Market Review 10-12

Market Review 10-12

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Forex News

GBP/USD Range Bound Ahead of Key Parliamentary Brexit Vote


The pair is range bound ahead of tomorrow’s brexit vote as tension remains high amid broad based USD weakness.

GBP/USD opened the new trading week with a bearish gap near 1.2700 handle before seeing a mild recovery through the mid-Asian trading window erasing losses from gap down opening. The price action of British Pound seems to be pinned at 1.2750 level as UK markets remain cautious in the run-up to the House of Commons vote on Prime Minister Theresa May’s latest Withdrawal Proposal, which is expected to face defeat at the hands of parliament. The vote on EU approved Brexit deal is to be by British Parliament tomorrow and the current scenario indicates that deal is likely to be voted down as Labor, the Liberal Democrats, the DUP, the SNP and dozens of Conservative MP’s remain solid on their stance against the deal which could lead to a general election leaving UK in a messy no-deal Brexit scenario.

GBP Could Slide Sharply On Increasing Brexit Woes

Meanwhile, news from UK Times newspaper that 48 letters required to trigger no-confidence vote on PM May’s government have finally been sent, also increased market fears and weighed on British Pound. However broad based US Greenback’s weakness helped the pair limit downside move despite bearish influence surrounding GBP. As of writing this article, GBPUSD pair is trading near flat at 1.2748 up by 0.35% on the day. On release front, UK’s calendar is highly active for the day as London market hours will see release of Q3 GDP, Industrial Production, Manufacturing Production and trade balance data with forecasts hinting at positive GDP data and dovish outcome for industrial and manufacturing production data. Bearish data will influence cable into a highly volatile price action as investors remain twitchy ahead of tomorrow’s Brexit vote.

Meanwhile US market hours remain relatively silent aside from JOLTs Job Opening data. When looking from technical perspective, the overall outlook for British Pound continues to remain firmly bearish. The daily chart shows that it broke the daily descendant trend line coming from November high through lateralization, invalidating the relevance of the break. In the same chart, a bearish 20 SMA has rejected advances while technical indicators resumed their declines within negative ground, keeping the risk skewed to the downside. According to the 4 hours chart, the pair offers a neutral-to-bearish stance, as it closed a few pips below a flat 20 SMA, as technical indicators maintain downward slopes below their midlines. Expected support and resistance for the pair are at 1.2695, 1.2660, 1.2620 and 1.2775, 1.2805, 1.2840 respectively.

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U.S. Dollar Falls, Pound Flat


The U.S. dollar, which is widely considered a safe-haven asset, fell on Monday in Asia even after tension with China escalated amid continuing concerns surrounding Chinese technology giant Huawei Technology.

The U.S. dollar index that tracks the greenback against a basket of other currencies was down 0.7% at 95.845 by 1:45 AM ET (06:45 GMT).

Tension with China remained in focus after reports over the weekend said Chinese Vice Foreign Minister Le Yucheng separately summoned both the US and Canadian ambassadors and lodged a “strong protest” urging Huawei Technology’s CFO Meng Wanzhou’s release.

Meng was arrested in Vancouver last week and faces extradition to the US, where she could be jailed for up to 30 years if found guilty.

Meanwhile, U.S. non-farm payrolls increased by 155,000 jobs last month, below economists’ median forecast of 200,000 jobs, data showed. Wage increase was weaker than expected even though its annual rise remained near the highest level in almost a decade.

Fed Chairman Jerome Powell said last week that U.S. interest rates were nearing neutral levels, which markets interpreted as signalling a slowdown in rate rises.

The USD/CNY pair was up 0.3% at 6.8948. The People’s Bank of China (PBOC) set the yuan reference rate at 6.8693 vs Friday’s fix of 6.8664.

Chinese customs data showed on Saturday that the country’s November exports rose 5.4% from a year earlier, below the 10% jump predicted by a Reuters poll.

Annual growth for exports to all of China’s major partners slowed significantly, according to the data.

Elsewhere, the USD/JPY pair fell 0.2% at 112.45 after data showed Japan’s third-quarter GDP was down at an annualised rate of 2.5%, compared with an initial estimate of a 1.2% contraction and against economists’ median forecast for a 1.9% decline.

In Europe, Tuesday will see the UK parliamentary vote on Prime Minister Theresa May’s current Brexit proposal. The GBP/USD pair was little changed at 1.2748 as UK markets remained cautious ahead of the vote.

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Stock Market News

Google, Facebook Face Australia Crackdown Over Market Power


  • Competition regulator recommends more oversight of tech giants
  • Digital platforms create news ‘echo chambers,’ ACCC says

Google and Facebook Inc. face a regulatory crackdown in Australia after the nation’s competition watchdog joined a chorus of international criticism over their use of data and the market power they wield across news and advertising.

