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• Prominent hedge fund names and billionaires have started to show their support for the ICO industry
• The VIX index is nearly twice more volatile now than Bitcoin

Bitcoin's market cap has dropped to $108 billion. The price is trading at $6715 and year to date it is down nearly 53.07%. However, I do think, that the tide is about to turn for Bitcoin and it won't be long before we see a major move. The evidence is in the hash rate which is consistently increasing, meaning, that miners are still very busy, and they hold the view that the price is going to rise. The hash rate has increased from 16EHash/s to 37EHash/s year to date.

Speaking from a fundamental perspective, there has been more positive news when it comes to Bitcoin than negative ones. The flow of news is an important element to measure the sentiment and you know that the reversal is on the cards when the momentum changes.

So, why do I think that there has been more positive news? Well, if one reads the recent headlines, it becomes clear that positive ones are outpacing now. For instance, Coinbase moving into the security coin listing space is the most obvious one. US-based cryptocurrency exchange Coinbase Inc. gained the approval of SEC to list security tokens and provide a broader range of financial services. Of course, it confirms that the landscape over in the US is becoming friendlier.

Prominent hedge fund names and billionaires have started to show their support for the ICO industry. There are more news coming out daily and these billionaires and hedge funds are disclosing their investments in the ICO projects. This sends the signals that not only the serious investors are highly interested in the ICO projects but also, they are no longer anxious about the regulatory issue. Professional investors backing up an ICO project is a major deal. It is a sign of confidence and it attracts huge interest from retail investors.

Higher volatility is something which can push the retail investors away. Why is this? Investors would search for alternative assets. Critics have also pointed out many times that Bitcoin's volatility is abnormal, and this hinders its adoption. I have compared the Bitcoin 10-day volatility to VIX index 10-day volatility. The VIX index is nearly twice more volatile now than Bitcoin.

The DAX index has ticked lower in the Tuesday session. Currently, the DAX is at 12,566, up 0.05% on the day. On the release front, there are no major German or eurozone events. In economic news, the eurozone trade surplus slipped to EUR 16.9 billion, short of the estimate of EUR 17.6 billion. This marked the lowest surplus since January 2017.

European equity markets showed little change last week and the DAX continues to trade quietly on Monday. Still, the trading tensions hovering in the air have many investors wondering if this is the calm before the storm. On Tuesday, the Trump administration said it was considering imposing tariffs on some $200 billion in Chinese goods, which would be a significant escalation in the trade war between the two economic giants. China has promised to respond with “firm and forceful measures”, but hasn’t provided any details. With neither side showing any flexibility, the markets could be heading for stormy waters if China retaliates.

Trade policy is not part of the Federal Reserve’s mandate, but Fed policymakers continue to voice concern about the escalating trade war between the U.S and its major trading partners, particularly China. On Friday, Dallas Fed President Robert Kaplan said he would have to downgrade his outlook if the tariff battle continues. Kaplan said that U.S tariffs on steel and aluminum imports had dampened capital expenditures plans and further trade tensions could lead to currency fluctuations and geopolitical instability.

European Union and Japan signed an unprecedented free trade agreement in Tokyo today. The signing was delayed from last Wednesday, as Japan Prime Minister Shinzo Abe needed to give more attention to the flood in southwester Japan. It's nevertheless a huge achievement in real terms by the two power houses after four years of negotiations. To name a few of the key points, it's estimated that Japan GDP will be boosted by 1% with around 290k jobs created. The 10% import duty on Japan car will be dropped. And, the majority of the EUR 1B duties by European exporters will also be removed.

Abe said today that "while protectionism is spreading in the world, Japan and the European Union will take the lead as flag bearers for free trade." European Council President Donald Tusk said "we are sending a clear message that we stand together against protectionism."

Sterling's reaction to today's job data is rather muted. Jobless claims rose 7.8k in June, above expectation of 2.3k.

Average weekly earnings including bonus rose 2.5% 3moy in May, slowed from 2.6% 3moy. Average weekly earnings excluding bonus rose 2.7% 3moy, slowed from 2.8% 3moy.

