CELO Price Rallies 40% After Launch of $20 Million Incentive Program

Key Insights:

  • In tandem with the announcement of the Incentive Program, the protocol’s native token saw a rally.
  • CELO’s price was up 40% in two days.
  • Celo also introduced an open-source API specification for payment providers called FiatConnect.

On April 4, the Celo Foundation announced the launch of ‘Connect the World,’ a $20 million campaign to incentivize the development of ‘high-quality Celo on- and off-ramps around the globe.’

Pumping the Ecosystem

Celo, a proof-of-stake layer 1 blockchain, announced a new $20 million incentive campaign at the start of the Celo Connect conference this week in Barcelona, Spain. The campaign called ‘Connect the World,’ aims to incentivize the development of high-quality Celo on- and off-ramps worldwide.

At the same event, the Foundation also introduced ‘Fiat Connect,’ an open-source application programming interface (API) specification for payment providers to make integrations more scalable.

According to Celo Foundation’s Medium post, the campaign begins with an offer of $50K to the first payment provider in each country to integrate FiatConnect and demonstrate an on- and off-ramp that meets the quality bar. The Foundation will also subsidize on-ramp fees of up to $100K for all providers, making it affordable for users to access Celo assets.

CELO’s price went up by more than 60% since the start of April to its highest point in over three months. This comes amid the project’s latest initiative that plans to spend $20 million to incentivize the development of Celo on- and off-ramps.

The new initiative will work with Celo Foundation’s stablecoins – cUSD, cEuro, and cREAL.

CELO Reaches 3-Month ATH

After the launch of Celo’s new incentive program, the project’s native token price began to rally. The coin surged above $5.5 on some exchanges.

Celo is ranked 19th among decentralized finance (DeFi) platforms in terms of total value locked (TVL), as per analytics firm DeFi Llama. The coin had a market capitalization of over $1.8 billion at press time.

At the time of writing, the coin had corrected to some extent and traded at $4.41. However, on a daily time frame, CELO was still up by 4.30%, while on the weekly, the asset had gained 29.80%

FXempire, Celo, Crypto
CELO Price Action | Source: FXEmpire

Celo’s recent gains on the back of ecosystem-centric developments have pushed the coin to its highest price level since mid-January.

Bitcoin (BTC) Finds Support as the Threat of War Subsides

Bitcoin (BTC) was on the rise for a 2nd consecutive day on Tuesday. Supported by news of Russia withdrawing troops from the Ukraine border, Bitcoin rallied by 4.7% to end the day at $44,565.

It was also another bullish session for Avalanche (AVAX), which surged by 13.4% to lead the way. Solana (SOL) and Ethereum (ETH) also found strong support, rallying by 9.5% and by 8.7% respectively. Terra (LUNA) and Ripple (XRP) ended the day with more modest gains of 6.9% and 6.2% respectively.

NASDAQ 100 Delivers Bitcoin Support Amidst Risk Aversion

After having ended Monday flat, the NASDAQ 100 jumped by 2.53% in the response to news from Eastern Europe. Once more, Bitcoin took its cues from the NASDAQ 100, which had also delivered Bitcoin support on Monday.

For the day ahead, news updates from Russia and the U.S will need continued monitoring. Late on Tuesday, the White House and NATO had remained cautious, in spite of the news of troop withdrawals. On the economic calendar, U.S retail sales figures for January will draw plenty of interest later today. The FOMC meeting minutes due out late in the day, however, will be key.

Bitcoin Fear & Greed Index Continues Upswing

On Monday, the  Bitcoin Fear & Greed Index had risen from 44/100 to 46/100 and continued to hold at 46/100 ahead of Tuesday’s Bitcoin breakout. In response, the Index climbed to 51/100 and back into neutral territory this morning.

Near-term, the Index trend will be key. The Index will need to move back through last week’s 54/100 high to bring $50,000 levels back into play for Bitcoin.

Bitcoin Fear & Greed Index 160222

Bitcoin Price Action

At the time of writing, Bitcoin was down by 0.35% to $44,420. Avoiding a fall through the day’s $43,930 pivot would support a run at the first major resistance level at $45,407. Bitcoin would need plenty of support to break back through to $45,000 levels, however. In the event of an extended rally, Bitcoin could test the resistance at $47,000 before any pullback. The second major resistance level sits at $46,250.

A fall through the pivot would bring the first major support level at $43,087 into play. In the event of an extended sell-off, the second major support level at $41,610 would likely come into play.

BTCUSD 160222 Daily

Looking at the EMAs and 4-hourly candlesticks (below), the signal has become more bullish. Bitcoin broke out from the 50-day EMA on Tuesday, which has pulled further away from the 200-day EMA overnight.  We also saw a bullish cross, with the 100-day EMA crossing through the 200-day EMA. A confirmation of the bullish cross would support another bullish day ahead. Key near-term, however, would be for Bitcoin to avoid falling back through the 50-day EMA, currently at sub-$43,000 levels.

At the time of writing, the NASDAQ 100 mini was down by 48.25 points, pegging Bitcoin back from an early move.

BTCUSD 160222 4-Hourly Chart

Natural Gas Prices Rebound on Cold Weather Forecast

On Friday, natural gas prices rebounded slightly after tumbling on Thursday. The week’s prices were up 1.5% but had large daily moves. On Wednesday, prices were up 14% followed by a 12% decline on Thursday. According to a recent National Oceanic Atmospheric Administration report, much colder than normal weather is expected to cover most of the Mid-West and cooler than normal will hover over the North East for the next 8-14 days.

Technical Analysis

On Friday, natural gas prices rallied, 1.5%. Support is seen near the 10-day moving average at 4.08. Resistance is seen near the 50-day moving average at 4.3. The 10-day moving average crossed above the 200-day moving average which means that a short-term up trend is now in place. Short-term momentum is negative as the fast stochastic generated a crossover sell signal. Medium-term momentum is positive as the MACD (moving average convergence divergence) histogram is printing in positive territory with an upward sloping trajectory which points to higher prices.

Production Rise in 2021

U.S. production of dry natural gas averaged an estimated 93.5 Bcf per day in 2021, up 2% from 2020. Natural gas production fell in 2020 as a result of low natural gas and oil prices that reduced drilling activity. Production grew in 2021 as drilling activity came back online, especially in the Permian Basin, where associated gas production in that region contributed to the overall growth in natural gas production.

European Equities: Economic Data, ECB President Lagarde, and U.S Earnings in Focus

Economic Calendar

Friday, 14th January

French CPI (MoM) (Dec) Final

French HICP (MoM) (Dec) Final

Spanish CPI (YoY) (Dec) Final

Spanish HICP (YoY) (Dec) Final

Eurozone Trade Balance (Nov)

ECB President Lagarde Speaks

The Majors

It was a mixed day for the European majors on Thursday. The DAX30 rose by 0.13%, while the CAC40 and the EuroStoxx600 ended the day with losses of 0.50% and by 0.05% respectively. It was a 3rd consecutive day in the green for the DAX30.

From the Eurozone, the ECB’s Economic Bulletin delivered more uncertainty following the latest spike in U.S inflation. Upward revisions to inflation and downward revisions to growth forecasts were market negative.

Economic data from the U.S also disappointed, with jobless claims unexpectedly rising in the week ending 7th January.

The Stats

There were no major stats from the Eurozone for the markets to consider, leaving the ECB Economic Bulletin in focus.

The ECB Economic Bulletin

Salient points from today’s Economic Bulletin included:

  • Global economy remains on a recovery path, although persisting supply bottlenecks, rising commodity prices, and Omicron weigh on near-term growth prospects.
  • Recent surveys suggest that growth momentum remained weak at the start of Q4.
  • While the euro area economy continues to recover, growth is also moderating.
  • Activity is expected to pick up strongly om the course of the year, however.
  • Output should exceed pre-pandemic levels in Q1 of 2022.
  • While supply chain bottlenecks persist, these should ease during 2022.

Growth

  • Projections are for annual growth of 5.1% in 2021, 4.2% in 2022, 2.9% in 2023, and 1.6% in 2024. Compared with September forecasts, 2022 growth was revised down, while 2023 growth was upwardly revised.

Inflation

  • Inflation will remain above 2% for most of 2022 and is expected to remain elevated in the near-term.
  • The ECB expects energy prices to stabilize, consumption patterns to normalize, and price pressures stemming from global supply bottlenecks to subside this year.
  • December annual inflation forecasts were 2.6% in 2021, 3.2% in 2022, and 1.8% in 2023 and 2024. These were materially higher than September projections.

