Cryptocurrency roundup: Black Friday crypto crash

Bitcoin fell to a six-week low today as wider markets sold off. Salon Sardana looks at the stories that caught our eye this week.

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Lingering Covid Uncertainty Will Likely Keep Markets Under Pressure Next Week

Financial markets have gone into full-blown correction on Friday. Oil collapsed, bond yields of major economies plummeted, indicating a strong demand for risk protection. Interestingly, the dollar is also falling, which until recently also served as a safe haven. It looks like the relatively high Treasury rates took away from it this status. The oversold yen, Swiss franc led growth in FX while pro-cyclical currencies (which growth correlates with expansion of the world economy) are falling strongly. It's not clear what could have caused such a dramatic change in sentiment, but it looks like the coronavirus is again involved. News media buzz about a new strain spreading in South Africa that may be resistant to existing vaccines. The number of daily covid cases caused by the new strain is still low, but the coronavirus pandemic in 2020 also began with a few cases. This idea, apparently, led some investors to decide to price in the risk of a repeat of the pandemic. The fall was intensified by speculative selling, given that loosened monetary policy of central banks + inflation drove risk assets to new historical highs and until recently they were swaying near ATH.Several countries were quick to halt flights to the country, signaling that other governments may be ready to impose travel restrictions. This risk looks to be the key reason of downcast mood that swayed markets today.In the short term, investors are likely to keep a close watch on news about whether the new strain will be able to supplant the existing ones in the country (as the Delta has done in some countries), as well as whether any vaccine developers will make a statement that the vaccine can be modified for this strain. This variable will influence the risk of new social and air travel restrictions in other countries. Protective assets should remain bid until those events, in particular, in the foreign exchange market, it is worth taking a closer look at the short positions on CADJPY, AUDJPY, NZDJPY, NZDCHF, CADCHF next week, as well as long positions in gold, which has corrected well after the recent rally and is ready for a new rally leg:It should also be borne in mind that US markets were closed yesterday due to Thanksgiving, and today the trading session will be shortened. As a consequence, the markets may continue to absorb the new covid shock early next week.Of the short-term technical scenarios, we can note the rebound in EURUSD from the previously indicated support level of 1.1170. European investors who have invested in US Treasuries due to the growing rate differential seem to be returning back, which puts pressure on the dollar and increases demand for the euro. Investment flows could allow the euro to develop momentum and test the upper limit of the main trend line for EURUSD - the 1.15 mark:

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/lingering-covid-uncertainty-will-likely-keep-markets-under-pressure-next-week"
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Market Spotlight: GBPAUD Approaching Second Target

GBPAUD Continues OnThe recent GBPAUD breakout trade is now on course to hit the second target at 1.8739. Following the test of the initial target at 1.8578 we saw price consolidating briefly, while still well above the breakout base. Price has now turned higher again, initiating a breakout above the bear channel. With this in mind, the focus is firmly on further upside with 1.8739 the next target and 1.8982 the broader target beyond.The turn lower in risk assets this week, as a result of fresh COVID fears, has hit AUD, allowing for the pair to continue higher. With fears over the new COVID strain likely to intensify over the weekend, there is plenty of room for GBPAUD to continue lower next week, backed up by retail trading data which currently shows this section of the market to be around 80% short.Keep an Eye OnLittle in the way of key data for either GBP or AUD next week. This means flows are likely to remain highly linked to movements in the risk complex, driven by developments in the COVID space. Make sure to keep an eye on incoming news over the weekend which will set the tone for early trading next week. Later in the week BOE’s Bailey will speak, this has the potential to be bullish for GBP given recent data strength (particularly inflation).

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What would another lockdown mean for markets?

A nasty new strain of Covid-19 has already sent markets tumbling, with the threat of further lockdowns now in the air. John Stepek looks at what that could mean for your wealth.

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FOMO Friday: NZDJPY Collapses On Muted RBNZ & New COVID Fears

NZDJPY Falls Apart Another week draws to a close and once again it’s a question of celebrating wins or commiserating over losses. While our friends in the US are likely more concerned with their Thanksgiving celebrations (many of which will stretch long into the weekend), on the European side of the coin, it’s business as usual. With that in mind, I’ve been talking with traders and the big focus this week is on the reversal we have seen in risk currencies in response to news of the new COVID strain, in some cases this initiated fresh moves and in some cases exacerbated existing moves. In the FX space, the move traders seem to be talking about is the 3.6% drop in NZDJPY this week. So, let’s break down what caused the move and, as ever, if you caught it? Well done! If not? There’s always next week!What Caused The Move?So, there are two key elements to the sell off in NZDJPY this week. Firstly NZD came under pressure in response to the RBNZ November meeting, with added pressure as risk assets collapsed under fears over the new COVID strain. Secondly, JPY saw a strong resurgence late in the week, reversing firmly higher on safe haven demand linked to the COVID news.RBNZ Disappoint BullsThe RBNZ meeting this week was a highly anticipated event given the hawkish expectations heading into the event. The market had fully priced in a .25% hike, fuelled by recent data strength and hawkish RBNZ commentary, with additional pricing showing a 40% probability of a larger hike. However, bulls were left disappointed as the bank only hiked by the well-expected .25%. Although the accompanying rate-path projections were lifted, the policy adjustments this time around were not enough to drive NZD higher.New COVID Strain Hits Risk Assets & Drives JPY HigherNews late in the week of the emergence of a new strain of COVID, located first in Botswana, which is more contagious and lethal than all other strain and, so far it seems, resistant to vaccines and antibodies. While it is very early days and more tests are needed on the strain, the initial results are raising fears of a fresh global wave of the pandemic. Many countries are now placing travel restrictions on South Africa in a bid to quell the spread. Risk assets have come under heavy pressure on Friday whereas safe haven assets, such as JPY have been driven higher. With this dynamic likely to gather pace over the weekend, there is room for further downside in the pair.Technical ViewsNZDJPYThe reversal lower in NZDJPY this week has seen the market breaking down below the bearish channel and below the 79.19 level. Price is currently testing support at the 77.34 level. With both MACD and RSI bearish, however, there is room for the move to continue lower towards 75.63.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/fomo-friday-nzdjpy-collapses-on-muted-rbnz-and-new-covid-fears"
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XAUUSD – Gold Driven by Falling Bond Yields