Unemployment rate was unchanged at 4.2% in the 3 months to May, staying a the joint-lowest since 1975. Employment rate rose to record high at 75.7%.

UK employment rates (aged 16 to 64 years), seasonally adjusted, January to March 1971 to March to May 2018.

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.16905
Open: 1.17101
% chg. over the last day: +0.26
Day's range: 1.17096 – 1.17151
52 wk range: 1.0571 – 1.2557

During yesterday's trading session the bullish sentiment was observed on the EUR/USD currency pair. Yesterday, a report on the volume of retail sales in the US for June was published, which met the expectations of investors and amounted to 0.5%. At the moment, EUR/USD is still rising. The key levels of support and resistance are 1.17100 and 1.17400 respectively. We recommend opening positions from these marks. The trading instrument is tending potentially to grow.

The news feed on 2018.07.17:

• The average wage level in the UK at 11:30 (GMT+3:00).

We also recommend paying attention to the speech by the Fed's head.

Indicators point to the power of buyers: the price has fixed above 50 MA and 200 MA.

The MACD histogram is located in the positive zone and above the signal line, which gives a strong signal to buy EUR/USD.

Stochastic Oscillator is near the overbought zone, the %K line has crossed the %D line. There are no accurate signals.

Trading recommendations

Support levels: 1.17100, 1.16800, 1.16400
Resistance levels: 1.17400, 1.17800

If the price fixes below the already "mirror" support of 1.17100, a technical correction of the EUR/USD quotes is expected. The movement is tending to 1.16800-1.16600.

Alternative option. If the price fixes above 1.17400, we recommend you opening long positions. The target level of movement is 1.17800-1.18000.

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.32166
Open: 1.32330
% chg. over the last day: +0.07
Day's range: 1.32343 – 1.32567
52 wk range: 1.2361 – 1.4345

Yesterday, a variety of trends was observed on the GBP/USD currency pair. At the moment, the technical pattern is ambiguous: the trading instrument is in a sideways trend. Investors expect additional drivers. The local support and resistance levels are 1.32300 and 1.32700, respectively. We recommend opening positions from these marks.

Today, the news feed on the UK economy is calm. We recommend you to pay attention to the speech by the Bank of England head Mark Carney.

The price is being traded above 50 MA and 200 MA, which indicates the power of buyers.

The MACD histogram is in the positive zone and above the signal line, which sends a signal to buy GBP/USD.

Stochastic Oscillator is located in the neutral zone, the %K line is crossing the %D line. There are no accurate signals.

Trading recommendations

Support levels: 1.32300, 1.31800, 1.31300
Resistance levels: 1.32700, 1.33100, 1.33500

If the price fixes above 1.32700, GBP/USD is expected to rise. The movement is tending to 1.33100-1.33500.

Alternative option. If the price fixes below the support level of 1.32300, it is necessary to consider sales of GBP/USD. The movement is tending to 1.31800-1.31600.

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.31523
Open: 1.31367
% chg. over the last day: -0.15
Day's range: 1.31135 – 1.31281
52 wk range: 1.2059 – 1.3795

There is a downward trend on the USD/CAD currency pair. Currently, the local levels of support and resistance are 1.31100 and 1.31350, respectively. Positions should be opened from these marks. The trading instrument is tending potentiallty to reduce.

The news feed on the economy of Canada is calm.

Indicators point to the power of sellers: the price has fixed below 50 MA and 200 MA.

The MACD histogram is in the negative zone and below the signal line, which gives a strong signal to sell USD/CAD.

Stochastic Oscillator is moving out from the oversold zone, the %K line is above the %D line, which gives a weak signal to buy USD/CAD.

Trading recommendations

Support levels: 1.31100, 1.30800
Resistance levels: 1.31350, 1.31600, 1.31900

If the price fixes below the support level of 1.31100, further decrease of the USD/CAD currency pair is expected. The movement is tending to 1.30800-1.30500.