From the U.S

Wholesale inflation figures were in focus following consumer inflation figures from Wednesday along with jobless claims.

In the week ending 7th December, initial jobless claims rose from 207k to 230k. Economists had forecast a fall to 200k.

On the inflation front, the producer price index rose by just 0.2% in December versus a forecasted 0.4% increase. In November, the index had risen by 1.0%. The Core producer price index rose by 0.5% after having risen by 0.9% in November. Economists had forecast a 0.5% increase.

The annual wholesale rate of inflation softened from 9.8% to 9.7% in December.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Thursday. Continental and Daimler led the way, with gains of 2.73% and 2.74% respectively. BMW and Volkswagen ended the day up by 1.61% and by 0.92% respectively.

It was a mixed day for the banks, however. Deutsche Bank fell by 0.20%, while Commerzbank rose by 1.15%.

From the CAC, it was a bullish day for the banks. Credit Agricole rose by 0.77%, with Soc Gen and BNP Paribas rallying by 2.18% and by 2.50% respectively.

The French auto sector also had a bullish session. Stellantis NV rose by 2.62%, with Renault jumping by 4.58%.

Air France-KLM rose by 0.86%, while Airbus SE ended the day down by 1.16%.

On the VIX Index

It was back into the green for the VIX on Thursday, marking just a 2nd rise in 6 sessions.

Reversing a 4.29% fall from Wednesday, the VIX surged by 15.27% to end the day at 20.31.

The NASDAQ tumbled by 2.51%, with the Dow and the S&P500 seeing losses of 0.49% and 1.42% respectively.

VIX 140122 Daily Chart

The Day Ahead

It’s a busier day ahead on the Eurozone’s economic calendar. Finalized December inflation figures from Spain and France are due out along with trade data for the Eurozone. Barring marked revisions to the prelim figures, expect the Eurozone’s trade data to have a greater influence.

On the monetary policy front, ECB President Lagarde is also scheduled to speak. The markets will be looking for any guidance on inflation and monetary policy.

Later in the session, U.S retail sales will also be key. An unexpected slide in consumption could question the FED’s views on the economic outlook. Earlier in the day, trade data from China will set the tone.

Away from the economic calendar, U.S corporate earnings will also be a key driver. Citi, JPMorgan Chase, and Wells Fargo are scheduled to release earnings results today.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 39 points.

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

E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Driving Toward Record High at 36330

March E-mini Dow Jones Industrial Average futures are inching higher early Tuesday as investors continue to assess the spread of the Omicron COVID-19 variant. On Monday, buyers drove the blue chip average to within striking distance of its record high as markets reopened after the Christmas holiday.

At 10:02 GMT, March E-mini Dow Jones Industrial Average futures are trading 36273, up 95 or +0.26%.

Some said Monday’s strength was fueled by strong holiday retail sales. According to Mastercard data, holiday sales rose 8.5% in 2021 from last year, the fastest pace in 17 years. The price action also suggested investors shrugged off worries over air travel after a holiday weekend that saw thousands of flights canceled due to COVID-related issues.

The Dow was led higher by shares of Microsoft Corp, Apple Inc and Salesforce.Com, which gained 2.32%, 2.30% and 2.04%, respectively.

Daily March E-mini Dow Jones Industrial Average

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up on Monday when buyers took out the last main top at 36098. A trade through 34547 will change the main trend to down.

The new short-term range is 34547 to 36279. Its retracement zone at 35413 to 35209 is the nearest support area.

Daily Swing Chart Technical Forecast

The direction of the March E-mini Dow Jones Industrial Average on Tuesday is likely to be determined by trader reaction to 36178.

Bullish Scenario

A sustained move over 36178 will indicate the presence of buyers. A trade through the intraday high at 36279 will indicate the buying is getting stronger. If this move creates enough upside momentum then look for a possible surge into the all-time high at 36330.

Bearish Scenario

A sustained move under 36178 will signal the presence of sellers. Crossing to the weak side of the former main tops at 36153 and 36098 will indicate the selling pressure is getting stronger. If this move creates enough downside momentum then look for the selling to possibly extend into the short-term retracement zone at 35413 – 35209.

A close below 36178 will form a potentially bearish closing price reversal top. If confirmed, this could trigger the start of a 2 to 3 day correction. But the uptrend is likely to remain intact.

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

OPEC+ Ignore Calls To Pump More Oil

In the face of high crude prices and U.S. pressure to help cool the market, OPEC and its oil-producing allies have decided to maintain their current production plan.

OPEC+ will continue its program, announced in August, to increase oil production by 400,000 barrels per day each month.

During a news conference on Thursday, Russia’s Energy Minister Alexander Novak said: “The decision was made earlier to increase production by 400,000 barrels a month, and I emphasize every month, through 2022. The decision was again made to maintain the parameters which were established earlier on Thursday

Novak responded that OPEC and its allies were maintaining market balance and being wary of potential changes in demand while not boosting production despite complaints from oil consumers like the U.S., India, and Japan.

OPEC+ may imperil the global economy by refusing to speed up oil production increases, according to the White House, which has warned the US is ready to use “all tools” to lower fuel prices.

OPEC, led by Saudi Arabia, and its allies, including Russia, refused to help tame rising oil prices, insisting they would only gradually increase production even as demand surges back from the depths of the global pandemic.

Despite being the heir to King Salman and the day-to-day ruler of the country, Biden is refusing to speak with Crown Prince Mohammed bin Salman. US intelligence reported in March that Crown Prince Mohammed bin Salman had authorised the killing of Washington Post journalist Jamal Khashoggi.

Abdullaziz is the half brother of the Crown Prince and is frustrated by western countries’ efforts to cut their dependence on fossil fuels whilst also pressing the kingdom to increase oil production.

The price of oil has recently reached its highest level since 2014, and countries who import crude are feeling the pain.

Joe Biden pointed to OPEC+’s unwillingness to pump more oil for the sharp rise in energy prices in the U.S. and worldwide.

In Rome, Biden said, “the idea that Russia and Saudi Arabia won’t pump more oil so that people can get gasoline to get to and from work is wrong.”

Microsoft, World’s Most Valuable Company, Jumps Apple

After Apple missed earnings expectations on Thursday, Microsoft became the world’s most valuable publicly-traded company on Friday, surpassing Apple in market value.

Apple stood at about $2.46 trillion at market close, while Microsoft reached nearly $2.49 trillion.

As a result of supply chain constraints, Apple’s fiscal fourth-quarter revenue missed Wall Street expectations. Despite Apple CEO Tim Cook’s estimates of a $6 billion revenue shortfall, the company expects worse supply chain issues in the December quarter.

Despite a 47% year-over-year increase in iPhone sales, sales fell short of analyst expectations. Sales of the iPhone 13 were only reported during the company’s fourth quarter.

On Tuesday afternoon, Microsoft also acknowledged supply constraints as it reported fiscal first-quarter earnings. However, the company issued a forecast for personal computers that easily exceeded expectations.

On the earnings call, Chief Financial Officer Amy Hood described Q2 as a strong demand quarter that will be constrained by supply. Nonetheless, she said, the market is still growing.

Revenue in Microsoft’s first fiscal quarter grew 22 percent year over year, beating expectations.

The first company to reach $1 trillion and $2 trillion market capitalization was Apple. Last year, it surpassed Saudi Aramco as the world’s most valuable publicly-traded company.

Microsoft last surpassed Apple in market cap in 2020 when the Coronavirus pandemic crippled supply chains. A major update to Windows in over five years led to it closing above a $2 trillion market cap for the first time in June.

In the year to date, Microsoft’s stock had risen nearly 48%, while Apple’s had risen almost 13%.

European Equities: Prelim Private Sector PMIs for May in Focus

Economic Calendar:

Friday, 21st May

French Manufacturing PMI (May) Prelim

French Services PMI (May) Prelim

German Manufacturing PMI (May) Prelim

German Services PMI (May) Prelim

Eurozone Manufacturing PMI (May) Prelim

Eurozone Markit Composite PMI (May) Prelim

Eurozone Services PMI (May) Prelim

The Majors

It was a bullish day for the European majors on Thursday.

The CAC40 and EuroStoxx600 rose by 1.29% and by 1.27% respectively, with the DAX30 ending the day up by 1.70%.

