Lukman’s Week Ahead Webinar, Aug 20 – Market Themes to Watch Out For

Have an in-depth look at what’s in store for the global and local markets with FXTM’s Research Analyst, Lukman Otunuga. Get the latest on the biggest market developments, how they could potentially impact trading instruments and a look at what major events are in store the week ahead. About the presenter:

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Lukman Otunuga has been a Research Analyst at FXTM since 2015. A keen follower of macroeconomic events, with a strong professional and academic background in finance, Lukman is well versed in fundamental and technical analysis. His in-depth analysis on global currency and commodity markets is often cited by leading international media, including the Associated Press (AP), BBC, CNBC, CNN, Marketwatch, NASDAQ, and The Telegraph. He has also appeared on Africa’s biggest television network, NTA 2. Lukman holds a BSc (hons) degree in Economics from the University of Essex, UK and an MSc in Finance from London School of Business and Finance.

King Dollar stands tall ahead of GDP fxtm academy

Global risk sentiment remains somewhat supported by easing trade tensions between Washington and Brussels with stock markets poised to conclude the trading week on a firm footing.

Asian stocks have already closed on a mixed note this morning, with European markets stabilizing ahead of the anticipated US GDP report this afternoon. Although the gut-wrenching selloff in Facebook shares weighed on Wall Street yesterday, US stocks could recover if US GDP data paints a positive picture of the US economy.

The trading week has undoubtedly been dominated by global trade developments and we may see this theme roll over into next week. Now a trade truce has been secured with the EU, will the United States be able to find a middle ground on trade with China? This remains a recurrent question on the minds of many investors.

Dollar appreciates ahead of US GDP

Dollar bulls were injected with a renewed sense of confidence yesterday after positive economic data boosted sentiment towards the US economy and reinforced rate hike expectations.

The encouraging jobless claims figures and durable goods orders stimulated buying sentiment towards the Dollar, consequently sending prices higher. With the attraction for the Greenback rolling over into Friday’s trading session, the Dollar Index has rallied towards the 94.90 level as of writing. Investors will direct their attention towards the pending US Q2 GDP report which could shape Fed rate hike expectations. A solid pickup in US economic growth during the second quarter of 2018 could send the Dollar Index back above 95.00 and beyond.

Euro more concerned with Dollar than ECB

The Euro’s recent weakness has more to do with an appreciating Dollar rather than the European Central Bank.

Market players hoping the ECB would create some fireworks were left empty-handed after the central bank offered no surprises during July’s policy meeting. As widely expected, interest rates were left unchanged, while the central bank reiterated its pledge to end QE by the end of 2018. The highlight of July’s meeting was when the ECB repeated that interest rates will be left on hold until “at least through summer of 2019”.

The divergence in monetary policy between the Federal Reserve and European Central Bank is likely to keep a lid on the EURUSD in the medium to longer term.

Commodity spotlight – Gold

It has been another bearish trading week for Gold mostly due to a stabilizing US Dollar.

Easing trade tensions between the United States and European Union have eroded appetite further for the precious metal with prices trading around $1218 as of writing. With the Dollar likely to remain buoyed by Fed hike expectations, the outlook for Gold remains grim.

Much attention will be directed towards the pending US GDP report this afternoon which could deal Gold the knockout blow. A strong US GDP print may ultimately strengthen the Dollar, inevitably translating into further downside for the precious metal. In regards to the technical picture, a breakdown below $1213 could inspire a decline towards $1200.

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Lukman’s Week Ahead Webinar, Aug 13 – Market Themes to Watch Out For

Have an in-depth look at what’s in store for the global and local markets with FXTM’s Research Analyst, Lukman Otunuga. Get the latest on the biggest market developments, how they could potentially impact trading instruments and a look at what major events are in store the week ahead. About the presenter:

REGISTER FOR FREE

Lukman Otunuga has been a Research Analyst at FXTM since 2015. A keen follower of macroeconomic events, with a strong professional and academic background in finance, Lukman is well versed in fundamental and technical analysis. His in-depth analysis on global currency and commodity markets is often cited by leading international media, including the Associated Press (AP), BBC, CNBC, CNN, Marketwatch, NASDAQ, and The Telegraph. He has also appeared on Africa’s biggest television network, NTA 2. Lukman holds a BSc (hons) degree in Economics from the University of Essex, UK and an MSc in Finance from London School of Business and Finance.

Lukman’s Week Ahead Webinar, Aug 6 – Market Themes to Watch Out For

Have an in-depth look at what’s in store for the global and local markets with FXTM’s Research Analyst, Lukman Otunuga. Get the latest on the biggest market developments, how they could potentially impact trading instruments and a look at what major events are in store the week ahead. About the presenter:

REGISTER FOR FREE

Lukman Otunuga has been a Research Analyst at FXTM since 2015. A keen follower of macroeconomic events, with a strong professional and academic background in finance, Lukman is well versed in fundamental and technical analysis. His in-depth analysis on global currency and commodity markets is often cited by leading international media, including the Associated Press (AP), BBC, CNBC, CNN, Marketwatch, NASDAQ, and The Telegraph. He has also appeared on Africa’s biggest television network, NTA 2. Lukman holds a BSc (hons) degree in Economics from the University of Essex, UK and an MSc in Finance from London School of Business and Finance.

Trump-Juncker Meeting in Focus, Lira Crumbles

European markets could benefit from the risk-on sentiment; however, gains may be limited as investors adopt a guarded approach ahead of a meeting between the EC President Jean-Claude Juncker and US President Donald Trump. With escalating trade tensions between the European Union and the United States still, a key theme that continues to weigh on global sentiment, the outcome of today’s meeting could leave a lasting impact on the markets. If the talks prove unsuccessful and trade tensions end up escalating further, risk sentiment is likely to be negatively impacted.

