a move.

Steering clear of the first major support level at $203.29, Ethereum rallied to a final hour intraday high $220.68.

Ethereum broke through the first major resistance level at $211.01 and the second major resistance level at $213.60.

At the time of writing, Ethereum was up by 0.62% to $221.80. A mixed start to the day saw Ethereum rise to an early morning high $224.84 before falling to a low $220.25.

Ethereum left the major support and resistance levels untested early on.

ETH/USD 29/05/20 Daily Chart

For the day ahead

Ethereum would need to avoid sub-$215.20 levels to bring the first major resistance level at $225.91 into play.

Support from the broader market would be needed, however, for Ethereum to break out from the morning high $224.84.

Barring an extended crypto rally, the first major resistance level would likely limit any upside on the day.

Failure to avoid sub-$215.20 levels could see Ethereum hit reverse.

A fall through the morning low $220.25 to sub-$215.20 levels would bring the first major support level at $209.73 into play.

Barring an extended crypto sell-off, however, Ethereum should steer well clear of the second major support level at $199.03.

Looking at the Technical Indicators

Major Support Level: $209.73

Major Resistance Level: $225.91

23.6% FIB Retracement Level: $257

38.2% FIB Retracement Level: $367

62% FIB Retracement Level: $543

Ripple’s XRP

Ripple’s XRP rose by 1.37% on Thursday.  Following on from a 2.19% gain on Wednesday, Ripple’s XRP ended the day at $0.20082.

Tracking the broader market, Ripple’s XRP fell to a late morning intraday low $0.19509 before finding support.

Steering clear of the first major support level at $0.1943, Ripple’s XRP rallied to a final hour intraday high $0.20142.

Ripple’s XRP broke through the first major resistance level at $0.2015 and second major resistance level at $0.2049 before pulling back.

The pullback saw Ripple’s XRP fall back through the major resistance levels to limit the upside on the day.

At the time of writing, Ripple’s XRP was down by 0.27% to $0.20027. A choppy start to the day saw Ripple’s XRP jump to an early morning high $0.20340 before falling to a low $0.19988.

Ripple’s XRP tested the first major resistance level at $0.2031 early on.

XRP/USD 29/05/20 Daily Chart

For the day ahead

Ripple’s XRP will need to avoid sub-$0.1990 levels to support another run at the first major resistance level at $0.2031.

Support from the broader market would be needed, however, for Ripple’s XRP to break back through to $0.2030 levels

Barring a broad-based crypto rebound, the first major resistance level and morning high would likely limit any upside.

Failure to avoid sub-$0.1990 levels could see Ripple’s XRP fall deeper into the red.

A fall through the morning low to sub-$0.1990 levels would bring the first major support level at $0.1968 into play.

Barring another crypto meltdown, however, Ripple’s XRP should steer well clear of the second major support level at $0.1928.

Looking at the Technical Indicators

Major Support Level: $0.1968

Major Resistance Level: $0.2031

23.6% FIB Retracement Level: $0.3638

38.2% FIB Retracement Level: $0.4800

62% FIB Retracement Level: $0.6678

Please let us know what you think in the comments below.

Thanks, Bob

The Crypto Daily – Movers and Shakers -29/05/20

Bitcoin rallied by 4.11% on Thursday. Following on from a 4.12% breakout on Wednesday, Bitcoin ended the day at $9,589.3.

A mixed start to the day saw Bitcoin fall to a mid-morning intraday low $9,118.2 before making a move.

Steering clear of the first major support level at $8,946.67, Bitcoin rallied to a final hour intraday high $9,630.3.

Bitcoin broke through the first major resistance level at $9,349.47 and second major resistance level at $9,488.63 before easing back.

The near-term bearish trend, formed at late June 2019’s swing hi $13,764.0, remained firmly intact, reaffirmed by the March swing lo $4,000.

For the bulls, Bitcoin would need to break out from the 62% FIB of $10,034 to form a near-term bullish trend.

The Rest of the Pack

Across the rest of the majors, it was also a bullish day for the majors on Thursday.

Cardano’s ADA surged by 17.71% to lead the way.

Binance Coin (+3.64%), Bitcoin Cash ABC (+3.34%), Ethereum (+5.77%), Monero’s XMR (+4.28%), Stellar’s Lumen (+4.92%), Tezos (+4.37%), and Tron’s TRX (+3.12%) also found strong support.

Bitcoin Cash SV (+1.17%), EOS (+1.67%), Litecoin (+2.05%), and Ripple’s XRP (+1.37%) trailed the front runners.

In the current week, the crypto total market cap fell to an early Monday low $238.04bn before rising to an early Friday high $263.53bn. At the time of writing, the total market cap stood at $261.58bn.

Bitcoin’s dominance fell to a Monday low 66.38% before a Thursday 69.54% spike. At the time of writing, Bitcoin’s dominance stood at 66.99%.

This Morning

At the time of writing, Bitcoin was down by 0.57% to $9,535.0. A mixed start to the day saw Bitcoin rise to an early morning high $9,618.8 before falling to a low $9,483.5.

Bitcoin left the major support and resistance levels untested early on.

Elsewhere, it was a mixed start to the day.

Cardano’s ADA joined Bitcoin in the red, with a 0.46% loss at the time of writing.

It was a bullish start to the day for the rest of the pack, however.

EOS led the way early on, rallying by 1.49%.

BTC/USD 29/05/20 Daily Chart

For the Bitcoin Day Ahead

Bitcoin would need to avoid sub-$9,450 levels to bring the first major resistance level at $9,773.67 into play.

Support from the broader market would be needed, however, for Bitcoin to break out from Thursday’s high $9,630.3.

Barring an extended crypto rally, the first major resistance level would likely limit any upside.

In the event of another extended crypto rally, the second major resistance level at $9,958.03 and the 62% FIB of $10,034 would likely come into play.

Failure to avoid sub-$9,450 levels could see Bitcoin fall deeper into the red.

A fall back through the morning low to sub-$9,450 levels would bring the first major support level at $9,261.57 into play.

Barring another extended crypto sell-off, however, Bitcoin should steer well clear of the second major support level at $8,933.83.

Economic Data to Take a Back Seat with Trump’s News Conference the Main Event

Earlier in the Day:

It was a relatively busy day on the economic calendar this morning. The Japanese Yen and Aussie Dollar were in action early in the day.

Away from the economic calendar, the markets responded to Trump’s announcement on Thursday of plans to unveil measures against China at the news conference later today.

Fiscal stimulus from Brussels and the easing of lockdown measures across the EU and the U.S had provided support to riskier assets ahead of today’s open.

Looking at the latest coronavirus numbers,

On Thursday, the number of new coronavirus cases rose by 112,124 to 5,900,627. On Wednesday, the number of new cases had risen by 110,221. The daily increase was higher than both Wednesday’s rise and 106,139 new cases from the previous Thursday.

France, Germany, Italy, and Spain reported 5,612 new cases on Thursday, which was up from 1,892 new cases on Wednesday. On the previous Thursday, 1,976 new cases had been reported.

From the U.S, the total number of cases rose by 22,413 to 1,768,216 on Thursday. On Wednesday, the total number of cases had risen by 20,392. On Thursday 21st May, a total of 28,089 new cases had been reported.

The uptick on Thursday will need to be monitored in the coming days. With the easing of lockdown measures now in the 4th week, it would be in the coming days that a 2nd wave would become evident…

For the Japanese Yen

Inflation was in focus in the early part of the day, along with industrial production and retail sales figures.

In May, the Ku-area of Tokyo saw inflationary pressures return, with core consumer prices rising by 0.20% In April, consumer prices had fallen by 0.10%, year-on-year.

According to the Ministry of Internal Affairs and Communication.

  • Rising prices for clothes & footwear (+1.7%), furniture & household utensils (+1.7%), and culture & recreation (+1.2%) supported the rise.
  • There were also increases in prices for medical care (+0.8%) and housing (+0.7%).
  • Prices for Education (-8.9%) and fuel, light, & water charges (-1.9%) pinned back inflationary pressures, however.
  • There were also declines in prices for transport & communication (-0.1%) and miscellaneous (-0.8%).

In April, industrial production slumped by 9.1%, based on prelim numbers, following a 3.7% decline in March. Economists had forecast a 5.1% slide.

According to the Ministry of Economy, Trade, and Industry,

Industries that mainly contributed to the decrease were:

  • Motor vehicles, iron, steel & non-ferrous metals, and transport equipment (excl. motor vehicles).

Industries that mainly contributed to the increase were:

  • Production machinery.

Forecasts for May were not much better, with the forecast for industrial production revised from -1.4% to -4.1%. For June, however, forecasts are for production to rise by 3.9%.

Retail sales also disappointed in April, with lockdown and social distancing measures weighing.

According to the Ministry of Economy, Trade, and Industry, retail sales tumbled by 13.7% in April, year-on-year, following a 4.7% slide in March. Economists had forecasts an 11.50% decline.

The Japanese Yen moved from ¥107.701 to ¥107.608 upon release of the figures. At the time of writing, the Japanese Yen was down by 0.22% to ¥107.41 against the U.S Dollar.

For the Aussie Dollar

Private sector credit stalled in April, following a 1.10% increase in March.

According to figures released by RBA,

  • Business credit rose by 0.1%, following a 3.1% rise in March.
  • Personal credit slid by 3.0%, following a 1.4% decline in March.
  • Housing credit rose by 0.2%, which was down from a 0.3% rise in March.

The Aussie Dollar moved from $0.66312 to $0.66315 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.08% at $0.6642.

Elsewhere

At the time of writing, the Kiwi Dollar was down by 0.11% to $0.6203.

The Day Ahead:

For the EUR

It’s a busy day ahead on the economic calendar. Key stats include French and German retail sales figures for April and the Eurozone prelim inflation numbers for May.

Prelim inflation figures for France and Italy and 2nd estimate GDP numbers for France are also due out.

We will expect the numbers to have a muted impact on the EUR, however. The EU’s recovery plan and the continued easing of lockdown measures remain positives.

While COVID-19 news and updates remain EUR positive, the markets will need to monitor the number of new cases. On Thursday, there was an uptick. If an upward trend begins, this could question member state plans to ease lockdown measures further.

From the early part of the day, it was risk aversion that pinned back the EUR as the markets await Trump’s news conference later today.

At the time of writing, the EUR was up by 0.07% to $1.1085.

For the Pound

It’s yet another quiet day ahead on the economic calendar. There are no material stats due out to provide the Pound with direction.

Through the day, expect market risk sentiment and any Brexit chatter to be key drivers.

At the time of writing, the Pound was up by 0.01% to $1.2322.

Across the Pond

It’s another busy day ahead on the U.S economic calendar. Economic data includes April inflation and personal spending figures and May consumer sentiment and Chicago PMI numbers.

Expect the May figures to have the greatest influence, with the markets likely to brush aside April numbers.

Outside of the numbers, FED Chair Powell is scheduled to speak. Any commentary on the U.S economy and monetary policy will garner plenty of attention.

The main event of the day, however, is Trump’s news conference. What does the U.S President have in store for China?

The Dollar Spot Index was up by 0.02% to 98.407 at the time of writing.

For the Loonie

It’s also a busy day on the economic calendar. Key stats include 1st quarter GDP numbers and April’s RMPI.

Expect the GDP figures to have some influence, though the markets are expecting some quite dire numbers. Anything better than forecast should be Loonie positive…

Crude oil prices and market risk sentiment will be the key driver on the day, however.

At the time of writing, the Loonie was down by 0.10% to C$1.3777 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

European Equities: U.S – China Tensions ahead of Trump’s News Conference to Test the Rally

Economic Calendar:

Friday, 29th May

German Retail Sales (MoM) (Apr)

French Consumer Spending (MoM) (Apr)

French GDP (QoQ) (Q1) 2nd Estimate

Italian CPI (MoM) (May) Prelim

Eurozone CPI (YoY) (May) Prelim

The Majors

It was a 5th consecutive day in the green for the DAX30, as the European majors continued to eat into the current year losses.