Following Wednesday’s losses, the FOMC meeting minutes released after the European close on Wednesday pegged the majors back early on Thursday.

With economic data from the Eurozone on the lighter side, stats from the U.S provided support later in the European session, however.

The Stats

Wholesale inflation figures for Germany were in focus this morning.

In April, the producer price index rose by 0.8% month-on-month, following a 0.9% increase in February.

According to Destatis,

  • Month-on-month, energy prices increased by 0.6%, with prices for intermediate goods rising by 1.8%.
  • Prices for non-durable goods increased by 0.6%, month-on-month, with prices for durable consumer goods up 0.4%.
  • Compared with April 2020, the index of producer prices for industrial products increased by 5.2%. This was the highest year-on-year increase since August 2011.
  • Prices of intermediate goods increased by 8.2%, compared with April 2020.
  • Compared with April 2020, energy prices jumped by 10.6%.
  • Price for durable consumer goods increased by 1.6%, with prices for capital goods up by 1.0%.
  • Non-durable consumer goods prices declined by 0.6%, however.

From the U.S

It was a relatively busy day on the economic calendar on Thursday. Philly FED Manufacturing numbers for May were in focus along with weekly jobless claim figures.

In May, the Philly FED Manufacturing Index fell from 50.2 to 31.5. Economists had forecast a decline to 43.0.

More significantly, however, initial jobless claims for the week ending 14th May fell from 478k to 444k. Economists had forecast a decline to 450k.

The downward trend in claims continues to support the optimistic outlook towards the U.S economy. Improving labor market conditions combined with the upward trend in personal savings rates point to a sharp pickup in consumption to fuel economic growth.

Impressive labor market figures will add further pressure on the FED to reconsider its policy stance in the coming months.

The Market Movers

For the DAX: It was a bullish day for the auto sector on Thursday. Daimler rallied by 2.33%, with BMW and Volkswagen seeing gains of 1.58% and 1.49% respectively. Continental rose by a more modest 0.64% on the day.

It was also a bullish day for the banks. Deutsche Bank and Commerzbank ended the day up by 0.27% and by 0.93% respectively.

From the CAC, it was a bullish day for the banks. Credit Agricole rose by 0.63%, with BNP Paribas and Soc Gen both seeing gains of 0.48% respectively.

It was also a bullish day for the French auto sector. Stellantis NV rose by 1.87%, with Renault gaining 0.14%.

Air France-KLM saw more red, falling by 2.34%, while Airbus SE ended the day up by 1.53%.

On the VIX Index

It was back into the red for the VIX on Thursday, ending a run of 3 consecutive days in the green.

Reversing a 3.66% gain from Wednesday, the VIX fell by 6.81% to end the day at 20.67.

The NASDAQ rallied by 1.77%, with the Dow and the S&P500 ending the day up by 0.55% and by 1.06% respectively.

VIX 210521 Daily Chart

The Day Ahead

It’s a busy day ahead on the European economic calendar. Prelim private sector PMI numbers for France, Germany, and the Eurozone are due out.

Expect plenty of influence from the numbers, with the markets looking for a pickup in service sector activity to support the economic recovery.

From the U.S, prelim private sector PMIs are also due out, with the services PMI likely to have the greatest impact on the majors.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 18 points.

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

S&P 500 Price Forecast – Stock Markets Continue to Tread Water

The S&P 500 has gone back and forth during the trading session on Friday as we continue to see a lot of grinding. Ultimately, the 3400 level above looms large and it looks like we will have to find some type of catalyst to get there. With the rising US dollar during the trading session on Friday, we have seen a bit of hesitation. However, we are still very much in an uptrend and it would make sense that we killed some time in this general vicinity in order to build up the necessary momentum to smash through the clearly obvious barrier. I think at this point in time we will break above there and go looking towards 3500 eventually. That does not mean we cannot pull back in the short term though.

S&P 500 Video 24.08.20

If we do pull back, I will be looking at the 3350 level as a potential buying opportunity, just as I will be looking at the 3300 level. Underneath there, I think there is a huge “floor” in the market closer to the 3200 level. This is an area that was previous support, and it is now being supported by the 50 day EMA as well. That being said, the market is likely to find plenty of value hunters going forward, unless of course there is some type of shock which of course is always a possibility. Looking at the overall attitude of the markets, I still believe that it remains a “buy on the dips” type of scenario in general. Looking at this candlestick, it tells me that we are simply killing time right now.

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

European Equities: Geopolitics and Manufacturing PMIs in Focus

Economic Calendar:

Monday, 1st June

Spanish Manufacturing PMI (May)

Italian Manufacturing PMI (May)

France Manufacturing PMI (May) Final

Germany Manufacturing PMI (May) Final

Eurozone Manufacturing PMI (May) Final

Tuesday, 2nd June

Spanish Unemployment Change

Wednesday, 3rd June

Spanish Services PMI (May)

Italian Services PMI (May)

German Unemployment Change (May)

German Unemployment Rate (May)

French Services PMI (May) Final

German Services PMI (May) Final

Eurozone Markit Composite PMI (May) Final

Eurozone Services PMI (May) Final

Eurozone Unemployment Rate (Apr)

Thursday, 4th June

Eurozone Retail Sales (MoM) (Apr)

ECB Monetary Policy Decision

ECB Press Conference

Friday, 5th June

German Factory Orders (MoM) (Apr)

The Majors

It was a bearish end to the week for the European majors, with a run of 5 consecutive days in the green coming to an end for the DAX30.

The DAX30 led the way down sliding by 1.65%, with the CAC40 and EuroStoxx600 falling by 1.59% and 1.44% respectively.

Economic data from the Eurozone took a back seat on the day, as the markets looked ahead Trump’s news conference. The U.S President had announced earlier in the week that he would introduce measures against China in response to the new security law for HK.

There had been no details ahead of the post-European close news conference to placate the markets earlier in the day.

Late in the European session, U.S economic data added to the market angst at the end of the month.

The Stats

It was a busy day on the Eurozone economic calendar on Friday. Key stats included French and German retail sales figures for April, 2nd estimate GDP numbers for France and prelim inflation figures for May.

There was nothing positive for the markets to consider. There were also no surprises in the slump in consumer spending in April.

Consumer prices were also in decline in the month, which was in line with market expectations.

The only positive was an upward revision to GDP numbers out of France, though really nothing for the markets to get excited about.

While the French economy contracted by 5.3% in the 2nd quarter, consumer spending tumbled by 20.2% following a 16.9% fall in March.

Germany recorded a 5.3% fall in spending, following on from a 4% slide in March.

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

It was also a busy day on the economic calendar. April stats took a back seat, however.

Chicago’s PMI and finalized consumer sentiment figures for May did disappoint, however.

Chicago’s PMI fell from 35.4 to 32.3, with the Consumer Sentiment Index revised down from a prelim 73.7 to 72.3. This was up just marginally from an April 71.8.

The numbers were certainly not good enough to support those expecting a speedier economic recovery from the April abyss.

The Market Movers

For the DAX: It was a bearish end to the week for the auto sector on Friday. Volkswagen and Daimler slid by 2.37% and by 2.78% respectively to lead the way down. BMW and Continental saw more modest losses of 1.41% and 2.10% respectively.

It was also a bearish day for the banks. Deutsche Bank declined by 1.39%, with Commerzbank sliding by 6.96%.

Deutsche Lufthansa also hit reverse, falling by 2.68% to end a run of 4 consecutive days in the green for the week.

From the CAC, bank stocks were under pressure on Friday. BNP Paribas and Soc Gen slid by 4.27% and by 4.92% respectively, with Credit Agricole falling by 2.15%.

The auto sector saw a 2nd consecutive day in the red, with Peugeot and Renault sliding by 4.65% and by 7.74% respectively.

Air France-KLM and Airbus SE also saw red, with the pair falling by 5.77% and by 5.69% respectively.

On the VIX Index

It was back into the red for the VIX on Friday. Reversing a 3.51% gain from Thursday, the VIX fell by 3.78% to end the day at 27.5.

A late reversal led to the loss on the VIX as the markets responded to Trump’s news conference late in the U.S session.

While Trump announced sanctions and an end to the U.S relationship with HK, the phase 1 trade agreement was left untouched. An olive branch or saving face… It was good enough for the U.S equity markets on the day that recovered early losses.

Economic data from the U.S did not help, however, which had also pressured the markets ahead of the news conference.

