Category: Currencies

Currency is a medium of exchange for goods and services. In short, it’s money, in the form of paper or coins, usually issued by a government and generally accepted at its face value as a method of payment. Currency is the primary medium of exchange in the modern world, having long ago replaced bartering as a means of trading goods and services. Currency is a generally accepted form of payment, usually issued by a government and circulated within its jurisdiction. The value of any currency fluctuates constantly in relation to other currencies. The currency exchange market exists as a means of profiting from those fluctuations. Many countries accept the U.S. dollar for payment, while others peg their currency value directly to the U.S. dollar.

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Currencies Trading Ideas & Charts

AUD/USD stays depressed at five-week low due to macroeconomic factors

The Aussie pair slumped during the last three days, as the negative Australian employment figures pushed the pair’s latest downside amid the US bank holiday. This was further deteriorated by the talks concerning a likely monetary policy divide between the Reserve Bank of Australia (RBA) and the US Federal Reserve (Fed), as well as the US-China phase 1 deal and Evergrande.

The following graph shows the AUD/USD trend of past 06 months:

Although AUD/USD bulls were trading downwards on account of October month contraction in Australia Employment change and a six-month high Unemployment Rate, they gained a little momentum as the Aussie jobs report showed a vast gap between market forecasts and actual data. The same enables the RBA (Reserve Bank Of Australia) to reiterate its rejection of the rate hike, also citing the inflation figures which are still expected to be ranging between the 2.0% and 3.0% target. On the contrary, the 31-year high US inflation puts the rate hike on the Fed’s platter. Hence, the US Dollar Index (DXY) has this key reason to aim for a fresh high since July 2020 and extend the last two-day uptrend.

Other than the central bank actions, downbeat forecasts concerning the economic growth of Australia’s largest customer China also weighed on the AUD/USD pair, majorly due to credit crisis for real-estate companies and power cut problems.

(Source: FXStreet)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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Currencies Trading Ideas & Charts

SBI Holdings to launch Japan’s first crypto asset fund;investors bullish on XRP

According to a report by Bloomberg, SBI intends to launch a fund that will invest in Bitcoin, Ethereum, XRP, Bitcoin Cash and Litecoin.

The fund, according to Tomoya Asakura, President of SBI affiliate Morningstar Japan K.K., would be geared at investors who are familiar with crypto assets and their volatility. Investors may need to invest anywhere from $9,100 (1 million yen) to $27,200 (3 million yen).

 According to the report, SBI wants to launch the first crypto asset fund by the end of November, with a second crypto asset fund to follow depending on performance. Asakura also alluded to SBI creating a separate crypto fund for institutional investors if the interest was high enough.

SBI had intended to launch its crypto fund as an investment trust, which is a common way to invest in Japan. However, the Financial Services Agency (FSA), the country’s primary financial regulator, has prohibited corporations from selling crypto investments using this way. After that, the corporation modified its approach and will now offer its crypto fund to investors through an “anonymous collaboration.” Due to Japan’s strict laws, it took the company more than four years to get the fund up and running.

The SEC vs. Ripple case takes another turn, making investors bullish on XRP.

  • The Securities and Exchange Commission announced on 22 Dec,2020 that it has filed an action against Ripple Labs Inc. and two of its executives, who are also significant security holders, alleging that they raised over $1.3 billion through an unregistered, ongoing digital asset securities offering.
  • Ripple Holdings is still the largest public holder of XRP, and the payments giant is facing legal action. Since December 2020, this has had a persistent negative influence on the price of the native asset XRP.
  • Recently, in the ongoing litigation, both Ripple and the SEC admit that Ripple owes no fiduciary duty to XRP holders. As a result, the XRP army is prepared to advocate for its own interests in the lawsuit.
  • This indicates that the XRP community has stepped up to protect the altcoin from unfavourable price impact.
  • Following a flash meltdown that saw the global crypto market value drop, the XRP price recovered primarily  due to a spike in on-chain activity. XRP price rose 10% following a slight reversal, according to data from Santiment, a behavioural analytics platform, as address activity intensified.
  • Further, positive developments in Ripple fuel the bullish narrative of XRP.
  • SBI Holdings (Strategic Business Innovator Group) is working on a cryptocurrency fund that will invest in Bitcoin, Ethereum, Bitcoin Cash, and XRP. The announcement of the fund by the Japanese financial behemoth is a positive move for Ripple and is expected to boost the utility of the native asset XRP.

