Connect with us

Analysis

5 Things to Watch Next Week

Published

on

Asset Current Value Weekly Change
S&P 500 2414 1.35%
DAX 12591 -0.38%
WTI Crude Oil 49.87 -1.25%
GOLD 1268.00 1.13%
Bitcoin 2210 7.43%
EUR/USD 1.1179 -0.26%

 

// -- Discuss and ask questions in our community on Workplace. Don't have an account? Send Jonas Borchgrevink an email -- //

1.            Will the Crypto-Crash last?

It’s been a long weekend for cryptocurrency traders, and for the first time in a while, the dominant trend was bearish. The major coins experienced several snapback rallies in the nervous, sometimes borderline panicky, environment. This morning’s healthy bounce could mean that we have seen the worst of the decline, but volatility is expected to remain elevated, with the next couple of sessions being crucial to the market. As the improving fundamentals and the lofty gains attracted more and more investors, and directed media attention to Bitcoin et al., the question is how new buyers will support the fragile market.

2.           More New Highs Ahead for Two Faced US Market?

The major US indices recovered with a 7-day winning streak after the mini sell-off that pushed global stocks lower. European and Asian indices are lagging US equities, as the British election suddenly turned questionable, while the Manchester terror attack also weighed on sentiment. The surprise Chinese downgrade sparked a battle between sellers and the “Invisible Hand” of the Chinese leadership, as the negative announcement was followed by a pretty obvious intervention by the PBC. As fewer and fewer stocks participate in the US rally, a deeper correction is more and more likely, although the short-term momentum is still bullish.

3.           What’s Next for Oil After the OPEC Meeting?

// -- Become a yearly Platinum Member and save 69 USD and get access to our secret group on Workplace. Click here to change your current membership -- //

WTI Crude Oil, 4-Hour Chart Analysis

The OPEC meeting ended with the expected 9-month extension of the cartel’s production cut, and although there are signs that the crude oil market is slowly healing, the crucial commodity spiked lower after the announcement. Saudi Arabia also plans to curb imports to the US to limit global supply, as the country’s budget is severely hurt by the declining revenues. The long-term effects of the moves are questionable, as the rapidly improving cost-effectiveness of the US shale industry is actually being helped by them, and the “shale-cap” on prices is expected to fall even lower from the current $60 level.

4.           Job’s Friday In Focus Before the Fed’s Next Meeting

US rate hike odds declined significantly last week despite the recovery in stocks, and the better than expected GDP growth number. The May employment report will be the last crucial release before the central bank’s next meeting, and although the consensus still points to a tightening move in June, the further schedule of the Fed is uncertain. A negative surprise could put pressure on the Dollar once again, especially Trump’s position remains vulnerable.

5.           Gold at Make or Break Levels

Gold showed relative strength in the last couple of weeks, and it remained near its one-month highs, despite the rebound in US stocks, and the general stability in risk assets. The metal is trading between important support and resistance levels at $1260 and $1275 respectively. While the long-term trend looks to be finally turning higher, a decline below $1240 could lead to a test of the $1200 level.

Gold Futures, 4-Hour Chart Analysis

Key Economic Releases of the Week

Day Country Release Actual Expected Previous
Monday EUROZONE Eurogroup Meeting
Tuesday EUROZONE Manufacturing PMI 57 56.5 56.7
Tuesday EUROZONE Services PMI 56.2 56.5 56.4
Tuesday GERMANY IFO Business Climate 114.6 113.1 112.9
Tuesday CANADA Wholesale Sales 0.90% 1.10% -0.20%
Tuesday US New Home Sales 569,000 611,000 621,000
Wednesday EUROZONE ECB Prsident Draghi Speaks
Wednesday CANADA BOC Rate Decision 0.50% 0.50% 0.50%
Wednesday CANADA BOC Statement
Wednesday US Existing Home Sales 5.57 mill 5.60 mill 5.70 mill
Wednesday US Crude Oil Inventories -4.4 mill -2.4 mill -1.8 mill
Thursday UK Revised GDP 0.20% 0.30% 0.30%
Thursday US Initial Jobless Claims 234,000 236,000 236,000
Friday JAPAN National Core CPI 0.30% 0.40% 0.20%
Friday US Core Durable Orders -0.40% 0.40% 0.00%
Friday US Prelim GDP 1.20% 0.90% 0.70%
Friday US UOM Consumer Sentimnet 97.6 97.6 97.7

