In this week’s edition of “Wednesday Worldview,” we jump right in to look at the cryptocurrency market. Starting with Bitcoin, we can see that BTC has begun to move higher ever since the crash below the $9,000 level. On July 6th, BTCUSD traded above $9,300, the first time in nearly ten days. The BTCUSD pair could rally towards the $9,5000 area if buyers can break above the current monthly high, around the $9,300 level. Medium-term bulls may start to target the $9,800 level and beyond as the $9,500 resistance level is overcome.
Pivoting to ETHUSD, we can see the pair is up a little over 3% in the last 24 hours. This has resulted in an uptrend on the ETHUSD pair daily chart, where the asset can also be seen climbing above traditional EMA’s. Ethereum is currently trading at $235 after a significant bull move rising above the daily 12-EMA at $229.63 and the 26-EMA at $229.8. ETH/USD also cracked the $232.80 resistance established on July 1st as the last daily high, which means the digital asset is now inside a daily uptrend. With BTCUSD recovering after the June 27th crash and ever-increasing amounts of on-chain and defi activity, it seems the bearish case for Ethereum is losing steam.
Switching back to traditional finance, we first take a look at the markets. In the most surprising news, the Euro was bullish against all of its major pairs. On the statistical front, in the Euro-Zone, retail sales rebounded in May by 17.8%, more than expected, after falling by 12.1% the previous month (revised from -11.7%). The GBP continued in the same trend as the Euro, extending Friday’s gains from 1.2438. Similarly, the USD/JPY held up well after the Japanese government released worse-than-expected economic data. Japan’s industrial production dropped 8.4% in May (-5.7% expected), mainly dragged by automakers cutting back production. USD/JPY remains on the upside after rebounding from a low of 107.04 seen yesterday. All of these currencies seem to be benefitting amid broad US dollar weakness.
Despite this US dollar weakness, US stocks and equities markets rallied across the board, with the Nasdaq, S&P, and the Dow Jones all moving up a couple of percentage points, respectively. In terms of equities, investors seem reinvigorated by positive news coming out of China, the US, and elsewhere. Looking at the US, we can see last week’s strong June jobs report added 4.8 million payrolls last month, which beat expectations by 1.8 million.
Backed with fresh data, it appears global economies are doing surprisingly quite well across the board this week with news of new jobs and increases in manufacturing. However short-lived, quick shifts in markets are times when traders can make large amounts of their money, but sometimes the best thing to do in market shifts are to do nothing or maybe best said by Jesse Livermore, “There is a time to go long, a time to go short and a time to go fishing.”, and this week might be just the time to go fishing.
Regardless, let us leave you with one more last gem from the great Warren Buffet regarding the benefits of compound investments: “The ideal business is one that earns very high returns on capital, and that keeps using lots of capital at those high returns. That becomes a compounding machine.”
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