In a preliminary report released Monday, the Australian Competition and Consumer Commission said a new or existing watchdog should investigate and monitor how large digital platforms rank and display adverts and news. It also expressed concern about a lack of transparency in how their key algorithms work.

“The ACCC considers that the strong market position of digital platforms like Google and Facebook justifies a greater level of regulatory oversight,” Chairman Rod Sims said in a statement. The report contains 11 preliminary recommendations and eight areas for further analysis as the inquiry continues.

The tech giants have come under increased scrutiny internationally amid concern about the dissemination of fake news and their potential to dominate online advertising. U.S. lawmakers have lambasted Facebook for failing to stop a flood of Russian propaganda during the 2016 election, while European regulators are looking at the advertising practices of digital platforms.

“This is a sign that Australia is looking to follow Europe’s lead in putting some sort of restrictions on these two companies’ enormous sway in the market,” said Andrew Hughes, a lecturer in marketing at the Australian National University. “It’s hard to think that this will curtail their dominance, but at least it’s a start in drawing a line and saying there needs to be more oversight.”

Echoing concerns in Europe, the ACCC said Google and Facebook had become the “dominant gateways between news media businesses and audiences,” leading to a loss of advertising revenue and ultimately cuts in the number of journalists who could play an important role in “exposing corruption and holding governments, companies, powerful individuals and institutions to account.”

The competition watchdog said its “preliminary view is that consumers face a potential risk of filter bubbles, or echo chambers, and less reliable news on digital platforms.”

A lack of transparency in key algorithms makes it difficult to know if the tech giants are favoring their own business interests over advertisers using the platforms, the ACCC said.

Google said in a response to questions about the report that “we develop innovative products to the benefit of consumers, businesses and the economy, and we work closely with advertisers and publishers across Australia.” Facebook said it remains “committed to working with the commission as they review the contribution of all digital platforms in Australia.”

The government isn’t expected to act on the ACCC’s recommendations until the final report is issued in June.

“Digital platforms have changed the way media content is produced, distributed and consumed,” Treasurer Josh Frydenberg said in a statement on Monday. “To make the most of opportunities that digital platforms bring, and to provide the right safeguards for the community, it is important that the regulatory environment remains fit-for-purpose.”

The ACCC’s preliminary report comes days after Australia’s parliament passed some of the world’s toughest anti-encryption legislation to force tech companies to help decode messages on services such as WhatsApp when they are used in terrorism and organized crime.

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Huawei CFO bail hearing to resume in Canada as Beijing piles pressure


The CFO of Chinese telecom giant Huawei Technologies Co Ltd is set to be back in a Canadian courtroom on Monday, fighting for her freedom with the help of pressure from Beijing, while prosecutors argue she cannot be trusted.

Huawei Chief Financial Officer Meng Wanzhou was arrested by Canadian authorities Dec. 1 at the request of the United States.

Meng, 46, faces U.S. accusations that she misled multinational banks about Huawei’s control of a company operating in Iran. This deception put the banks at risk of violating U.S. sanctions and incurring severe penalties, court documents said. U.S. officials allege that Huawei was trying to use the banks to move money out of Iran.

Canadian prosecutors argued against giving her bail while she awaits extradition to the United States.

Meng argued that she should be released on bail while awaiting an extradition hearing due to severe hypertension and fears for her health while incarcerated in Canada, court documents released on Sunday showed. In a sworn affidavit, Meng said she is innocent of the allegations and will contest them at trial in the United States if she is surrendered there.

She was detained while transferring flights in Canada and appeared in a British Columbia court on Friday for her bail hearing. After nearly six hours of arguments and counter arguments, the hearing was adjourned until Monday.

China has strongly criticized her detention and demanded her immediate release. Her arrest has roiled global markets as investors worry that it could torpedo attempts to thaw trade tensions between the United States and China.

Meng, the daughter of Huawei’s founder, has been held in custody since her arrest. Her lawyer argues that this situation is untenable due to her health. Meng said in the sworn affidavit she was taken to a hospital for treatment for hypertension after being detained.

Meng also has sleep apnea and was treated for a carcinoma, lawyer David Martin told court on Friday.

At issue is whether Meng should be set free while her extradition case proceeds. The U.S. has 60 days to file a formal request; if its evidence convinces a judge the case has merit, Canada’s justice minister will decide whether to extradite Meng.

On Monday a judge could decide to set Meng free on any number of conditions, including high-tech surveillance, or to keep her in jail, according to some legal experts.