The CAC40 led the way once more rallying by 1.76%, with the DAX30 and EuroStoxx600 rising by 1.06% and 1.64% respectively.

Economic data from the Eurozone had a muted impact on the majors as the markets continued to respond to the EU recovery plan as lockdown measures ease.

From the U.S, the markets found solace in the U.S weekly jobless claims in spite of another 2m jump in initial jobless claims. While coming in at 2.123m for the week ending 22nd May, it was lower than in recent weeks.

Ultimately, however, the upbeat reaction to the recovery plan muted market jitters over rising tensions between the U.S and China.

The Stats

It was a quiet day on the Eurozone economic calendar on Thursday. Key stats included May’s prelim inflation figures for Germany and Spain.

For Spain, consumer prices fell by 1.0%, year-on-year, following a 0.7% decline in April. The Harmonised Consumer Price Index fell by 0.9%, year-on-year, also following a 0.7% fall in April.

Things were not much better out of Germany, with consumer prices falling by 0.1%, month-on-month. In April, consumer prices had risen by 0.4%.

From the U.S, it was a busy day on the economic calendar.

According to 2nd estimate GDP figures, the economy contracted by 5.0% in the 1st quarter, revised down from a 1st estimate 4.8%.

Core durables goods orders slid by 7.4%, with durable goods orders tumbling by 17.2%. While dire, both sets of figures came in ahead of forecasts.

Pending home sales figures were also disappointing. In the month of April, sales tumbled by 21.8% versus a forecasted 15% slide. In March, pending home sales had slumped by 20.8%. Since late April, however, housing sector activity has rebounded, limiting the impact of the numbers.

The markets have moved on from the 1st quarter and April figures, considered to have been the economic bottom.

For the markets, the weekly jobless claims figures garnered greater interest on the day.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Thursday. Volkswagen and Daimler slid by 3.72% and by 3.19% respectively to lead the way down. BMW and Continental saw more modest losses of 2.29% and 1.17% respectively.

It was a mixed day for the banks, however. Deutsche Bank declined by 2.13%, while Commerzbank closed out the day with a 0.70% gain.

Deutsche Lufthansa continued to find support from the easing of lockdown measures and bailout. Following on from a 1.74% gain on Wednesday, a 2.86% rally delivered a 4th consecutive day in the green for the week.

From the CAC, it was also a mixed day for the banking sector on Thursday. BNP Paribas and Soc Gen fell by 0.12% and by 2.71% respectively, while Credit Agricole eked out a 0.03% gain.

The auto sector returned to the red, however, with Peugeot and Renault falling by 1.10% and by 2.67% respectively.

Air France-KLM rose by a further 0.61% following Wednesday’s 2.81% gain, while Airbus SE fell by a further 1.65%.

On the VIX Index

It was a 1st day in the green from 4 on Thursday. Reversing a 1.39% fall from Wednesday, the VIX rose by 3.51% to end the day at 28.6.

The upside on the day came in response to the rising tensions between the U.S and China. On Thursday, the U.S President announced that he would unveil measures against China at Friday’s news conference.

This announcement came in the wake of China approving the security bill for Hong Kong. On Wednesday, Secretary of State Pompeo had stated that HK was no longer autonomous with China.

The U.S majors had been in positive territory before Trump’s announcement that led to a pullback late in the session.

VIX 29/05/20 Daily Chart

The Day Ahead

It’s a busy day ahead on the Eurozone economic calendar. Key stats include April retail sales figures from France and Germany and May’s prelim inflation figures for the Eurozone.

2nd estimate GDP numbers are also due out of France along with May’s prelim inflation figures from France, Italy, and Spain.

With the markets looking beyond the 1st quarter and April, the stats should have a muted impact on the majors today.

From the U.S, it’s also a relatively busy day ahead on the economic calendar. Once again, the lion’s share of the stats is for April that should have a limited impact later in the day.

Any downward revisions to finalized consumer sentiment figures could draw some attention.

FED Chair Powell will also have some influence late in the session. Expect the Trump news conference to be the main event of the day…

Ahead of the European open, the majors were under pressure in anticipation of sanctions and more on China…

The Latest Coronavirus Figures

On Thursday, the number of new coronavirus cases rose by 112,124 to 5,900,627. On Wednesday, the number of new cases had risen by 110,221. The daily increase was higher than both Wednesday’s rise and 106,139 new cases from the previous Thursday.

France, Germany, Italy, and Spain reported 5,612 new cases on Thursday, which was up from 1,892 new cases on Wednesday. On the previous Thursday, 1,976 new cases had been reported.

From the U.S, the total number of cases rose by 22,413 to 1,768,216 on Thursday. On Wednesday, the total number of cases had risen by 20,392. On Thursday 21st May, a total of 28,089 new cases had been reported.

In the futures markets, at the time of writing, the DAX was down by 151.5 points, with the Dow down by 111 points.

For a look at all of today’s economic events, check out our economic calendar.

U.S Weekly Jobless Claims to Put the Greenback in Focus as Geopolitical Risk Lingers

Earlier in the Day:

It was a relatively busy day on the economic calendar this morning. The Aussie Dollar and Kiwi Dollar were in action once more.

Away from the economic calendar, the markets also responded to the moves across the EU and the U.S from Wednesday.

Fiscal stimulus from Brussels and the U.S government’s moves to further reopen the economy provided both support for riskier assets early on. Market sentiment overshadowed economic data that remained weak while improving …

For the commodity currencies, however, concerns over rising tensions between the U.S and China did pin back any breakouts.

Looking at the latest coronavirus numbers,

On Wednesday, the number of new coronavirus cases rose by 110,221 to 5,788,503. On Tuesday, the number of new cases had risen by 95,878. The daily increase was higher than both Tuesday’s rise and 89,941 new cases from the previous Wednesday.

France, Germany, Italy, and Spain reported 1,892 new cases on Wednesday, which was up from 1,535 new cases on Tuesday. On the previous Wednesday, 3,225 new cases had been reported.

From the U.S, the total number of cases rose by 20,392 to 1,745,803 on Wednesday. On Tuesday, the total number of cases had risen by 19,185. On Wednesday 20th May, a total of 21,774 new cases had been reported.

For the Kiwi Dollar

Business Confidence improved in May, with the ANZ Business Confidence Index rising from an April -66 to a finalized -41.8. May’s prelim had come in at -46.

According to the latest ANZ Report,

  • A net 39% of firms expect weaker economic activity in their own business, with the retail sector the most pessimistic once more.
  • Employment intentions rose from a net 50.8% of firms intending to reduce employment to a net 42%.
  • Investment intentions improved marginally from a negative 45% to a negative 32%.
  • Profit expectations rose from a net 70.4% expecting lower profitability to a net 56%. The agricultural sector remained the weakest at -71%, with the construction sector the least negative at -42%.
  • Export intentions rose by just 6 points to -36.

The Kiwi Dollar moved from $0.61897 to $0.61840 upon release of the numbers. At the time of writing, the Kiwi Dollar was up by 0.05% to $0.6185.

For the Aussie Dollar

1st quarter private new capital expenditure fell by 1.6%, quarter-on-quarter, following a 2.8% fall in the 4th quarter. Economists had forecast a 2.6% decline.

According to the ABS,

  • While investments in building and structures fell by 1.1%, investments in equipment, plant, and machinery slid by 2.3%.
  • Year-on-year, total New CAPEX slid by 6.1%.
  • Investments in building and structures tumbled by 7.9%, with investments in equipment, plant, and machinery falling by 4.0%.

The Aussie Dollar moved from $0.66222 to $0.66282 upon release of the figures. At the time of writing, the Aussie Dollar flat at $0.6622.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.13% to ¥107.86 against the U.S Dollar.

The Day Ahead:

For the EUR

It’s another relatively quiet day ahead on the economic calendar. Key stats include prelim May inflation figures from Germany and Spain.

Business and Consumer confidence figures out of Italy and the Eurozone should have a muted impact, following the EU’s COVID-19 recovery plan announced on Wednesday.

We will expect EU’s recovery plan and the continued easing of lockdown measures to provide support.

The markets will need to track any chatter from Beijing and Washington, however. Any rise in tensions and action from either side will test risk appetite on the day.

At the time of writing, the EUR was up by 0.11% to $1.1018.

For the Pound

It’s yet another quiet day ahead on the economic calendar. There are no material stats due out to provide the Pound with direction.

On Wednesday, we saw the Pound take a hit in response to the threat of the BoE cutting interest rates into negative territory.

BoE Chief Economist Haldane had attempted to pour cold water on such a prospect but to no avail.

Through the day, expect market risk sentiment and any Brexit chatter to be key drivers.

At the time of writing, the Pound was up by 0.05% to $1.2267.

Across the Pond

It’s a busy day ahead on the U.S economic calendar. Economic data includes April durable goods, 2nd estimate GDP numbers, and pending home sales figures for April.

Barring any deviations from 1st estimates, expect April’s core durable goods orders to garner some attention.

Any moves in response to the durable goods orders are likely to be limited, however. The market focus will be on the weekly jobless claims figures.

There’s plenty of optimism as the U.S economy continues to reopen, but whether the markets can stomach another 2m jump remains to be seen.

The Dollar Spot Index was down by 0.17% to 98.893 at the time of writing.

For the Loonie

It’s a quiet day on the economic calendar. There are no material stats due out of Canada to influence the Loonie.

A lack of stats will leave the Loonie in the hands of market risk sentiment and the weekly EIA crude oil inventory numbers…

At the time of writing, the Loonie was down by 0.02% to C$1.3755 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

European Equities: Futures Point to another Surge Driven by Economic Optimism

Economic Calendar:

Thursday, 28th May

Spanish HICP (YoY) (May) Prelim

German CPI (MoM) (May) Prelim

Friday, 29th May

German Retail Sales (MoM) (Apr)

French Consumer Spending (MoM) (Apr)

French GDP (QoQ) (Q1) 2nd Estimate

Italian CPI (MoM) (May) Prelim

Eurozone CPI (YoY) (May) Prelim

The Majors

It was yet another bullish day for the European majors on Wednesday, with the CAC40 rising by 1.79% to lead the way.

The DAX30 and EuroStoxx600 saw more modest gains of 1.33% and 0.24% respectively.

While there were no material stats to provide direction on the day, it was the EU’s COVID-19 recovery plan the spurred a 4th consecutive day in the green for the DAX30.

The EU Commission announced plans to roll out a larger than anticipated €750bn to support the EU economic revival.

Unsurprisingly Italy and Spain are to get the largest slices of the pie, which will be in the form of grants and loans.

U.S – China tensions did pin back the majors late in the day, though the COVID-19 economic recovery plan was of far greater influence.

The Stats

It was a quiet quiet day on the Eurozone economic calendar on Wednesday. There were no material stats for the markets to focus on mid-week.

Outside of the numbers, the ECB was in action, however. ECB President Lagarde spoke before the release of the ECB’s Financial Stability Review.

In spite of the Buoyant mood across the European majors, Lagarde delivered a somber appraisal of the Eurozone economy and outlook.

Lagarde stated that the economic contraction is likely to be between the ECB’s base case and worst-case scenarios, while also acknowledging that it is hard to forecast just how badly the economy has been affected.

The ECB’s Financial Stability Review also delivered some concerns for the markets to brush aside.

According to the May review, key vulnerabilities include:

  • Tightening of financial conditions.
  • Significant increase in debt burdens.
  • Weaker bank intermediation capacity and profitability.
  • Liquidity concerns among vulnerable non-banks.

Please follow the link to access the Financial Stability Review.

From the U.S, there were no material stats to influence the European majors later in the day.

