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Dollar Technicals are Stretched, but Fundamental Shift Underway

The US dollar has recorded its best two-week performance since Reagan was President. There has been a sea change. Although the low in global yields took place before the US election, and deflation forces looked to have been largely defeated (with a few exceptions, including Japan), more market participants recognize the likelihood that the three-decade decline in bond yields may be over.

At the very least, the promise of fiscal stimulus for a U.S. economy that is already growing near-trend, while core PCE deflator and wage growth gradually increasing, may be confirming the biggest change in the investment climate since the financial crisis. The dramatic adjustment seen in interest rate markets and the dollar reflects the repricing of assets under a new paradigm. Of course, two weeks after the election, details do not exist yet, and the Republican President-elect has bolder ideas that part of the Republican Party that may lead the legislative branch. However, the direction is clear.

The US Dollar Index has risen for ten consecutive sessions. In this two-week period, it has gained about 4.25% to reach its best level since 2003. It has only fallen in two of the first seven weeks here in Q4. On October 20, when the 50-day moving average moved above the 200-day moving average (Golden Cross), Dollar Index closed near 98.30. It pushed a little past 101.30 last week. The technicals are stretched. The RSI is at its highest in more than 18 months, but there no bearish divergences.

The price action gives no reason to think that this surge in dollar demand has been satiated. In the last seven sessions, the Dollar Index recorded higher highs and higher lows. The next important chart point is seen near 101.80. That is the 61.8% retracement of the Dollar Index’s decline from what I have dubbed the Clinton Dollar Rally of the second half of the 1990s, ending with G7 intervention to arrest the euro’s slide. A convincing break of that area will make my longer-term call of a move to that Clinton Dollar Rally high (~121) look less extreme.

Even after being down nine consecutive sessions, the euro still could not sustain the smallest of upticks, and so its streak was extended ahead of the weekend. It is not the US side of the equation. Europe is looking more and more out of step. The US, Japan, Canada, and the UK (expected to be signaled by UK Chancellor of the Exchequer in the Autumn Statement in the week ahead) are or will adopt the more stimulative fiscal policy. The EC continues to insist on austerity, and Germany is not inclined to use the fiscal space that the IMF and ECB claim to exist.

Just as importantly, if not more so, the populist-right appeal that has arguably been expressed in the UK and the US heads toward Europe. Europe is more vulnerable to a rise in nationalism and anti-integration sentiment. Italy’s referendum and Austria’s presidential election are the first. The most likely scenario following the probable defeat of the referendum is another caretaker government whose mandate to resolve the conflicting electoral law and prepare for 2018 election. Austrian’s presidency is mostly ceremonial office, but the victory of the populist right candidate would be seen as another sign of the power of that tendency.

The euro’s 50-day moving average fell below the 200-day moving average on October 24 when it finished the North American session a little above $1.0880. To reach that level required the euro to violate the uptrend drawn off the January, June and July lows. The 2015 low was in the $1.0460 area in the spring and $1.0525 at the end of the year. These represent the next near-term targets. Given the speed and duration of the euro’s slide, some technical bounce would not be surprising. We note that the euro has not closed above its five-day average since 4 November. It comes in now near $1.0675. An intraday move, or close above there would be a preliminary indication of the end of the strong downside momentum.

The dollar has risen 7% against the yen over the past two weeks. It is rose neared JPY111 for the first time in six months. Like the dollar’s gains against the euro, the rise in the dollar vs. the yen fueled by the sharp higher US interest rates, the greater US premiums, and the general reflation meme. At JPY110.35 the dollar recouped half of this year’s losses. The 50% retracement from the dollar’s peak from mid-2015 near JPY125.85 is a little below JPY112.50. The technical readings are stretched. The MACDs and Slow Stochastics appear to be peaking, while the RSI is at its highest level since the middle of 2015. The dollar has been climbing the five-day average. It is now near JPY109.45. Its violation would warn that the leg up is over.

Sterling snapped a two-week advance against the US dollar. It lost a little more than 2% against the dollar last week. It held up a little better than the euro (~ -2.4%). This also underscored the sense of it being a dollar move. The US premium over the UK on two-year money (~86 bp) appears to be the largest in the quarter of a century that Bloomberg has data. Sterling finished last week below its 20-day moving average (~$1.2365) for the first time since November 1. It is poised to test the congestion band seen between $1.2160 and $1.2260.

