Forex Weekend Preview: Bitcoin Burns, EUR/USD Outlook
Shain Vernier • 2 min read
It has been an extremely active week on the markets. Central bank announcements, surprise economic reports, and historical geopolitical events all brought heavy participation to the forex. Through the chaos, there have been some solid trading opportunities and plenty of money to be had. With any luck at all, the next five sessions will bring us more of the same.
The economic calendar is vacant this weekend. Sunday’s electronic open is followed by a few events worthy of note:
Australia Labour Day
China Foreign Direct Investment (Feb.)
U.S. Monthly Budget Statement (Feb.)
Monday marks a bank holiday in Australia, so be on the lookout for lagging liquidity in the Aussie. FDI numbers out of China may serve to influence the debt and gold markets, but nothing earth-shattering is likely.
The big event that everyone will be watching is the progression of the U.S./North Korea summit. Mainstream media outlets are going full-bore on the subject and will keep it up over the weekend. Coverage is mixed, with opinions varying from “incredibly reckless” to “a breakthrough in global geopolitics.”
The only opinion that matters is that of mother market — she seems to like the idea of a denuclearized Korean Peninsula, as the DJIA is up over 330 points for the session.
Crypto Meltdown Part 3: Bitcoin Is In Trouble
The hits keep coming for Bitcoin (BTC) and traders are heading for the door. Price has fallen another 5% in the last 24 hours to around $8700. Weekly performance is much worse, showing a loss of more than 22%. No simple way to put it, this is a bloodbath.
It is easy to get caught up in the swings of BTC and lose sight of the big picture. Month-over-month BTC is up better than 7%. Year-over-year BTC is up over 600%, a fantastic return on any asset.
Of course, the mind of an active trader functions in the now. The high water mark of $20,000 is fresh in everyone’s mind and a valuation of $8500 seems minuscule in comparison. Unfortunately, selling begets selling and a coming test of $5000 appears more probable every day.
In a live update from Thursday, I broke down the scenario facing the EUR/USD for the near-term. Today’s poor U.S. Unemployment Report derailed a pending downtrend prompting rotation back toward the Daily SMA and Bollinger MP.
The 1.2300 handle is proving to be a two-way catalyst for participation. I expect the market to settle near this level going into the weekend. With a vacant economic calendar for Monday, the EUR/USD is in a prime position to creep north early next week.
Enjoy a few days off before the market reopens Sunday. This time of year is challenging for an active trader. There are few breaks in the action and burnout becomes a factor that kills performance.
Sometimes the best thing we can do is get away from the screen and put the markets down for awhile. Don’t worry — they will be here when you get back.