Market players should be prepared to expect the unexpected from the talks, especially when considering how highly unpredictable the Trump administration can be.

Turkish Lira crumbles after central bank holds rates

The Turkish Lira depreciated heavily against the Dollar yesterday after the nation’s central bank defied market expectations by leaving interest rates unchanged at 17.75%, despite inflation soaring.

This move immediately raised questions over the central bank’s independence, a month after President Recep Tayyip Erdogan’s re-election under an amended constitution that enabled him to follow through on his promise to take more direct control over monetary policy. Outside of Turkey, global trade tensions, a broadly stronger Dollar and expectations of higher US interest rates have exposed to the Lira to downside risks. With a combination of external and domestic factors eroding buying sentiment towards the Lira, the local currency remains at risk of depreciating towards 5.00 and beyond against the Dollar.

Currency spotlight – EURUSD

The EURUSD was on standby on Wednesday morning, as investors positioned ahead of the anticipated meeting between US President Trump and European Commission President Jean-Claude Juncker.

Heightened concerns over a trade war with the United States have shaved some attraction away from the Euro and this can be reflected in the bearish price action. There could be some action on the EURUSD today depending on the outcome of the meeting. Focusing on the technical picture, the EURUSD remains in a wide range on the daily charts. Sustained weakness below 1.1700 could inspire a decline towards 1.1640 and 1.1600, respectively. In regards to the longer-term outlook, the divergence in monetary policy between the European Central Bank and the Federal Reserve could ensure the currency pair remains depressed for prolonged periods.

Lukman’s Week Ahead Webinar: Market Themes to Watch Out For

Have an in-depth look at what’s in store for the global and local markets with FXTM’s Research Analyst, Lukman Otunuga. Get the latest on the biggest market developments, how they could potentially impact trading instruments and a look at what major events are in store the week ahead. About the presenter:

REGISTER FOR FREE

Lukman Otunuga has been a Research Analyst at FXTM since 2015. A keen follower of macroeconomic events, with a strong professional and academic background in finance, Lukman is well versed in the fundamental and technical analysis. His in-depth analysis of global currency and commodity markets is often cited by leading international media, including the Associated Press (AP), BBC, CNBC, CNN, Marketwatch, NASDAQ, and The Telegraph. He has also appeared on Africa’s biggest television network, NTA 2. Lukman holds a BSc (hons) degree in Economics from the University of Essex, UK and an MSc in Finance from London School of Business and Finance.

Gold attempts to stabilize while Bitcoin extends rally

Gold bulls were offered a temporary lifeline in the form of Dollar weakness on Tuesday with prices rebounding towards $1226 as of writing.

While the yellow metal has scope to venture higher in the near term if the Dollar continues to soften, the medium-to-longer term outlook remains tilted to the downside. Market expectations over the Federal Reserve raising rates gradually are likely to prompt investors to shun the zero-yielding metal, while a broadly stronger Dollar is poised to threaten any meaningful upside gains. With the fundamental drivers behind the Dollar’s appreciation in recent months still firmly intact, Gold looks to be in trouble.

The technical picture remains heavily bearish on the daily charts with the death cross formation issuing an ominous warning to investors. There have been consistently lower lows and lower highs on the daily charts while the MACD trades to the downside. A weakening Dollar could elevate Gold prices back towards $1234 and possibly $1245. However, bears may exploit the rebound to pull prices back towards $1213. Alternatively, a decisive break down below $1213 may open a path towards the psychological $1200 level.

Have Bitcoin bulls come out of hibernation? This was the question on the minds of many investors today after the cryptocurrency conquered $8000 for the first time since May.

An inflow of positive news over the past few weeks regarding cryptocurrencies has revived investor appetite for Bitcoin and this can be reflected in the bullish price action. Goldman Sachs and BlackRock have expressed interest in the cryptocurrency markets while the Financial Services Board declared that they do not pose a threat to the global financial system. With this renewed sense of optimism over cryptocurrencies attracting investors from all directions, further upside could be on the cards in the near term.

Taking a look at the technical picture, Bitcoin is turning bullish on the daily charts with prices trading marginally above $8100 as of writing. A daily close above $8000 could encourage an incline towards $8250.

It will be interesting to see if the revived positivity over Bitcoin injects bulls with enough inspiration to challenge the $10000 psychological level this quarter.

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Fed Meeting Kicks-Off – What to Expect?

June’s Fed meeting could still be a market shaker as investors direct their attention towards the hotly-anticipated economic projections from Chairman Jerome Powell. Markets will most likely exploit today’s policy meeting to gain fresh insights into how fast the Federal Reserve may raise interest rates again in the second half of 2018. With inflation accelerating and economic data from the United States expected to take a positive trajectory, there is a suspicion that we might see increased interest rate expectations. If the central bank expresses optimism over the forecast of future US interest rate increases, this could be viewed as hawkish by financial markets.

All attention will be on Fed Chair Jerome Powell, who is likely to be quizzed over the state of the US economy, rate hike timings and the impact of trade tensions during his press conference. Expectations that the Fed might adopt a more aggressive approach towards monetary policy normalization this year will grow if Powell announces that he will hold press briefings after every meeting. All in all, a hawkish Fed statement is likely to boost the Dollar, which remains sensitive to monetary policy speculation.

Speaking of the Dollar, the currency has appreciated against its major counterparts this morning. The Dollar Index remains comfortably bullish on the daily charts with 94.00 in sight. Prices are trading above the 20 Daily Simple Moving Average while the MACD has crossed to the upside. A breakout and daily close above 94.00 could encourage an incline higher towards 94.30 and 95.00, respectively. A failure for bulls to secure a close above 94.00 could encourage a decline back towards 93.60.

Gold pressured ahead of Fed meeting

Gold is feeling the heat ahead of the FOMC meeting this afternoon, which is expected to conclude with a US interest rate increase.