VIX 01/06/20 Daily Chart

The Day Ahead

It’s a busy day ahead on the Eurozone economic calendar. Key stats include May’s manufacturing PMIs out of Italy and Spain. Finalized numbers are also due out of France, Germany, and the Eurozone.

The markets will be looking for a slower pace of contraction in Italy’s manufacturing sector mid-way through the 2nd quarter.

Finalized numbers for Germany and the Eurozone will also need to avoid downward revisions to support the majors.

Later in the day, the markets preferred ISM Manufacturing PMI from the U.S will also garner plenty of interest. If the Chicago PMI from last week is anything to go by, the markets may be in for a surprise.

Ahead of the European session, China’s Caixin Manufacturing PMI drew attention, with the PMI rising from 49.4 to 50.7 in May. From the weekend, the NBS PMIs were fairly steady…

Ultimately, however, expect the markets may be in the hands of the news wires. Any Beijing response to the latest moves by the U.S administration will be the key driver. Expect the U.S administration to also react to any retaliation from China. Status quo would suggest Trump’s move was nothing more than muscle-flexing…

COVID-19 news updates will also need monitoring. Late last week, we saw a pickup in new cases. A continued uptrend will also test support for riskier assets. Medical experts continue to warn of the easing in lockdown measures coming too soon. Sunday’s numbers should ease any immediate concerns, however.

The Latest Coronavirus Figures

On Sunday, the number of new coronavirus cases rose by 112,809 to 6,263,071. On Saturday, the number of new cases had risen by 124,155. The daily increase was lower than Saturday’s rise while up from 101,608 new cases from the previous Sunday.

France, Germany, Italy, and Spain reported just 991 new cases on Sunday, which was down from 3,045 new cases on Saturday. On the previous Sunday, 1,470 new cases had been reported.

From the U.S, the total number of cases rose by 20,569 to 1,837,170 on Sunday. On Saturday, the total number of cases had risen by 23,338. On Sunday 24th May, a total of 20,190 new cases had been reported.

In the futures markets, at the time of writing, the DAX was up by 167.5 points, with the Dow up by 57 points.

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

Optimism Burns Eternal

There was strong follow-through in the Asia Pacific region, where most markets advanced by more than 1% today. However, the bloom came off the rose, so to speak, in Europe. After a higher opening, markets reversed lower, and the Dow Jones Stoxx 600 is off about 0.75% in late morning turnover. All the major sectors are lower, led by utilities and industrials.

The US 10-year yield closed yesterday at 72 bp, its highest in a month, and sent Asia Pacific yields higher. However, the German-French proposal and ideas that the ECB will likely increase its bond purchases saw peripheral yields fall more than core rates.

The US 10-year yield is also a little softer. The risk appetites were expressed as a weaker US dollar, yen, and Swiss franc, while high-beta dollar-bloc currencies and Scandis jumped, and this has continued today. The JP Morgan Emerging Market Currency Index rose by nearly 1% and is up another 0.2% today and is at new highs for the month.

Gold reached $1765.4 yesterday before stabilizing, and today it is consolidating around $1726-$1740. Oil is also consolidating after yesterday’s surge. The July WTI contract reached $33 yesterday. It bottomed in late April a little above $17. It is trading today between $31 and $33 a barrel.

Asia Pacific

China is adding pressure on Australia. Even though Beijing has not formally linked its actions against Australian barley and beef as retaliation for its calls for an investigation into Covid-19 and the wet markets, there is little doubt about the subtext.

China is threatening to widen the trade dispute, and reports suggest it could extend to other products, such as wine, seafood, and oatmeal. On the other hand, Australia is the largest producer of iron ore, and Chinese demand has lifted prices to eight-month highs. Brazil, the second-largest producer, is being hobbled by a surge in virus cases and is now the world’s third-largest hotspot. Still, China’s apparent willingness to disrupt trade, as it has with Canada over Huawei, is unsettling.

The Bank of Japan’s next scheduled meeting is on June 18, but officials signaled an emergency meeting at the end of this week. The ostensible purpose is not to adjust monetary policy itself. Instead, it is expected to unveil a new program to support small businesses. The central bank left its bond-program unchanged today and stepping into the market to buy JPY1.2 bln of ETFs and REITs.

The dollar has been confined to about a 30-pip range against the yen below JPY107.60. For the sixth session, it has been limited to the range set on May 11 (~JPY106.40-JPY107.75). There are options for $1.5 bln that expire today between JPY107.65 and JPY107.75 and a $640 mln option at JPY107.35 that will also be cut today.

Just when the Australian dollar looked to be (finally) rolling over, with its first close below the 20-day moving average in a month before the weekend, it jumped up yesterday, and the follow-through buying today is testing recent highs. The late April high was set near $0.6570, and today’s high is just below. The intraday technicals suggest consolidation is likely. The PBOC set the dollar’s reference rate a little higher than the bank models suggested.

The dollar remained above CNY7.10 for the second session, which had been seen as the upper end of the acceptable range. We had thought that ahead of the National’s People Congress later this week, officials would have wanted a more stable yuan exchange rate. Meanwhile, tomorrow, the Loan Prime Rate is set, and more than 75% in a Reuters poll expect the one and five-year rate to be unchanged at 3.85% and 4.65%, respectively.

Europe

It has been up to the individual European countries to respond to the virus. The federal or joint effort has been limited largely to the ECB. However, that will change in the coming weeks as the EU prepares to respond. Yet, that is a point in itself, the level is not the monetary union but the larger group of 27. The vehicle is the EU’s budget seven-year financial framework that has been a bone of contention even before the pandemic.

Germany and France jointly proposed a 500 bln joint borrowing as part of the EU budget that will be used to help spur economic recovery. Germany and France envisioned grants, while several countries want loans. The funds would be raised by the EU and available based on need, while the repayment will be according to the share of the EU budget (tied to the size of an economy).

The ultimate EU effort will likely be larger than these funds, which still require agreement among the members. Last month the EC suggested a 2 trillion-euro packaged that included 320 bln euro borrowing. Its proposal included grants, loans, and guarantees. Investors liked what they saw, and Italian bonds rallied strongly.

The 10-year yield fell 19 bp, the most since late March, and the premium over German narrowed to below 215 bp for the first time in a month. The French 10-year yield rose a couple of basis points, less than the (~six basis-point) increase in the German Bund yield, despite Fitch’s cut in the outlook to negative before the weekend.

The UK reported jobless claims surged by 856.5k in April, while the claimant count rate rose to 5.8% from 3.5% in March and 3.4% at the end of 2019. Those working but experiencing an income loss qualify. The average weekly earnings (2.4% vs. 2.8%) and unemployment rate (3.9% vs. 4.0%) are March readings. Separately, while in trade talks with the EU, the US, and Japan, the UK unveiled a new post-Brexit tariff schedule. Some items like dishwashers and freezers will enter the UK duty-free next year. A 10% tariff will remain on cars, and duties will still be levied on agriculture goods.

The German ZEW survey was mixed. The current assessment deteriorated to a new low of -93.5 (from -91.5). However, the expectations component soared to 51.0 from 28.2. This is its highest level in five years. The IFO survey and the PMI, both due later this week, are seen as more important soft economic reports.

The euro is extending yesterday’s rally, which was the largest in a month, and the first push above $1.09 since May 4. The high from May 1, when Europe was on holiday, was near $1.1020, and that area is the next target, and the 200-day moving average is found there as well. The euro has not traded above it since late March. The intraday technical readings, however, are stretched, and initial support is seen near $1.0920. Sterling recovered smartly yesterday.

After falling to almost $1.2075, its lowest level since late March, sterling rebounded to nearly $1.2230 yesterday and reached almost $1.2270 today. The gain is notable too because another MPC member (Tenreyro) weighed on on the negative interest rate debate and claimed it was a powerful transmission mechanism with a positive impact on some EU countries. An option for nearly GBP430 mln is set at $1.23 rolls off today. As is the case with the euro, sterling’s gains through the European morning have stretched the intraday technical readings, cautioning against chasing it immediately higher.

America

An experimental vaccine by Moderno, the US biotech firm, showed some promise in a small first study to spur an immune system response to the novel coronavirus. The innovation here appears to be stimulating one’s own body to generate the spike protein that, like Covid-19, which ideally triggers the creation of antibodies. This helped lift sentiment. On the other hand, President Trump has given the World Health Organization 30-day for “major substantive improvements,” or America’s temporary funding freeze will become permanent.

