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The Swing Overview – Week 28 2022

This week's new record inflation readings sent a clear message to central bankers. Further interest rate hikes must be faster than before. The first of the big banks to take this challenge seriously was the Bank of Canada, which literally shocked the markets with an unprecedented rate hike of a full 1%. This is obviously not good for stocks, which weakened again in the past week. The euro also stumbled and has already fallen below parity with the usd. Uncertainty, on the other hand, favours the US dollar, which has reached new record highs.

 

Macroeconomic data

The data from the US labour market, the so-called NFP, beat expectations, as the US economy created 372 thousand new jobs in June (the expectation was 268 thousand) and the unemployment rate remained at 3.6%. But on the other hand, unemployment claims continued to rise, reaching 244k last week, the 7th week in a row of increase.   But the crucial news was the inflation data for June. It

Crypto: How To Estimate A Risk And Take A Profit?

What Is (DYDX)? dYdX Cryptocurrency Supporting Perpetual Trading - Altcoins of Interest

Rebecca Duthie Rebecca Duthie 09.05.2022 13:54
Summary: How does dYdX work? A look into what a perpetual cryptocurrency trading exchange is. Advantages of investing in the dYdX crypto exchange. Past and future price performance. Read next: ($GARI) Gari Network's Future Looks Bright As Investors Await New Advancements.  dYdD is a decentralised trading platform that is used for cryptocurrency margin trading. Dydx is a decentralised trading platform that is used for cryptocurrency margin trading for assets such as ETH, BTC, SOL, DOT and more. The bulk of the trading happens on the Ethereum blockchain, however, with the recent launch of layer 2, the Dydx exchange can be used for inexpensive, instantly settled trades. Dydx has successfully filled a niche market in the world of cryptocurrencies. Since the launch of this platform in September 2021, they have added many features, including lending and borrowing services to decentralise the trading experience. The exchange has a market cap of $258.2 million, a circulating supply of 65569295 with a max of 1 billion. dYdX is a leading crypto exchange that supports perpetual trading. Dydx is a leading crypto exchange that supports perpetual trading. It trades on the ethereum block chain using smart contracts and no intermediaries. Perpetual trading on cryptocurrencies are financial derivatives that enable traders to bet on crypto asset price movements, using leverage without owning the underlying asset. Some advantages of using this method are: Increased flexibility of trades by allowing both long and short trades. Increased leverage. Dydx is aiming at trading for everyone. They are building an open platform for crypto financial products, which is powered by the Ethereum blockchain. dYdX works in the following way: The creation of smart contracts has allowed for cryptocurrency exchanges to create decentralised liquidity pools, collateralisation and lending across popular protocols like Uniswap, Sushi and Compound. dYdX took all of the best decentralised financial technologies and combined them to form a first-of-its-kind cryptocurrency derivatives exchange using crowd sourced liquidity only. To explain this concept more, it means that when you deposit collateral to open a leveraged trading position, you are borrowing from a decentralised liquidity pool that is funded entirely by other traders. Dydx Layer 1 blockchain: Layer 1 is a highly liquid, decentralised exchange for both crypto margin trading and for spot trading. On this layer it is possible to leverage up to 5x your position. As long as users collateralise correctly, it is fast and efficient to borrow funds for your positions. dYdX claims to have built the fastest and most powerful decentralised exchange ever through their layer 2 blockchain. Advantages of layer 2: No gas cost and lower fees: when users deposit to layer 2, the user will no longer be required to pay fees to miners. Fast withdrawals: layer 2 does not have a waiting period to withdraw funds. Security and privacy: increased security and privacy via zero-knowledge rollups*. Very fast: trades are instantly executed and confirmed on the blockchain within hours. Mobile friendly: can be used on any device thanks to upgrades. Cross-margining : users are able to access leverage across positions in multiple markets from a single account. USDC collateral: dYdX allows users to provide USDC as collateral in their trades. *Zero-knowledge rollups is a Layer 2 scalability solution that allows blockchains to validate transactions faster whilst ensuring gas fees remain low. How to trade perpetually with Dydx: Download the dYdX trading app and open it. Connect your crypto wallet to the app. Deposit funds into the wallet and then select the “trade” option. Open a trading position with selected leverage and limits. Use the app to track your position's performance. Read next: (SOL) Solana Coin Continues to Grow - Popular Altcoins, SOL: What Is It & How Does It Work?  The dYdX token, the platform gives dYdX tokens to its users in the form of generous rewards. Advantages of the dYdX token: dYdX liquidity staking pool: this feature is important for keeping the exchange alive and financially supported. Trading rewards: it is possible to earn dYdX tokens just by trading on the platform. Discounted trading fees: if users hold dYdX tokens in their wallet, they can receive a 3% discount on trading fees. Governance token: dydx is also used for governance of the protocol, which gives holders voting rights. PAST, PRESENT AND FUTURE PRICE When the token was first launched the price spiked and showed promise, since then the price has been on a consistent downward trend. In general the crypto market is volatile, this is shown in the price changes for this cryptocurrency. Currently with the negative global investor sentiment, the price of cryptos have been falling in general over the past months, which could be a reason this tokens value is currently trading so low. The coin price is forecasted to increase in the future. In 2022, the price is expected to increase by 78% and is expected to continue on this upward trend for the next 5 years. dYdx cryptocurrency Price Chart Sources: academy.shrimp.io. Dydx.exchange, cryptoadventure.com, trading-education.com
The Swing Overview - Week 19 2022