Although geopolitical tensions and uncertainty initially supported the yellow metal, a Fed interest rate hike could punish zero-yielding Gold. Investors will continue to observe how prices behave around the $1300 mark, before and after the Fed meeting. Focusing on the technical picture, a solid close above $1300 may open a path higher towards $1324. Alternatively, sustained weakness below the $1300 level could invite a decline back towards $1280.

Gold Weekly Chart
Gold Weekly Chart

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Italeave? Political Crisis Causes Havoc in the Italian Bond Market

This latest political crisis has been a while in the making. A general election in March did not result in a clear leader but confirmed surging support for nationalist parties. The anti-establishment Five Star Movement (M5S) and the far-right League, who together took more than 50 percent of the vote, have been attempting to form a coalition government based on their shared protectionist policies.

Italian president Sergio Mattarella has the power to veto appointments. Mattarella rejected the nascent coalition’s choice of a noted Eurosceptic for finance minister – Paolo Savona. This refusal prompted the coalition’s choice of prime minister, Giuseppe Conte, to step down. Mattarella appointed an interim prime minister, Carlo Cottarelli, but the resulting backlash was so powerful it looked unlikely that he would be able to govern effectively or even survive a vote of no confidence. There was the talk of another round of elections to follow to try to elect a new government.

The widespread fear was that populist support would solidify and grow, cementing a solid outright win for one of the populist parties and make Italy’s exit from the euro a firm possibility. In fact, there were concerns that this proposed election would serve as a snap referendum on the euro itself. That Mattarella’s intervention was viewed by many as unpatriotic meddling on behalf of Brussels did nothing to calm the groundswell of anger.

There was certainly enough anger towards Mattarella and his choice of prime minister to risk destabilizing Italy’s place in the eurozone. Luigi Di Maio, the leader of M5S, and Matteo Salvini, leader of the League, encouraged their supporters to peacefully mobilize and demonstrate against the president on the 2nd of June. A poll released last Monday suggests there’s been a five percent increase in vote share for the League since the March election.

The general instability rocked the Italian bond market in particular. Ever-sensitive to political turmoil (despite Italy’s fair share of it, historically), short-term Italian bond prices plummeted and yields saw their largest one-day increase in over 25 years, as panic prompted a massive selloff. 10-year bond yields also leap-frogged recent highs, jumping from 1.8 at the start of the month to a startling 3 percent – a level not seen in four years. These rises in bond yields were a sure sign that investors lost their faith in the security of the asset, as they raced to limit their exposure to the Italian economy and demanded higher returns for the money they’re pumping into it.

This crisis also contaminated nearby countries, with yields on Greece’s 10-year bonds increasing to 4.74 percent and Portugal’s to 2.16 percent. Comparisons to the turmoil of the eurozone debt crisis of 2011 and 2012 were made, but some economic commentators remained convinced that this was more of a short-term blip – provided, of course, that Italy made no further moves to withdraw from the EU. Bond yields stayed a good distance away from the dark days of seven percent during the 2011 and 2012 crisis.

They were proved right. On Thursday, Mattarella approved the proposed cabinet put forward by the coalition, and it was announced that the new government would be sworn in the next day – without a vehement eurosceptic in the finance minister’s seat. Bond yield levels were driven back to more normal levels and settled at roughly the same place they were at the start of the week (before Tuesday’s panic-inducing hike).

The anxiety at play in the Italian bond market may have settled for the time being. However, investors should note that, while Savona was the most forthright voice in the coalition about Italy’s place in the EU and the single currency, anti-EU sentiment in Italy’s new government has not been resolved. It’s likely that the financial markets will remain highly sensitive to the inevitably ongoing political drama in Rome. It seems simmering support for populist politics and nationalist policies will continue to be a major actor on the European stage.

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Risk Aversion Intensifies as China Strikes Back

This tit-for-tat action was an uncharacteristically speedy response from Beijing, coming barely two weeks after President Trump slapped $60 billion worth of tariffs on Chinese imports. Interestingly, it appears that the Chinese response is aimed squarely at the Trump heartland, with states that voted for the former reality TV star most likely to feel the ill effects.

This latest development has fueled concerns that a global trade war is brewing – and stock markets are suffering. Investors are likely to remain on a knife edge as the markets anticipate what happens next. Will China impose more tariffs on U.S. imports? Will the U.S. bite back, and, if they do, how reasonable will the response from Washington be?

Whatever the outcome, market players are expected to continue their migration from riskier assets to safe-haven investments. It’s a trend that saw Gold jump on Wednesday, buoyed by market uncertainty. The yellow metal could continue shining as a combination of Dollar weakness, geopolitical uncertainty, and escalating trade tensions accelerate the flight to safety.

Technical traders will continue to observe how Gold behaves around the $1340 level. A technical break above this point could encourage an incline towards $1360. Alternatively, bulls’ failure to keep Gold above $1340 may result in a decline towards $1324.

Will NFP support the Dollar?

The main risk event for the Dollar this week will be the NFP report on Friday, which should offer an insight into the health of the U.S. labor market.

Last week’s revision of fourth-quarter U.S. GDP figures (up to 2.9% from 2.5%) gave Dollar bulls a much-needed boost. While the better-than-expected GDP figures encouraged hopes that the Fed may adopt a slightly more aggressive approach to rate hikes, bulls are still in need of further encouragement and will be paying close attention to the NFP report on Friday.

A solid NFP that displays signs of accelerating wages and labor force strength will be seen as a positive sign that the Fed may raise interest rates more than anticipated this year. Speculation over higher rates will likely push the Dollar higher. Alternatively, a disappointing headline NFP print and soft wage growth figures could expose the Dollar to downside risks.

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Gold Quivers as Powell Takes Centre Stage

King Dollar appreciated against a basket of major currencies on Tuesday as the hotly anticipated FOMC meeting got underway. However, the greenback is trading lower on Wednesday’s session. This is Fed Chair Jerome Powell’s first such outing, and the markets are widely expecting his Central Bank to raise interest rates today. Attention will be centered on the press conference and ‘dot plot’ chart, the Fed’s de facto policy forecast.