Alternative option. If the price fixes above the already "mirror" resistance level of 1.31350, the correction of the USD/CAD quotes is expected. The target level of movement is 1.31600-1.31900.

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 112.203
Open: 112.269
% chg. over the last day: -0.02
Day's range: 112.344 – 112.375
52 wk range: 104.56 – 114.74

There is an ambiguous technical pattern on the USD/JPY currency pair. The quotes are in a sideways trend. Investors expect additional drivers. The price is testing the key support level of 112.250. The resistance level is still 112.600. Positions must be opened from these marks.

The news feed on the economy of Japan is calm.

Indicators do not send accurate signals: the price is being traded between 50 MA and 200 MA.

The MACD histogram is near the 0 MArk.

Stochastic Oscillator is located in the neutral zone, the %K line is above the %D line, which indicates the growth of USD/JPY.

Trading recommendations

Support levels: 112.250, 111.900, 111.500
Resistance levels: 112.600, 112.900

If the price fixes below the 112.250 level, the USD/JPY currency pair is expected to decline. The movement is tending to 111.900-111.700.

Alternative option. If the price fixes above the resistance of 112.600, we recommend opening long positions. The target level of movement is 112.900-113.100.

The American dollar is falling against a basket of the major currencies. Last week was marked by the maximum increase of the USD for the last month. The US dollar index (#DX) closed in the negative zone (-0,24%). US retail sales data for June was also released and it met the expectations of investors at the level of 0,5%.

The trading conflict between the USA and China is still in the spotlight. Weak economic reports from China has strengthen the concerns of the financial market participants that this trading war with the United States may slow the growth of Chinese economics. The US Administration, in turn, is not satisfied with the retaliatory duties on imports of American goods from China, the EU, Canada, Mexico and Turkey. Washington, D.C., considers these actions as illegal and illegitimate.

The Consumers Price Index of New Zealand was released during the Asian trading session. It fell to 0,4%, while experts expected 0,5%. Today we expect the statements of the head of the Bank of England, Mark Carney, and the chairman of the Federal Reserve, Jerome Powell.

The "black gold" prices drop sharply against the increasing oil supply on the world’s market. At the moment, futures for the WTI crude oil are testing a mark of $66,95 per barrel. At 23:30 (GMT+3:00), a report on the US crude oil inventories will be published.
Market Indicators

Yesterday, there was a variety of trends in the US stock market: #SPY (-0,09%), #DIA (+0,19%), #QQQ (-0,24%).

At the moment, the 10-year US government bonds yield is at the level of 2,85-2,86%.
The news feed on 2018.07.17:

- The Average UK salary at 11:30 (GMT+3:00).

We also recommend paying attention to the speech by the heads of the Fed and the Bank of England.

EUR/USD has posted gains in the Tuesday session. Currently, the pair is trading at 1.1733, up 0.18% on the day. In economic news, there are no events in the eurozone. The U.S releases manufacturing and housing indicators. Federal Reserve Chair Jerome Powell testifies before the Senate Banking Committee. On Wednesday, the Eurozone releases Final CPI and the U.S publishes building permits and housing starts. Fed Chair Jerome Powell testifies before the House Financial Services Committee.

After a sluggish first quarter, U.S retail sales reports have rebounded in the second quarter. Core retail sales were revised upwards to 0.8% in May, and the June gain of 0.5% edged above the forecast of 0.4%. Retail sales gained 0.4%, and were up an impressive 6.6% on an annualized basis. Consumer spending is a key driver of economic growth, and a tight labor markets and firming inflation are further indications that the economy is in excellent shape. The Fed is widely expected to raise rates again at the September meeting, with odds of a quarter-point hike at 87%, according to the CME Group.

The escalating trade war between the U.S and China is raising concerns not just on the equity markets but at the Federal Reserve as well. On Friday, Dallas Fed President Robert Kaplan said he would have to downgrade his economic outlook for the economy if the tariff battle continues. Kaplan said that U.S tariffs on steel and aluminum imports had dampened capital expenditures plans and further trade tensions could lead to currency fluctuations and geopolitical instability. With Fed policymakers split on whether to raise rates once or twice in the second half of 2018, the outcome of the tariff battle could have a significant impact on the monetary policy and on the direction of the U.S dollar.