The Swing Overview - Week 19 2022

Purple Trading Purple Trading 16.05.2022 10:59
The Swing Overview - Week 19 Stock indices continued to weaken strongly last week, while the US dollar has already surpassed the mark 104 and is at 20-year highs. However, a set of important data is behind us, which could bring some temporary relief to the equity markets. The Czech koruna weakened sharply after the appointment of the new CNB Governor Ales Michl, who is a proponent of a dovish approach. Thus, the rise in interest rates in the Czech Republic appears to be close to its peak.   Macroeconomic data The US consumer inflation for April was reported on Wednesday, which came in at 8.3% on year-on-year basis. Analysts were expecting inflation to be 8.1%. Although the figure achieved was higher than expectations, it was still lower than the 8.5% inflation figure achieved in March. On a month-on-month basis, the price increase in April was 0.3%, significantly lower than in March when prices rose by 1.5%.   On Thursday, industrial inflation was reported at 8.8% year-on-year and 0.4% month-on-month for April.   The positive thing about this data is that inflation declined from previous readings. However, it is important to note that the year-on-year comparison is based on data where inflation was also higher in the previous year due to the recovery from the Covid-19 pandemic.   The Fed chief reiterated that he expects another 0.50% point rise in interest rates at the next two Fed meetings. He also mentioned that a higher rate hike cannot be ruled out if necessary.   The US 10-year bond yields came down from their peak and made a slight correction. However, the US dollar continued to strengthen and broke the resistance at 104. The dollar is thus at 20-year highs. Figure 1: US 10-year bond yields and USD index on the daily chart   Equity indices heavily oversold The strong dollar, rising US bond yields, the war in Ukraine and the effects of the lockdown in China were the main reasons for the decline in equity indices. The SP 500 index hit 3,860, the lowest level since March 2021. This is also where long-term support is. However, the important macro data is behind us and the market has processed all the available fundamental information. This could bring temporary relief to the markets and the index could make an upward correction. The fall in 10-year bond yields, gives this move some boost as well.   Figure 2: The SP 500 on H4 and D1 chart However, from a technical analysis perspective, the US SP 500 index remains in a current downtrend as the markets have formed lower low and is also below both the SMA 100 and EMA 50 moving averages on the H4 and daily charts. The nearest resistance is 4040 - 4070. The next resistance is at 4,140 and especially 4,293 - 4,300. The support is at 3,860 - 3,900.   German DAX index In macroeconomic data, the German ZEW Economic Sentiment for May was reported last week and showed a reading of -34.3, an improvement from the previous month's reading of -41.0. Inflation in Germany for April is at 7.4% on year-on-year basis and up 0.8% from March (the previous month's increase was 2.5%). Figure 3: German DAX index on H4 and daily chart The index continues to move in a downtrend along with the major world indices. The price has reached the SMA 100 moving average on the H4 chart, which tends to signal resistance in a downtrend. The price is moving below the SMA 100 on both the daily chart and the H4 chart, confirming the bearish sentiment. The nearest support according to the H4 is 13,600 - 13,650. The resistance is 14,300 - 14,330. The next resistance is 14,592 - 14,632.   The big sell-off in the euro continues The euro fell to 1.0356 against the dollar, the lowest value since January 2017. This value is also an area of significant support where price could stall. Fundamentally, the euro's depreciation is due to the strong dollar and the Fed's hawkish policy, which contrasts with the ECB's policy of not raising rates yet.    Figure 4: The EURUSD on H4 and daily chart Eurozone inflation data will be reported next week, which could be an important catalyst for further movement. The significant support is priced around 1.0350 - 1.040. The current resistance is at 1.05.   Czech koruna weakened strongly on the new governor appointment The President Miloš Zeman surprised with the appointment of Ales Michl for the governor of the CNB. Michl is known for his dovish views, having spoken out against raising interest rates at recent meetings. His appointment was welcomed in the markets by a strong depreciation of the Czech koruna. However, the bank later intervened in the markets by selling part of its foreign exchange reserves to prevent further depreciation of the Czech koruna.   It is important to know that the Bank's monetary policy is decided by the seven-member Bank Board. So far, the proportion for voting on rate hikes has been 5:2. But by the end of June, the president must appoint 3 new board members. This could significantly change the voting ratio on the board and set a new course for the bank's policy, which would mean a halt to the rise in interest rates. However, it is likely that at the June board meeting the board, still with the old composition, will decide on further interest rate increases. Figure 5: The USD/CZK and the EUR/CZK on the daily chart The Czech koruna has reached 24.36 against the dollar and 25.47 against the euro, from which it started to descend after the CNB interventions.  
What Does Inflation Rates We Got To Know Mean To Central Banks?

What Does Inflation Rates We Got To Know Mean To Central Banks?