Whether the Federal Reserve will raise interest rates three times or four this year has been a major market theme, and it is widely hoped that the meeting will offer fresh insight and clues as to the US interest rate timings for 2018. As trading drew to a close last night, market commentators were confident in their predictions that a hike was imminent. Powell has previously expressed optimism over the health of the US economy, could we see the Fed follow a similar tone today?

The Dollar is at risk from depreciation if Powell strikes a less hawkish tone than the markets expect. It is worth noting that the Dollar is still in the grip of the political uncertainty radiating from Washington, not to mention concerns that the pending trade war could negatively impact the US economy. These conflicting fundamental drivers behind the Dollar could send the currency on a rollercoaster ride, with bulls likely to find support in the form of rate hike expectations and bears remaining inspired by US political uncertainty.

Taking a look at the technical picture, the Dollar Index still remains pressured below the 91.00 resistance level. Will Jerome Powell inspire bulls with enough inspiration to conquer this level? That is the question everyone is asking.

Gold Gets the Jitters

The prospects of an interest rate hike this week has left Gold wobbly and vulnerable. The metal rallied slightly on Tuesday as stocks dropped across the board, and continues to extend its gains on Wednesday ahead of the Fed meeting.

Although trade war fears and political uncertainty have somewhat stimulated appetite for the yellow metal in recent weeks, the market was more concerned about possible March US rate hikes, which likely contributed to yesterday’s downside.

It should be kept in mind that Gold is a zero-yielding asset and is likely to feel the heat in a high-interest rate environment. A catalyst is clearly needed for Gold to make its next big move and this could come in the form of Powell. Prices are coming under increasing selling pressure on the daily charts, with the psychological $1300 the next key level of interest.

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Markets Trumped, Dollar crumbles

The European Union was swift to fight back, threatening to slap tariffs on American products if Trump went ahead with his plans. The Dollar crumbles in responses and stock markets tumbled while Gold, ever the safe haven of choice, shines again.

Risk aversion might have been the name of the game during this week, but investors shook off that negativity come Monday morning. The markets left more than a few commentators scratching their heads as a risk-on mood saw a strong bounce in the Dow Jones, S&P 500 and European markets. Concerns of a global trade war eased, with many speculating that Trump’s last Thursday proposal was a negotiating tactic and not a series suggestion. The President himself later confirmed that the tariffs could be dropped if the U.S negotiates a “new and fair” NAFTA agreement. Reports from those close to the Oval Office also suggest Trump is under pressure from all quarters – his allies included – to drop the tariffs. Another factor likely to have contributed to this week’s upside.

With the outcome far from predictable, investors should remain diligent. Financial markets are still highly reactive to tariff developments and a well-timed presidential tweet or press conference would likely see them flounder once again. Major US trade partners, specifically the EU, have been vocal in their intention to impose similar sanctions should Trump go ahead with his plan, another development investors will need to monitor closely.

While Monday and Tuesday’s period of relief and calm may continue supporting stock markets, overall uncertainty still has the ability to limit upside gains.

Dollar calms before the storm

The Dollar could become a battleground for bulls and bears as market players juggle with the conflicting fundamental themes driving the currency.

On one side of the equation, bulls remain supported by expectations of higher US interest rates thanks to Federal Reserve Chair, Jerome Powell. Powell’s debut congressional appearance last week has fueled market speculation that we may see as many as four US rate hikes this year. On the other side of the coin, the bears still have everything to play for and the threat of a trade war continues to put pressure on the Dollar.

The main event risk for the Dollar this week will be Friday’s NFP report, which could offer fresh insight into the health of the US labor markets. A strong NFP print, accompanied by signs of wage growth, may boost market expectations of higher US rates.

The Dollar Index is likely to benefit from such an outcome with prices potentially venturing higher. Speaking of the Dollar Index, prices have broken back below the 90.00 level. Sustained weakness below 90.00 could encourage a decline towards 88.50. Alternatively, a move back above 90.00 would invite an incline towards 90.55 and 91.00, respectively.

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Dollar Stages a Comeback as FOMC Minutes Release Looms

There were no major announcements or changes following last month’s Fed meeting, so it seems unlikely that the release of January’s meeting notes will spark a significant reaction from the currency markets. Most will be hoping for insight into planned interest rate hikes for 2018 and, with many commentators citing a March hike as likely, investors will be dissecting the minutes for clues as to whether the central bank will come out dovish or hawkish in Yellen’s wake. The Fed’s stance on inflation, tax cuts, and infrastructure spending will also be under scrutiny.

Mounting speculation surrounding Fed rate hikes could pave the way for further upside, but gains could just as easily be limited by other key fundamental drivers. Bulls may be encouraged by optimism over the US economy, rising inflation and rate hike expectations, while Bears will likely cite ongoing political risk in Washington, a widening US fiscal deficit, and the prospect of interest rate hikes from foreign central banks as reason enough to view the greenback with caution.

But, for the moment, bulls appear to have the upper hand, and a hawkish tone in today’s notes will likely see the Dollar strengthen further. Could the Dollar’s recovery be the start of a bull rally or just an empty technical bounce? Time will tell.

Taking a look at the technical picture, the Dollar Index remains pressure on the daily charts. A failure of prices to keep above 89.50 could encourage a decline towards 89.00. Alternatively, a breakout above 90.00 may pave a path to further upside.

Commodity Spotlight on Gold

An appreciating Dollar has weakened Gold considerably this week, with prices sinking towards $1324.15. It seems that the prospect of higher US interest rates is having an impact on the zero-yielding metal, which may be at risk of sinking still lower if FOMC hawks make an appearance later today.