The Market Movers

For the DAX: It was another particularly bullish day for the auto sector on Tuesday. Daimler surged by 10.68% to lead the way, with BMW and Continental rallying by 6.94% and by 6.43% respectively. Volkswagen saw a more modest 3.93% gain on the day.

It was another bullish day for the banks. Deutsche Bank and Commerzbank rallied by 5.28% and by 6.62% respectively.

Deutsche Lufthansa saw a relatively modest 1.74% gain after 6.51% and 7.92% gains on Monday and Tuesday.

From the CAC, it was a bullish day for the banking sector on Wednesday, following on from Tuesday’s gains. BNP Paribas rallied by 8.82% to lead the way, with Credit Agricole and Soc Gen gaining by 5.30% and 6.56% respectively.

The auto sector also found strong support. Peugeot rose by 4.91%, while Renault surged by 17.47. Added support for Renault came from an announcement by Nissan to rebuild its relationship with Renault.

Air France-KLM gained a further 2.81% following Tuesday’s 10.64% breakout, while Airbus SE fell by 2.67%.

On the VIX Index

It was a 3rd consecutive day in the red on Wednesday. Following on from a 0.53% decline on Tuesday, the VIX fell by 1.39% to end the day at 27.6.

The downside on the day came in spite of rising tensions between the U.S and China and a gloomy economic environment.

Support for the U.S majors on the day continued to come from the easing of lockdown measures and hopes of a continued economic recovery.

From a market perspective, both fiscal and monetary policy support will likely continue until the employment conditions recover.

On Wednesday, the S&P500 rose by 1.48%, with the Dow and NASDAQ gaining 2.21% and 0.77% respectively.

VIX 28/05/20 Daily Chart

The Day Ahead

It’s a relatively quiet day ahead on the Eurozone economic calendar. Prelim May inflation figures are due out of Spain and Germany later today.

We don’t expect the numbers to have a material impact on the majors, however, with the markets anticipating inflation to remain under pressure.

From the U.S, April’s durable goods and core durable goods orders and 2nd estimate GDP figures are due out, along with jobless claims numbers.

Barring deviation from 1st estimates, expect the jobless claims to have the greatest impact on risk appetite and the Dollar. Can the markets stomach another 2m jump in claims?

Away from the economic calendar, the markets will be looking towards Capitol Hill for the U.S government’s reaction to China’s new HK securities law.

While the rise in tensions between the U.S and China remains negative for risk sentiment, COVID-19 news and updates should provide further support. Expect any further progress towards a COVID-19 vaccination to deliver further support.

The Latest Coronavirus Figures

On Wednesday, the number of new coronavirus cases rose by 110,221 to 5,788,503. On Tuesday, the number of new cases had risen by 95,878. The daily increase was higher than both Tuesday’s rise and 89,941 new cases from the previous Wednesday.

France, Germany, Italy, and Spain reported 1,892 new cases on Wednesday, which was up from 1,535 new cases on Tuesday. On the previous Wednesday, 3,225 new cases had been reported.

From the U.S, the total number of cases rose by 20,392 to 1,745,803 on Wednesday. On Tuesday, the total number of cases had risen by 19,185. On Wednesday 20th May, a total of 21,774 new cases had been reported.

In the futures markets, at the time of writing, the DAX was up by 142.5 points, with the Dow up by 185 points.

For a look at all of today’s economic events, check out our economic calendar.

Litecoin, Stellar’s Lumen, and Tron’s TRX – Daily Analysis – 28/05/20

Litecoin

Litecoin rallied by 3.79% on Wednesday. Reversing a 1.61% decline from Tuesday, Litecoin ended the day at $43.87.

It was a bullish start to the day. Litecoin rallied from an early morning intraday low $42.23 to a late afternoon intraday high $43.98.

Litecoin broke through the first major resistance level at $42.98 and the second major resistance level at $43.66 before pulling back.

A late pullback saw Litecoin fall back through the second major resistance level to sub-$43.30 levels before finding late support.

A final hour rally saw Litecoin break back through the second major resistance level to wrap up the day at $43.8 levels.

At the time of writing, Litecoin was down by 0.41% to $43.69. A bearish start to the day saw Litecoin fall from an early morning high $43.86 to a low $43.65.

Litecoin left the major support and resistance levels untested early on.

LTC/USD 28/05/20 Daily Chart

For the day ahead

Litecoin would need to avoid sub-$43.40 levels to bring the first major resistance level at $44.49 into play.

Support from the broader market would be needed, however, for Litecoin to breakout from Wednesday’s high $43.98.

Barring an extended crypto rally, Wednesday’s high would likely leave Litecoin short of the first major resistance level and.

Failure to avoid sub-$43.40 levels could see Litecoin fall deeper into the red.

A fall back through the morning low to sub-$43.40 would bring the first major support level at $42.74 into play.

Barring an extended crypto sell-off, however, Litecoin should steer clear of sub-$42 and the second major support level at $41.61.

Looking at the Technical Indicators

Major Support Level: $42.74

Major Resistance Level: $44.49

23.6% FIB Retracement Level: $62

38.2% FIB Retracement Level: $78

62% FIB Retracement Level: $104

Stellar’s Lumen

Stellar’s Lumen rose by 1.59% on Wednesday. Partially reversing a 1.76% fall from Tuesday, Stellar’s Lumen ended the day at $0.066041.

It was a bullish start to the day. Stellar’s Lumen rallied from an early morning intraday low $0.064520 to a late morning intraday high $0.067666 before hitting reverse.

Stellar’s Lumen broke through the first major resistance level at $0.06619 and the second major resistance level at $0.06749.

The reversal saw Stellar’s Lumen slide back through the major resistance levels before finding late support to wrap up the day at $0.066 levels.

At the time of writing, Stellar’s Lumen was up by just 0.01% to $0.066050. There were no major movements within the 1st hour of the day.

Stellar’s Lumen left the major support and resistance levels untested early on.

XLM/USD 28/05/20 Daily Chart

For the day ahead

Stellar’s Lumen would need to move back through to $0.06610 levels to bring the first major resistance level at $0.06763 into play.

Support from the broader market would be needed, however, for Stellar’s Lumen to break back through to $0.067 levels.

Barring a broad-based crypto rally, the first major resistance level and Wednesday’s high $0.067666 would likely limit any upside.

Failure to move back through to $0.06610 levels could see Stellar’s Lumen hit reverse.

A fall through to sub-$0.065 levels would bring the first major support level at $0.06449 into play.

Barring an extended crypto sell-off, however, Stellar’s Lumen should steer well clear of the second major support level at $0.06293.

Looking at the Technical Indicators

Major Support Level: $0.06449

Major Resistance Level: $0.06763

23.6% FIB Retracement Level: $0.1051

38% FIB Retracement Level: $0.1433

62% FIB Retracement Level: $0.2050

Tron’s TRX

Tron’s TRX rose by 0.58% on Wednesday. Partially reversing a 0.74% decline from Tuesday, Tron’s TRX ended the day at $0.014710.

It was a bullish start to the day. Tron’s TRX rallied from an early morning low $0.014529 to a late morning intraday high $0.015041 before hitting reverse.

Tron’s TRX broke through the first major resistance level at $0.01479 and the second major resistance level at $0.01498.

The reversal saw Tron’s TRX slide through the major resistance levels to a late intraday low $0.014502 into the red.

Late in the day, however, Tron’s TRX moved back through to $0.01470 levels to end the day in the green.

In spite of the late pullback, Tron’s TRX steered clear of the first major support level at $0.01432.

At the time of writing, Tron’s TRX was down by 0.11% to $0.014694. A mixed start to the day saw Tron’s TRX rise to an early morning high $0.014725 before falling to a low $0.014694.

Tron’s TRX left the major support and resistance levels untested early on.

TRX/USD 28/05/20 Daily Chart

For the Day Ahead

Tron’s TRX would need to move through to $0.01480 levels to support a run at the first major resistance level at $0.01499.

Support from the broader market would be needed, however, for Tron’s TRX to break out from the morning high $0.014725.

Barring a broad-based crypto rebound, the first major resistance level and Wednesday’s high $0.015041 would likely limit any upside.

Failure to move through to $0.01480 levels could see Tron’s TRX fall deeper into the red.

A fall through Wednesday’s low $0.014521 would bring the first major support level at $0.01447 into play.

Barring an extended crypto sell-off, however, Tron’s TRX should steer clear of sub-$0.014 levels. The second major support level at $0.01424 would likely limit any downside.

Looking at the Technical Indicators

Major Support Level: $0.01447

Major Resistance Level: $0.01499

23.6% FIB Retracement Level: $0.0322

38.2% FIB Retracement Level: $0.0452

62% FIB Retracement Level: $0.0663

Please let us know what you think in the comments below

Thanks, Bob

EOS, Ethereum and Ripple’s XRP – Daily Tech Analysis – 28/05/20

EOS

EOS rose by 2.49% on Wednesday. Reversing a 0.76% decline from Tuesday, EOS ended the day at $2.5689.

A bullish start to the day saw EOS rally from an early morning intraday low $2.5047 to a late morning intraday high $2.5724.

EOS broke through the first major resistance level at $2.5403 before sliding back.

Coming within range of the second major resistance level at $2.5735, EOS fell back to sub-$2.54 levels before finding support.

Through the late part of the day, EOS found support from the broader market to wrap up the day at $2.56 levels.

At the time of writing, EOS was down by 0.16% to $2.5647. A bearish start to the day saw EOS rise to an early morning high $2.5716 before sliding to a low $2.5566.

EOS left the major support and resistance levels untested early on.

EOS/USD 28/05/20 Daily Chart

For the day ahead

EOS would need to avoid sub-$2.55 levels to bring the first major resistance level at $2.5935 into play.

Support from the broader market would be needed, however, for EOS to break out from Wednesday’s high $2.5737.

Barring a broad-based crypto rally, resistance at $2.58 would likely leave EOS short of the major first resistance level.

Failure to avoid sub-$2.55 levels could see EOS slide deeper into the red.

A fall through the morning low to sub-$2.55 levels would bring the first major support level at $2.5245 into play.

Barring an extended crypto sell-off, however, EOS should steer clear of the second major support level at $2.4801.

Looking at the Technical Indicators

Major Support Level: $2.5245

Major Resistance Level: $2.5935

23.6% FIB Retracement Level: $6.62

38% FIB Retracement Level: $9.76

62% FIB Retracement Level: $14.82

Ethereum

Ethereum rallied by 3.75% on Wednesday. Reversing a 1.58% fall from Tuesday, Ethereum ended the day at $208.41.

A bullish start to the day saw Ethereum rally from an early morning intraday low $200.76 to a mid-day high $207.75.

Ethereum broke through the first major resistance level at $205.08 before pulling back to a low $205.10.

Finding support at the first major resistance level, Ethereum rallied to a final hour intraday high $208.48.

In spite of the late rally, Ethereum came up short of the second major resistance level at $209.24.

At the time of writing, Ethereum was down by 0.29% to $207.80. A bearish start to the day saw Ethereum fall from an early morning high $208.50 to a low $207.20.

Ethereum left the major support and resistance levels untested early on.

ETH/USD 28/05/20 Daily Chart

For the day ahead

Ethereum would need to avoid sub-$206 levels to bring the first major resistance level at $211.01 into play.

Support from the broader market would be needed, however, for Ethereum to break out from the morning high $208.50.

Barring an extended crypto rally, resistance at $210 would likely leave Ethereum short of the first major resistance level.

Failure to avoid sub-$206 levels could see Ethereum fall deeper into the red.

A fall through the morning low $207.20 to sub-$206 levels would bring the first major support level at $203.29 into play.

Barring an extended crypto sell-off, however, Ethereum should steer well clear of the second major support level at $198.16.