NASDAQ reportedly will tighten its rules for IPOs that will make it more difficult for small Chinese companies to list. The listing of many Chinese companies on US exchanges has come under greater scrutiny recently. While the need for reform is clear, in the current setting, it is seen as part of the larger US campaign against China.

The US reports April housing starts and permits. At issue is the magnitude of the decline, and expectations are for a drop of 20-25%. It is the May survey data that, like the Empire State survey and University of Michigan consumer sentiment, that may show the first signs that a bottom was reached. Still ahead this week are the Philly Fed survey and preliminary PMI.

Separately, Treasury Secretary Mnuchin and Fed Chairman Powell will testify remotely before the Senate Banking Committee, and their prepared remarks have already been released. The takeaway is that although more steps may be taken, the economic recovery is expected to begin in Q3.

Canada and Mexico’s economic calendars are light today. The US dollar tested this month’s low near CAD1.3900 earlier day to extend yesterday’s loss that began from a little above CAD1.4100. The downside momentum appears to be stalling, and initial resistance is seen in the CAD1.3970-CAD1.4000 area. The greenback is also consolidating yesterday’s losses against the Mexican peso. Yesterday, it had fallen to its lowest level since mid-April near MXN23.45. The next support area is seen in the MXN23.25-MXN23.35 band.

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

This article was written by Marc Chandler, MarctoMarket.

E-commerce: A Growth Story that Looks Set to Continue

Online trading platform eToro has not missed the opportunity to deliver investment products for its client base to take advantage of the rapid growth seen in the retail eCommerce space.

Back in the ‘wonder days’, e-commerce was something for Silicon Valley and those with the foresight of just how integral the web and online shopping would become to our everyday lives.

10-years ago, we would be hopping off to the travel agent to book our flights to our dream destinations or home for the holiday season.

Hotels had to take credit card bookings by fax, at best and, in the worst case, risk holding a room for a ghost booking.

Department stores prospered as the one-stop-shop concept peaked back at the turn of the Millennium.

2 decades on, millennials and non-millennials alike have materially shifted the retail landscape.

The Numbers

While e-commerce has been long associated with global trade, growth in retail eCommerce sales has also been impressive.

In 2017, global retail e-commerce sales hit $2.3 trillion, with sales projected to hit a whopping $6.54 trillion by 2022, according to Statista.

The top 3 online stores reportedly had revenues totaling close to $100bn in 2017. While less than 10% that was still quite a chunk of the market.

By region, there were also some significant variations in retail eCommerce sales. Perhaps unsurprisingly, Asia has been one of the front runners in recent years.

China reportedly accounted for 19% of total retail e-commerce sales back in 2016, compared with just 6.7% in Japan.

Unsurprisingly, China’s retail e-commerce sales have continued to rise since back in 2016.

The increase in the middle class and greater product awareness driving demand.

China will not have been alone, however, with Europe, the U.S and the rest of the laggards also seeing an increase in numbers. In spite of that, however, it would be hard to actually catch up with China.

According to reports, retail eCommerce sales account for more than 35% of total retail sales in China. That is the highest in the world.

In 2018, China retail eCommerce sales hit $1,526.70bn. This accounted for more than 50% of the total of $2,016.33bn in global retail eCommerce sales in 2018.

Retail eCommerce sales in the U.S hit $525.69bn, which is still a big number as the pre-millennials continued to support the malls and the shopping avenues.

Elsewhere, the numbers are smaller. Retail eCommerce sales hit $123.60bn in the UK and just $109.26bn.

China to Lead the Way

When considering the fact that retail eCommerce sales jumped by 34.3% in China in 2018, compared with 16.0% in the U.S and 24.2% globally, that’s quite a move.

Couple that with China’s projected growth, population size and the projected rise in the number of online buyers, the future looks bright for the retail eCommerce space.

In 2018, digital buyers accounted for just 48.2% of the Chinese population. This is projected to rise to 58.8% by 2022.

Focusing on the world’s largest retail eCommerce market, Alibaba has the largest market share at 58.2%.

JD.com’s market share sits at just 16.3%, while Amazon China has just 0.7% of the market share.

When also factoring in the continued rise of the middle class in China and projections that see China’s GDP surpassing that of the U.S within the next 10-years, retail eCommerce investments should form part of any investment portfolio, when looking at the numbers alone.

eToro shares this view and offers a blended retail eCommerce portfolio for its clients to benefit.

If we look at 2019 retail sales figures, China saw retail sales growth of 8%, year-on-year, in 2019. That towered over 5.82% growth in the U.S over the same period.

In actual numbers, China is projected to see total retail sales exceed that of the U.S for the 1st time in 2021.

www.eMarketeer.com had projected for China’s total retail sales to hit $6.031tn in 2020 versus U.S retail sales of $5.695tn.

Economic woes and the coronavirus outbreak will have set China back and may lead to China falling behind total U.S retail sales until 2021 – 2022.

This is a delay, however, China will likely overtake and sooner rather than later.

The Players

A number of marquee companies have driven the surge in online retail sales. These included Alibaba, Amazon.com, JD.com, Apple, Walmart, Dell Technologies, the Otto Group, Vipshop Holdings, Gome Electrical Appliances, and even Macy’s…

It’s ultimately America’s Amazon.com and China’s Alibaba and JD.com that perch at the top of the e-commerce retail sales tree.

While JD.com is currently focussed domestically, Alibaba and Amazon.com have a more global footprint. The jury is still out on who has the brighter future and whether they can hold onto their existing market shares.

Alibaba and JD.com may have geographical concentration risk, but when considering the shift in China’s demographics, both look well placed and that’s assuming the focus doesn’t extend significantly beyond China’s borders…

When we consider the likes of Amazon.com, Walmart.com and the other U.S household names that have gone web-based, protectionism could become their undoing.

Only recently, Walmart.com pulled out of the battle for market share in China, deciding to become an investor in JD.com.

Amazon.com has ultimately also failed in China and Alibaba in the U.S.

The Ever-Changing Landscape

Time will tell whether the two big U.S names can regroup. Exploring low penetration geographies will be key from an investment perspective. That then brings regulation and geopolitics into focus.

When we consider Apple.inc, a top 5 retail eCommerce player, China is a sizeable market, as is the EU. Trump’s foreign policy could materially damage Apple.inc and even Amazon.com and Walmart’s fight for global market share.

That delivers the opportunity to smaller players and that’s never a bad thing for investors in search of the next big opportunity.

Is the growth in eCommerce over? The numbers suggest not… Finding the right geography by researching demographics and consumer behavior is key, however.

One thing is certain. The world is unlikely to stop shopping any time soon. The easier it is the better and let’s not forget the logistics involved in a physical shopping spree…

Investors don’t need to go direct to the source to get exposure to the retail eCommerce space.

Investing in e-commerce

While there are a large number of listed e-commerce stocks available to gain exposure to the industry, more niche investment opportunities are also available.

eToro has developed an e-commerce ShoppingCart within its copy portfolio platform.

CopyPortfolio is a portfolio management product developed by eToro. The investment strategy provides access to an equally weighted portfolio that gives investors exposure to the retail eCommerce sector.

eToro developed the ShoppingCart in recognition of the sector’s historical growth and anticipated expansion in the coming years.

While the broader eCommerce sector includes non-retail players involved in payments, logistics and cybersecurity, eToro’s ShoppingCart focuses on pure retailers.

This gives prospective investors a blended portfolio exposure to the retail eCommerce sales industry.

In conclusion, there’s unlikely to be much backtracking for the eCommerce sector. How the sector performs in the coming years, however, will have a correlation with economic growth and labor market conditions.

Trade wars and regulatory risks are also factors to consider. This is particularly the case as countries such as the U.S enter a phase of protectionism.

Either way, however, eToro is well-placed to deliver investors with exposure to a sector that will continue to expand globally. While some markets may see growth level out, others will undoubtedly enter into what is becoming an ever-increasing global online retail market.

The good news for those investing in eToro’s e-commerce ShoppingCart, the minimum investment is just $2,000 and eToro provides all the analysis and portfolio details that an investor could want to monitor the portfolio’s performance.

Building a personalized portfolio would certainly be more cumbersome and less cost-efficient.

Zero Commission Stock Trading The Evolution Continues

For years, retail and institutional investors had grappled with commission fees that ate into earnings.

There was, in fact, very little reason for the online trading world to change tact, after all, it was the standard across the industry.