Focusing on the technical picture, the yellow metal is coming under increasing selling pressure on the daily charts. Sustained weakness below $1340 could encourage a decline lower towards $1324.15, while a scenario where bulls are able to maintain control above $1340 may invite an incline higher towards $1360.

Gold Daily Chart
Gold Daily Chart

This article was written by Lukman Otunuga, a senior analyst at FXTM

The Crypto Menagerie: a Collection of the World’s Weirdest Altcoins

For one night only, FXTM Senior Writer Ben Lovell-Viggers plays ringmaster as he guides you through the bizarre world of altcoins. Expect chills, thrills and a litigious ‘half-man-half-fish hybrid’…

Dogecoin (DOGE)

Developed as a joke in 2013 by Billy Markus and Jackson Palmer, Dogecoin is immediately recognizable thanks to the furry countenance of its mascot, a Shinu Inu and bonafide internet legend called Kabosu. Unlike competing cryptocurrencies, there is no limit to how many Dogecoin can be produced. This means that Dogecoin is unlikely to appreciate in value to the same extent as its peers; however, the currency has seen success as an online tipping system, used to reward notable content on sites like Reddit. Combined with high-profile charitable endeavors like sending the Jamaican Bobsled Team to the Sochi Winter Olympics, and you’ve got all the ingredients for a cult-status cryptocurrency. Very wow! Much excite!

Unobtanium (UNO)

Unobtanium markets itself as ‘the platinum to Bitcoin’s gold’, ‘something to acquire and hold over a long period of time, similar to precious metals’. The precious metal allegory doesn’t stop there – quantities of Uno are measured in ‘kgs’. Only 250,000 Uno have been made available for mining over the next 300 years, making them rare – really rare. Despite this, Uno’s popularity endures while hundreds of altcoins have bitten the dust. A collector’s novelty or a genuine cryptocurrency? You decide.

Petro

One of the few cryptocurrencies on this list that isn’t a joke – at least, not a funny one. Venezuelan President Nicolás Maduro revealed the ‘petromoneda’ cryptocurrency in December as a means to “advance monetary sovereignty” and open up “new forms of international financing”. Ostensibly backed by Venezuela’s oil, gold and diamond reserves, the petro has been greeted with near-universal skepticism. Its announcement comes against a backdrop of civil disorder, severe shortages of basic necessities and double-digit inflation; critics have warned that further hyperinflation of Venezuela’s currency, the bolivar, is the most likely result. Some experts argue that the petro is little more than an elaborate money-laundering scheme, used by the wealthy and powerful to smuggle funds out of Venezuela’s imploding economy. 

TrumpCoin (TRUMP)

As someone who surfed a cresting wave of internet memes all the way to the US Presidency, it should come as no surprise whatsoever that Donald Trump has a digital currency named for him. In its own words, TrumpCoin’s ultimate goal is to ‘support President Trump and his powerful vision to Make America Great Again’. Having seen The Donald successfully installed in the Whitehouse, the ‘Trump Patriots’ behind TrumpCoin pledge that their crypto ‘will continue to integrate itself into the agenda of President Trump’.

200,000 of the six million available TrumpCoins have been set aside for donation to the Trump administration once the currency reaches ‘a substantial value’ – because even billionaire statesmen could always use a little cash injection.

PutinCoin (PUT)

We couldn’t include TrumpCoin on this list without mentioning its spiritual counterpart: the PutinCoin, named for the enigmatic Russian premier. PutinCoin’s creators don’t beat about the bush – in their words, this crypto was created to ‘pay tribute to the people and the president of one of the largest and greatest countries in the world: Russia (sic)!’ In fact, PutinCoin is only one of several cryptocurrencies that celebrate Vladimir Vladimirovich Putin. PutinClassic (PUTIC) is one notable example, despite operating more as a digital ‘souvenir’ than a functional cryptocurrency. ‘It is nice to keep in your wallet’, insists the PutinClassic official forum.

Useless Ethereum Token (UET)

UET markets itself as ‘the world’s first 100% honest Ethereum ICO’. And honest it most definitely is:

‘You’re going to give some random person on the internet money, and they’re going to take it and go buy stuff with it. Probably electronics, to be honest. Maybe even a big-screen television. Seriously, don’t buy these tokens.’

Need we say more?

Mooncoin (MOON)

Like many successful cryptocurrencies, Mooncoin has a frivolous gimmick – it limits its total coin supply based on the average distance of the Earth from the Moon. That, however, is where the frivolity ends. Created with a focus on ease-of-use and transparency, this increasingly-popular crypto is designed for micropayments. Low transaction costs and block time, combined with a large coin supply, make mining Mooncoin significantly easier than other digital currencies. And that’s not all – the creators of Mooncoin are also responsible for developing MoonWord, a free programming language, and SmartLikes, a way of monetizing ‘likes’ on online content using Mooncoin. Fun fact: there’s a town called Mooncoin in County Kilkenny, Ireland.

Coinye (COINYE)

Famous for its short life as much as its libelous premise, Coinye lived fast and died young. Released on January 7th, 2014 as ‘Coinye West’, this script-based cryptocurrency featured famously-lighthearted rapper Kanye West as its mascot – without his permission. A trademark infringement lawsuit swiftly followed. Even changing the name to ‘Coinye’ and replacing West’s likeness with that of a ‘half-man-half-fish hybrid’ could not delay the inevitable, and by January 14th – a mere week after release – Coinye was no more. “I’ve never had someone try and sue me before, let alone an A-list celebrity,” Coinye developer Harry Willis recounted. “We didn’t win, but we’ve cost Mr. West thousands in legal fees which is a great feeling.”

For the latest market news, visit FXTM.

From Gold to Code: Could Cryptocurrencies Really Replace Fiat Money?