Looking at the Technical Indicators

Major Support Level: $203.29

Major Resistance Level: $211.01

23.6% FIB Retracement Level: $257

38.2% FIB Retracement Level: $367

62% FIB Retracement Level: $543

Ripple’s XRP

Ripple’s XRP rose by 2.19% on Wednesday. Reversing a 1.20% fall from Tuesday, Ripple’s XRP ended the day at $0.19810.

Tracking the broader market, Ripple’s XRP rallied from an early morning intraday low $0.19385 to a late morning intraday high $0.20109.

Ripple’s XRP broke through the first major resistance level at $0.1965 and the second major resistance level at $0.1993.

Coming up short of the third major resistance level at $0.2047, Ripple’s XRP fell back through the major resistance levels to a low $0.19613.

Finding support late in the day, Ripple’s XRP broke back through the first major resistance level to wrap up the day at $0.1980 levels.

At the time of writing, Ripple’s XRP was down by 0.21% to $0.19769. A bearish start to the day saw Ripple’s XRP fall from an early morning high $0.19810 to a low $0.19706.

Ripple’s XRP left the major support and resistance levels untested early on.

XRP/USD 28/05/20 Daily Chart

For the day ahead

Ripple’s XRP will need to move through to $0.1980 levels to support a run at the first major resistance level at $0.2015.

Support from the broader market would be needed, however, for Ripple’s XRP to break out from Wednesday’s high $0.20109 levels.

Barring a broad-based crypto rebound, the first major resistance level and Wednesday’s high $0.20109 would likely limit any upside.

Failure to move through to $0.1980 levels could see Ripple’s XRP fall deeper into the red.

A fall through back through the morning low $0.19706 would bring the first major support level at $0.1943 into play.

Barring another crypto meltdown, however, Ripple’s XRP should steer well clear of the second major support level at $0.1904.

Looking at the Technical Indicators

Major Support Level: $0.1943

Major Resistance Level: $0.2015

23.6% FIB Retracement Level: $0.3638

38.2% FIB Retracement Level: $0.4800

62% FIB Retracement Level: $0.6678

Please let us know what you think in the comments below.

Thanks, Bob

Midweek Market Drivers: Global Expand Of COVID-19, Situation In Europe, and US-China Tensions

The number of new COVID-19 cases across the globe has exceeded 5 million.

How the situation is evolving in the European Union?

Aside from Spain, which has had 1 blip of over  1,000, we’ve seen the most adversely affected see sub-1,000 new cases each day for 9 consecutive days. The most affected being France, Germany, Italy, and Spain.

We had some concerns over how quickly governments were easing lockdown measures. When we factor in the 2-week incubation period, these numbers are fairly positive. They should give the markets some hope that a 2nd wave can be avoided.

Governments are about a 4-5 day period and about a week out to convince the more pessimistic…

If we look at China as a base case that should also be supportive.

We can then also look at virus vaccine news that has also been market positive late last week and early this week.

It appears that the coronavirus crisis continues to hit the global economy dramatically.

In the meantime, are there any improvements?

From the economic data, shifting through May and June numbers, the focus remains on employment and business and consumer confidence figures.

In Germany this week, we saw both business and consumer confidence improve, coming off the back the easing of lockdown measures.

The key, however, remains labor market conditions, which need to materially improve to drive confidence and consumption.

Expect these to be the key areas of focus and to drive the market near-term.

A pickup in consumption would drive a service sector recovery that would then filter through to the manufacturing sector.

Despite positive forecasts, the US-China conflict continues to be in the spotlight. Also, the Chinese government introduced a new HK Securities Law.

How did these events affect the markets?

There was some skepticism over the phase 1 trade agreement. We then saw accusations fly over the cause of the coronavirus pandemic leading to a deterioration in relations.

China has responded with the HK Securities Law and the U.S government is expected to respond in kind this week. This could include sanctions.

The markets have been almost Teflon in the early part of the week. On Wednesday morning, however, we saw risk appetite tested, as focus shifted back to the U.S – China tensions.

This shift in focus came as Trump announced that the U.S will respond to China’s plans for HK.

Let’s see what happens there. Beijing is not going to sit back this time around, not after the year-and-a-half that it took to come up with a phase 1 trade agreement.

Risk appetite will be tested. We do have COVID-19 news to keep the markets buoyed and there is also vaccine talk to provide support.

U.S China tensions, that relationship isn’t going to improve any time soon. Could you imagine a China-Russia alliance against the U.S and anyone else who wants to jump on Trump’s bandwagon?

That would certainly give the markets a rough time, particularly with Iran there in the Middle East as well.

It seems like the US-China tensions do not influence the markets significantly.

Meanwhile, is there anything else notable in regards to commodities and geopolitics?

Other than COVID-19, vaccines, and U.S China relations, there’s very little else to consider from a global financial market perspective.

There is one thing to consider, however, looking further down the track. Will the markets be as optimistic about the economic recovery once June stats begin to come out.

We saw May’s economic indicators show economic activity pickup from the depths of the abyss in April figures.

If we see June numbers fall off from May, then that optimism will come into question. May would have seen a larger pickup just due to the fact that economies were reopening.

I’m not convinced that the global economy will recover as quickly as the markets suggest. When you look at the equity markets and the rebound in the Aussie Dollar and Loonie. These are quite big moves when considering the doom and gloom ahead.

So, let’s see what happens when we begin to see June numbers…

For a look at all of today’s economic events, check out our economic calendar.

Litecoin, Stellar’s Lumen, and Tron’s TRX – Daily Analysis – 27/05/20

Litecoin

Litecoin fell by 1.61% on Tuesday. Partially reversing a 2.09% gain from Monday, Litecoin ended the day at $42.29.

A mixed start to the day saw Litecoin rose to an early morning intraday high $43.07 before hitting reverse.

Falling short of the first major resistance level at $43.59, Litecoin slid to a late afternoon intraday low $41.79.

Litecoin fell through the first major support level at $42.04 before recovering to wrap up the day at $42 levels.

At the time of writing, Litecoin was up by 0.33% to $42.43. A bullish start to the day saw Litecoin rise from an early morning low $42.23 to a high $42.60.

Litecoin left the major support and resistance levels untested early on.

LTC/USD 27/05/20 Daily Chart

For the day ahead

Litecoin would need to avoid sub-$42.40 levels to bring the first major resistance level at $42.98 into play.

Support from the broader market would be needed, however, for Litecoin to breakout from the morning high $42.60.

Barring an extended crypto rally, the first major resistance level would likely limit any upside.

Failure to avoid sub-$42.40 levels could see Litecoin hit reverse.

A fall back through the morning low $42.23 would bring the first major support level at $41.70 into play.

Barring another extended crypto sell-off, however, Litecoin should steer clear of the second major support level at $41.10.

Looking at the Technical Indicators

Major Support Level: $41.70

Major Resistance Level: $42.98

23.6% FIB Retracement Level: $62

38.2% FIB Retracement Level: $78

62% FIB Retracement Level: $104

Stellar’s Lumen

Stellar’s Lumen fell by 1.76% on Tuesday. Partially reversing a 3.26% rally from Monday, Stellar’s Lumen ended the day at $0.064880.

It was bearish through most of the day. Stellar’s Lumen fell from an early morning intraday low $0.066385 to a mid-afternoon intraday low $0.063970.

Stellar’s Lumen fell through the first major support level at $0.06447 before finding support late in the day.

The partial recovery saw Stellar’s Lumen briefly revisit $0.065 levels before easing back.

At the time of writing, Stellar’s Lumen was down by 0.55% to $0.064520. A mixed start to the day saw Stellar’s Lumen rise to an early morning high $0.065225 before falling to a low $0.064520.

Stellar’s Lumen left the major support and resistance levels untested early on.

XLM/USD 27/05/20 Daily Chart

For the day ahead

Stellar’s Lumen would need to move back through to $0.065 levels to bring the first major resistance level at $0.06619 into play.

Support from the broader market would be needed, however, for Stellar’s Lumen to break out from the morning high $0.065225.

Barring a broad-based crypto rebound, the first major resistance level would likely limit any upside.

Failure to move back through to $0.065 levels could see Stellar’s Lumen fall deeper into the red.

A fall through to sub-$0.064 levels would bring the first major support level at $0.06377 into play.

Barring an extended crypto sell-off, however, Stellar’s Lumen should steer clear of the second major support level at $0.06266.

Looking at the Technical Indicators

Major Support Level: $0.06377

Major Resistance Level: $0.06619

23.6% FIB Retracement Level: $0.1051

38% FIB Retracement Level: $0.1433

62% FIB Retracement Level: $0.2050

Tron’s TRX

Tron’s TRX fell by 0.74% on Tuesday. Partially reversing a 3.83% rally from Monday, Tron’s TRX ended the day at $0.01460.

It was a bearish start to the day. Tron’s TRX fell from an early morning intraday high $0.014709 to a mid-afternoon intraday low $0.014241.

Tron’s TRX fell through the first major support level at $0.01431 before finding support late in the day.

The late recovery saw Tron’s TRX move back through the first major support level to wrap up the day at $0.01460 levels

At the time of writing, Tron’s TRX was down by 0.35% to $0.014549. A bearish start to the day saw Tron’s TRX fall from an early morning high $0.014625 to a low $0.014549.

Tron’s TRX left the major support and resistance levels untested early on.

TRX/USD 27/05/20 Daily Chart

For the Day Ahead

Tron’s TRX would need to avoid sub-$0.01450 levels to support a run at the first major resistance level at $0.01479.

Support from the broader market would be needed, however, for Tron’s TRX to break out from Tuesday’s high $0.014709.

Barring a broad-based crypto rebound, the first major resistance level would likely limit any upside.

Failure to avoid sub-$0.01450 levels could see Tron’s TRX fall deeper into the red.

A fall through to sub-$0.01450 levels would bring the first major support level at $0.01432 into play.

Barring an extended crypto sell-off, however, Tron’s TRX should steer clear of sub-$0.014 levels. The second major support level at $0.01405 should limit any downside.

Looking at the Technical Indicators

Major Support Level: $0.01432

Major Resistance Level: $0.01479

23.6% FIB Retracement Level: $0.0322

38.2% FIB Retracement Level: $0.0452

62% FIB Retracement Level: $0.0663

Please let us know what you think in the comments below

Thanks, Bob

The Crypto Daily – Movers and Shakers -27/05/20

Bitcoin fell by 0.62% on Tuesday. Partially reversing a 2.20% gain from Monday, Bitcoin ended the day at $8,845.5.

A mixed start to the day saw Bitcoin rise to a late morning intraday high $9,013.3 before hitting reverse.

Falling short of the first major resistance level at $9,037.13, Bitcoin slid to a late afternoon intraday low $8,704.9.

Steering clear of the first major support level at $8,693.43, Bitcoin recovered to $8,800 levels to limit the loss on the day.

The near-term bearish trend, formed at late June 2019’s swing hi $13,764.0, remained firmly intact, reaffirmed by the March swing lo $4,000.

For the bulls, Bitcoin would need to break out from the 62% FIB of $10,034 to form a near-term bullish trend.

The Rest of the Pack

Across the rest of the majors, it was another mixed day for the majors on Tuesday.

Monero’s XMR rose by 0.24% to buck the trend.

It was a bearish day for the rest of the pack, however.

Bitcoin Cash SV slid by 2.57% to lead the way down.

Binance Coin (-1.04%), Ethereum (-1.58%), Litecoin (-1.61%), Ripple’s XRP (-1.20%), Stellar’s Lumen (-1.76%), and Tezos (-1.54%) also struggled.

Bitcoin Cash ABC (-0.18%), Cardano’s ADA (-0.69%), EOS (-0.76%), and Tron’s TRX (-0.74%) saw relatively modest losses on the day.

