Tuesday, 28 May 2019

US-CHINA TRADE TENSIONS MAY WEIGH ON NAIRA; BITCOIN NEARS $9000

Lukman Otunuga,
FXTM Research Analyst

There is no doubt that persistent trade tensions between the United States and China have left a mark on emerging market currencies. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html

The rising risk aversion created from ongoing trade uncertainty developments has negatively impacted appetite for riskier assets and this continues to be reflected across financial markets. http://www.tectono-business.com/2015/07/tectono-business-review-in-conjunction_21.html With trade disputes also fueling concerns over slowing global growth consequently pressuring oil prices, this is bad news for the Naira and Nigerian economy. Should a US-China trade war result in oil prices collapsing, Nigeria’s economic recovery and exchange rate stability may be threatened. For Nigeria to shield itself against external risks and oil price volatility, there needs to be a stronger push on diversification away from oil reliance to other sustainable sources of economic growth.

Fellow Nigerians, are you aware that our crude oil will soon become useless? Yes, it will, in no distant time, become valueless owing to the fact that the countries that rely on it as their only source of energy are developing more affordable alternative sources of energy. When this finally happens, what will we do? How are we currently preparing for this imminent economic doom? Which other sector will continue to stabilize our economy? Nigerians, the only solution is developing the agricultural sector. In fact, this is the only solution. Very soon, the major source of revenue will become agriculture and agro-exports. How are you positioning yourself to play big in agro-export business? Why don’t you get a practical manual that explains the stages of export trade from processing and packaging of commodities to receipt of payment by the foreign buyers? Yes, arm yourself with the contemporary trends in export trade. This manual explains export operations, export management, export documentations and methods of payment in export trade? Yes, it is a contemporary step-by-step guide to export trade. It tells all the contemporary dynamics in export trade. To get it, click on this link: http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html

Bitcoin explodes higher as bulls shift into higher gear
Bitcoin is positioned to remain a major talking point across financial markets this week after jumping as much as 10% yesterday to almost $9000. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html

With no industry news or reports behind the abrupt upside, the primary factor behind Bitcoin’s aggressive appreciation is likely based around price action. The technical picture suggests that the cryptocurrency remains heavily supported by the bullish ‘golden cross’ formation on the daily charts. http://www.tectono-business.com/2015/07/tectono-business-review-in-conjunction_21.html This occurs when the 50-day simple moving average crosses above the 200-day moving average. With prices slowly approaching $9000, the path of least resistance certainly points north. A solid daily close above $9000 has the potential to open a clean path towards $10,000.

Pound lost in Brexit drama and political chaos
The past few days have certainly not been kind for the British Pound which remains one of the weakest G10 currencies. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html

Theresa May’s resignation is likely to add to the uncertainty over Brexit and what to expect in the coming months. With fears of a no-deal Brexit mounting by the day amid the drama, the British Pound remains fundamentally bearish. Technical traders will continue to watch how prices behave around 1.2620. A solid daily close below this point will signal a selloff towards 1.2500 in the short to medium term.

EURUSD hovers around 1.1200
The Euro remains on standby below 1.1200 as investors digest the results of the European Parliament elections. With concerns over Italy’s budget denting appetite for the Euro, the EURUSD is positioned to trend lower. http://www.tectono-business.com/2016/02/contemporary-step-by-step-guide-to.html

Taking a look at the technical standpoint, the EURUSD remains bearish on the weekly charts as there have been consistently lower lows and lower highs. Sustained weakness below 1.1200 is likely to open a path towards 1.1100 and 1.1000, respectively.

Commodity spotlight – Gold
Gold struggled for direction today with prices hovering around $1283 as sizzling US-China trade tensions and Brexit uncertainty sent investors rushing towards the Dollar. Although the precious metal got off to a slow start this week, bulls remain in control above $1280. Should this level prove to be reliable support, the next key point of interest for Gold may be found around the $1300 psychological level.

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