In 2009, a mysterious individual named ‘Satoshi Nakamoto’ propelled cryptocurrencies into the mainstream with the introduction of bitcoin and shook the world of finance to its core. Bitcoin was only the beginning of the world’s love affair with this novel form of currency. Now we have more than 1400 cryptocurrencies, each one with a different purpose or application. Some seek to raise the crypto bar even higher, others are looking for their own 15 minutes of fame and then, naturally, there are those looking to use the fad to scam money from the incautious.

Cryptocurrencies have accumulated a large fan base; November 2017 saw bitcoin capping close to $18,000 and selected financial institutions have begun accepting payments in cryptocurrencies without hesitation. So, is it time we start talking about whether or not cryptocurrencies represent the future of money? FXTM’s Senior Writer, Samantha Robb, weighs the pros and cons and looks at just how realistic a world without the jingling sound of coin-filled pockets really is.

Almost 50 years ago, the world transitioned from using money linked to the value of precious commodities to a centralized system of fiat money. Now, some would have us believe that we are facing the looming possibility of discarding fiat, breaking the status quo and shifting to digital currency altogether.

A large amount of the support for cryptocurrencies like Bitcoin stems from the speculative crypto craze that has trickled down to every home with access to the internet, tv or newspapers. One of the main reasons it has successfully captured the public’s imagination is the ‘stick-it-to-the-man’ attitude that cryptocurrencies represent. Since there isn’t any governmental body regulating digital coinage, government policy or financial institutions have no impact on their value whatsoever. In fact, not only are cryptocurrencies unaffected by any regulatory agenda, they are also immune to geography. The value of a crypto remains the same regardless of which side of the ocean you’re on, eliminating the need for third-party processors and other middlemen. This could be a huge advance in regards to saving time and money on overseas transactions. In addition, the blockchain technology on which bitcoin runs ensures a much higher degree of privacy when it comes to users’ transactions. In a world where concerns surrounding online privacy escalate daily, it’s no surprise that this is another point in favor of the cryptocurrency revolution.

On the other hand, we cannot avoid the simple fact that the utopian fantasy of people controlling their own money is a fallacy. The ugly truth is that this type of thinking stems from not taking into account the real implications that the shift from fiat to crypto could have. For one, introducing cryptocurrencies as the new economic system would mean rebuilding the system from the ground up. This type of fundamental restructure would cost a jaw-dropping amount of energy and money, particularly when we think about all the banks, governments, businesses and people that would have to make the switch.


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Furthermore, there is a sound reason why financial service regulators are tightening up compliance requirements. The second half of 2017 brought about a number of adjustments to the regulatory framework, such as MiFID II and the GDPR initiatives that are set to take effect in May this year. These regulatory initiatives are intended to help protect millions of traders and investors from the terrifying number of schemes that seek to part the unwary from their money, crypto scams included. Then, there’s money-laundering – banks and financial services firms already spend an enormous amount on anti-money laundering programmes; the introduction of cryptocurrency as the new norm poses an immense threat to any AML initiative. Finally, like anything that takes place online, there is always a chance of accounts being hacked, error messages cropping up and power cuts wiping out entire wallets.

Ultimately, the crypto-mania that has consumed the financial markets, investors and the imagination of the public is a powerful catalyst for change. It’s unclear what exact form this change will take, but one thing’s for certain: we have come a long way from counting gold.

This article is written by Lukman Otunuga, a senior analyst at FXTM

Bitcoin, Bears and Gold

Bitcoin on the Back Foot

News that the new Head of the Bank for International Settlements views Bitcoin as a threat to financial stability and a “Ponzi scheme,” saw the cryptocurrency tumble below the $6000 mark on Tuesday. Bitcoin has been struggling to fight back against ongoing negativity, with bears determined to attack prices at any given opportunity. Yesterday’s excruciating losses are just the latest in a series of downsides that have seen the cryptocurrency lose more than 50% since the start of the year.

Reports that US and UK banks are banning customers from buying digital currencies with credit cards has not helped matters. The announcement that China will bar access to foreign cryptocurrency exchanges has further compounded the issue, and the outlook for the world’s premier crypto remains bearish. Could we be seeing the currency move full circle, with December’s astronomical gains the last violent flicker of a flame destined to wane? Only time will tell.

Although the recent days have been though for the number one cryptocurrency, Bitcoin has managed to recover on Wednesday to trade at $8165, up +22.56%.

Are the Bears Here to Stay?

Bitcoin isn’t the only instrument feeling the pressure of the bears. Concerns that the central banks are raising interest rates faster than expected saw world shares come under intense selling pressure on Tuesday. This follows a two-day plunge that saw Wall Street chart its steepest one-day decline in more than six years on Monday. By end of trading on Tuesday, Asian markets were awash with red, while European markets lost 2%.

Commentators remain largely in agreement over the latest decline, with UK Treasury Secretary Steven Mnuchin labeling it a correction, while traders on the other side of the pond predict a market bottom. The theories behind this week’s decline are many and varied, ranging from higher interest rate expectations to a healthy correction, to an overextending bull run and profit taking. However, if stock markets continue to drop, investors could be forced to evaluate whether the current global selloff is something bigger than a correction.

Commodity Spotlight: Gold

The stock market decline was good news for Gold on Monday, with futures on the yellow metal jumping 0.6% as investors fled volatile equities. However, Tuesday was a different story, and Gold tumbled below the technical support level – even as world stocks took a beating. Gold is trading slightly lower on Wednesday at $1326, down -0.24%.

The current decline is thought result from a strengthening US Dollar and renewed expectations of higher US interest rates. The metal may yet venture lower if the Dollar continues to find ground.

Gold Daily Chart
Gold Daily Chart

This article was Written by Lukman Otunuga, a Research Analyst at FXTM. For more information, please visit: ForexTime

Dollar Dims While Gold Shines

The Greenback has had a tough week, and the knocks look set to keep coming. The dollar index slipped another 0.5% on Monday 15 January, to trade at three-year lows. I initially argued that the ongoing USD selloff was the result of concerns over low inflation in the United States, but Friday put paid to that theory.