According to local media reports, Meng is being kept in Alouette Correctional Centre for Women, a Vancouver-area jail. Reuters could not independently verify these reports.

Meng’s wealth and power are undeniable as the financial chief of one of the biggest telecommunications companies in the world, which builds everything from networks to handsets and is seen as one of China’s best chances to change the global technology landscape.

Huawei is now China’s largest technology company by employees, with more than 180,000 staff and revenue of $93 billion in 2017.

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Cryptocurrency News

Bitcoin Cash – ABC, Litecoin and Ripple Daily Analysis – 10/12/18


It’s back into the red for the majors this morning, with Sunday’s gains providing little respite to the negative bias plaguing the market.

Bitcoin Cash – ABC back in the $100s

Bitcoin Cash ABC gained 7.11% on Sunday, reversing Saturday’s 4.29% fall, to end the day at $105.72. The Sunday partial recovery left Bitcoin Cash ABC down 37.72% for the week.

Bullish through much of the day, Bitcoin Cash ABC recovered from an early morning intraday low $97.71, breaking through the first major resistance level at $107.14 to strike a late afternoon intraday high $110 before easing back.

Bitcoin Cash ABC managed to hold above the first major support level at $93.15 with the day’s $97.71 low, a second day of steering clear of major support levels after some heavy losses earlier in the week.

At the time of writing, Bitcoin Cash ABC was down 1.6% to $104.04, with a bullish start to the day hitting reverse, Bitcoin Cash ABC falling from a morning high $107.89 to a morning low $103.2 before finding support, the major support and resistance levels left untested early on.

For the day ahead, a move back through to $104.5 and hold by the early afternoon would support an afternoon recovery to bring the morning’s $107.89 high into play, while sentiment across the broader market will need to materially improve for Bitcoin Cash ABC to take a run at the first major resistance level at $111.24.

Failure to move back through to $104.5 and hold by the afternoon could see Bitcoin Cash ABC pullback deeper into the red, with a fall through the morning low $103.2 bringing sub-$100 levels and the day’s first major support level at $98.95 into play before any recovery.

Litecoin Finds Support

Litecoin gained 4.63% on Sunday, reversing Saturday’s 2.34% loss, to end the week down 24.12% at $25.3.

Tracking the broader market, Litecoin rallied from a start of a day intraday low $24.06 to a late afternoon intraday high $26.62 before easing back to $25 levels by the day’s end.

The moves through the day saw Litecoin break through the first major resistance level at $26.28, while leaving the first major support level at $22.53 untested on the day.

At the time of writing, Litecoin was down 1.5% to $24.92, with Litecoin falling from an early morning high $25.65 to a morning low $24.82, the early moves leaving the day’s major support and resistance levels untested.

For the day ahead, a move back through the morning high $25.65 would bring $26 levels and the day’s first major resistance level at $26.69 into play before any pullback. Barring a broad based market rally, Litecoin will likely struggle beyond Sunday’s high $26.62 to pin back a break out from the first major resistance level.

Failure to move through $25.33 to this morning’s high could see Litecoin fall back further through the day, with a fall through the morning low $24.82 bringing the first major support level at $24.03 and $23 levels into play before any recovery.

The day’s second major support level at $22.77 could be tested later in the day should the negative bias persist.

Ripple Avoids sub-$0.30s

Ripple’s XRP rose by 2.05% on Sunday, following on from a 1.65% gain on Saturday, to end the day at $0.31697. Upward momentum through the weekend saw Ripple’s XRP cut the weekly deficit to 14.77%.

Bucking the trend from the broader market Ripple’s XRP, a relatively range bound morning saw Ripple’s XRP ease to a late morning intraday low $0.30476, steering well clear of the first major support level at $0.2896.

An early afternoon bounce back saw Ripple’s XRP rally to an intraday high $0.3295, falling short of the first major resistance level at $0.3363, before easing back to $0.31 levels.

At the time of writing, Ripple’s XRP was down 0.37% to $0.3158, a morning high $0.32178 and morning low $0.3148 leaving the major support and resistance levels left untested early on.

For the day ahead, a move back through $0.3171 would signal another run at $0.32 levels to bring the day’s first major resistance level at $0.3294 and $0.33 levels into play before any pullback, with Sunday’s high $0.3295 likely to limit upside in the day, barring a broad based cryptomarket bounce.

Failure to move back through and hold above $0.3171 could see Ripple’s XRP pullback through the morning low $0.3148 to bring $0.30 levels and the day’s first major support level at $0.3047 into play before any recovery, sub-$0.30 support levels unlikely to be tested barring materially negative news hitting the wires.

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