 

Key Economic Releases of Next Week

Day Country Release Expected Previous
Monday EUROZONE ECB President Draghi Speaks
Tuesday AUSTRALIA Building Approvals 3.20% -13.40%
Tuesday GERMANY Prelim CPI Index -0.10% 0.00%
Tuesday CANADA Current Account -11.4 bill -10.7 bill
Tuesday US Personal Spending 0.40% 0.00%
Tuesday US CB Consumer Confidence 120.1 120.3
Wednesday CHINA Manufacturing PMI 51 51.2
Wednesday CHINA Services PMI 54
Wednesday GERMANY Retail Sales 0.40% 0.10%
Wednesday EUROZONE Flash CPI 1.50% 1.90%
Wednesday CANADA GDP 0.30% 0.00%
Wednesday UK Chicago PMI 57 58.3
Wednesday US Pending Home Sales 0.70% -0.80%
Thursday AUSTRALIA Capital Expenditure 0.60% -2.10%
Thursday AUSTRALIA Retail Sales 0.30% -0.10%
Thursday UK Manufacturing PMI 56.5 57.5
Thursday US ADP Employment Growth 181,000 177,000
Thursday US Initial Jobless Claims 239,000 234,000
Thursday US ISM Manufacturing PMI 54.7 54.8
Thursday US Crude Oil Inventories -4.4 mill
Friday UK Construction PMI 52.7 53.1
Friday CANADA Trade Balance 0.0 bill -0.1 bill
Friday US Non-Farm Payrolls 186,000 211,000
Friday US Hourly Earnings 0.2% 0.3%
Friday US Unemployment Rate 4.4% 4.4%
Friday US Trade Balance -45.5 bill -43.7 bill
Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



Feedback or Requests?

2 Comments

2 Comments

  1. Angie

    May 30, 2017 at 1:24 am

    Hello . Does anyone have any thoughts as to the future of the Australian dollar vs Euro and USA dollar.
    Thoughts of the future Australian economy and share market

    • Mate Cser

      May 30, 2017 at 7:04 pm

      Hello Angie, I expect the Aussie to continue its decline against the Dollar (I have been expecting 0.6 for a while, which still seems to be a good target), while the Euro is a bit more tricky, considering the sorry state of some of the Eurozone economies. The Chinese slowdown, the pressure on commodity prices, the oversized financial sector, and the crazy housing market are all huge risks at this point, so I’d definitely be defensive with Australian assets right now. I will post an article on Australia and Canada in the coming two weeks, if you have any questions until then, let me know!

You must be logged in to post a comment Login

Leave a Reply

Analysis

Daily Analysis: Dollar Rally Continues amid Fed Chair Confusion

Published

on

Tuesday Market Recap

Asset Current Value Daily Change
S&P 500 2554 -0.09%
DAX 12995 -0.07%
WTI Crude Oil 51.53 -0.66%
GOLD 1287.00 -1.22%
Bitcoin 5652 -0.86%
EUR/USD 1.1751 -0.38%

Yesterday’s trends are mostly continued in financial markets, such as the low-volatility levitation in stocks and the slightly more active trading in currencies with the apparent Dollar strength. The Great British Pound continued to be under pressure amid the amplified Brexit-related worries, but most of the other majors also lost ground to the Greenback.