Core consumer data released last week showcased the biggest increase in U.S consumer prices for 11 months, bolstering expectations that inflation looks set to pick up pace this year. With inflation strengthening, rumors of March’s Federal Reserve interest rate hike are gaining momentum. Ordinarily, this would help prop up a flagging Greenback but it continues to wallow, suggesting currency weakness may be a recurrent theme this quarter.

It is possible that the Dollar’s selloff is in part down to political risks, scandals, and machinations currently gripping Washington. A 2017 study by the University of California, Berkley, identified that much of the Dollar’s attractiveness as a reserve currency was the result of a ‘security premium’ – i.e., the historical dominance of the currency was intrinsically tied to America’s position as a global superpower and the protection it offered allies. With the current administration flip-flopping over alliances, embarking on a war of words with Pyongyang, and actively provoking tensions in Palestine, it could be that USD has lost its ‘security premium’.

That said, anxiety over the impact of Trump’s tax overhaul is also like to color investor sentiment. I believe the Dollar remains at the threat of steeper losses if the impact of Trump’s tax reform fails to meet market expectations.

Taking a look at the technical picture, the Dollar Index is heavily bearish on the daily charts. There have been consistently lower lows and lower highs while technical lagging indicators, such as the MACD, point to a downside. The breakdown below 91.00 could encourage a further decline towards 90.00 and 88.00, respectively.

Gold continues to shine

From a technical standpoint, Gold is heavily bullish on the daily charts. The Candlesticks are trading firmly above the 50 Simple moving averages, while the MACD has also crossed to the upside. A decisive breakout and daily close above $1340 could encourage a further incline higher towards $1360. Alternatively, a situation where bulls are unable to keep prices above $1340 could trigger a technical correction back to the $1325 level.

Gold Weekly Chart
Gold Weekly Chart

This article is written by Lukman Otunuga, a senior analyst at FXTM

The Bitcoin Week: Bitcoin Mania Continues as Prices Remain Near All Time High

Demand from retail investors topped expectations and saw the futures exchange halt trading twice in an effort to control volatility. CBOE’s website also crashed under the volume of traffic. Commentators were quick to point out that the crash corresponded with a spike in the Bitcoin price (the currency jumped from $14,500 to $15,736 in a matter of minutes), confirming that futures demand will likely drive Bitcoin price, and vice versa.

Sunday’s contract launch is a key step in the cryptocurrency’s journey towards mainstream, legitimate trading instrument. Bitcoin’s lack of intrinsic value – it is not tied to a physical asset or backed by a Central Bank – and massive speculative bubble remains a concern for many. A number of high profile commentators are on record discussing the cryptocurrency in less than favorable terms. However, for the moment at least, the currency continues to demonstrate an impressive resilience to such negativity and has so far weathered pessimistic statements from the likes of JP Morgan’s Jamie Dimon and, just yesterday, UBS’s Paul Donovan.

That said, concerns over its legitimacy have done little to deter the Bulls, as evident from the current price action. With prices breaking above $17,000 on Tuesday and Bulls showing no signs of tiring, we may even see Bitcoin conclude 2017 on $20,000. Bitcoin is trading at $16559, up +0.94 as of 10:00 GMT.

Dollar higher ahead of FOMC

The greenback flexed against a basket of major currencies during yesterday’s trading session, as optimism in US tax reforms continues to pick up the pace. While, on the face of it, Bulls are firmly in control, sluggish US inflation could yet present a headwind for the current upside.

With the recent wage growth figures in November printing below market estimates, the Dollar remains vulnerable to losses as for today’s FOMC statement dawns. Investors’ attention will be focused on Yellen’s last address, which is widely expected to conclude with the Federal Reserve raising US rates by 25 basis points.

Optimism from policymakers over the US economy is likely to support the greenback. Alternatively, if the tone of the meeting centers on concerns over low inflation, or fails to shine a light on Fed plans for rate hikes in 2018, the Dollar may find itself subject to selling pressure.

From a technical standpoint, the Dollar Index looks somewhat bullish on the daily charts, with prices breaking above 94.00 during Tuesday’s trading session. A decisive daily close above 94.00 could encourage a further incline towards the 94.50 mark. Alternatively, weakness below 93.70 may open a path towards 93.50.

Commodity spotlight – Gold

It’s shaping up to be another painful week for the yellow metal, which tumbled to $1240 on Monday and Tuesday – its lowest level in nearly five months. Gold continues to trade near the five-month low on Wednesday morning.

US tax reform optimism is the likely instigator of this fall, although a strengthening Dollar likely added to the downside. Yellen’s press conference today may pave the way for yet more punishment and, if FOMC hawks take to the stage, $1230 could become the next level of interest.

Taking a look at the technical picture, Gold is heavily bearish on the daily charts. There have been consistently lower lows and lower highs, while the MACD is trading to the downside. Previous support around $1250 may transform into a dynamic resistance that encourages a further decline towards $1230.

Gold Daily Chart
Gold Daily Chart

This article is written by Lukman Otunuga, a senior analyst at FXTM

The Rise and Rise of Bitcoin

Bitcoin remains the talk of the town, as the cryptocurrency marched to a fresh high on Monday, charging above $8200. This latest rally means the currency has appreciated an eye-watering 700% year to date.

With Bitcoin repeatedly hitting record highs, it’s fair to say the market is bullish. Financial heavyweights including Goldman Sachs are among those rumored to be opening Bitcoin trading desks, and the potential for incredible returns continues to attract investors from all walks of life, a factor that may well continue to fuel the upside. CME have also recently announced plans to trade bitcoin futures and this, coupled with favorable regulations in Japan (which accounts for 60% of Bitcoin trading volumes) has helped to boost the upside still further.

