Crypto asleep

This Daily Digest will cover:

• Crypto asleep but narrowing range should point to a larger move coming
• FED speakers last week on the hawkish side
• Risk looking strong but debt ceiling holds the key

I promised last week that I would not mention the debt ceiling again but sadly I am forced to. Stocks and risk markets saw a strong move higher late Thursday on reports of a deal to raise the debt ceiling being close. This has not materialised as yet but shows how the market is likely to react when an 11th hour deal is done. The deadline of June 1st looms large but the sides feel close to me which puts me into dip buying mode this week as I remain certain a deal will be pushed through at some point.

FX and Crypto had a week to forget as little fresh money was put to work and we really feel like we are stuck in listless, trendless ranges still. EUR/USD has bounced from its lows but at 1.0800 this morning is basically a coin toss. USD/JPY is more interesting as it pushes recent highs above 138 and eyes up 140. Short USD/JPY was a lot of people’s trade of the year and it has not worked so momentum could gather pace if we hold above 136.50/137.00.

Crypto is frankly asleep. Ranges are familiar and momentum is non-existent. However, tight ranges like this are often a precursor of a larger quick move. Watch 25,800/27,500 and 1710/1860 for signs of a break that should not be faded in my opinion.

FOMC minutes on Wednesday, Core PCE on Thursday and debt ceiling developments dominate a very quiet calendar this week.

As always, good luck.

Richard Usher
Head of OTC Trading