XAUUSD, H4

After the gold price fell heavily at the beginning of the week following Powell’s nomination to return to the position of Fed chair for a second term, gold has finally found support in the uptrend line around 1,780, and has now breached  1,800 on the risk-off mood that dominates markets today.

Even gold prices will be pressured by the appreciation of the Dollar and US economic data that came out on Wednesday, but the decline in bond yields this morning is supporting gold prices before the end of the week. The 10-year US yield today has dropped from 1.63% to 1.54%. The new wave of Covid-19 outbreaks in Europe and the US is another factor of uncertainty for this weekend that has pushed gold prices above 1,800 again as a safe haven asset.

From a technical point of view the price of gold remains in a bullish Chanel frame. Along with the trend reversal pattern of Inverted Head and Shoulder prices with key resistance (neckline) at 1,800, this corresponds to the movement of the RSI rising from the oversold zone. However, the break above 1,800, there is still more. One key resistance waits at the MA200 line at 1810. The MACD is in a downtrend and continues to move in the negative territory, though if the signal line has been cut up that means if the price fails to break above 1,800, it is ready to fall back to test the 1,780 low again.

The long Thanksgiving holiday can cause market volumes to drop, but this may be offset by the volatility of the uncertainty that may occur during the weekend. At 09:30 GMT  XAUUSD was trading at 1,806. 

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Chayut Vachirathanakit
Market Analyst – HF Educational Office – Thailand

 

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Everyone wants more leisure time – but is that possible?

One of the effects of the pandemic is that everyone wants to work less – whether from home or in the office. But is that possible over the long term?

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Investment Bank Outlook 26-11-2021

Think INGUSD: All focus on the new strainYesterday’s closure of the US markets for Thanksgiving caused most FX pairs to trade within very tight ranges. Today, markets will reopen but only for half a day, and should see another fairly low-volatility session today.The general environment in FX remains remained quite supportive for the dollar, as the FOMC minutes and a bunch of good data kept market speculation on faster tapering and earlier tightening alive. On top of this, the worsening contagion situation in Europe and risk of fresh containment measures are generating further divergence in policy expectations between the ECB and Fed.Overnight, we saw the highly oversold yen gain nearly 1% against the dollar while pro-cyclical currencies followed global stocks lower after the concerning news about a new Covid variant that appears to have the biggest mutation seen so far. The most notable previous Covid variants proved, in general, to be also more transmissible and more lethal than the first Covid strain, and scientists are attempting to evaluate whether this is the case as well. At a very early stage, the evidence seems quite concerning.The variant has been identified primarily in South Africa, and multiple countries are rapidly blocking all flights to the country, as well as other African nations. The rand is unsurprisingly a major underperformer, having dropped to one-year lows and still looking quite vulnerable.More information on the variant will be needed, but it looks like it is indeed going to be a very “black” Friday for global risk sentiment. JPY and CHF should remain a favourite choice as safe-haven hedges above the dollar, which should however remain supported against all the pro-cyclical bloc. NOK, AUD and NZD appear particularly at risk.

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The stocks to buy now as the boom in digital healthcare takes off

Thanks to Covid-19, policymakers and investors have become more aware of the wide array of opportunities in the sector. The good news is that we are at the start of a long-term growth trend, says Stephen Connolly

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Backtracking on HS2: the state of high-speed rail in the UK

The government has found a reverse gear on the controversial high-speed rail project. But does backing out now make sense?

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Jerome Powell’s poisoned chalice

US president Joe Biden has nominated Jerome Powell for a second term in charge of the Federal Reserve. But it could prove a “poisoned chalice” for Powell. Here's why.

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Turkey heads for a currency crisis as the lira plummets

The Turkish lira has lost 40% of its value so far this year after the central bank bowed to pressure to cut interest rates.

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Vivek Ramaswamy: beware of the "woke industrial complex"

Merryn talks to author and investor Vivek Ramaswamy about how big fund managers are using ESG investing to undermine the foundations of democracy.

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Wine of the week: two simply perfect pinotages

This the most attractive pinotage I have ever tasted: clean, fresh and structured and with more layers than a millefeuille.  

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