It’s an impressive rise to fame for a novelty instrument that had a market value of just $1000 at the start of the year. Even negative comments from titans including Warren Buffet and JP Morgan’s CEO Jamie Dimon, declaring the currency ‘worthless’ and a “fraud” did little to quell the upside. With the technical picture extremely bullish and bulls illustrating dominance above $8000, speculation mounts that we may even see the cryptocurrency hit $10,000 by the end of the year.

Opinions still remain sharply divided over Bitcoin’s future. Some analysts are firm of the conviction that we’re witnessing the birth of a new investment instrument, while others cling firmly to the thinking that the Bitcoin romance is little more than a short-term fling. Only time will tell which one is correct, but personally, I’m leaning more towards the second option.

Euro pressured by political risk

News that collation talks in Germany had collapsed on Sunday night left the Euro open to downside risk yesterday. German Chancellor, Angela Merkel, had been seeking to build a coalition between her CDU/CSU bloc, the Greens and Free Democratic Party (FDP) – a vital alliance necessary to secure the German premier majority support in the Bundestag.

Concerns over Merkel ruling with only a minority government for support played out in the markets throughout Monday. Her failure to unite the three parties heightened fears of political uncertainty in the EU’s largest economy and sparked speculation of a fresh wave of elections. The uncertainty is likely to translate to yet more pain for the EUR.

While EURUSD attempted to claw back losses during the day, it quickly turned bearish again amid speculation the recovery was down to dollar weakness rather than a change of sentiment towards the euro. Taking a look at the technical picture, the EURUSD remains bearish below 1.1850. A breakdown and solid daily close below 1.1730 may encourage a further decline back towards 1.1680 and 1.1600, respectively. If bulls want to jump back into the game, the 1.1850 resistance level needs to be conquered.

EUR/USD Daily Chart
EUR/USD Daily Chart

Commodity spotlight – Gold

Gold finished last week on a bullish note, as a weakening dollar sent prices soaring to a monthly high above $1295 but on Monday gold prices fell, giving up all Friday’s rise. Dollar weakness is likely to continue as long as the uncertainty over US tax reforms eigh on markets. News of U.S Special Counsel Robert Mueller subpoenaing Donald Trump’s election campaign also pressure the greenback.

From a technical standpoint, as long as gold can keep above $1280, the next levels of interest will be $1289 and $1300 respectively. Alternatively, weakness below $1280 could trigger a selloff towards $1267.

Gold Daily Chart
Gold Daily Chart

This article is written by Lukman Otunuga, a senior analyst at FXTM

Drama in Europe Overshadows Euro, Gold in Focus

Political Drama Grips the Euro

The big news yesterday was Catalonia or, more accurately, Catalan President Charles Puigdemont’s response to Madrid’s independence deadline. Puigdemont’s inability to officially state whether his administration had declared independence from Spain saw the euro start the trading week under pressure, as the political drama prompted investors to shun the currency.

Spanish Prime Minister, Mariano Rajoy, is on record hinting that an official declaration of independence from Puigemont could prompt Madrid to invoke Article 155 for the first time since it was drawn up in 1978. Invoking 155 would effectively allow the Spanish government to legally take control of Catalonia. Should this occur, the euro would likely find itself under immediate selling pressure, as investors assess whether escalating political tensions in Europe could pose another threat to the unity of the trading block.

From a technical standpoint, the EURUSD remains on standby in a wide range ahead of Thursday’s deadline.

Technical traders will continue to observe how prices react around the 1.1850 level, and a breakout above 1.1850 may encourage a further incline towards 1.1920 and 1.2000 respectively. Alternatively, weakness below 1.1850 may trigger a selloff towards 1.1730 and 1.1680.

EUR/USD Daily Chart
EUR/USD Daily Chart

Will UK CPI data impact Sterling?

Fluctuating monetary policy speculations, rocky Brexit negotiations, and concerns over Theresa May’s longevity as Prime Minister have seen sterling embark on a rollercoaster over the last few weeks.

The currency sharply depreciated last week following European Chief Negotiator for Brexit, Michel Barnier’s comments. The French Republican said that talks around Britain’s exit from the European Union were at a deadlock, causing the GBP/USD to drop to 1.3120 last Thursday, down from a high of 1.3262 earlier that day. A report in Germany’s Handelsblatt newspaper the same day stating that the United Kingdom could be offered a two-year transitional Brexit deal provided a much-needed lifeline, and the beleaguered currency went on to recover gains, charting a rise of more than 150 pips against the Dollar on the day.

Attention now will be directed to today’s CPI report, which is set to hit a five year high, pressuring the Bank of England to raise interest rates. While there is an argument that higher rates will tame inflation, this could also impact business confidence and may have a negative impact on a fragile UK economy. Will the central bank raise rates in Q4 in an effort to tame inflation, or will it be forced to remain on standby amid Brexit uncertainty? This is the question every trader is asking.

Market players will continue to observe how the GBPUSD reacts around the 1.3300 region. Weakness below this level may open a path back towards 1.3150. Otherwise, a solid break above the 1.3300 resistance could inspire bulls to attack 1.3380.

GBP/USD Daily Chart
GBP/USD Daily Chart

Commodity Spotlight: Gold

With Catalonia and Brexit dominating the headlines, Gold looks set to become the unsung hero of the week. The yellow metal began the trading week shining, as prices crept towards the US$1305 mark. Political risks in Spain and escalating tensions between North Korea and Iran have contributed to keeping investor interest in the safe haven high. However, strong US dollar and investor’s profit-taking pulled the precious metal to trade at $1292 as of 8:00 GMT.

Gold Daily Chart
Gold Daily Chart

A weekly close above the $1300 psychological resistance level may encourage bulls to target $1320. However, as prices broke below $1300, then the next level of interest will be $1280.

This article is written by Lukman Otunuga, a senior analyst at FXTM