Early in the week, the crypto total market cap fell to an early Monday low $238.04bn before rising to a Tuesday high $247.84bn. At the time of writing, the total market cap stood at $243.55bn.

Bitcoin’s dominance fell to a Monday low 66.38% before rising to a Tuesday high 66.86%. At the time of writing, Bitcoin’s dominance stood at 66.57%.

This Morning

At the time of writing, Bitcoin was down by 0.24% to $8,824.0. A mixed start to the day saw Bitcoin rise to an early morning high $8,896.5 before falling to a low $8,822.7.

Bitcoin left the major support and resistance levels untested early on.

Elsewhere, it was a mixed start to the day.

Cardano’s ADA and Monero’s XMR led the way down, with losses of 0.87% and 0.53% respectively.

Ethereum (+0.28%), Litecoin (+0.17%), and Ripple’s XRP (+0.49%) bucked the trend early on.

BTC/USD 27/05/20 Daily Chart

For the Bitcoin Day Ahead

Bitcoin would need to move through to $8,860 levels to bring the first major resistance level at $9,004.23 into play.

Support from the broader market would be needed, however, for Bitcoin to break out from the morning high $8,896.5.

Barring an extended crypto rally, the first major resistance level would likely limit any upside.

In the event of an extended crypto rally, the second major resistance level at $9,162.97 would likely come into play.

Failure to move back through to $8,860 levels could see Bitcoin fall deeper into the red.

A fall back through the morning $8,822.2 would bring the first major support level at $8,695.83 into play.

Barring another extended crypto sell-off, however, Bitcoin should steer clear of the second major support level at $8,546.17.

EOS, Ethereum and Ripple’s XRP – Daily Tech Analysis – 27/05/20

EOS

EOS fell by 0.76% on Tuesday. Partially reversing a 1.50% gain from Monday, EOS ended the day at $2.5070.

A mixed start to the day saw EOS rise to an early morning intraday high $2.5334 before hitting reverse.

Falling short of the first major resistance level at $2.5640, EOS slid to a late afternoon intraday low $2.4600.

EOS fell through the first major resistance level at $2.4679 before finding support to wrap up the day at $2.50 levels.

At the time of writing, EOS was up by 0.52% to $2.5202. A mixed start to the day saw EOS fall to an early morning low $2.5047 before striking a high $2.5233.

EOS left the major support and resistance levels untested early on.

EOS/USD 27/05/20 Daily Chart

For the day ahead

EOS would need to move back through to $2.53 levels to bring the first major resistance level at $2.5403 into play.

Support from the broader market would be needed, however, for EOS to break out from Tuesday’s high $2.5334.

Barring a broad-based crypto rally, the major first resistance level would likely limit any upside on the day.

Failure to move back through to $2.53 levels could see EOS slide back into the red.

A fall through the morning low to sub-$2.50 levels would bring the first major support level at $2.4669 into play.

Barring an extended crypto sell-off, however, EOS should steer clear of the second major support level at $2.4267.

Looking at the Technical Indicators

Major Support Level: $2.4669

Major Resistance Level: $2.5403

23.6% FIB Retracement Level: $6.62

38% FIB Retracement Level: $9.76

62% FIB Retracement Level: $14.82

Ethereum

Ethereum fell by 1.58% on Tuesday. Partially reversing a 2.22% gain from Monday, Ethereum ended the day at $200.91.

A mixed start to the day saw Ethereum rise to an early morning intraday high $205.03 before hitting reverse.

Falling short of the first major resistance level at $207.18, Ethereum fell to a late afternoon intraday low $196.65.

The reversal saw Ethereum fall through the first major support level at $199.48 before finding support.

Steering clear of the second major support level at $194.89, Ethereum recovered to $202 levels before easing back.

At the time of writing, Ethereum was up by 0.55% to $202.02. A mixed start to the day saw Ethereum fall to an early morning low $200.76 before striking a high $202.44.

Ethereum left the major support and resistance levels untested early on.

ETH/USD 27/05/20 Daily Chart

For the day ahead

Ethereum would need to avoid sub-$201 levels to bring the first major resistance level at $205.08 into play.

Support from the broader market would be needed, however, for Ethereum to break out from the morning high $202.44.

Barring an extended crypto rally, the first major resistance level would likely limit any upside.

Failure to avoid sub-$201 levels could see Ethereum slide into the red.

A fall through the morning low $200.76 levels would bring the first major support level at $196.70 into play.

Barring an extended crypto sell-off, however, Ethereum should steer well clear of the second major support level at $192.48.

Looking at the Technical Indicators

Major Support Level: $196.70

Major Resistance Level: $205.08

23.6% FIB Retracement Level: $257

38.2% FIB Retracement Level: $367

62% FIB Retracement Level: $543

Ripple’s XRP

Ripple’s XRP fell by 1.20% on Tuesday. Partially reversing a 1.90% gain from Monday, Ripple’s XRP ended the day at $0.19359.

A bullish start to the day saw Ripple’s XRP rise to an early morning intraday high $0.19680 before hitting reverse.

Falling short of the first major resistance level at $0.1991, Ripple’s XRP slid to a late afternoon intraday low $0.19142.

Steering clear of the first major support level at $0.1912, Ripple’s XRP recovered to $0.1950 levels before easing back.

At the time of writing, Ripple’s XRP was up by 0.70% to $0.19495. A bullish start to the day saw Ripple’s XRP rise from an early morning low $0.19385 to a high $0.19510.

Ripple’s XRP left the major support and resistance levels untested early on.

XRP/USD 27/05/20 Daily Chart

For the day ahead

Ripple’s XRP will need to avoid sub-$0.1940 levels to support a run at the first major resistance level at $0.1965.

Support from the broader market would be needed, however, for Ripple’s XRP to break out from the morning high $0.19510.

Barring a broad-based crypto rally, the first major resistance level would likely continue to leave Ripple’s XRP short of $0.20 levels.

Failure to avoid sub-$0.1940 levels could see Ripple’s XRP hit reverse.

A fall through to sub-$0.1940 levels would bring the first major support level at $0.1911 into play.

Barring another crypto meltdown, however, Ripple’s XRP should steer well clear of the second major support level at $0.1886.

Looking at the Technical Indicators

Major Support Level: $0.1911

Major Resistance Level: $0.1965

23.6% FIB Retracement Level: $0.3638

38.2% FIB Retracement Level: $0.4800

62% FIB Retracement Level: $0.6678

Please let us know what you think in the comments below.

Thanks, Bob

The ECB and Brussels Put the EUR in Focus as Geopolitics Tests Risk Sentiment

Earlier in the Day:

It was a relatively busy day on the economic calendar this morning. The Aussie Dollar and Kiwi Dollar were in action, with economic data out of China also in focus.

Away from the economic calendar, the market’s attention returned to U.S – China tensions and China’s security law for HK.

COVID-19 news and numbers did remain supportive, however, with positive vaccine news hitting the news wires in the 1st half of the week.

Looking at the latest coronavirus numbers,

On Tuesday, the number of new coronavirus cases rose by 95,878 to 5,678,282 On Monday, the number of new cases had risen by 83,824. The daily increase was higher than both Monday’s rise and 94,189 new cases from the previous Tuesday.

France, Germany, Italy, and Spain reported 1,535 new cases on Tuesday, which was up from 747 new cases on Monday. On the previous Tuesday, 2,848 new cases had been reported.

From the U.S, the total number of cases rose by 19,185 to 1,725,411 on Tuesday. On Monday, the total number of cases had risen by 19,790. On Tuesday 19th May, a total of 20,688 new cases had been reported.

For the Kiwi Dollar

The RBNZ’s Financial Stability Report was in focus in the early hours.

Salient points from the latest report included,

  • COVID-19 has led to unprecedented economic disruption, with small businesses under stress.
  • Fiscal and monetary policy has cushioned the near-term impact. These include wage subsidies, large scale asset purchases to reduce interest rates, and a record low OCR.
  • Banks are in a strong position to support the economic recovery. The Reserve Bank has adjusted policies to enable banks to keep lending.
  • Measures include:
    • Mortgage deferrals for households and small businesses.
    • Delayed implementation of planned increases to capital requirements by a minimum of 12-months.
    • Eased core funding ratio requirements.
    • Supported the Business Finance Guarantee Scheme by creating a Term Lending Facility.

The Kiwi Dollar moved from $0.61971 to $0.61984 upon release of the report. At the time of writing, the Kiwi Dollar was up by 0.11% to $0.6192.

For the Aussie Dollar

Construction Work Done fell by 1.0% in the 1st quarter, following on from a 3.0% slide in the 4th quarter. Economists had forecast a 1.5% decline.

According to the ABS,

  • Residential work done fell by 1.6%, quarter-on-quarter, and slid by 12.5% when compared with the 1st quarter of 2019.
  • Total construction work down fell by 6.5% in the 1st quarter, year-on-year.

The Aussie Dollar moved from $0.66512 to $0.66530 upon release of the figures. At the time of writing, the Aussie Dollar down by 0.11% to $0.6646.

Out of China

Industrial profit figures for April had little influence. Year-on-year, profits were down by 4.3%, following a 34.9% slump in March. Year-to-date, profits were down by 6.75%, following a 36.7% tumble in March.

The Aussie Dollar moved from $0.66512 to $0.66530 upon release of the figures.

Elsewhere

At the time of writing, the Japanese Yen was up by 0.04% to ¥107.50 against the U.S Dollar.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. While there are no material stats due out of the Eurozone, the ECB and the EU Commission are in focus today.

In the early part of the European session, ECB President Lagarde is scheduled to speak. Expect any chatter on monetary policy or the economic outlook to influence. Lagarde’s speech precedes the release of the ECB’s Financial Stability Review. We will expect the review to be a key area of focus for the markets today.

With the ECB in focus early in the day, Brussels will also be in the spotlight. The European Commission is due to announce the COVID-19 Recovery Fund and EU Budget.

At the time of writing, the EUR was down by 0.10% to $1.0971.

For the Pound

It’s another quiet day ahead on the economic calendar. There are no material stats due out to provide the Pound with direction.

A lack of chatter on Brexit and the risk-on sentiment has provided the Pound with further support this week. Expect any updates on Brexit and COVID-19 to test this support, however.

At the time of writing, the Pound was down by 0.06% to $1.2327.

Across the Pond

It’s also a quiet day ahead on the U.S economic calendar. Following Tuesday’s consumer confidence figures, there are no material stats to influence later today.

A lack of stats leaves geopolitics center stage. On Tuesday, U.S President Trump stated that there would be a U.S response to China’s plans for HK by the end of the week… Measures could include sanctions on China…

The Dollar Spot Index was up by 0.14% to 99.042 at the time of writing, with the U.S – China jitters providing support.

For the Loonie

It’s a relatively quiet day on the economic calendar. Building permit figures are due out later today that will likely have a muted impact on the Loonie.

With concerns over the U.S – China relations and the prospects of sanctions on China resurfacing, we can expect the Loonie to be under pressure.

Much will depend on how Beijing will respond to any steps taken by the U.S government. The continued easing of lockdown measures across major economies, remains Loonie positive, however.

At the time of writing, the Loonie was down by 0.06% to C$1.3785 against the U.S Dollar.

European Equities: The ECB and the EU Commission in Focus alongside China

Economic Calendar:

Thursday, 28th May

Spanish HICP (YoY) (May) Prelim

German CPI (MoM) (May) Prelim

Friday, 29th May

German Retail Sales (MoM) (Apr)

French Consumer Spending (MoM) (Apr)

French GDP (QoQ) (Q1) 2nd Estimate

Italian CPI (MoM) (May) Prelim

Eurozone CPI (YoY) (May) Prelim

The Majors

It was another bullish day for the European majors on Tuesday, with the CAC40 rising by 1.46% to lead the way.

The DAX30 and EuroStoxx600 weren’t close behind, with gains of 1.00% and 1.08% respectively.

