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Bitcoin 10K Breakout!

Bitcoin (BTC/USD) – Weekly Candlesticks
Source: GKFX / MT4 (July 28, 2020)


Bitcoin has decisivley broken the 10k barrier alongside the descending trendline formed from all-time highs in 2018. Next major resistance is the 2019 peak at $13,800.
 

TAKEAWAYS


•    Bitcoin has taken out the 10,000 level (now > 11k)
•    Gold hits a record high (futures > $1985 per oz.)
•    Moderna launches 30,000 person phase 3 vaccine trial
•    DAY AHEAD: US consumer confidence
 

MARKETS


Dollar-weakness is the biggest story across financial markets at the moment. The descent in the dollar sees EUR/USD at its highest since September 2018 just under 1.18, while USD/JPY is now testing the critical 105 round number support.
 
Gold hit record highs yesterday and gold futures now over $1980 per oz and silver has crossed $25 per oz. WTI crude nudged higher but some reintroduction of travel restrictions is limiting expectations for fuel demand.

Asian stocks are shooting higher early Tuesday thanks to positive vaccine news and hopes for a new US stimulus package. One exception to the rule was Japan’s Mitsubishi Motors, where shares dived 10% to an all-time low. Tech stocks rebounded on Monday in the lead-up to earnings this week, helping Wall Street make a positive start to the week. Shares in Europe look set to open in the green on Tuesday.
 

GURU WISDOM


“5:1 risk reward ratio allows you to have a hit rate of 20%. I can actually be a complete imbecile. I can be wrong 80% of the time and still not lose.” – Paul Tudor Jones
 

Bitcoin Breakout


Crypto currencies seem to haven woken from their slumber! Bitcoin has broken out of a 3-month consolidation under $10,000 and is now north of 11,000. Weakness in the US dollar and surging commodity prices are contributing to the enthusiam. Bitcoin’s main selling point is as a decentralised currency unaffected by government and central bank decsions. Asset prices inflating under huge new government debt spending and money priting is the right kind of environment for crypto.
 

Vaccine latest


A double dose of good vaccine news is adding to the optimism in markets. Moderna shares popped on Tuesday on news it will begin a 30,000-person phase 3 trial for its coronavirus vaccine. Immunologist and White House advisor Dr Anthony Fauci has said the vaccine could be approved by November- with Moderna saying it could have 300 million doses ready early next year. After US markets closed, Pfizer said it too was beginning final stage trials for its COVID-19 vaccine.
 

$2000 Gold?


The strong momentum in precious metals prices is not giving way, with gold continuing to surge to new record highs. It is $20 shy of hitting $2000 per oz for the first time, which at the current rate could easily happen this week. A snapback in the US dollar might temporarily disrupt the trend but a backdrop of negative real rates (meaning interest rates after accounting for inflation) means there is not the usual opportunity cost to investing in gold, which earns no interest.

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