Jump to content

Bitcoin surges as sanctions bite Russian ruble. Traders eye china PMI, RBA decision


Recommended Posts

Bitcoin, Ethereum, rallies in response to Russian sanctions; Chinese PMI data, RBA interest rate decision today as fighting in Ukraine rages and BTC/USD may target the 50,000 level if momentum carries prices above the 61.8% Fib

1646096330279.jpg
Source: Bloomberg
 
 

Tuesday’s Asia-Pacific outlook

Asia-Pacific markets look set for a mixed open as traders mull the latest developments stemming from the Ukraine conflict. US stock markets trimmed heavy losses overnight, with the tech-heavy Nasdaq 100 index closing 0.34% higher, but the S&P 500 shed 0.24%, securing a second monthly loss for the US benchmark. Investors flocked to the safety of Treasuries, particularly short-term tenures, reversing some recent flattening across the curve that occurred in recent weeks. The Japanese Yen and Swiss Franc attracted heavy inflows amid the volatile market landscape as traders assessed the latest western sanctions on Russia.

Bitcoin, and other major cryptocurrencies, were big winners going into today’s APAC trading session. BTC/USD rose north of 10% over the past 24 hours, bringing prices to the highest levels since February 17. The cascade of sanctions being piled onto Russia from the United States and its allies, including the removal of major Russian banks from the SWIFT messaging system, has effectively marooned the Russian banking system from the global financial markets, casting doubt on Russia’s financial ability to weather the economic penalties. The Russian Ruble tumbled further against the Greenback overnight, with USD/RUB rising more than 20%.

The sharp rise in Bitcoin and other cryptocurrencies comes amid a significant uptick in trading volumes in Russia’s Ruble and Ukraine’s Hryvnia, according to data firm Kaiko cited in a Bloomberg report. Russian oligarchs and others who fear being impacted by the sanctions may be fleeing to Bitcoin, given its perceived insulation from the traditional financial system. Ukraine’s Vice Prime Minister, Mykhailo Fedorov, requested major exchanges to restrict users with a Russian address on Monday.

The response from major crypto exchanges has been mixed. Binance said it would block sanctioned individuals but would not freeze all Russian accounts. The possibility exists that western powers may soon target these flows, although Russia’s ability itself to sidestep sanctions through crypto is likely very limited. Meanwhile, crude oil is trading near the 96 level as traders move to price in a global market without Russia’s nearly 10 million barrels per day. Canada announced a ban on all Russian oil imports, although the country hasn’t imported any since 2019.

Today, China’s National Bureau of Statistics (NBS) will report February purchasing managers’ indexes (PMI) for its services and manufacturing sector. Analysts see manufacturing PMI dropping back into the contractionary territory at 49.8, according to a Bloomberg survey. That would be the weakest manufacturing report since October when Covid’s Delta variant and an energy crunch stifled factory activity. The services sector is expected to fall as well but should remain in expansion above the 50 level.

The Reserve Bank of Australia (RBA) is set to report its March interest rate decision at 3:30 GMT today. The Australian central bank is likely to keep its benchmark rate steady at 0.10% despite robust labor market strength and lofty raw material and consumer product prices. Still, RBA Governor Philip Lowe may strike a more hawkish tone, in a further capitulation to relatively hawkish market expectations. The missing piece for an RBA rate liftoff appears to be weak wage growth, tracking at 2.3% y/y in the fourth quarter, allowing RBA policymakers to stand firm. The market sees over 90 basis points of tightening by the December meeting, according to cash rate futures. AUD/USD may rise if Mr. Lowe indicates a willingness to tighten monetary conditions sooner than previously communicated.

Bitcoin technical forecast

BTC/USD rocketed higher overnight, clearing above the 40,000 psychological level, the 50-day Simple Moving Average (SMA) and the 38.2% Fibonacci retracement. The next obstacle for bulls is the 61.8% Fib level and the falling 100-day SMA. A break above those levels may shift bulls’ focus onto the 50,000 mark, a level untouched since December 2021. Momentum looks healthy, with the MACD line crossing above the signal line and on track to cross above the center line. The Relative Strength Index (RSI) is also moving firmly higher. Alternatively, a pullback may drag prices to the 40,000 level, where some support is likely to be offered.

BTC/USD daily chart

1646097841327.png
Source: TradingView

This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. This information Advice given in this article is general in nature and is not intended to influence any person’s decisions about investing or financial products.

The material on this page does not contain a record of IG’s trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

Thomas Westwater | Analyst, DailyFX, New York City
01 March 2022 12:56

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      21,178
    • Total Posts
      90,701
    • Total Members
      41,286
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    Afi
    Joined 29/01/23 11:39
  • Posts

    • Does anybody know the BIL (SPDR Bloomberg 1-3 Month T-Bill ETF) equivalent with a GBP currency hedge? I want the interest yield but I don't want the currency risk.
    • Capital, win loss ratio. If you have a trading edge and you can consistently win 50% of your trades, so your winning 5 trades out of 10. So if your risking 1% of your capital per trade, out of your 10 trades 5 would be losers, so that’s 5% loss and realistically out of the 5 winning trades, some would make small profits, some break even and 1, 2 or 3 could run nicely IF you can let your profits run, basically your making money out of 2 trades out of the 10 trades (80/20 Rule Pareto principle) So a $20,000 acct risking 1% is $200 per trade, this will keep the trader with his trade risk based on being able to win 50% of his trades. A long term trend trader can win with 30% wining trade. Basically you need to know your numbers. Rgds Pete
    • Investing in stocks can be a great way to grow your wealth over time. However, there are different approaches that investors can take when choosing which stocks to buy. Two of the most popular approaches are growth investing and value investing. Growth Investing Growth investing is an investment strategy that focuses on buying stocks of companies that are expected to grow at a faster rate than the overall market. These companies are often in industries that are growing quickly, such as technology or healthcare. Investors who use this approach believe that these companies will be able to generate higher profits in the future, which will lead to higher stock prices. One of the main advantages of growth investing is that it can potentially provide higher returns than the overall market. However, it is also riskier than other investment strategies, as these companies often have higher valuations and more volatile stock prices. Value Investing Value investing is an investment strategy that focuses on buying stocks of companies that are undervalued by the market. These companies may be in industries that are out of favour or have recently experienced challenges, but they have strong fundamentals and a history of profitability. Investors who use this approach believe that these companies are undervalued and that their true value will be recognized in the future, leading to higher stock prices. One of the main advantages of value investing is that it can potentially provide lower risk than growth investing. However, it may also provide lower returns in the long run, as these companies may not have the same growth potential as companies in the growth investing category. Comparing Growth and Value Investing Growth and value investing are two different approaches to stock investing, each with its own advantages and disadvantages. Growth investing can potentially provide higher returns but is riskier, while value investing can provide lower risk but potentially lower returns. An investor may choose one approach or a combination of both. A portfolio that contains a mix of growth and value stocks can provide a balance of potential returns and risk. Conclusion Both growth investing and value investing can be effective ways to invest in stocks. The key is to understand the potential risks and rewards of each approach and to choose the one that aligns with your investment goals and risk tolerance. Analyst Peter Mathers TradingLounge™ 
×
×
  • Create New...