Check Your Shadow

Happy Groundhog Jobs Day!!

February 2nd is marked on many calendars as a uniquely superstitious holiday in which a rodent named Phil who lives in Pennsylvania will decide if we’re ready for Spring or if we get six more weeks of winter.

This tradition comes at an auspicious time for the financial markets. The irregularities in the bonds market have spread and are now worrying stock investors.

The jobs data coming from the US today could provide an omen for Wall Street. Will they step out of their hole with confidence or will they cower at the sight of their own shadow?

For those of you hodling cryptos as the main part of your portfolio, you could probably skip to the end, but you probably shouldn’t.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

• Bond’s Continue to Fall
• NFP Jobs Day!!
• Red Crypto Night

Please note: All data, figures & graphs are valid as of February 2nd. All trading carries risk. Only risk capital you can afford to lose.

The Backdrop

At the moment, the US government has an outstanding debt level of approximately $20.6 trillion. Who do they owe all this money to??

Well, everyone. Governments borrow money in the form of bonds, which are paid back gradually over time. At the moment if you want to lend money to the United States for the next 10 years, they will pay you back an annual “yield” of 2.79%.

The reason this yield is so important is that US government debt is seen as a benchmark for most types of lending on the planet.

Even though this is the highest yield we’ve seen since early 2014, it’s really not that much historically. This graph from CNBC shows us the 10-year yield since 1954.

Of course, nobody is really worried about a yield of 2.8%. The problem here is the rate at which it’s rising and if the world is ready to see rates that are much higher.

Janet Yellen’s final words to us from the pulpit of the US Federal Reserve can be seen as a warning about inflation. If indeed it does come quickly, lending rates will go up. That’s when we’ll truly see how well this quantitative easing experiment really worked.

Jobs Numbers Today

At 1:30 PM GMT the United States will publish its monthly jobs report. As many of you know, this is usually the most highly watched statistic by the financial markets and has been known to cause huge moves in everything from the USD, to stocks, and commodities.

Analysts are expecting a strong number of more than 180,000 jobs added in January. If the number comes out on target or within 50,000 more or less, the reaction may be quite muted.

A pleasant surprise here could add some much-needed confidence to the stock market, which has been showing some serious signs of nervousness lately.

In addition, we’ll be watching the average hourly earnings. If salaries in the US start to increase quicker than expected it could spur on inflation.

Bitcoin Support

Selling continued overnight from the number one cryptotrading nation.

The good news is that volumes have spiked in Japan…

The not so good news is that much of this volume seems to be mostly on the short side.

The other good news is that the Sushi Premium has come down drastically and even reversed. The price per bitcoin in Japan is now cheaper than it is anywhere else in the world.

The action from South Korea on the other hand remains somewhat muted and the premiums are still slightly above the rest of the market.

As far as the technical analysis, we are now at the decision point that we’ve been speaking about for the last few weeks.

Here’s the chart we’ve been looking at with the three relevant levels…

As you can see, we’re now just below the breakout level (purple line) and resting on the 200 day moving average (yellow). The big test will be at the long term trend line (blue).

Of course, everyone draws their trend lines slightly differently. For the purpose of this analysis, I’ve tried to draw it as conservatively as possible. A small break below wouldn’t be much of an issue but if we do go much below this line we could very well be heading for 6 more weeks of hodling winter.

Have an amazing weekend!

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation. The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro. Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose. Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

The post Check Your Shadow appeared first on Crypto Currency Online.

source https://cryptocurrencyonline.co/check-your-shadow/