// -- Discuss and ask questions in our community on Workplace. Don't have an account? Send Jonas Borchgrevink an email -- //

The Dollar rally has been fueled by the rise in the odds of some of the hawkish Fed Chair candidates, while overall, the “race” for the positions looks more chaotic than ever. Interestingly, the long-end of the yield curve is refusing to follow the short-term moves, and without the effects of the Fed’s QE program, the yield curve would probably be inverted by now, signaling strong recession risks.

Dollar Index (DXY), 4-Hour Chart Analysis

// -- Become a yearly Platinum Member and save 69 USD and get access to our secret group on Workplace. Click here to change your current membership -- //

The major stock indices are virtually unchanged yet again and even the previously surging Nikkei entered a consolidation, adding to the unusual October lull. Commodities have been quite active thanks to the Dollar’s vigor, with crude oil and gold both turning lower. Oil gave back most of yesterday’s gains as the Iraqi-Kurdish conflict turned out to be less violent than previously feared, and the brief rally fizzled.

WTI Crude Oil, 4-Hour Chart Analysis

Cryptocurrencies

The major coins are having a mixed session at best, as yesterday’s rebound wasn’t durable, and most of the coins turned back lower again. That said, despite the recent choppy price action, the total market cap of the segment is close to its all-time high, even as only Bitcoin is trading near its own record price level.

The optimism regarding Ethereum major Byzantium upgrade wasn’t enough to lift the second most valuable coin today, and the price of the ETH token retreated below the key $330 level after touching $350 yesterday after the upgrade’s lock-in. Ripple and NEO have been among the most active majors today, but with opposing performances, as Ripple fell significantly after yesterday’s break-out attempt, while NEO defied gravity and jumped above the $30 level after a corrective period.

BTC/USD, 4-Hour Chart Analysis

Technical Picture

The S&P 500 is grinding higher despite the overbought short-term momentum readings, and the benchmark is trading very close to its all-time high. The 2550 level is still in focus, but until volatility remains near record lows, the minuscule moves are unlikely to change the technical setup. While a sudden drop in prices could quickly negate the recent break-out, the consolidation could very well lead to further upside, as bulls remain firmly in control, despite the lofty valuation levels.

S&P 500 Futures, 4-Hour Chart Analysis

Key Economic Releases on Tuesday

Time, CET Country Release Actual Expected Previous
02:30 AUSTRALIA RBA Meeting Minutes
10:30 UK CPI 3.00% 3.00% 2.90%
11:00 GERMANY ZEW Sentiment 17.6 20.3 17
12:00 EUROZONE Final CPI 1.50% 1.50% 1.50%
15:15 US Industrial Production 0.30% 0.40% 0.20%
15:15 US Capacity Utilization Rate 76.00% 76.20% 76.10%

Featured image from Shutterstock

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



Feedback or Requests?

Continue Reading

Analysis

Technical Analysis: NEO Jumps as Broad Markets Turns Lower

Published

on

As the new waves of regulatory changes keep on hitting the segment, the major cryptocurrencies are mostly lower today. After the major update of Ethereum, and the recent surge in the price of Bitcoin, choppy conditions developed, with no clear short-term trend in most of the coins.

// -- Discuss and ask questions in our community on Workplace. Don't have an account? Send Jonas Borchgrevink an email -- //

NEO is the best performing major today, as it surged back to the $30 level after a frustrating period that was dominated by a downward drift.  The coin is now just below the key resistance level, and it could be ready to test the $34 level, with a further target found at $40. The long-term picture still looks positive, with strong support levels at $27 and $25.

NEO/USDT, Daily Chart Analysis

// -- Become a yearly Platinum Member and save 69 USD and get access to our secret group on Workplace. Click here to change your current membership -- //

Ethereum is in a consolidation after the encouraging rally towards the end of last week, while Bitcoin is also correction after its stellar rise. The two largest coins pulled the rest of the majors lower, while Ripple remained very volatile after touching the $0.30 level yesterday, trading below the $0.26 again.

Litecoin, Dash, Monero, and IOTA are all a bit lower today, while Ethereum Classic found some relative strength, although it remains stuck in a declining short-term trend. All in all, the segment is still in a clear uptrend, so let’s see which coins are the most promising regarding the short-term picture.