Sterling may be more interesting against the euro than against the dollar. The euro recorded an outside day against sterling, though failed to generate a stronger reversal signal by closing above the previous day’s high. Still, the lows had been seen the euro nearly complete a 50% retracement (~GBP0.8510) of its post-referendum gains. The technical indicators confirm a low may have been approached. The RSI is curling higher, while the MACDs and Slow Stochastics look about to turn. While eurozone politics are an important factor, May is expected to mount a rigorous defense of her royal prerogative, perhaps on the same logic that did not require Brown from submitting the Lisbon Treaty to Parliament. Initially, resistance is seen near GBP0.8645 and then maybe GBP0.8720.

The Canadian dollar was the only major currency to gain against the US dollar last week (~0.3%). The Toronto stock exchange was the second-best performing major stock market last week (~2%) behind Japanese shares (Topix +3.6%). Oil prices snapped a three-week decline. But, it is not unusual for the Canadian dollar to outperform European currencies and the yen in a strong US dollar environment. What is impressive of the even the minor Canadian dollar gains is that it come as US two-year interest rate premiums over Canada rose to its highest level in 10-months. At 38 bp it has risen 12 bp over the past two weeks.

The greenback’s highs were made at the start of last week (~CAD1.3590) and the attempted retest before the weekend was rebuffed, after a seemingly bullish outside advancing session was recorded the previous day. The CAD1.3575 area houses the upper Bollinger Band and the 50% retracement of the US dollar’s decline from the late-January high, a little below CAD1.37 to May low near CAD1.2460. To be anything significant from a technical perspective, the US dollar pullback needs to extend through CAD1.3400.

After the Japanese yen, the Australian dollar has fallen the most of the major currencies since the US election. It has lost a touch more than 5%, while the yen has depreciated by 5.7%. In the second half of last week (three sessions), the Aussie dropped nearly 3% (2.9%). Softer metal prices provided a ready excuse, but the new higher interest rate environment steals some of the thunder of the traditional high yielders, like the Australian dollar. Like the yen, but unlike the euro and sterling, speculators in the futures market were leaning the wrong way. They had net long Australian dollar futures positions.

Before the weekend, the Australian dollar met, almost to the tick, the 50% retracement objective of this year’s gain. The next retracement objective is near $0.7200. However, the near-term yellow flag is that the Aussie closed below the lower Bollinger Band (~$0.7400) for three consecutive sessions. While a corrective bounce may lift the Aussie back toward the Bollinger Band, the Bollinger Band itself may drift lower toward prices.

The Mexican peso fell almost 1.5% last week to bring its month-to-date decline to 8.3%. The central bank hiked rates by 50 bp, but after strengthening into the meetings, the peso sold off afterward and the technicals do not preclude another test on the record lows. The US dollar peaked on November near MXN21.39. It fell to nearly MXN20.30 before Mexico’s rate hike. A move now above MXN20.80-MXN21.00 would increase the likelihood that the greenback makes another run at highs.

The price of the January 2017 light sweet crude oil futures has risen only in one of the last seven sessions. It was a roughly 5.6% gain Tuesday on ideas that maybe Russia will participate in OPEC’s attempt to reduce supply. It more than offset the string of losses and was sufficient to snap a three-week air pocket, as the market grew suspicious of a meaningful accord. The point is that the downside momentum has eased and the technical tone has improved. A move above $47 would be constructive and set up another test on the $50 threshold.

US 10-year Treasury yields continued their upward climb tacking on another 23 bp on top of the previous week’s 38 bp rises. New highs in the 10-year yield were seen ahead of the weekend at 2.35%. The next obvious technical target is last year’s high near 2.50%. In the big picture, yields have been falling for 30 years. The 10-year fell to almost 1.30% this year, essentially test the cyclical low seen in 2012. This may mark the historic low, and such low yields will look as quaint as the double yielding Treasuries, the last of which recently matured. We suspect that the two-year yield, which has risen 25 bp since the election to 1.05%, is going find the 1.10%-1.20% area provides a formidable cap.

The S&P 500 rose a little less than 1% last week. It rose 3.8% in the prior week. The S&P 500 has moved within 0.5% of its record high. The Dow Jones Industrials set record highs at the start of the week, before consolidating in what appears to be a flag pattern, typically a continuation pattern. The NASDAQ Composite set a new record high before profit-taking kicked in ahead of the weekend. Details may not be known, but investors anticipate a very pro-business bias of the new U.S. Administration, featuring deregulation and tax cuts, even if they have to wait for details

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Daily Financial News

What is the best crypto wallet ?