It all changed back in the 4th quarter of 2019, however. It was inevitable that one of the largest online platforms would take the 1st step as the on-line trading industry became more cutthroat, with brokers batting for clients in a relatively saturated market place.

The change was not only significant but also out of the blue. Online trading platforms used to charge as much as US$7 for each trade. When considering the size of the on-line stock trading market, this translated into significant revenues for brokers and materially reduced earnings for investors.

In 2017, the major brokerages cut fees and market volatility in 2018 saw brokers bleed. That paved the way for 0% commission trading that hit the on-line stock trading world in 2019.

This market volatility and slide in broker income was not just seen in the U.S but also across the Pond.

eToro was well placed and nimble enough at the time to follow the trend from the U.S and shift the landscape in Europe.

Why the Need for Change?

While there has been a marked growth in online trading platforms, supporting the trade of stocks globally, some fared better than others.

While the likes of Charles Schwab was certainly amongst the leaders in the U.S, eToro was and remains a front runner in Europe.

It was for this very reason that Schwab was able to catch the markets off guard late last year and for eToro to set the trend in Europe.

While the market balked at the concept of dropping commission fees, it is worth noting that fees were not dropped for all investment strategies and services.

The decision to cut commission fees and offer 0% commission trading was ultimately made to lure investors away from banks and other platforms that held commission fees unchanged.

It wasn’t just the existing investor base that eToro and others were interested in. The removal of fees also drew in new investors, which was key.

A larger client base provides a significant opportunity to cross-sell other investment products, where commission fees remain.

With the U.S and European equity markets hitting fresh record highs at the turn of the year, investors will have certainly enjoyed better returns after being freed from punitive commission fees.

Investor Benefits

Market access to a wide range of stocks offered under the zero-commission scheme is certainly an exciting proposition for investors and traders.

There is absolutely no reason for investors and traders to show loyalty to platforms that continue to eat into earnings.

For investors and traders, higher profit margins as a result of 0% commission trading increases interest in alternative asset classes.

Just in the last week, we saw the global equity markets bleed in response to the spread of the coronavirus.

In stark contrast, the cryptocurrency market was on the move, finding sizeable inflows as a hedge.

This was not a one-off, with the rise in tensions between Iran and the U.S also leading to a spike in the crypto market.

Investors and traders have benefitted, not only from the vast number of 0% commission stocks on offer but also from eToro’s crypto asset class offering.

For investors, this is an undeniable benefit, while eToro also sees a jump in its investor base.

Ultimately that is essential for a successful platform as it delivers liquidity for investors and traders across the eToro platform. This is particularly important in volatile markets…

The Now

One thing is for certain, the trading world has grown over the last decade. We’ve seen geopolitical risk take center stage since Trump’s President Election victory back in 2016.

Retail investors across Europe have historically accounted for a small proportion of the equity market investor base. High commission fees and inaccessibility left many out in the cold

That has now changed and eToro’s decision to go commission-free on an array of stocks has driven that change.

For investors, it’s not just the crypto world that is on offer.

eToro also offers Indices, Exchange-Traded Funds. Even FX has seen volatility on the rise, drawing investors in.

The benefit for a trader and investor is the one-stop-shop that eToro offers, which allows investors and traders to more efficiently manage P&L. There’s no need to have multiple platforms to cover the ever-widening range of asset classes on offer.

Looking at eToro’s European platform, eToro not only offers zero commission on trades but also:

  • Zero stamp duty for UK investors. Under UK law, investors must pay stamp duty.

eToro goes a step further than others by paying this for investors.

  • No limit on trading volume.
  • The offer of fractional shares.
  • Free access to TipRanks expert stock analysis.

It is fair to say that brokers who held onto their trading commission fees have little time left. The 0% commission stock trading world has become the norm.

The Future

For investors who may have cashed out, with global equity markets having hit record levels, there is something to consider.

As the global equity markets become more accessible to the untapped, bourse market caps are inevitably going to rise.

An increase in the retail composition across the more institutionally biased equity markets of Europe and the U.S will also see volatility pick up. We’ve seen the crypto world draw seasoned traders away from the more traditional asset classes in search of volatility.

eToro is ideally positioned to allow its client base to benefit and to offer the same seasonal investors access across multiple asset classes.

It’s certainly an exciting time for the global financial markets and traders entering the online trading world.

Satoshi delivered Bitcoin to remove the banking world’s grasp on payment platforms.

eToro may well eat into the banks’ trading monopoly.

With the zero-commission investing now on offer, we will also see a rise in the offering of fractional share trading.

eToro is already there. Evolution suggests that fractional trading is next, just as we have seen across the crypto market.

After all, not everyone is able or wants to stump up $9,000 for a single Bitcoin…

That would grant the less wealthy investor access to a whole new world. Even the likes of Amazon.com, Tesla, and Berkshire Hathaway, the world’s most expensive stock, would be within reach.

Zero commission is only available to clients of eToro Europe Ltd. and eToro UK Ltd., and does not apply to short or leveraged stock trades. Zero commission means that no broker fee has been charged when opening or closing the position. Other fees may apply. For additional information regarding fees click here. Your capital is at risk.

Using the Wisdom of the Crowd by Copy Trading with eToro

Copy trading is a style of trading that has seen massive growth over the past five years. Inspired by the rise of social networks a few years earlier, financial markets trading platforms decided to try to merge the dynamism of financial markets trading, with the social and peer-to-peer information and knowledge sharing character of a social media platform.

It worked and copy trading has been the fastest growing part of the retail-facing CFDs and forex trading market since. But for those who haven’t yet become acquainted with this social, dynamic and educational trading format, we’ll explain everything you need to know here.

Hold tight and get ready to discover:

  • What Exactly Is ‘Copy Trading’?
  • Who Is Copy Trading Suitable For And Should I Try It?
  • Can Copy Trading Be Profitable?
  • A Step-by-Step Guide To Starting Copy Trading With eToro

What Exactly Is ‘Copy Trading’?

As the name suggests, the core of ‘copy trading’ is trading financial instruments such as forex pairs, cryptocurrencies, commodities, stocks and indices by mirroring, or copying, the trading position of other traders linked through a social platform. Copy traders can browse the historical record of traders they are considering copying and they are ordered in a leaderboard based on success rate.

Copy traders can further burrow down into individual traders and look at their record for trades on particular instruments. For example, a trader might be successful overall but further inspection shows they have a particularly strong record trading forex pairs or just certain forex pairs such as EUR/USD or USD/JPY. They might also trade commodities like gold and oil, stocks like Facebook and Apple and indices like the S&P 500. But their record may not be quite as strong across these other asset classes.

So the copy trader may wisely decide to only copy trades placed on the instruments the trader being mirrored has the best record on. They’ll choose other traders to mirror when placing trades involving other instruments based on where they are strongest.

Traders can set alerts based on their own preferences that tell them when one of the traders they are following has set up a position. They can then decide on a trade-by-trade basis if they’d like to copy those trades.

Copy trading also involves plenty of flexibility. It’s not a case of selecting a trader to ‘copy’ and then the platform automatically mirroring their every trade exactly. It can be but only if the copy trader chooses to do so. But different traders have different account values. So a trader starting off with an account balance of $200, $500 or $1000 wouldn’t be practically able to exactly copy the trades of another trader with an account balance of $10,000.

Or at least all of them and it probably wouldn’t be wise. It is recommended that the investment exposure on individual trades doesn’t exceed a few percent of overall capital. Trading is not about every trade finishing in the money. Even the best traders take plenty of positions that finish out of the money. The secret is in getting enough right. So spreading risk is important. You don’t want to blow half your account balance on one trade that doesn’t work out.

With that in mind, traders can copy a trade exactly as a percentage of overall account balance rather than value. Or choose another value based on their own strategy if they wish. The ‘copy’ trade will use the copy traders selected value with the ‘copy’ restricted to when the position is opened and closed based on the actions of the trader being copied.

Copy trading also leaves room for flexibility. The trader can, should they wish, decide mid-trade to go their own direction and no longer copy the trader they chose to by closing a position early or leaving it open.

There’s also a lot of social interaction on Etoro’s copy trading platform with traders openly discussing potential trades, their reasoning and strategies. Used smartly this can be a great resource for new, less experienced and even more experienced traders to learn by sharing each other’s knowledge, opinions and research techniques.

