The trade war rhetoric continues today as well and as a result JPY has found some nice bids. Safe haven assets love uncertainty so the Yen and Gold have been rallying today. Cryptocurrencies on the other hand, are on a retrace mode after the bullish reverse of the last two days. Will this retrace end soon? Let’s take a look.

You better get out of the way when giants fight

Retrace of reverse for Cryptocurrencies?

Cryptocurrencies managed to put up a reversal this week so far. You might consider it a retrace of the bigger downtrend but let’s just call it a reversal so we don’t get confused with the retrace that has been going on today.

As we showed it yesterday, Bitcoin jumped off the 200 SMA on the daily chart and the 50 SMA on the weekly chart since they come at the same level. It climbed around $1,000 from the lows during the last few days, so it has been a decent attempt from the buyers.

Bitcoin broke the 20 SMA (grey) which was pushing the downtrend last week and the 50 SMA (yellow) on the H4 chart. So, the steep downtrend of the last week was rightfully challenged by the buyers.

Although, today we are seeing a retrace lower. Bitcoin has dived back below these moving averages now, but this might be it for the sellers. The stochastic indicator is nearly oversold which means that the retrace lower is almost complete.

But, we can’t be sure about anything in forex or in cryptocurrencies. This might be just a retrace or it might be a continuation of the downtrend. So, the next few hours are going to be decisive for Bitcoin and the rest of the altcoin market.

Looks like the retrace lower is over

Safe Haven Assets benefit as the Trade War Heads for the Next Phase

The trade was between the US and who knows who is heating up. The US is increasing the pressure for the Chinese in particular and the Chinese are responding back. Germany is playing the counselor, pushing for dialogue between the two world giants in order to avoid escalation.

But, Europe is in a weak position until it becomes the federal state it is headed for. Trump doesn’t care for anyone and China is still a communist country if you forgot about it.

Chinese officials are saying that China cannot accept Trump’s requirement to cut the deficit by $100 billion. Instead, they are hitting back with sanctions on US goods, as expected. China will levy tariffs on 106 US products Trump just said that the US is not in a trade war with China, but the current situation must change.

I don’t know what a trade war is for Trump, but this does look like a war and the market is taking notice. USD/JPY lost about 70 pips earlier today as the market sentiment worsened, while Gold rallied higher. Although, at the moment I see this dive in USD/JPY as a good opportunity to go long with a short term signal which I will explain below.

Trades in Sight

Bullish USD/JPY

1. The trend has turned bullish
2. The retrace down is almost over
3. The candlesticks are pointing to a reversal
4. Moving averages are providing support

The stochastic is almost overbought

USD/JPY entered the next phase of the uptrend yesterday as it climbed around 100 pips from the lows. It has retraced lower this morning amid trade war comments from China and the US, but it looks like the retrace is over now. The moving averages are providing support on the H1 chart and stochastic is oversold, so I’m thinking of going long now.