What is the best crypto wallet: a hardware wallet, a software wallet, or a mobile wallet?

In the early stages of learning how to use Bitcoin, the security question arises: how to ensure your coins remain in your possession? Only by generating and storing keys in a way that can be verified can you be certain. It is impossible to be sure no one else has a copy of your keys unless you know they were created properly and stored offline.

Hardware wallets create your keys offline using a random number generator, so they cannot be logged. Additionally, the keys are kept permanently offline, so they cannot be accidentally shared on a network.

In software wallets and mobile wallets, random number generators are often built into the device the wallet is installed on. Since they use inputs like the current time to calculate randomness, they are difficult to verify and generally not secure. Even if your device generates randomness in a secure manner, host the resulting keys on a networked device, and an attacker can extract, view, or intercept them at any time.

It is transparent to verify that open-source hardware wallets create and store randomness securely, and that your keys are kept offline while being protected from threats like phishing. It is different in the case of open-source Bitcoin wallet though.

In addition to protecting against other vulnerabilities, hardware wallets resolve new attacks both progressively and reactively among security researchers. Supporting bug bounty programs ensures that all types of security issues are regularly checked.

What is the best crypto wallet_ a hardware wallet, a software wallet, or a mobile wallet_

Stay more secure everywhere

Hardware wallets have set a new standard for universal cybersecurity, as we discussed above. According to speculators, the future of the internet – dubbed Web3 – will rely on cryptographically secure keys backed up physically. In the cryptosphere, as well as in everyday business, e-commerce, and social media, hardware wallets are essential.

Your assets and identity are both protected offline when you use a hardware wallet for authentication, so there is no counterparty risk.

As a result of forgetting passwords and changing authenticator devices, security has long relied on third parties. Using the open recovery seed standard, users can backup their accounts safely without relying on a third party and recover accounts from any compatible device. Using Shamir backup, the recovery seed is split into multiple equal parts for stronger security.

Keeping in mind that not just crypto can be targeted is important. Similarly, your data can be leaked, resulting in phishing attacks, hostage situations, or compromised devices arriving by mail.

It has become easier and more affordable for everyone to have verifiable security thanks to hardware wallets.

The base layer of crypto security is hardware wallets

By bridging the digital and physical worlds, hardware wallets create digital keys offline and keep them safe. Crypto assets can be controlled with the keys in many ways, such as two-factor authentication, digital signatures, or two-factor authentication.

With open standards, you can ensure the same level of security across any app you use. As a result, dozens of hardware wallet manufacturers have appeared around the world, accelerating the adoption of crypto security and ensuring standards are maintained to ensure your coins remain yours regardless of wallet.

Daily Financial News

Monero Price starts the Selloff, BitcoinCash and Cardano struggle

Table of Contents

Monero Price starts the Selloff, BitcoinCash and Cardano struggle

Monero Price (XMR) tumbled at a double-digit rate today and is likely to continue to fall somewhat , extending its declining trend for a third day straight after hitting a two-month high earlier in the week.

The broader selloff in cryptocurrencies impacted XMR price; the fresh wave of downside volatility in digital currencies was pinged by regulators and the surprise drop in trading volume.

Before the latest crypto market crash, Monero price gained substantial momentum in the last couple of weeks.

it even climbed to the 10th spot in its market capitalization.

n the middle of this month( if launched on time) a spin off or fork of the monero coin called MoneroV will be launched , people that have monero coins can get 10 moneroV coins for every monero coin. this is always good for the market and Monero went on a small rise. this is now behind us and the prices settled before this announcement was made returning more to its original value.

But for traders and brokers these were a few interesting days where people that saw the market the correct way made good profits

Still Trader’s sentiments overall turned bearish

the main reasons for this are:

crypto exchanges registration with SEC

The U.S. SEC has informed all the domestic cryptocurrency exchanges to get the registration certificate or wait for a crackdown on them.

a crackdown on Japanese exchanges

Japanese authorities are now closely watching digital currencies to protect crypto traders from adverse events, such as Coincheck hack – which resulted in the loss of $500 million worth of coins.

declining trading volume

Lower trading volume is a major factor behind the broader selloff in digital currencies, while the decline of 80% in Google searches indicates the waning popularity of cryptocurrencies.

harsh comments from European regulators.