More positive economic data out of Germany, the continued easing of lockdown measures, and progress towards a COVID-19 vaccine were the key drivers.

On the vaccine front, a number of U.S firms were making progress, with Novavax reporting that human trials had commenced. With Novavax moving onto human trials and Moderna reporting positive results last week, there was a boost for travel and bank stocks.

Once more, the markets brushed aside tensions between the U.S and China.

The Stats

It was a relatively quiet day on the Eurozone economic calendar on Tuesday. Germany was back in the limelight, however, with June’s GfK Consumer Climate figures in focus.

According to the GfK report:

  • The Consumer Climate Index rose by 4.2 points to -18.9 for June 2020.
  • It was noted that, in spite of the uptick, the GfK stood at its 2nd lowest level ever recorded.
  • As expected, the easing of lockdown measures delivered support, while concerns over job losses weighed.
  • A 9.8 point fall in the propensity to save provided support, after a surge in the sub-index in April.
  • Consumer’s economic expectations improved, with the sub-index rising by 11 points to -10.4.
  • Income expectations rose after a record fall in the previous month, though a 13.6 point rise to -5.7 remains a whopping 63 points below the same time last year…

From the U.S

May consumer confidence figures provided direction later in the day.

The CB Consumer Confidence Index rose from a revised 85.7 to 86.6. It wasn’t the most spectacular rise, with consumers’ assessment of current business and labor market conditions weighing. The Present Situation Index fell from 71.1 to 73.0. By contrast, the Expectations Index increased from 94.3 to 96.9.

The Market Movers

For the DAX: It was a particularly bullish day for the auto sector on Tuesday. Continental led the way, rallying by 4.43%. BMW, Daimler, and Volkswagen saw more modest but solid gains of 2.53%, 2.31%, and 2.42% respectively.

It was also a particularly bullish day for the banks. Deutsche Bank surged by 8.46%, with Commerzbank rallying by 6.06%. 

Deutsche Lufthansa was amongst the front runners once more, rallying by 6.51% off the back of 7.92% jump on Monday.

The top performers on the DAX were Deutsche Bank and Deutsche Lufthansa on Tuesday.

From the CAC, it was a bullish day for the banking sector on Tuesday, following on from Monday’s gains. Credit Agricole rallied by 7.99% to lead the way, with BNP Paribas and Soc Gen gaining 7.25% and 7.02% respectively.

The auto sector also found strong support, with Peugeot and Renault rallying by 5.76% and by 6.62% respectively.

Air France-KLM led the way, however, surging by 10.64%, while Airbus SE rose by 7.11%.

On the VIX Index

It was 2nd consecutive day in the red on Tuesday. Following on from a 4.64% fall on Friday, the VIX fell by 0.53% to end the day at 28.0. It was a U.S public holiday on Monday.

The minor loss on the day came in spite of a post-memorial day equity market rally, with jitters over China limiting the downside on the VIX.

On Tuesday, the S&P500 rose by 1.23%, with the Dow and NASDAQ ending the day with gains of 2.17% and 0.17% respectively.

The Day Ahead

It’s a quiet day ahead on the Eurozone economic calendar. There are no material stats due out of the Eurozone to provide the majors with direction.

While there are no stats, ECB President Lagarde is due to speak in the early part of the European session. Lagarde’s speech precedes the ECB’s financial stability review that is due out later in the session.

Key takeaways will be how the ECB sees the economic recovery and whether further support is on the horizon. All of this is assuming that the ECB’s calls for fiscal policy support are met with the rollout of the COVID-19 recovery fund.

The timing is apt considering the fact that the European Commission is due to launch a coronavirus recovery fund later today. This is to be coupled with a longer-term European Union budget that will likely raise some eyebrows.

Once more, some member states will likely be miffed at having to support less prosperous nations adversely affected by the virus. The focus today will be on the size and what strings are attached and what component is likely to reach the pockets of voters…

From the U.S, there are no material stats to provide the majors with direction late in the session.

Away from the calendar, geopolitics and the latest COVID-19 news and numbers will also have influence throughout the day. Early in the day, jitters over China dragged the futures into the red.

The Latest Coronavirus Figures

On Tuesday, the number of new coronavirus cases rose by 95,878 to 5,678,282 On Monday, the number of new cases had risen by 83,824. The daily increase was higher than both Monday’s rise and 94,189 new cases from the previous Tuesday.

France, Germany, Italy, and Spain reported 1,535 new cases on Tuesday, which was up from 747 new cases on Monday. On the previous Tuesday, 2,848 new cases had been reported.

From the U.S, the total number of cases rose by 19,185 to 1,725,411 on Tuesday. On Monday, the total number of cases had risen by 19,790. On Tuesday 19th May, a total of 20,688 new cases had been reported.

In the futures markets, at the time of writing, the DAX was down by 52 points, with the Dow down by 20 points.

Who Needs China? Optimism and Hope Continue to Drive Riskier Assets Northwards

Onwards and upwards the global equity markets go and the commodity currencies are joining in on the rally.

Just 6-weeks ago, the Aussie Dollar was down at sub-$0.60 levels against the Greenback.

When considering the quite dire economic environment and the grim outlook, the broad-based recovery has been a remarkable one.

The bigger question that needs to be answered, however, is whether the latest breakout is sustainable.

The Here and Now

As we have moved beyond the 1st quarter and April economic indicators, the markets have formed a clear view.

May’s private sector PMIs suggested that the economic meltdown had bottomed out in April. Consumer confidence and business confidence figures have also shown that sentiment has picked up.

There’s one clear issue with the current sentiment, however.

While the U.S and China go back at it and the global supply chain remains broken, central banks and governments will be looking for a consumer-driven economic rebound.

In fact, when the news wires report of small firms leaving stimulus monies untapped, there must be some concern over what lies ahead.

At a minimum, there needs to be a marked bounce back in labor market conditions. That then needs to translate into consumption to fuel the merry-go-round.

The Good News

While there is so much uncertainty, the good news is that new coronavirus cases continue to head downwards. In key economies at least, with Asia and the EU impressing.

It is particularly poignant when considering the fact that we are now reaching that 2-week time-lapse since governments began introducing their lockdown measures, however.

At a minimum, this trend must continue in the next 1-2 weeks and with it, a successful treatment or vaccine.

Only then can the services sector truly expect a marked shift in outlook.

The Bad News

Trump could turn on China and the EU at any time and the China ball has already started rolling.

Throw in the EU, talk of a conflict with Iran and even the U.S severing ties with the Saudis and the geopolitical landscape may change forever.

As we have seen in the past, the markets don’t do too well to change. Just look at the effects of Brexit on the UK economy and the Pound.

So, for Trump there is the hope that, while the U.S economy may have seen its worst quarter since the Great Depression, the U.S equity markets continue to line voter pockets…

Today’s Market Moves

Today, we saw optimism overshadow U.S – China tensions and a gloomy economic outlook once again.

This may well continue should we see progress being made towards a COVID-19 vaccine or treatment drug.

Near-term, however, we will need to begin considering June figures to assess the speed of the economic recovery.

Today’s consumer confidence figures may be positive from a risk perspective. This is assuming that U.S consumer confidence does rise in spite of quite dire weekly jobless claims figures.

That leaves the markets exposed to a market shock, once we begin to digest June numbers…

Let’s face it, it would be almost a dream for labor market conditions, private sector activity, consumer consumption to bounce back to the end of 2019 levels…

At the time of writing, the EUR was up by 0.60% to $1.09603. Assuming that governments and central banks continue to throw money where it’s needed, we could even see $1.13 levels.

For the Aussie Dollar and Kiwi Dollar, we could see even greater gains…

It is a long way to fall though should that optimism shift in June, however.

26/05/20 EUR/USD Daily Chart

Economic Data Puts the EUR and the Greenback in Focus as Risk Appetite Builds

Earlier in the Day:

It was a relatively quiet day on the economic calendar this morning. The Kiwi Dollar was in action, with April trade figures in focus.

Away from the economic calendar, the markets continued to monitor HK and the U.S reaction to China’s security law. Progress of the bill to make it more difficult for Chinese companies to list on U.S exchanges and China’s response also remains a factor.

COVID-19 news and numbers, however, remained supportive, driving market optimism and demand for riskier assets.

Looking at the latest coronavirus numbers,

On Monday, the number of new coronavirus cases rose by 83,824 to 5,582,404. On Sunday, the number of new cases had risen by 101,608. The daily increase was lower than Sunday’s rise, while higher than 82,564 new cases from the previous Monday.

France, Germany, Italy, and Spain reported just 747 new cases on Monday, which was down from 1,470 new cases on Sunday. On the previous Monday, 1,916 new cases had been reported.

From the U.S, the total number of cases rose by 19,790 to 1,706,226 on Monday. On Sunday, the total number of cases had risen by 20,190. On Monday 18th May, a total of 22,231 new cases had been reported.

For the Kiwi Dollar

On the trade front, the trade deficit narrowed from a NZ$3,460m to NZ$2,500m in April. The monthly trade surplus jumped from NZ$722m to a record NZ$1,267m.

According to NZ Stats,

  • The total value of goods exports decreased by NZ$220m (4.0%) from April 2019 to hit NZ$5.3bn.
    • A fall of NZ$211m (-69%) in the export of logs pinned back exports in April.
    • The slide in log exports, however, was offset by a NZ$202m (29%) jump in milk powder exports.
    • Kiwi fruit exports also continued to support, with a NZ$116m (37%) rise compared with April 2019.
    • Compared with April 2019, exports to Japan and the U.S increased, while exports to China, the EU, and Australia slumped.
  • Goods imports in April 2020 slid by NZ$1.1bn (-22%) to NZ$4.0bn, marking the 2nd largest decline on record.
    • A sharp slide in petroleum and products of NZ$352m (-58%) contributed to the slump in imports.
    • The imports of crude oil fell by NZ255m (77%), with petrol and diesel imports falling by NZ$97m (35%).

The Kiwi Dollar moved from $0.61011 to $0.60992 upon release of the figures. At the time of writing, the Kiwi Dollar was up by 0.29% to $0.6121.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.14% to ¥107.86 against the U.S Dollar, while the Aussie Dollar was up by 0.24% to $0.6561.

The Day Ahead:

For the EUR

It’s a relatively quiet day ahead on the economic calendar. Germany remains in focus, with May’s GfK Consumer Climate figures due out later this morning.

Expect some influence from the numbers, which will give some indication of whether a service sector-driven economic recovery is feasible near-term.

Global trade terms remain weak, which will likely shift focus to service sector activity near-term. Consumer confidence and consumption will be pivotal in any economic recovery.

At the time of writing, the EUR was up by 0.11% to $1.0910.

For the Pound

It’s another quiet day ahead on the economic calendar. Following Monday’s holiday, expect Brexit and COVID-19 news updates to be the key drivers on the day.

Will there be a surprise decision to agree to a Transition period extension? The current economic environment would support such a move. It would be hard to imagine voters complaining when considering the impact of the COVID-19 pandemic on the UK economy.

At the time of writing, the Pound was up by 0.14% to $1.2208, with risk sentiment providing support.

Across the Pond

It’s also a relatively busy day ahead on the U.S economic calendar. Following Monday’s public holiday, May’s consumer confidence figures are due out later today.

A marked pickup would be needed in confidence to support a more optimistic economic outlook. Weekly jobless claims figures suggest that, while an easing of lockdown measures is positive, labor market conditions will weigh.

April’s new home sales and March house prices figures also due out should have a muted impact later today.

Away from the calendar, chatter from the Oval Office and any progress with the bill to toughen rules on Chinese firms listing on U.S exchanges will also influence. There’s also any U.S response to China’s plans for the HK security law to also monitor.

The Dollar Spot Index was down by 0.18% to 99.687 at the time of writing.

