'Cryptocurrencies a bubble market, difficult to analyze but good to be traded' - Nenad Kerkez, Admiral Markets
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PROFILE
• Current Job: Analyst and Full-Time Trader at Admiral Markets
• Career: Holds a MSc Degree in Economics at the John Naisbitt University (formerly known as Megatrend). Works as Senior lecturer and market analyst for Admiral Markets
Nenad Kerkez is an analyst and trader who has been in the market since 2008 and works closely with Admiral Markets as their Head Lecturer and Market Analyst. He is well known in the FX Community, ranking in the top 10 traders and analysts in the Forex Factory High Impact Members Ranking.
Nenad covers over 25 currencies on an intraday basis and has a Masters in economics. He also developed CAMMACD TM, a proprietary trading and analysis strategy. Further, he is the co-founder and head of Elite Currensea Trading, an educational website for currency traders.
EUR/USD has been stuck now for a while in-between 1.11 and 1.12: What's your short-term outlook of the pair? What does it need to break out of this range?
The ATR(14) of the pair is currently 60 which indicates a very slow moving market. A clear 4h or daily close below 1.1100 is needed for the price to proceed towards 1.1000 while a close above 1.1295 is needed for 1.1358.
Can the BoE sustain the current monetary policy with inflation picking up big due to Sterling weakness? What's your GBP outlook on the long-run?
The current UK Gilt’s are showing no signs of a rate hike in the interim, with the 2-Year Gilt Yield at 0.22% p.a. Despite this, we must consider the key metrics that the BoE will need to consider before tightening monetary policy. It appears these key metrics have been achieved, as the latest headline inflation is currently at 2.9% p.a., and full employment exists with unemployment at 4.6%. Despite full employment and modest inflation, the uncertainty Brexit brings to the future of the UK economy leaves the BoE in a catch-22 with respect to monetary policy. At this stage, I am neutral to bullish on the GBP given where the economy is at currently.
USD/CAD has been diverging more than usual from Oil prices, with Canadian data picking up: Do you expect more downfalls in the USD/CAD? Which are the key levels for the Loonie?
Despite the weakness in Oil prices due to increases in production of Oil from the US and Libya, the Loonie continues to strengthen. I think this movement in this pair has largely been technical and due to USD weakness and perhaps a flatter outlook on rate hikes by the US Fed. At this stage, we must watch the Daily trend line which has held since May 2016, so the 1.32 level is absolutely critical for further upside movement. Daily MACD looks like a bullish cross-over, with upside to 1.36 in sight again, but if this trend line breaks, then we must look for a target to 1.30 or lower. The big question on this pair is whether the US Fed can hike again.
Where's Oil headed? Is the current downtrend targeting below 40$ levels? How low can it go?
The OPEC oil cuts have been absorbed by rising production in the US and Libya, and this commodity has been bearish for the past month. The key level Crude-Oil is targeting is the 50% Fib at 41.60/bbl, if this level breaks, then we must look for the big round number of 40/bbl as a potential target. This commodity is quite volatile, so be careful of sudden buying should sentiment change or if we get sudden production interruption or an increase in Oil demand as we enter the US driving season.
Cryptocurrencies have experienced huge rallies lately, but we also saw a huge Flash Crash this past week on the Ethereum: Is there a bubble in this asset class? Can these currencies be trusted from a trading standpoint?
This is absolutely a bubble market, at the end of the day this is still a fiat currency. It is not backed by any physical asset, so it is very difficult to value other than using technical analysis to assist with short-term trade setups. I would be interested to see how the demand for such cryptocurrencies would exist in a high interest rate environment as they do not generate interest, so luckily for such markets we are not. Again, I am personally very keen to trade cryptocurrency markets vs USD and I will start doing it soon. Currencies that I recommend are: Bitcoin, Litecoin, Ripple and Ethereum.
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