 (Source:FXStreet, https://news.bitcoin.com)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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Currencies Trading Ideas & Charts

Recent flash crash urges Bitcoin whales to buy it at a discount

 nearly 15% less than the previous day and reflecting a loss of more than $410 billion. A selling spree among the investors drove the prices of nearly every single coin, erasing the gains of the retail traders amidst the news of El Salvador’s first day accepting bitcoin as legal tender. This move resulted from the $4 billion cascading liquidations from the over-leveraged Bitcoin and Ethereum futures.

In the middle of the flash crash, El Salvadoran President Nayib Bukele remarked that the country took advantage of crashing prices to purchase 150 bitcoins in addition, boosting its total to 550 coins, which amounts to about $25 million. The correction in the Bitcoin market highlighted the need to book profits consistently along the rally. 

The Bitcoin fear and greed index, which is considered as an indicator of the overall sentiment of traders in the market, recently indicated ‘fear’. Analysts expect a potentially volatile period ahead for Bitcoin, as nearly 336,000 traders positions were liquidated in the crash. However, post Tuesday’s downfall, BTC is now on its road to recovery. Spent output ratios that look at profitability and losses taken over a particular time frame shows that the long-term holders have largely maintained their positions indicating the larger wallet moves were on-balance active short-term traders. On the contrary, it is observed by the analysts that the whales have been significantly buying BTC, increasing their holdings. Historically, whenever large wallet investors have increased their holdings and accumulated BTC, a price rally has followed. The proponents have claimed that if new buyers constantly inject capital in Bitcoin, it could break key resistance and set an all-time new record, further in 2021. Analysts expect Bitcoin to continue upwards climb and target the $57,000 level next.

About Bitcoin:

Bitcoin is the world’s first decentralized cryptocurrency- a type of digital asset that uses public-key cryptography to record, sign and send transactions over the Bitcoin blockchain.

Launched in 2009, bitcoin is the world’s largest cryptocurrency by market capitalization. Unlike fiat currency, bitcoin is created, distributed, traded, and stored with the use of a decentralized ledger system, known as a blockchain. Bitcoin’s history as a store of value has been turbulent; it has gone through several cycles of boom and bust over its relatively short lifespan. As the earliest virtual currency to meet widespread popularity and success, bitcoin has inspired a host of other cryptocurrencies in its wake.

(Source: FXStreet, Investopedia, Forbes)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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Currencies Trading Ideas & Charts

Coinbase Global Benefits from more Interest and Adoption of Cryptocurrency, but the Future Remains Unknown

Golden bitcoins. Cryptocurrency on computer motherboard.

The company’s reputation, regulatory compliance, and track record as a custodian have allowed it to maintain transaction fees above many of its peers despite operating in a crowded field with hundreds of competing firms trying to grab market share in the rapidly growing space. Coinbase has continued to branch off into adjacent businesses offering cryptocurrency collateralized loans, a crypto debit card, blockchain infrastructure support, and data analytics services.

While these new businesses expand the company’s presence in the cryptocurrency space and add new revenue streams, the company still earns the majority of its income through the transaction fees traders pay when they trade on Coinbase’s platform. These fees are charged as a percentage of trade’s total value. Due to its breadth of its service offerings and the connection between cryptocurrency prices and trading revenue, Coinbase’s short- and long-term results are deeply tied to the health and growth of cryptocurrencies as an asset class. 

Cryptocurrency adoption continues to rise but questions regarding the long-term viability of cryptocurrency, the role of speculation in current market prices, and the potential for a more hostile regulatory environment remain unanswered.

Financial Strength 

Coinbase is in an excellent financial position, particularly after receiving an influx of capital from private-investment- in-public-equity investors coinciding with its direct listing on the Nasdaq exchange. Coinbase saw a spike in trading volume in the first quarter of 2021, leading the company to generate more net income in the first quarter of the year than in the entirety of 2020. As a result, the company ended March 2021 with nearly $2 billion in cash against only $500 million in borrowed crypto assets. Since March, Coinbase has issued $1.25 in convertible debt due in 2026, adding to both its liquidity reserves and its debt load. The decision to keep Coinbase largely free of debt makes sense given how volatile the company’s revenue generation can be. Coinbase needs to keep sufficient financial reserves to sustain itself in the event of a major market collapse.