For the Loonie

It’s a quiet day on the economic calendar. There are no material stats due out of Canada to provide the Loonie with direction.

Geopolitics and improved market sentiment towards the economic outlook will likely remain the key drivers.

Overnight BoC Governor Poloz spoke of inflation likely to take some time to return to target. Poloz added that the BoC has some flexibility in the time it takes to get inflation back to target. The comments suggested that there would be no monetary policy moves to fuel inflationary pressures.

At the time of writing, the Loonie was up by 0.17% to C$1.3961 against the U.S Dollar.

European Equities: Futures Point Northwards as the Markets Attempt to Shrug of China Concerns

Economic Calendar:

Tuesday, 26th May

GfK German Consumer Climate (Jun)

Thursday, 28th May

Spanish HICP (YoY) (May) Prelim

German CPI (MoM) (May) Prelim

Friday, 29th May

German Retail Sales (MoM) (Apr)

French Consumer Spending (MoM) (Apr)

French GDP (QoQ) (Q1) 2nd Estimate

Italian CPI (MoM) (May) Prelim

Eurozone CPI (YoY) (May) Prelim

The Majors

It was a bullish start to the week for the European majors on Monday, with the DAX30 rising by 2.87% to lead the way.

The CAC40 and EuroStoxx600 weren’t far behind, with gains of 2.15% and 1.47% respectively.

Positive economic data out of Germany, a continued easing of lockdown measures, and particularly low new COVID-19 cases provided support.

The combination of fiscal stimulus, progress towards a coronavirus vaccine, and monetary policy contributed to the optimism on Monday.

Jitters over rising tensions between the U.S and China and news of China’s proposal for a Security Law for HK took a back seat on the day.

The Stats

It was a relatively busy day on the Eurozone economic calendar on Monday. German 2nd estimate GDP figures and May’s IFO Business Climate Index were in focus early in the session.

According to Destatis,

  • The economy contracted by 1.9%, year-on-year, and by 2.2% quarter-on-quarter, which was in line with the 1st estimate.
  • This was the largest decrease since the GFC and the 2nd largest since Germany’s unification.
  • Household consumption slid by 3.2%, quarter-on-quarter.
  • Global fixed capital formation in machinery and equipment was down by as much as 6.9%.
  • Final consumption expenditure of general government (+0.2%) and gross capital fixed formation in construction (+4.1%) had a stabilizing effect.
  • Foreign trade weighed, with exports down by 3.1% from the 4th quarter, while imports increased by 0.7%.

On the business confidence front, there was some improvement, with the IFO Business Climate Index rising from 74.3 to 79.2.

According to the May IFO survey,

  • The IFO Business Climate Index rose from 74.2 to 79.5 in May, despite companies assessing their current situation as slightly worse.
  • In spite of the negative sentiment towards the current economic climate, the outlook did improve significantly.
  • While the outlook did improve due to an easing in lockdown measures, the Expectations Index remained well below pre-U.S – China trade war levels.
  • In May, the Business Expectations Index rose from 69.4 to 80.1, while the Current Assessment sub-Index slipped from 79.4 to 78.9.

Looking at the Business Climate Index:

  • The Manufacturing Business Climate Index jumped off the back of a more optimistic outlook.
  • Service sector firms saw an improvement in both outlook and sentiment to support a rise in the Business Climate Index.

From the U.S, there were no material stats with the U.S markets closed for the day.

The Market Movers

For the DAX: It was a relatively bullish day for the auto sector on Monday. Continental and Daimler rose by 1.64% and by 0.83% to lead the way. BMW and Volkswagen saw more modest gains of 0.12% and 0.24% respectively.

It was a bullish day for the banks, however. Deutsche Bank rallied by 2.75%, with Commerzbank gaining 0.97%.

Deutsche Lufthansa jumped by 7.92% on Monday to lead the way on the DAX. News of Lufthansa resuming flights to as many as 20 destinations by mid-June provided support. This was coupled with expectations of a government bailout that may come close to €10bn.

From the CAC, it was a relatively bullish day for the banking sector on Monday, following on from Friday’s gains. Credit Agricole rallied by 2.00% to lead the way, with BNP Paribas and Soc Gen gaining 1.87% and 0.84% respectively.

It was a bullish day for the auto sector, with Peugeot and Renault rallying by 6.20% and 4.44% respectively.

Air France-KLM also found support, rallying by 4.55%, while Airbus SE jumped by 8.51%.

On the VIX Index

The U.S markets were closed on Monday.

The Day Ahead

It’s a relatively quiet day ahead on the Eurozone economic calendar. Key stats are limited to Germany’s GfK Consumer Climate figures for June.

With lockdown measures easing across Germany and the EU, consumer confidence will need to see a pickup to support the majors.

Sentiment towards the job market and the outlook for hiring will be key. Hopes of a pickup in economic activity should support a more positive outlook.

From the U.S, expect U.S consumer confidence figures for May to also provide direction later in the session.

Outside of the numbers, any chatter from Beijing or Washington will also influence. The latest COVID-19 news and numbers will also need to be market positive. All of this ahead of Wednesday COVID-19 recovery fund talks.

The Latest Coronavirus Figures

On Monday, the number of new coronavirus cases rose by 83,824 to 5,582,404. On Sunday, the number of new cases had risen by 101,608. The daily increase was lower than Sunday’s rise, while higher than 82,564 new cases from the previous Monday.

France, Germany, Italy, and Spain reported just 747 new cases on Monday, which was down from 1,470 new cases on Sunday. On the previous Monday, 1,916 new cases had been reported.

From the U.S, the total number of cases rose by 19,790 to 1,706,226 on Monday. On Sunday, the total number of cases had risen by 20,190. On Monday 18th May, a total of 22,231 new cases had been reported.

In the futures markets, at the time of writing, the DAX was up by 9.5 points, with the Dow up by 267 points.

Litecoin, Stellar’s Lumen, and Tron’s TRX – Daily Analysis – 26/05/20

Litecoin

Litecoin rose by 2.09% on Monday. Partially reversing 4.08% slide from Sunday, Litecoin ended the day at $42.96.

A bearish start to the day saw Litecoin fall to an early morning intraday low $41.76 before finding support.

Steering clear of the first major support level at $41.21, Litecoin rose to a late morning intraday high $43.31.

Falling short of the first major resistance level at $43.73, Litecoin fell back to $42 levels going into the afternoon.

A late afternoon return to $43 levels was brief, with Litecoin wrapping up the day at $42 levels.

At the time of writing, Litecoin was down by 0.79% to $42.62. A mixed start to the day saw Litecoin rise to an early morning high $43.07 before falling to a low $42.35.

Litecoin left the major support and resistance levels untested early on.

LTC/USD 26/05/20 Daily Chart

For the day ahead

Litecoin would need to move back through to $42.70 levels to bring the first major resistance level at $43.59 into play.

Support from the broader market would be needed, however, for Litecoin to breakout from Monday’s high $43.31.

Barring an extended crypto rally, the first major resistance level would likely limit any upside.

Failure to move back through to $42.70 levels could see Litecoin fall deeper into the red.

A fall back through the morning low $42.35 would bring the first major support level at $42.04 into play.

Barring another extended crypto sell-off, however, Litecoin should steer clear of the second major support level at $41.13.

Looking at the Technical Indicators

Major Support Level: $42.04

Major Resistance Level: $43.59

23.6% FIB Retracement Level: $62

38.2% FIB Retracement Level: $78

62% FIB Retracement Level: $104

Stellar’s Lumen

Stellar’s Lumen rallied by 3.26% on Monday. Partially reversing a 4.74% slide from Sunday, Stellar’s Lumen ended the day at $0.066044.

A bearish start to the day saw Stellar’s Lumen fall to an early morning intraday low $0.063783 before making a move.

Steering clear of the first major support level at $0.06249, Stellar’s Lumen rose to an early evening intraday high $0.066240 before.

Falling short of the first major resistance level at $0.06684 Stellar’s Lumen wrapped up the day at $0.066 levels.

At the time of writing, Stellar’s Lumen was up by 0.52% to $0.066385. A bullish start to the day saw Stellar’s Lumen rise from an early morning low $0.066042 to a high $0.066385.

Stellar’s Lumen left the major support and resistance levels untested early on.

XLM/USD 26/05/20 Daily Chart

For the day ahead

Stellar’s Lumen would need to avoid sub-$0.06540 levels to bring the first major resistance level at $0.06693 into play.

Support from the broader market would be needed, however, for Stellar’s Lumen to break out from the morning high $0.066385.

Barring a broad-based crypto rally, the first major resistance level would likely limit any upside.

Failure to avoid sub-$0.06540 levels could see Stellar’s Lumen give up Monday’s gains.

A fall through to sub-$0.06540 levels would bring the first major support level at $0.06447 into play.

Barring an extended crypto sell-off, however, Stellar’s Lumen should steer clear of the second major support level at $0.06290.

Looking at the Technical Indicators

Major Support Level: $0.06447

Major Resistance Level: $0.06693

23.6% FIB Retracement Level: $0.1051

38% FIB Retracement Level: $0.1433

62% FIB Retracement Level: $0.2050

Tron’s TRX

Tron’s TRX rallied by 3.83% on Monday. Partially reversing a 5.15% slide from Sunday, Tron’s TRX ended the day at $0.014710.

A bearish start to the day saw Tron’s TRX fall to an early morning intraday low $0.014117 before finding support.

Steering clear of the first major support level at $0.01383, Tron’s TRX rose to a final hour intraday high $0.014710.

In spite of the support throughout the day, Tron’s TRX came up short of the first major resistance level at $0.01493.

At the time of writing, Tron’s TRX was down by 1.01% to $0.014561. A bearish start to the day saw Tron’s TRX fall from an early morning high $0.014709 to a low $0.014561.

Tron’s TRX left the major support and resistance levels untested early on.

TRX/USD 26/05/20 Daily Chart

For the Day Ahead

Tron’s TRX would need to avoid sub-$0.01450 levels to support a run at the first major resistance level at $0.01491.

Support from the broader market would be needed, however, for Tron’s TRX to break out from Monday’s high $0.014710.

Barring a broad-based crypto rally, the first major resistance level would likely limit any upside.

Failure to avoid sub-$0.01450 levels could see Tron’s TRX fall deeper into the red.

A fall through to sub-$0.01450 levels would bring the first major support level at $0.01431 into play.

Barring an extended crypto sell-off, however, Tron’s TRX should steer clear of the second major support level at $0.01392.

Looking at the Technical Indicators

Major Support Level: $0.01431

Major Resistance Level: $0.01491

23.6% FIB Retracement Level: $0.0322

38.2% FIB Retracement Level: $0.0452

62% FIB Retracement Level: $0.0663

Please let us know what you think in the comments below

Thanks, Bob

EOS, Ethereum and Ripple’s XRP – Daily Tech Analysis – 26/05/20

EOS

EOS rose by 1.50% on Monday. Partially reversing a 2.84% fall from Sunday, EOS ended the day at $2.5249.

A bearish start to the day saw EOS fall to an early morning intraday low $2.4500 before making a move.

Holding above the first major support level at $2.4477, EOS rose to a late morning intraday high $2.5461.

Falling well short of the first major resistance level at $2.5678, EOS fell back to sub-$2.50 levels by late morning.

Finding support through the 2nd half of the day, however, Litecoin moved back through to $5.3 levels before easing back.

At the time of writing, EOS was down by 0.47% to $2.5131. A mixed start to the day saw EOS rise to an early morning high $2.5328 before falling to a low $2.5125.

EOS left the major support and resistance levels untested early on.

EOS/USD 26/05/20 Daily Chart

For the day ahead

EOS would need to move back through to $2.53 levels to bring the first major resistance level at $2.5640 into play.

Support from the broader market would be needed, however, for EOS to break out from Monday’s high $2.5461.