The Euro extends recovery from Friday's spike low at 1.1613 into third straight day and probes again through strong barriers at 1.1716/29, provided by base of thick daily cloud / falling 55SMA.

Weaker dollar maintains positive Euro's near-term tone, with north-heading momentum / slow stochastic and daily MA's (10,20,30) turning into bullish configuration and supporting scenario.

Penetration and close within daily cloud would generate bullish signal for extension towards next strong barrier at 1.1790 (09 July high), which guards key barriers at 1.1848/54 (14 June high / Fibo 38.2% of 1.2413/1.1908 fall).

Testimony of Fed chief Powell (today & Wednesday) is the event and is closely watched as investors expect signals for Fed's further rate hikes, which would boost the greenback and send the Euro lower.

Conversely, current uptrend could extend further on dovish tone from Powell.

Res: 1.1762, 1.1790, 1.1848, 1.1854
Sup: 1.1729, 1.1716, 1.1701, 1.1679

On Monday, the dynamics of oil was in the spotlight on a combination of negative factors by both the potential demand and the supply part. Asian markets lose 0.5%-0.7% on Tuesday morning. After returning to the highs area since March, the American S&P 500 lost growth momentum in anticipation of further signals from the economy or the Fed's chairman.

The dollar index has continued its decrease since Friday, losing 0.8% in the meantime and failing to stay in the area of year highs near 95. The pair EURUSD managed to return to the area above 1.17 on Monday and is currently trading on 1.1715 after Fed's Kashkari calls to make a pause in rate hikes to avoid the yield curve inversion.

The gold is trading at $1240 per ounce – at around the one-year lows reached on Friday. This precious metal has lost more than 125 dollars since April on fears that trade conflicts would slow down the Asian economic growth, as well as due to the interest rates rising, which increases the attractiveness of bonds – alternatives to gold.

Quotes of Crude Oil and petroleum companies were under pressure after the report that Libya had been ready to fully resume the shipments. Brent lost on Monday more than 4%, and collapsed to the lowest levels since April, to the area of $72 per barrel Brent. In addition, the prices of oil companies had come under pressure, which caused the negative closing of the American S&P 500 with a fall by 0.13%. Besides the news from Libya, oil is pressed by the US administration's intentions to open a strategic stock to push the quotes lower. Moreover, the attitude of Russia and Saudi Arabia to increase actively its production is an additional factor of pressure from the supply side for Crude Oil.

Asian exchanges on Tuesday morning continue to lose its positions after the disappointment by Chinese statistics published on Monday. The growth rate of the Chinese economy sank to a two-year minimum at 6.7% yoy, and the industrial production slowed noticeably above expectations. In addition, investors are hesitant about the prospects of trade wars between the major partners. In the worst-case scenario, it will seriously suppress the global economic growth and will lead to a decline in demand for oil and other types of raw materials.

Besides, on Tuesday, the focus of the markets will be on Powell's first speech in the U.S. Congress as a Fed Chairman. The markets are set to hear a confirmation of the tightening policy, but will listen carefully to the assessments of trade conflicts risks. The confidence that the U.S. economy in the upcoming quarters will stay on track for impressive growth would support the dollar and cause a wave of growth in short-term interest rates on debt markets. The reaction of the stock areas in this case can be somewhat complex. Active tightening can reduce the attractiveness of stocks in the U.S. and provoke the risky assets sale all over the world.

EUR/USD

Current level - 1.1729

The bias is positive above 1.1700, for a rise towards 1.1790, en route to 1.1830 area.

USD/JPY

Current level - 112.36

There is still a chance for a dip to 111.80 zone before renewal of the general upmove, towards 114.50.

GBP/USD

Current level - 1.3249

Intraday allow a corrective dip to 1.3190 support area, where the pair should find a reliable base for another upswing, towards 1.3360, en route to 1.3460.