Purple Trading Purple Trading 15.07.2022 13:36
The Swing Overview – Week 28 2022 This week's new record inflation readings sent a clear message to central bankers. Further interest rate hikes must be faster than before. The first of the big banks to take this challenge seriously was the Bank of Canada, which literally shocked the markets with an unprecedented rate hike of a full 1%. This is obviously not good for stocks, which weakened again in the past week. The euro also stumbled and has already fallen below parity with the usd. Uncertainty, on the other hand, favours the US dollar, which has reached new record highs.   Macroeconomic data The data from the US labour market, the so-called NFP, beat expectations, as the US economy created 372 thousand new jobs in June (the expectation was 268 thousand) and the unemployment rate remained at 3.6%. But on the other hand, unemployment claims continued to rise, reaching 244k last week, the 7th week in a row of increase.   But the crucial news was the inflation data for June. It exceeded expectations and reached a new record of 9.1% on year-on-year basis, the highest value since 1981. Inflation rose by 1.3% on month-on-month basis. Energy prices, which rose by 41.6%, had a major impact on inflation. Declines in commodity prices, such as oil, have not yet influenced June inflation, which may be some positive news. Core inflation excluding food and energy prices rose by 5.9%, down from 6% in May.   The value of inflation was a shock to the markets and the dollar strengthened sharply. We can see this in the dollar index, which has already surpassed 109. We will see how the Fed, which will be deciding on interest rates in less than two weeks, will react to this development. A rate hike of 0.75% is very likely and the question is whether even such an increase will be enough for the markets. Meanwhile, there has been an inversion on the yield curve on US bonds. This means that yields on 2-year bonds are higher than those on 10-year bonds. This is one of the signals of a recession. Figure 1: The US Treasury yield curve on the monthly chart and the USD index on the daily chart   The SP 500 Index Apart from macroeconomic indicators, the ongoing earnings season will also influence the performance of the indices this month. Among the major banks, JP Morgan and Morgan Stanley reported results this week. Both banks reported earnings, but they were below investor expectations. The impact of more expensive funding sources that banks need to finance their activities is probably starting to show.   We must also be interested in the data in China, which, due to the size of the Chinese economy, has an impact on the movement of global indices. 2Q GDP in China was 0.4% on year-on-year basis, a significant drop from the previous quarter (4.8%). Strict lockdowns against new COVID-19 outbreaks had an impact on economic situation in the country. Figure 2: SP 500 on H4 and D1 chart The threat of a recession is seeping into the SP 500 index with another decline, which stalled last week at the support level, which according to the H4 is in the 3,740-3,750 range. The next support is 3,640 - 3,670.  The nearest resistance is 3,930 - 3,950. German DAX index The German ZEW sentiment, which shows expectations for the next 6 months, reached - 53.8. This is the lowest reading since 2011. Inflation in Germany reached 7.6% in June. This is lower than the previous month when inflation was 7.9%. Concerns about the global recession continue to affect the DAX index, which has tested significant supports. Figure 3: German DAX index on H4 and daily chart Strong support according to the daily chart is 12,443 - 12,500, which was tested again last week. We can take the moving averages EMA 50 and SMA 100 as a resistance. The nearest horizontal resistance is 12,950 - 13,000.   The euro broke parity with the dollar The euro fell below 1.00 on the pair with the dollar for the first time in 20 years, reaching a low of 0.9950 last week. Although the euro eventually closed above parity, so from a technical perspective it is not a valid break yet, the euro's weakening points to the headwinds the eurozone is facing: high inflation, weak growth, the threat in energy commodity supplies, the war in Ukraine. Figure 4: EUR/USD on H4 and daily chart Next week the ECB will be deciding on interest rates and it is obvious that there will be some rate hike. A modest increase of 0.25% has been announced. Taking into account the issues mentioned above, the motivation for the ECB to raise rates by a more significant step will not be very strong. The euro therefore remains under pressure and it is not impossible that a fall below parity will occur again in the near future.   The nearest resistance according to the H4 chart is at 1.008 - 1.012. A support is the last low, which is at 0.9950 - 0.9960.   Bank of Canada has pulled out the anti-inflation bazooka Analysts had expected the Bank of Canada to raise rates by 0.75%. Instead, the central bank shocked markets with an unprecedented increase by a full 1%, the highest rate hike in 24 years. The central bank did so in response to inflation, which is the highest in Canada in 40 years. With this jump in rates, the bank is trying to prevent uncontrolled price increases.   The reaction of the Canadian dollar has been interesting. It strengthened significantly immediately after the announcement. However, then it began to weaken sharply. This may be because investors now expect the US Fed to resort to a similarly sharp rate hike. Figure 5: USD/CAD on H4 and daily chart Another reason may be the decline in oil prices, which the Canadian dollar is correlated with, as Canada is a major oil producer. The oil is weakening due to fears of a drop in demand that would accompany an economic recession. Figure 6: Oil on the H4 and daily charts Oil is currently in a downtrend. However, it has reached a support value, which is in the area near $94 per barrel. The support has already been broken, but on the daily chart oil closed above this value. Therefore, it is not a valid break yet.  

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