Barring a broad-based crypto rally, the major first resistance level would likely limit any upside on the day.

Failure to move back through to $2.53 levels could see EOS slide deeper into the red.

A fall through the morning low to sub-$2.5070 levels would bring the first major support level at $2.4679 into play.

Barring an extended crypto sell-off, however, EOS should steer clear of the second major support level at $2.4109.

Looking at the Technical Indicators

Major Support Level: $2.4679

Major Resistance Level: $2.5640

23.6% FIB Retracement Level: $6.62

38% FIB Retracement Level: $9.76

62% FIB Retracement Level: $14.82

Ethereum

Ethereum rose by 2.22% on Monday. Partially reversing a 3.38% slide from Sunday, Ethereum ended the day at $204.06.

A bearish start to the day saw Ethereum slide to an early morning intraday low $198.01 before making a move.

Steering clear of the first major support level at $195.73, Ethereum rose to an early evening intraday high $205.71.

Falling short of the first major resistance level at $207.10, Ethereum eased back to wrap up the day at $204 levels.

At the time of writing, Ethereum was down by 0.08% to $203.90. A mixed start to the day saw Ethereum rise to an early morning high $204.75 before falling to a low $203.60.

Ethereum left the major support and resistance levels untested early on.

ETH/USD 26/05/20 Daily Chart

For the day ahead

Ethereum would need to move through to $205 levels to bring the first major resistance level at $207.18 into play.

Support from the broader market would be needed, however, for Ethereum to break out from Monday’s high $205.71.

Barring an extended crypto rally, the first major resistance level would likely limit any upside.

Failure to move through to $205 levels could see Ethereum slide deeper into the red.

A fall through the morning low to sub-$202.60 levels would bring the first major support level at $199.48 into play.

Barring an extended crypto sell-off, however, Ethereum should steer well clear of the second major support level at $194.89.

Looking at the Technical Indicators

Major Support Level: $199.48

Major Resistance Level: $207.18

23.6% FIB Retracement Level: $257

38.2% FIB Retracement Level: $367

62% FIB Retracement Level: $543

Ripple’s XRP

Ripple’s XRP rose by 1.90% on Monday. Partially reversing a 3.27% fall from Sunday, Ripple’s XRP ended the day at $0.19614.

Tracking the broader market, Ripple’s XRP fell to an early morning intraday low $0.18928 before finding support.

Coming within range of the first major support level at $0.1892, Ripple’s XRP rose to a final hour intraday high $0.19716.

Falling short of the first major resistance level at $0.1985, Ripple’s XRP eased back to $0.1961 levels at the day end.

At the time of writing, Ripple’s XRP was down by 0.22% to $0.19571. A mixed start to the day saw Ripple’s XRP rise to an early morning high $0.19680 before falling to a low $0.19570.

Ripple’s XRP left the major support and resistance levels untested early on.

XRP/USD 26/05/20 Daily Chart

For the day ahead

Ripple’s XRP will need to avoid sub-$0.1940 levels to support a run at the first major resistance level at $0.1991.

Support from the broader market would be needed, however, for Ripple’s XRP to break out Monday’s high $0.19716.

Barring a broad-based crypto rebound, the first major resistance level would likely leave Ripple’s XRP short of $0.20 levels.

Failure to avoid sub-$0.1940 levels could see Ripple’s XRP fall deeper into the red.

A fall through to sub-$0.1940 levels would bring the first major support level at $0.1912 into play.

Barring another crypto meltdown, however, Ripple’s XRP should steer well clear of the second major support level at $0.1863.

Looking at the Technical Indicators

Major Support Level: $0.1912

Major Resistance Level: $0.1991

23.6% FIB Retracement Level: $0.3638

38.2% FIB Retracement Level: $0.4800

62% FIB Retracement Level: $0.6678

Please let us know what you think in the comments below.

Thanks, Bob

How to Invest in Cryptocurrencies: The Complete Guide for 2020

Seasoned investors continue to cross over from the more mature asset classes and regulators have eased off on the Crypto assault that led to the 2018 slump.

With Bitcoin and the broader market sitting at more than 50% below their all-time highs, there is still plenty of incentive to enter the crypto sphere.

For many, however, the crypto market may seem like a maze. There are a tremendous number of exchanges and brokers and that is before considering regulations imposed by regulators in recent years.

Investing in cryptocurrencies requires a level of due diligence not too dissimilar to the research involved in other more mature asset classes.

The volatility and sizeable returns on offer have certainly allowed investors to dream. After all, Bitcoin has yielded a mass number of Bitcoin millionaires, more commonly known as whales.

So, how do we invest in cryptocurrencies?

While there are multiple considerations, some are more important than others when looking to enter the crypto market.

Just jumping in on a whim that the majors will reach historical highs is a dangerous game. This is no dissimilar to jumping into the equity markets when they are sitting at record highs.

There is one material difference, however. The regulatory landscape has materially changed since late 2017. For this very reason, investors may continue to face plenty of uncertainty before the market can find a return to the hay days.

Understanding the key drivers and market characteristics are therefore particularly important.

Basic Essentials

In this guide, you will learn the key preparations that you need in order to build your cryptocurrency portfolio.

Before making an investment, deciding on the source of funds would certainly be step 1.

In spite of the current interest rate environment, it is recommended that you avoid funding the portfolio with debt.

Credit Card or Bank Account – Investors will, therefore, need to decide on cash or credit card. As an investor, you can either fund your crypto trading account with a debit/credit card or by funding with a bank transfer.

It is worth noting, however, that certain jurisdictions have banned the funding of crypto exchanges with credit cards. Some banks have even taken a step further and banned the transfer of fiat money to such exchanges.

Nonetheless, the simplest method to fund a crypto exchange account is with a credit/debit card. This does tend to come with higher fees and caps on transfer amounts, however.

Fiat to Bitcoin Exchange

First, you need to decide on which cryptocurrency or cryptocurrencies that you wish to trade.

You would then need to identify the exchanges that have the largest trading volumes for the chosen cryptocurrencies.

One consideration here is your source of funds. Not all exchanges allow fiat money deposits. A vast majority of exchanges restrict deposits to Bitcoin.

Carrying out the necessary research on the most appropriate exchange is important. If you are looking for an exchange that accommodates the purchase of Bitcoin with fiat money:

Coinbase is popular and easy to use, with a strong global presence. The exchange has the necessary security measures as well as delivering adequate liquidity for trading.

When searching for the right exchange, it is worth noting that each has its pros and cons. The important thing is to identify the exchange that, first and foremost, delivers on your personal requirements.

Other popular exchanges include:

These crypto exchanges not only cater to Bitcoin investors and traders but altcoins in general.

It’s also worth considering exchanges that offer a wider choice of cryptocurrencies and altcoins. This would allow you to diversify your investments and gain exposure to the broader crypto market.

We recommend that you use Coingecko to research the respective cryptocurrencies and volumes across the exchanges.

Bitcoin to Crypto Exchange

The next exchanges that you should look into are the ones you will be using for the Altcoins. Many of the smaller coins, my market cap, are generally not supported by larger exchanges. Generally speaking, the only way to buy those smaller coins is by buying them using Bitcoins or Ethereum.

On most exchanges, you need to deposit Bitcoins as you cannot buy coins directly from the exchange. This is why it’s crucial that you have a Fiat to Bitcoin Exchange first.

You can buy Altcoins from Binance, BitTrex, Kucoin, and Kraken.

Choose the Right Wallet

The next step in the crypto investment journey is to select the appropriate crypto wallets. It is essential to have your crypto wallet before buying any cryptocurrencies. You will need wallets to store your coins within your secure personal wallets.

While exchanges allow investors to hold purchases coins within assigned exchange wallets, it’s recommended that you withdraw your cryptos and hold them in private wallets. This protects you and your investments from hackers and theft. It is also worth noting that wallet compatibility also needs to be considered.

Crypto wallets to choose from include but are not limited to:

Before Getting Started

Prior to deciding on the most suitable crypto exchanges and wallets to support your trading activity, you need a trading strategy. As part of your strategy build, there are a number of factors to keep in mind:

  • Only invest in what you can afford to lose
  • Do not take a loan to invest
  • Do your own research, monitor the news wires, and view technical analysis on the respective cryptos that you decide to go with. FX Empire covers the largest cryptos, with exchanges also providing technical analysis to their users free of cost.
  • Set realistic expectations, don’t be greedy, and know when to accept a loss. (It is easy to be influenced by the news wires and overzealous analysts talking of the next crypto boom or doom. It is best to block out such noise.

Forming a Crypto Trading Strategy

While identifying the most appropriate wallets and exchanges are vital, formulating a trading strategy is undoubtedly the most important pre-investment step for a prospective trader.

Key Decisions:

  • Cryptocurrency selection – A blend of the largest cryptos along with medium-sized to small cryptos by market cap is recommended. This also addresses any liquidity issues for the overall portfolio.
  • Worth noting – A certain cryptocurrencies may have values that exceed the intended investment size. In such instances, identifying an exchange that offers CFDs or partial investment of a crypto coin is important.
  • Trader durations – For traders with adequate time to trade, a short, medium, and longer-term trading strategy would make sense.
    • Smaller size, more volatile, coins increase earnings potential intraday. These should ideally form no more than 20% of the total investment pool.
    • The Largest coins should form longer-term strategies. With adequate research, however, smaller coins may also form part of this strategy.
    • For the more medium-term strategies, which would be anything beyond intraday but less than a month, a blended portfolio is recommended. This can comprise of small, medium, and large-cap coins.
  • In any trading strategy -using risk management tools and indicators is recommended. While there are fees incurred for using stop loss and trade profit, using these would protect your downside.

80/20 Rule

When considering crypto market volatility and the rise and fall of the smaller coins, an 80/20 blend of large-cap to mid to small-cap would be recommended.

This would provide the opportunity to make sizeable gains any sudden surge in the small to mid-cap cryptos, whilst also holding the more stable coins. Do note that stable is a relative term in the crypto market. Even Bitcoin can see sizeable swings on a given day…

Does the Number of Coins Matter?

It ultimately boils down to the investment strategy that you build. With a blended portfolio, 1 Bitcoin may make up your large-cap portfolio, or 20 Litecoin for instance. It is important to focus on the blend rather than the actual number of coins that make up each component of the portfolio.

Recommendations

Below is a range of cryptos to consider the different components of your portfolio. This is not a comprehensive breakdown of the broader market and there may be coins that are more to your liking. As always, carry out the necessary research before hitting the buy or sell order…

Large Caps

Tezos, Ripple, Bitcoin, Ethereum, EOS, Cardano, Bitcoin Cash SV, Bitcoin Cash ABC, and Binance Coin.

Mid-Caps

Zcash, VeChain, True USD, Tron’s TRX, Qtum, OmiseGo, OKB, NEO, Ethereum Classic, Dogecoin, DASH, and Cosmos. These have been selected based on 24-hour volumes and have market caps of between $100m and $1bn.

Low Caps

This will consist of cryptos with a market cap of less than $100m and will likely have lower trading volumes. That means less liquidity, which is why this component should form a lower proportion of the portfolio.

Unibright, Theta Fuel, Status, MCO, Matic Network, IOST, HyperCash, BitTorrent, and ABBC Coin.

Next Steps

Once you have built your strategy, selected your cryptos, opened your trading accounts, and set up your wallets, it’s time to trade.

While you may be able to have a better sense of when to enter more mature markets, such as the global equity market, it’s less simple to pick the right entry point in the crypto world.

Other than entering at an all-time high, there’s no hard and fast rule other than waiting for any sell-off to flatten out.

Once you start trading, remain disciplined, and ensure you run your risk parameters each day.

These will include your charts that should have your support and resistance levels embedded.

And remember, not every trade will yield a return, so don’t panic should your first trade take a hit.