Regulators started taking actions against cryptocurrencies exchanges to evade illegal activities and price manipulation techniques.

this affects the markets as the hype has settled down.

this affects other currencies in a similar manner as Cardano (ADA), which is the eighth largest cryptocurrency based on market capitalization, plunged more than 6% today to the lowest level since mid-December.

Its market capitalization stands around $5.9 billion, slightly higher from Stellar’s (XLM) capitalization of $5.8 billion.

And Bitcoin Cash (BCH) traded in the range of $1200 in the last of couple week before falling to $1000 level today.

it could be assumed that this will continue to go down till another hype cathes the markets. cryptocurrencies have become already something that is less sexy and more mainstream ,this is good for its development but for those that only invest not so much.

still as a trader you see a volatile market where enough fluctuations happen mostly based on news to make some good trades. good luck

Daily Financial News

Supreme Court Sides With Bits of Gold in Bank Dispute

Supreme Court Sides With Bitcoin Broker “Bits of Gold” in Israeli Bank Dispute

Upon appeal, the Israeli Supreme Court has rejected the closure of Bits of Gold’s banking facilities at Leumi bank, Tel Aviv.

The Israeli cryptocurrency brokerage’s appeal followed a previous ruling against it that has now been set aside by the higher court.

As Israel and many other countries struggle with the accelerated phenomenon of virtual currencies, Leumi Bank recently made the news for being a particularly blunt in its rejection of Bitcoin.

We should of course not be surprised with the banks attitude towards bitcoin or any other cryptocurrency for that matter. keep in mind that the banks become more and more obsolete because of them.

They will keep on loosing money which now they make with ridiculous commissions of work that is fully automated. so they will try to see how they are able to make the operation and acquiring cryptos as hard as possible knowing that they will never be able to stop them.

There is widespread anticipation that the upcoming G20 Summit in March 2018 will produce a global, moderate framework for a regulatory approach. Set against that are persistent hostile stances the world over from banks, asset managers and even governments towards cryptocurrencies.

Now that the countries understand there is money to be made with Taxation in cryptocurrencies they might want to make sure that the banks stay within their lane.

Apart from the Israeli revenue service opting to tax cryptocurrency assets as “properties” and other more positive developments dating back to mid-2017, Israel remains a strange mix of genteel acceptance alongside wildly opposing voices.

There is thus Hope But no decision

Bits of Gold has fought a David and Goliath battle since their banker decided it wanted to steer clear of all cryptocurrency-related business.

On record as recently telling another bitcoin-related trader that they simply don’t want the business, Leumi Bank’s hard-line stance is accumulating bad press. The second-largest bank in Israel appears as discriminatory when analyzing virtual currency traders and other digital coin businesses.

During 2017, a customer made a bank transfer to the Kraken exchange site for buying bitcoin worth $1000. The bank identified the request, halted it, and started investigating.

The elated CEO of Bits of Gold, Youval Rouach said that “The court’s decision enables us to focus on the growth of the Israeli cryptocurrency community.”

The February 26 Supreme Court ruling granted Bits of Gold a temporary injunction against their account closure pending further scrutiny by the bank and other parties. The presiding bench declared that the company had “acted transparently and did not violate any provision of law.”

Calling the bank’s concerns “speculative” and turning an unsympathetic ear to the plaintiff, the ruling does, however, allow for the bank to still close the account on any small technical detail that defies legislation. As a record of a public spat around cryptocurrency’s right to be recognized in many ways, the ruling is seen as a victory for the local cryptocurrency community.

One Small Step Forward

Although not as absolute as nations like China that has opted for draconian bans, Israel is a front line for digital coins’ right not just to exist, but also become assets in the true sense of the word. The Supreme Court noted in its written ruling that Bits of Gold had not made itself guilty of the violation of any standing laws since opening its doors for business.

The Bits of Gold v. Leumi Bank case might become something of a test case once the bank applies its mind in scrutinizing the company’s accounts against the backdrop of existing legislation. The outcome will also be informed by sentiment post the G20 Summit due in March as well as other global regulatory trends.

Now that the countries understand there is money to be made with Taxation in cryptocurrencies they might want to make sure that the banks stay within their lane.

This was First Published by coindesk