Facebook, Inc. (NASDAQ:FB) Libra Project in Question After PayPal (PYPL) Withdraws

Facebook, Inc. (NASDAQ:FB) Libra Project in Question After PayPal (PYPL) Withdraws

Facebook, Inc. (NASDAQ:FB) Libra Project in Question After PayPal (PYPL) Withdraws

The coalition Facebook FB formed to create its cryptocurrency project named Libra is starting to unravel. Back in June, Facebook announced that they would be playing their hand in the cryptocurrency field, stating that they would be working with financial services companies like Visa V, PayPal PYPL, and others. The news of the social media giant’s latest endeavor was initially received with acclaim from Wall Street as some analysts even went as far as to say that Facebook’s new initiative could become a worldwide currency. However, as of late, the project has decelerated as questions surrounding the continued participation of the financial services companies have surfaced.

Project Libra Losing Steam

A few days ago, news hit that Mastercard MA and other financial partners that agreed to help build and maintain project Libra’s payment network were reconsidering their involvement in the project. The announcement comes on the heels of US and European countries taking more stringent measures against the development of the project. Bruno Le Maire, France’s finance minister, said the Libra project would lead to “an eventual privatization of money, replacing weaker currencies in countries around the world and undermining states’ sovereign independence.”

The finance minister went on to comment that “These are serious concerns, and under these conditions, we can’t authorize Libra’s development on European soil.” The financial companies who were signed on to help develop the project are now warry of attracting regulatory scrutiny. Major defections could hurt the project as Facebook’s attempt to persuade consumers to swap their national currencies for a digital coin may become compromised. Regulatory scrutiny is the last thing Facebook needs as their reputation and practices have come under question as federal agencies investigate the company.

PayPal announced that they would be withdrawing themselves from project Libra. The financial services firm stated, “PayPal has made the decision to forgo further participation in the Libra Association at this time and to continue to focus on advancing our existing mission and business priorities as we strive to democratize access to financial services for underserved populations.” This is definitely not a good look for Facebook as they are now scrambling to keep the remaining financial companies on board.

Takeaway

For the time being it seems that Project Libra is in trouble of falling out with more of its corporate backers as it continues to face scrutiny from regulators. Regulators have serious concerns about the privacy of the project as well as the financial stability of the potential currency. Facebook has already said that investors had nothing to worry about as the company wouldn’t have unilateral control of the currency but to no avail. Wall Street will have its eyes set on how the matter unfolds in the coming days.

Technical Indicators

Overall, the bias in prices is: Downwards.

By the way, prices are vulnerable to a correction towards 185.33.

The projected upper bound is: 188.31.

The projected lower bound is: 170.25.

The projected closing price is: 179.28.

Candlesticks

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 21 white candles and 29 black candles for a net of 8 black candles.

A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 85.5995. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a buy 2 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 44.22. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 59 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -32. This is not a topping or bottoming area. The last signal was a buy 2 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 9 period(s) ago.

Rex Takasugi – TD Profile

FACEBOOK INC A closed down -0.770 at 179.680. Volume was 41% below average (neutral) and Bollinger Bands were 11% narrower than normal.

Open     High      Low     Close     Volume___
180.000 181.180 178.090 179.680 9,359,793
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 178.93 185.02 175.91
Volatility: 29 31 38
Volume: 14,939,252 13,519,463 17,674,320

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

FACEBOOK INC A is currently 2.1% above its 200-period moving average and is in an downward trend. Volatility is low as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of FB.O at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on FB.O and have had this outlook for the last 5 periods.

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