For the CFDs or forex broker hosting a copy trading platform the advantage is encouraging more people to trade, for longer and more successfully. Brokers make their money by taking a small cut of every trading position. This is called the ‘spread’ – the difference between an instrument’s buy and sell price.

New traders often make a lot of mistakes while they are learning the ropes and can quickly burn through their initial deposit. Many never trade again after that. Offering copy trading and the ability to mirror the trades of more experienced and successful traders gives new traders a great opportunity to learn on the job and trade successfully by copying others before striking out on their own. They then trade more and for longer so the broker makes more money from them. Successful traders are incentivised to lend their experience and expertise to those copying their trading positions by being given a cut of the broker’s spread. It’s a win-win-win.

Why should people try social trading?

Basically any trader can learn something from seeing how other traders go about their business. When do they open a position and why, when do they get out and how much capital have they exposed to a trade? There’s no ‘right’ way to trade and markets are also constantly evolving so there’s always something to learn.

For Some, it might be less about copying particular traders or trades and more about interacting with other traders and exchanging views and approaches. For experienced traders with a solid track record of success, trading on a copy trading platform is further incentivised by the potential to build up a following of ‘copiers’. If their record shows they are worth copying and they succeed in attracting a strong following their share of the spread could be a great source of additional income on top of their own trading.

Can Copy Trading Be Profitable?

While there’s no guarantee that copying a previously successful trader will be profitable, because they might suddenly stop being successful, copy trading certainly can be. For some there is probably a better chance of being profitable by copying a trader with a strong track record than there is by going it completely alone and taking decisions based on still limited knowledge and experience.

Even for more experienced traders, learning things from others should help them become a more rounded, experienced and ultimately profitable trader.

However, traders should be aware that there are never any guarantees in trading and choose the traders they copy and how they copy them carefully. Copy trading is a very useful trading tool but shouldn’t be mistaken for a silver bullet to amassing riches quickly. Successful traders carefully and methodically build up their trading balance over time by spreading their risk and playing the odds, not by putting everything on a few positions and waiting for them to finish in the money before retiring in luxury!

A Step-by-Step Guide To Starting Copy Trading With eToro

Starting to copy trade on the eToro platform couldn’t be simpler. Registering an account takes a matter of minutes. The only thing to really be aware of is that you will need your personal identification number, or NI number in the UK, at the ready. Before you put actual cash on your balance you may have to have to provide a scanned copy of your national identity document or passport.

Once you’ve done that you’ll have an account. The next step is to fill in your public profile. That’s what will be seen by other traders and has to be completed before you can interact with them though you have some flexibility on how much information you provide.

Once you’ve done that, which literally takes 10-15 minutes from beginning to end, if not less, your all set to copy trade!

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFD assets.


Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Past performance is not an indication of future results.

This content is intended for information and educational purposes only and should not be considered investment advice or investment recommendations.

USD/CAD Daily Forecast – 1.3344 Fibo Level Acting as a Critical Resistance

After marking the day’s opening near 1.3268 level on Monday, 1.3277 resistance ensured to cap daily gains in the Asian session. Traders can expect low volatility throughout the day amid lack of significant economic events.

USD Index at its Top Mark

Greenback bulls might conquer the pinnacle in the long-term soon, ignoring a near-term short impulsive downside. Substantial SMAs remain stalled near the bottom region of the USD Index chart, developing an excellent shield to limit daily losses.

US Dollar Index 1 Day 19 August 2019
US Dollar Index 1 Day 19 August 2019

On the upper side, the Greenback might have to surpass multiple barriers to reach the 99 highest level. Overhead resistances stay stemmed near 98.31, 98.44, 98.68, and 98.93 levels. However, a stable 10-day old slanting support line was another point of interest on the south side.

Oil Prices Jumped on Rising Middle East Tensions

After a weekend attack on an oilfield in eastern Saudi Arabia, the Crude Oil WTI Futures grabbed some fresh bids, climbing new levels. Also, on the technical chart, the prices were forming a falling wedge trading bullish pattern. Hence, traders can expect a strong surge in the near-term prices soon.

OIL 1 Day 19 August 2019
OIL 1 Day 19 August 2019

Anyhow, escalating trade tensions continued to put a lid over any potential gains. Meantime, reports suggested that the US President Donald Trump was quite less optimistic over resolving the trade issues. Trump proclaimed, “I’m not ready to make a deal yet.”

Significant Economic Events

Today, traders can take a back seat as the economic calendar lacks critical USD-specific and CAD-specific events. Also, the market won’t witness any oil-impacting Crude reports like the EIA/API data reports on Monday.

Technical Analysis

1-Week Chart

On the weekly chart, the USD/CAD pair was heading upwards, targeting the center line of the Bollinger Bands.

USDCAD 1 Week 19 August 2019
USDCAD 1 Week 19 August 2019

Anyhow, a triumphant march above the center line would signal for a sustained uptrend in the upcoming sessions. On an overall view, the pair was forming a symmetrical triangle for the last two years. Nevertheless, the Relative Strength Index (RSI) was stuck near 50 mark, revealing neutral buyer’s interest.

1-Day Chart

After testing the 1.3344 Fibonacci Retracement level last week, the Loonie pair appeared to rebound and head southwards.

USDCAD 1 Day 19 August 2019
USDCAD 1 Day 19 August 2019

However, the MACD line and the signal line of the MACD technical indicator stood above the zero line, strengthening the bulls. Also, the below-lying Parabolic SAR provided additional support to the buyer side. Ability to breach above the 1.3344 resistance would enable fresh challenge over next resistances stalled near 1.3437 and 1.3526 levels. Any move on the flip side would activate the support handles near 1.3183, 1.3112, and 1.3018 levels.

USD/CAD Daily Forecast – Bulls Crossing Fingers, Expecting US Oil Output Growth

The Loonie pair opened up today near 1.3049 level and showcased a breakout, shattering the sturdy 1.3054 resistance. Somehow, the pair rebounded in the Asian session itself after touching the 1.3059 mark. On the downside, the bears ensured to cross and below the near term 50-day SMA. However, pair found significant stoppage near 1.3049 resistance-turned-support laterwards.

On the USD front, things appear more bullish in the short term. The Greenback bulls had already crossed above the 50-day SMA yesterday.

US Dollar Index 60 Min 16 July 2019
US Dollar Index 60 Min 16 July 2019

In the early hours, the US Dollar Index was heading north, targeting the 100-day and 200-day SMA confluence. Any move taking the Index above this confluence would enable it to challenge the robust 97.09 and 97.12 levels.

Meanwhile, the Oil prices were heading down, trading near $59.44 bbl. US Oil Production resumed in the Gulf of Mexico region after Hurricane Barry. The market expects the Crude output to rise undermined US production restart. Such an action would go against the OPEC+ supply cuts, who agreed on another extension for nine more months.

Significant Economic Events

Today, there are quite a few high volatile economic events on the US economic docket. Among them, the vital events remain the Fed‘s Chair Powell’s speech and June Retail Sales data. This time, the Street expects the Retail Sales Control Group data to report near 0.3% over 0.4% forecasts.

Traders must also pay some attention to the June MoM Retail Sales and Retail Sales excluding Autos. This time, market keep a bearish stance over both these reports, expecting a 0.2% over the previous 0.5%.

No Oil-catalyst reports are coming up on Tuesday. However, there are few low volatile CAD-specific events on Foreign and Canadian Securities.

Technical Analysis

1-Day Chart

USDCAD 1 Day 16 July 2019
USDCAD 1 Day 16 July 2019

On the daily chart, the pair seemed to have difficulty in breaching the 1-month old descending slanting resistance. Even today, the pair continued to respect this strong resistance line. Hence, one can expect a rebound price action if the pair hits this resistance handle. On the downside, support lines stall near 1.2975 and 1.2923 levels. Even the Relative Strength Index (RSI) was indicating 38 levels, depicting lack of interest among the market participants.

3-Hour Chart

USDCAD 180 Min 16 July 2019
USDCAD 180 Min 16 July 2019

The Loonie pair was struggling with the 50-day and 100-day SMA confluence in order to justify the rising RSI indicator. A successful march above this resistance confluence would activate the overhead significant 200-day SMA. Before encountering this aforementioned major SMA, the pair also need to surpass the strong 1.3143 resistance. Meantime, a near-term downside remains limited as the pair appeared to clinch near its 9-month bottom.