(more…)

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



Feedback or Requests?

Continue Reading

Analysis

Daily Analysis: Volatility Near Record Low 30 Years After Black Monday

Published

on

Monday Market Recap

Asset Current Value Daily Change
S&P 500 2555 0.12%
DAX 13003 0.09%
WTI Crude Oil 51.88 0.82%
GOLD 1296.00 -0.61%
Bitcoin 5680 2.95%
EUR/USD 1.1793 -0.25%

Stocks markets in the US are at a standstill near their all-time highs, with the major indices trading in extremely narrow ranges yet again. Volatility, as measured by the VIX, is close to its all-time high, in stark contrast to the average October readings, as this month is the most negative for equities regarding seasonality. In fact, this October is the least volatile ever so far, while this week is the 30th anniversary of the most volatile day ever on Wall Street.

// -- Discuss and ask questions in our community on Workplace. Don't have an account? Send Jonas Borchgrevink an email -- //

A Riskless Market?

On Black Monday in 1987, the Dow crashed by more than 23% during one session, as widespread bullishness coupled and novel portfolio techniques lead to a massive wave of selling. Although such one-day moves should be prevented by circuit breaking rules in today’s market, the notion that risk is non-existent in the current environment is as dangerous as it was three decades ago.

VIX, Weekly Chart

// -- Become a yearly Platinum Member and save 69 USD and get access to our secret group on Workplace. Click here to change your current membership -- //

Stocks have been very quiet across the globe today, with only the Nikkei continuing its break-out to two-decade highs yet again. In Europe, British assets were the most active, as the Brexit talks seem to be in quite a big trouble, and that pushed the Pound and the Euro lower compared to the Dollar. The Greenback’s rally put pressure on gold as well, and the Japanese Yen also declined, as safe-haven assets were sold in the calm environment.

Nikkei Index, 4-Hour Chart Analysis

Oil has been very active as the Iraqi army took control of Kirkuk defying the Kurdish resistance, the WTI contract rose as much as 2% before retreating below the $52 per barrel level, and as we speculated during the weekend, the spike is unlikely to cause a structural change in energy markets, and we expect the range trading environment to continue in the crucial commodity.

WTI Crude Oil, 4-Hour Chart Analysis

Cryptocurrencies

Today was a big day for the crypto segment thanks to the Byzantium update of the Ethereum network, and although the hard fork went smoothly, the session ended on a slightly negative note. Ethereum pulled back towards the $330 support/resistance level, while Bitcoin remained stuck near the $5700 level after recovering from Sunday’s dip.

Ripple has been the other major mover of the day as the coin first surged higher and hit the $0.30 resistance just to fall back swiftly below the $0.26 level towards the end of the day. Despite the decline, the currency is still in a clear uptrend, but more volatile moves are expected in its price. Among the smaller coins, Stellar Lumens more than doubled in price after the announcement of a deal with IBM, as blockchain adoption continues in full force, pointing out the sound fundamentals behind the boom in the segment

ETH/USD, 4-Hour Chart Analysis

Key Economic Releases on Monday

Time, CET Country Release Actual Expected Previous
3:30 CHINA CPI 1.6% 1.6% 1.8%
3:30 CHINA PPI 6.9% 6.3% 6.3%
14:30 US Empire Manufacturing Index 30.2 20.3 24.4

Key Economic Releases on Tuesday

Time, CET Country Release Expected Previous
2:30 AUSTRALIA RBA Meeting Minutes
10:30 UK CPI 3.0% 2.9%
11:00 GERMANY ZEW Sentiment 20.3 17.0
12:00 EUROZONE Final CPI 1.5% 1.5%
15:15 US Capacity Utilization Rate 0.4% 0.2%
15:15 US Industrial Production 76.2% 76.1%

Featured image from Shutterstock

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



Feedback or Requests?

Continue Reading

Trending