Traditional Markets
The last day of April and the first trading day of the week will start out a bit slowly. Traders in China and Japan have the day off with local holidays. Tomorrow there will be some holidays in Europe as well.
Though the holidays may affect liquidity, it seems like there won't be any significant downtime. Do be careful though, when market liquidity is thin it's quite common to see spikes, gaps, and all sorts of slippage.
We've already experienced this just a bit this morning in the commodities markets. Take a look at oil that dropped quite suddenly. Not a huge move but it was rather sudden...
Gold also had two such spurts this morning of sudden selling...
...as it inches closer to the important resistance line at $1,300 per ounce.
Another May Shakeup
With less than a year left of Brexit negotiations, Theresa May received another blow last night. Her close ally Amber Rudd has been forced to resign.
Ms. Rudd, a long time ally of the British Prime Minister, has been under intense pressure following scrutiny of targets for removing illegal immigrants and the Windrush scandal.
The Pound itself is also at a critical junction as we can see on this graph of the GBPUSD. Take a look at the long-term trendline (yellow) which has been a very strong support line for the rising Pound. At this time in converges with the short-term support line of 1.3750 (dotted blue) and if it breaks below it will put the Bank of England in a rather sour spot for their upcoming meeting on May 10th.
Crypto-Market Test Levels
Bitcoin is also at a critical junction at the moment and indeed starting the week out rather sluggishly. As we discussed on Friday, the next test is at $10,000, a critical level of resistance. As well, Ethereum is working hard to surpass $700 a coin.
It does seem like the massive upward momentum that we saw last week is on hold for now and waiting for further confirmation before cryptotraders pile into the buy side again. All of the top 10 cryptos are down so far today and the weekend hasn't been fantastic.
Still, it hasn't been terrible. In the grand scheme of things, if we can hold current valuations, I believe it will be the best thing for this market. We all enjoy it when prices rise uncontrollably but if those rises aren't backed by real-world adoption as discussed above, then we'll have to give them back eventually and that puts us back to square one.
A break in the above-mentioned levels for Bitcoin and Ether could indeed lead to some more FOMO but I'm not sure if that's the most healthy thing for cryptos at the moment.
Let's have an amazing week ahead!
Comments
Log in or sign up to join the conversation.