No-moat Coinbase reported strong second-quarter results with earnings of $6.42 per share and net revenue of $2.23 billion coming in above our expectations. Earnings benefited from a tax benefit of $737 million as a result of tax deductions associated with the company’s direct listing. Strong cryptocurrency prices during the quarter drove total trading volume to a new all-time high of $462 billion, 38% more than last quarter. Coinbase added 29 new cryptocurrencies to be traded on its platform and now lists 83 different offerings. Coinbase continues to increase spending with operating expenses increasing 66% from last quarter and 838% year over year. As a result of the sharp sequential increase in operating expenses the company’s operating margin fell from roughly 55% in the first quarter to 39% in the current quarter.

The two largest drivers of this decline were technology and development spending, which increased 58%, sequentially and marketing spending, which increased 66%. Historically, Coinbase has kept marketing spending at 10% or less of sales, as it relied more heavily on word of mouth than on advertising to grow. The company is now guiding marketing expenses to be around 12%-15% of sales during 2021. Average retail trading fees increased from 1.21% in the first quarter to 1.26% in the second quarter, due to a mix shift away from the company’s less expensive Coinbase Pro platform. 

Bulls Say’s

  • Coinbase has established itself as the leading U.S.cryptocurrency exchange and established a strong reputation for security in an industry filled with risk for traders.
  • Coinbase has been able to accelerate the rate at which it lists new cryptocurrencies, giving the company more exposure to the growth of the asset class.
  • There is a global market for cryptocurrency. Regulatory approval from international regulators will allow Coinbase to expand its operations and increase its footprint globally.

Company Profile 

Founded in 2012, Coinbase is the leading cryptocurrency exchange platform in the United States. The company intends to be the safe and regulation-compliant point of entry for retail investors and institutions into the cryptocurrency economy. Users can establish an account directly with the firm, instead of using an intermediary, and many choose to allow Coinbase to act as a custodian for their cryptocurrency, giving the company breadth beyond that of a traditional financial exchange. While the company still generates the majority of its revenue from transaction fees charged to its retail customers, Coinbase uses internal investment and acquisitions to expand into adjacent businesses, such as prime brokerage, data analytics, and collateralized lending.

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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Currencies Trading Ideas & Charts

Crypto Market Logs in 3.5% Drop in Trade, Bitcoin Sheds Weekly Gains

Despite strong optimistic sentiments, Bitcoin (BTC) experienced corrections at the start of the week, falling by 6% as of 9 a.m. IST to close at $39,700.

BTC stayed above $41,000 for the majority of the day until being dragged down by the bears in the early hours of Monday. If the downturn continues, BTC may shortly test its first support at $39,000.

BTC trade volume surged by more than 7% across all exchanges.

Ethereum (ETH) was down 0.8% this week, although it maintained its gains from the previous week. It closed at $2,560, slightly over the $2,530 barrier mark. It is developing support levels at $2,330 and $2,250.

Polygon (MATIC), Stellar (XLM), and Theta (THETA) are among the major altcoins that have lost 5-7 percent in the last 24 hours, while others have lost 3-4 percent.

BTC is expected to bounce back from its present support level of $42,000 this week, with the 20-week moving average being tested afterwards. If BTC maintains its position, ETH’s hard fork, which went live on August 4, should continue to fuel momentum in the larger altcoin market.

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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Currencies Trading Ideas & Charts

Bulls in the AUD /USD: Sprinting Against the Wind, Aiming for Daily Goals.

Near 0.7445 is the 78.6 percent Fibonacci retracement line, which will be a test for the bulls.

AUD/USD Daily Chart

Despite the weakening news flow, the Australian dollar is trading at its highest level since July 19, testing the 0.74 level.

 The Australian dollar has only retraced around a third of its losses this month. To test the July 6 high at 0.7600, a break above 0.7480 is required. If the RBA makes a dovish flip next week, this will become more difficult.

(Source: FactSet)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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Currencies Trading Ideas & Charts

AUD/JPY Price Analysis: Despite A Positive Australian Q2 CPI, The Pair Is Off Its Intraday High.

While the weekly bottom near 80.60 may provide immediate support ahead of the monthly low near 79.80, the psychological magnet of 80.00 may act as an additional filter to the south.

