Forex Market Overview
The Australian and New Zealand dollars both saw major declines to a fresh multi-month low and down for a twelfth consecutive day. The devaluation of the Chinese yuan weighed on the Australian currency alongside with dismal data.
But in the U.S., despite the Federal Reserve decided to lower interest rates, the US dollar still managed to enjoy a relative value increase last week. There aren’t going to be any major reports coming up this week, but we’ll keep a close eye on how the ongoing trade war is reflected in the currency market.
The Canadian dollar had an up and down week last week, largely attributed to ongoing trade tensions. Meanwhile, a conservative future forecast along with possible easing measures caused the euro to struggle.
Elsewhere, we saw the pound have yet another negative week, which was mostly due to the increased likelihood of a hard Brexit. Additionally, pessimistic forecasts from the Bank of England are causing many forex traders to look elsewhere.
In Asia, the Japanese yen enjoyed a positive week, indirectly benefiting from trade disputes within the region.
Stock Market Overview
The stock market opened the week with a very bearish dive, watching the DOW fall by more than 800 points. Until the trade issues with China can be dissolved, most American stocks can be expected to struggle.
Among some of the biggest losers from this week’s stock plunge were Tyson Foods (NYSE:TSN), arms manufacturers, and large-scale miners. Foods and agricultural products also experienced a major downturn—something that is notably rare for this time of the year.
There will be a lot to pay attention to over the course of the next week. Companies tied to the yuan, luxury items, agricultural goods are expected to have a volatile couple of days. We’ll also pay attention to the actions of the Federal Reserve and see how its policies are reflected throughout the stock market.
Crypto Market Overview
While global stocks have been struggling, Bitcoin has been able to turn things around. In fact, after falling from $13,000 to around $9,000, the coin has rebounded and is currently trading over $11,700. If the other global markets cannot correct themselves, investing in the crypto market may seem like a comparatively less-risky option.
Taking a Closer Look at BTC/USD
After breaking above the neckline of the double bottom chart pattern we identified last week, Bitcoin has also confirmed above the daily Ichimoku cloud. However, as it normally happens with the Ichimoku theory, the pair is now pulling back towards the upper band of the Ichimoku Kinko Hyo.
BTC/USD - Bitcoin Price Technical Analysis based on Ichimoku
As China continues to soften its stance on crypto and take measures against the Yuan, we can expect Bitcoin to continue its impressive value increase. Elsewhere in the industry, Litecoin’s decision to half its payments to miners will likely cause it to decrease in value.
Samsung’s commitment to offering a series of new crypto apps will likely benefit both the company, along with the industry as a whole. Other companies we’ll keep an eye on this week include MasterCard and Nokia (HE:NOKIA). Amid ongoing tensions in most other markets, the world’s top crypto players are hoping to have a productive August.
On top of this, Bitcoin has generally been inversely correlated to the US stock market as many institutional investors have been using it as a hedge. With a potential rate cut by the Fed this week, the US stock could see further gains. Double down on that if the Fed hints on more cuts in 2019.