CURRENCY HIGHLIGHTS – May 2019
Euro Price Slide Set to Continue as European Elections Draw Closer.
EURUSD is continuing the drift lower of the past week on concerns that the latest European Parliament elections will see a rise in populism and Euro-skepticism. That’s bad news for the EURO, which could yet lose more ground against a backdrop of trade wars and Brexit.
EURO PRICE WEAKNESS MAY PERSIST
European Parliament elections take place this week, beginning Thursday and ending Sunday, with the results likely to confirm the rise of populism and Euro-skepticism. That could spell further losses for the Euro, which has already dropped to its lowest level since May 3 and has been easing for the past week.
NET-LONG POSITIONS ARE 16.8% HIGHER:)LAST WEEK
USDJPY: Retail trader data shows 67.0% of traders are net-long with the ratio of traders long to short at 2.03 to 1. In fact, traders have remained net-long since May 03, when USDJPY traded near 111.083; price has moved 1.6% lower since then. The number of traders net-long is 7.6% higher than yesterday and 16.8% higher from last week, while the number of traders net-short is 4.0% higher than yesterday and 5.7% higher from last week.
Pound stays firm on Brexit deal hopes.An extremely erratic tone for global equities and to a lesser extent for the US Dollar since early May, shifting back and forth from “risk off” to “risk on” phases through the Fed, US Employment report and developments since the weekend on US-Sino trade negotiations and tariffs.This has left the US$ indecisive in the very short-term, BUT a key theme through this uncertain stage has been a strengthening of Sterling (GBP).The GBPUSD Forex rate has seen a strong advance from late April through early May, driven by optimism of a Brexit agreement between the Conservative and Labour parties, to see the threat higher to target a key technical resistance level, at 1.3196.
Gold feels the Dollar pressure. Current situation does not look good for the demand and in our opinion, the price of this precious metal can go significantly lower.
Gold keeps going down despite quite a big amount of risk around the globe (Trade Wars, Iran, Brexit). The main reason for that seems the stronger USD. Buyers are doing all they can to protect the major up trendline. They even managed to create two hammers on a daily chart. Normally, that would be a great buy signal but the problem is that the price is still going lower. Sellers look like they do not care about the long tail of yesterday’s candle.
BITCOIN and ALTCOINS
Since our recent BTC analysis, Bitcoin has crushed many resistances between $5000 all the way to $8000.
This time we saw a sharp move down, breaking the $5000 but surprisingly quickly correcting up (after touching $4940 on Bitstamp). What can be learned is that the situation is still very fragile. But after all, we still see the bulls quite strong on top the $5000 support. The glide below $5000 was quickly filled up with demand. The $5000 war was short and BTC made an impressive rally within last month.
The general sentiment in the crypto market is very positive and as said many times already, we expect a huge breakout of cryptocurrency.