It’s worth mentioning that the pair’s weakness beyond 79.80 will need to be confirmed by the yearly low near 79.20 before the AUD/JPY bears are directed to late December 2020 tops near 78.80.

The AUD/JPY currency pair is currently trading at 80.98, with a daily change of 0.05 percentages the same day.

AUD/JPY: Four-hour chart

(Source: FactSet)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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Currencies Trading Ideas & Charts

An e-commerce behemoth could be on the verge of making a huge foray into cryptocurrency.

So, what’s the deal?

A job offering for a “Digital Currency and Blockchain Product Lead” was recently posted on Amazon. The individual in charge of the e-commerce giant’s blockchain strategy and product roadmap will be tasked with filling the position.

Following a report from City A.M. on Monday, enthusiasm about Amazon’s digital currency plans reached a fevered pitch. Amazon is “absolutely” preparing up to take Bitcoin payments by the end of the year, according to the British financial journal, and plans to develop its own cryptocurrency by 2022.

Amazon, on the other hand, refuted City A.M.’s assertions, telling Bloomberg that “despite our interest in the industry, the conjecture that has ensued surrounding our precise plans for cryptocurrencies is not true.”           

Despite this, Amazon stated that it is keen to learn more about digital currencies and how they might be integrated into its large e-commerce network. The business stated, “We remain committed on investigating what this could look like for people shopping on Amazon.”

So, what’s next?

It would be a game-changer for the crypto business if Amazon accepted Bitcoin and other cryptocurrencies as payment. The action would immediately increase Bitcoin’s legitimacy and usability. As a result, the value of the cryptoasset would most likely increase.

Even if this happens, it will most likely take some time. In the interim, there are numerous dangers to be aware of. For instance, crypto investors should be on the lookout for a possible crackdown on stablecoin issuer Tether, which has piqued authorities’ interest in recent weeks after investors raised concerns about its reserve statements’ lack of clarity.

Source: Factset

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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Currencies Trading Ideas & Charts

Increasing pressure on the Australian dollar

The RBNZ said on 14/09 that it will abruptly cease its quantitative easing programme, prompting many economists to push back their forecasted NZ rate hike to August. The next gathering of the bank is set for August 18.

The Australian currency plummeted against the New Zealand dollar as a result of the announcement, with the Reserve Bank of Australia’s (RBA) own guidance indicating that rates will not be raised until 2024. Bank bill futures, on the other hand, suggest that the RBA will begin tightening in late 2022.

Australian dollar has been sliding in recent weeks

Following the June labour force report, which showed the unemployment rate fell to a decade-low 4.9 percent, the Australian dollar continued its downward trend on Thursday, falling 0.3 percent to US74.61. The Australian dollar has been sliding in recent weeks, falling over 3.5 percent in just the previous month.

Despite exceeding economists’ estimates, the robust jobs data failed to halt the downward trend. The labour survey came before Sydney’s draconian limitations and the imposition of a fifth lockdown for Victorians to control a new outbreak, so most investors ignored the news.

Experts Comments

“As the leader of the hiking bloc, money should just pile into the Kiwi,” said Westpac senior currency strategist Sean Callow. “The Australian will not gain much with the Kiwi, and we expect the cross rate to break substantially lower.”

“The market is now more worried about the consequences of the NSW lockdown on future months’ numbers,” said Ray Attrill, head of FX strategy at NAB. “GDP might be negative in the third quarter, which would support the RBA’s assertion that it is playing the long game.”

Source: afr

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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Currencies Trading Ideas & Charts

AUD/USD last Week Price Prediction – The Australian Dollar Remains Very Weak

Paper currency. Australian money.

The Australian dollar has struggled last week, as we have been unable to breach above the 0.75 handle. However, if Australia continues to tighten its grip on the market, it will be intriguing to monitor.

The lockdown has already stretched from Sydney to Melbourne, and given enough time, the Australians will find a cause to lock down the rest of the country. At this moment, I believe the Australian dollar is poised to decline to 0.70, particularly if we can breach below the 0.74 mark.

If we wear down below that level, I believe the bearish trend will ramp up, and the scenario will indeed be more or less a danger event. The US Currency Index keeps threatening a breakout to the higher, indicating that the US dollar is gaining traction.

This would be fascinating to see if this plays out, because we are presently on the verge of a breakdown, and at that time, I would not only continue to be short the Australian dollar, but I would also be looking for ways to add to my position.

Source: fxempire

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.