Forex Signals Brief for May 19: China Puts Bitcoin on Notice

US Wrap

Equity markets continue to see red, while today it was China putting pressure on Bitcoin and crypto markets.

The day started out strongly for most crypto’s before China issued a statement reiterating their stance that digital tokens cannot be used as a form of payment. ‘Virtual currencies should not and cannot be used in the market because they’re not real currencies’, was the official word from the PBOC, which lead to falls in BTC, ETH and most of the top coins.

Elsewhere, the falling USD continues to be a trend that we must take note of. The Greenback dropped under 90.00 on the US Dollar Index, which pushed the majors up and helped prop up the commodities sector. GOLD continued to trade at recent highs, while SILVER dipped slightly but remains above the key $28 level.

The Data Agenda

The economic calendar will feature a host of CPI prints today, starting with the UK and Eurozone, while we get the Canadian data later in the session. Inflation is getting out of control across the world at the moment so these readings will be important and market-moving for bond markets.

Later in the US session, we are looking towards the latest release of the FOMC minutes, however, we are really not expecting to hear anything of substance. If inflation is through the roof and the FOMC aren’t prepared to act, I can’t see much new information in the minutes making any difference at this stage.

Forex Signal Update

The FX Leaders Team had a solid trading session, closing two winners from three trades and making the most of moves in the majors.

XRP – Active Signal

XRP was looking very bullish early in the US session and testing above $1.65, before the China headlines pulled the entire market down. Nevertheless, XRP looks strong and if you look at the chart of XRP/BTC, you can clearly see a very bullish setup at the moment.

LTC – Active Signal

We are back in a long position in LTC and fortunately, it was a strong performer yesterday against a backdrop of a weak market. For now, we look for price to reclaim $300.

Cryptocurrency Update

Bitcoin has had a big week to say the least and for the time being, price is under the key $44,000 level. 

From here, we can look at the recent lows as key support which currently stands at $42,000. The longer price holds under $44,000, the weaker the chart becomes.

The weakness in Bitcoin will continue to weigh on the entire sector.