 

US Stock Market Overview – Stocks Trade Mixed, Energy Shares Rally

US stocks were mixed on Wednesday, as both the Dow and the S&P 500 closed in the red while the Nasdaq bucked the trend. Strong earnings from Micron boosted the semi-conductor space which helped buoy the tech heavy Nasdaq. Sectors were also mixed. Energy shares led the way higher rising 2.25%, fueled by a surge in crude oil prices following a larger than expected draw in crude oil inventories. Utilities were the worst performing sector.

Energy Shares Surge

Energy shares were buoyed by a larger than expected draw in crude oil stockpiles. The Energy Information Administration reported that crude oil inventories decreased by 12.8 million barrels from the previous week. Expectations were for a 2-million barrel draw. At 469.6 million barrels, crude oil inventories are about 5% above the five year average for this time of year. Gasoline inventories decreased by 1.0 million barrels last week and are at the five year average for this time of year. Distillate fuel inventories decreased by 2.4 million barrels last week and are about 7% below the five year average for this time of year. Total commercial petroleum inventories decreased last week by 11.9 million barrels last week.

Demand remains solid. According to the EIA total demand over the last four-week period averaged 20.6 million barrels per day, up by 1.8% from the same period last year. Over the past four weeks, gasoline demand averaged 9.7 million barrels per day, up by 2.1% from the same period last year. Distillate fuel demand averaged 3.9 million barrels per day over the past four weeks, up by 2.9% from the same period last year.

The drop in inventories came from lower imports. The EIA reported that crude oil imports averaged 6.7 million barrels per day last week, down by 812,000 barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 7.4 million barrels per day, 10.2% less than the same four-week period last year.

The G20 is This Weekend

President Trump will meet with President Xi Jinping at the G-20 summit of world leaders. The two world leaders are scheduled to meet Saturday, the second day of the two-day summit in Osaka, Japan. Officials from both countries have been careful to manage expectations ahead of the summit, playing down the possibility of completing a trade deal.

US Business Investment Rose

US made capital goods rose more than expected in May. The Commerce Department said on Wednesday orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, increased 0.4% last month amid increases in demand for machinery, and computers. Expectations were for core capital goods orders edging up 0.1% in May. Core capital goods orders rose 2.3% on a year-on-year basis. Shipments of core capital goods increased 0.7% last month after an upwardly revised 0.4% gain in the prior month. Core capital goods shipments are used to calculate equipment spending in the government’s gross domestic product measurement.

GBP/USD Daily Forecast – Cable Shifts Gear as Brexit Party Holds the Lead in the EU Elections

The GBP/USD pair started near 1.2721 levels and waved upwards. The pair seemed to continue the recovery mode, which began on May 23. At around 03:00 GMT, the Fiber was hovering near 1.2737 levels.

Brexit Party Taking up UK Seats in the EU Parliament

The Prime Minister of UK had announced her resignation which will take place on June 7. Recently, May said that she would act as lame-duck  PM until a new candidate for PM post is appointed.

Last night, the results of the recent European Parliamentary Elections came out. The UK’s Brexit Party was leading with almost 40% of significant share than other parties. Among the other parties, the Liberal Democrats, the Greens, and the Change UK came second highest. Notably, this time the Brexit Party received ten percentage points more than the UK Independence Party did in 2014.

Nigel Farage, the Brexit Party Leader, had won the MEP seats for the South East of England. His victory had set up an example for the Conservative & Labour Parties to lose grounds in the next UK General Election. Farage stands firm over UK leaving the EU before October 31 and talked about the weak Government stance on Brexit. In a recent interview, Nigel said: “that failure to implement Brexit would show Britain not to be a democracy”.

The Market might experience rigorous volatility as odds for significant Political Changes are shooting up. The dominant ones include the appointment of a new leader for the UK and his approach over resolving the Brexit deadlock. Meanwhile, the Labour’s Corbyn might continue to send approvals for a Second Referendum on the Brexit-deal with May’s departure.

The investors stay anticipated on the EU Parliamentary election results. The Greenback computed against the major six currencies slipped 0.07% in the Asian session. The US-China Tech Cold War took another diversion after the US consider to black-list Hikvision, Chinese Giant Surveillance OEM. This latest stance of Donald Trump has deepened the existing Trade tensions. In a nutshell, the GBP/USD pair benefited more from Brexit party victory and a minor slump in the USD Index in the early hours.

GBP/USD Impacting Events

The economic calendar had remained silent on the GBP-specific events Today. As the London market remains closed for Spring Bank Holiday, the currency pair stood open to any Brexit Fundamentals. As the US is celebrating Memorial Day, there are no USD-specific events today. But investor might look for tomorrow’s Inflation report hearing for the UK, as it is the only big volatile event for Tuesday.

Technical Analysis

1-Hour Chart

GBPUSD 60 Min 27 May 2019
GBPUSD 60 Min 27 May 2019

The overall sentiment remained quite flat during the early hours on Monday. The 200-days Significant SMA had crowned the moving pair halting near 1.2750 levels in the upper Bollinger Band. However, at the same time, the 100-days SMA was taking rounds near the lower boundary of the Bollinger Bands. Quite surprisingly the 50-days SMA was intersecting the medium term 100-days SMA, alluding some near term bull run. RSI had significantly dropped to 53 levels from 68 levels today morning, showing a lack of investor interest.

1-Day Chart

GBPUSD 1 Day 27 May 2019
GBPUSD 1 Day 27 May 2019

When observed from a broader scale perspective, the pair had remained capped under the 50% Fibo retracement level multiple times. Anyhow, the pair lost hold laterwards and dropped down below the 61.8% Fibo level. The plunge rally has then taken the GBP/USD pair downwards breaking even the 78.6% Fibo level. The pair was approaching to attempt testing the 78.6% Fibo level or 1.2800 levels.

Price of Gold Fundamental Daily Forecast – Dovish Fed Minutes Could Spike Prices Higher

Gold futures are trading higher on Wednesday shortly after the regular session opening. The strength is being fueled by lower Treasury yields, a weaker U.S. Dollar Index and a drop in demand for risky assets. This is the right combination for a rally today. However, gains could be limited later in the session if the dollar turns higher due to safe-haven demand.

At 12:51 GMT, June Comex gold futures are trading $1276.00, up 2.80 or +0.22%.

Technically, gold found support at $1269.00 on Tuesday, inside a major 50% to 61.8% retracement zone at $1272.70 to $1253.00 and slightly above the low for the year at $1267.30. The price action suggests that gold investors found value and were willing to step in to defend the 2019 low. The catalyst behind today’s strength are lower yields, lower stocks and a lower U.S. Dollar Index.

Stocks Lower

U.S. stock index futures are expected to open lower on Wednesday. This indicates a “risk-off” scenario could be developing. Gold could benefit from the move if investors decide to treat it as a safe-haven asset. If they decide to switch back to the dollar for protection then gold’s gains could be limited.

Dollar Index Falls on Safe-Haven Buying, Slightly Better Euro

The U.S. Dollar is trading lower against a basket of major currencies, led by a rally in the Japanese Yen and Swiss Franc, which are garnering support from safe-haven buying, due to renewed selling pressure on higher-risk assets.

The dollar could also be under pressure due to position-squaring ahead of the release of the Fed minutes from its May monetary policy meeting at 18:00 GMT. The dollar could weaken if the minutes show policymakers discussed cutting interest rates later in the year and if they discussed the economic conditions that would trigger such a move.

Daily Forecast

Gold prices could surge today if the three main influences:  the dollar, yields and stocks, continue to trade lower. Gains could be limited if safe-haven buying supports the dollar.

The Fed minutes could provide support for gold if they show the Federal Open Market Committee discussed an interest rate cut and outlined the conditions that would encourage policymakers to cut rates.

NZD/USD Huge Inverted SHS Pattern Suggests Bullish Reversal

Dear Traders,

The NZD/USD has formed a bullish SHS pattern so we might see another bullish reaction from the POC zone –>

The NZD is gaining momentum vs USD just a day prior to FOMC statement and FED cash rate decision. Equities remain solid, so a sense of a mild risk-on sentiment is in play, which may see some capital move into other currencies outside the USD. 0.6650-60 is the zone where fresh buyers are and as long as 0.6628 holds, bulls should be safe. Targets are 0.6648 and 0.6697 with 0.6719 as the final target. Only a drop below 0.6628 could cause a temporary relief where the price might reach 0.6589.

The analysis has been done with the
CAMMACD.MTF template.

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Many green pips,
Nenad Kerkez aka Tarantula FX
Elite CurrenSea