A Little Breakout Goes A Long Way

Happy Canada Day, Eh?

The afternoon session is likely to be a bit muted as the US indexes close out early in preparation for the 4th of July. However, even though the Yanks Knucks are taking a long weekend, the markets should remain pretty fluid.

The real downtime will come in tomorrow evening when they light up the barbecue and start the fireworks stocks and commodities will take a rest.

There is a possibility of fireworks in the Cryptomarkets of course because Cryptos have no borders and no national holidays. They trade 24/7/365!

Today’s Highlights

Big In Japan

Spreadsheet Action

Cryptos could go Ether Way

Please note: All data, figures & graphs are valid as of July 3rd. All trading carries risk. Only risk capital you’re prepared to lose.

Market Overview It’s already been quite an eventful day in Asia. Some positive manufacturing data has come out from both China & Japan but that’s just the icing on the cake.

China has just opened up their $9 Trillion debt market to foreign buyers through a link in Hong Kong. Now, anybody who wants to buy Chinese bonds can do so even if they are not Chinese citizens. A huge step towards the goal of opening the Chinese markets to global investors.

In Japan, the mood is not quite as celebratory. Prime Minister Shinzo Abe has suffered a humiliating defeat in local Tokyo elections and will very likely need to make some cabinet changes in the near future in order to consolidate his power.

Mr. Abe’s policies are one of the main reasons that the Japanese Yen has been so weak over the past few years. Here take a look at the USD/JPY since Abe’s election in December 2012.

(Remember USD/JPY shows Dollar strength so chart going up means Yen getting weak.)

USD/JPY Chart

Here Comes Phil

After Theresa May’s embarrassing victory in the snap elections last month, a softer brexit now seems to be the order of the day. Chancellor of the Exchequer Philip Hammond, AKA Spreadsheet Phil will be filling us in on some important details today. Phil was feeling a lot of pressure before the elections as a soft brexit guy in a hard brexit world. But now that the public yelled soft, his position has somewhat firmed.

Big businesses who were feeling sick to the stomach about leaving the EU will be feeling a bit better today listening to level-headed Phil, especially after the Bank of England’s show last week.

The GBP/USD is sticking firm to its psychological resistance of 1.3000. With a little help from Brexit, the Pound is much cheaper than anybody could have dreamed two years ago.

Now, thanks to a BoE who is looking more likely to firm up the Pound, and a government who isn’t looking to tank it, a little breakout could go a long way.

GBP/USD Chart

Ether way

Both Bitcoin and Ethereum seem to have found themselves a comfortable price range.

Just looking at the technical analysis we can see some triangles forming in the markets.

Here’s Ethereum…

ETHERUM Chart

and here’s Bitcoin…

BTC Chart

With this type of pattern, technical analysts will expect the price range to continue to diminish until eventually it is forced to break out.

For example, Litecoin had a little breakout last night (blue circle), which very quickly turned into a whopping swing (orange rectangle).

LTC Chart

With the absence of any strong fundamental information, these technical moves on the charts become extremely significant to short term traders.

Let’s have an amazing week ahead!

Disclosure: This content is for information and educational purposes only and should not be considered investment advice or an investment recommendation. Past performance is not an indication of future results. All trading carries risk. Only risk capital you’re prepared to lose.

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