Daily Analysis: Up, Up and Away?

Thursday Market Recap

Asset Current Value Daily Change
S&P 500 2479 0.24%
DAX 12212 -0.76%
WTI Crude Oil 49.14 0.84%
GOLD 1256.00 0.57%
Bitcoin 2558 3.38%
EUR/USD 1.1653 -0.70%

The Federal Reserve unleashed another round of buying in US risk assets, pushing stocks up to new all-time highs yet again. European investors are not so happy with the dovish Fed announcement, as the DAX and the Euro Stoxx 50 both headed south today on the renewed strength of the common currency. Of course, the mixed earnings reports also have a (small) part in the performance of the benchmarks, but the FX movements are dominating the markets, hands down. The NASDAQ is still the global leader as the benchmark inched higher again, emerging from the short-term consolidation of the last few sessions.

NASDAQ 100, 4-Hour Chart Analysis

The Dollar’s new lows against the Euro were short lived as a relatively deep correction started this morning, taking the most traded currency pair back to the 1.17 level after hitting a new two-year high just below 1.18 yesterday. The Aussie, the Pound, and the Yen also took a nosedive from their respective highs, but gold is holding on to most of its gains despite the bounce in the Greenback. Oil and industrial commodities are also in the green, but as the markets continue to digest yesterday’s announcement, we expect choppy trading conditions in all of the major markets.

EUR/USD Daily Chart Analysis

Cryptocurrencies

Cryptocurrencies are in a weak bounce today, as Bitcoin lead the way higher without strong momentum, although yesterday’s dip also failed to breach the key levels near $2450. With the long-term picture still being constructive, we still expect another leg higher in BTC and the other majors, but more short-term consolidation is possible around these levels, especially with ETH and some of the other coins lagging BTC today, and with the continued uncertainty regarding BTC’s protocol change on August 1.

BTC/USD, 4-Hour Chart Analysis

Technical Picture

The DAX moved lower once again today after bouncing off strong support near 12,150. The strength of the Euro still weighs heavily on the index, as the declining short-term trend remains intact. With the short-term MACD still in oversold territory, another bounce off the current levels is possible, and no new short positions should be opened here. Bulls might try to open new positions, but tight stops should be used, as the trend is still negative.

          DAX Index, 4-Hour Chart Analysis

Key Economic Releases on Thursday

Time, CET Country Release Actual Expected Previous
10:00 EUROZONE M3 Money Supply 5.0% 5.0% 5.0%
14:30 US Core Durable Goods Orders 0.2% 0.4% 0.3%
14:30 US Initial Jobless Claims 244,000 242,000 233,000

Key Economic Releases on Friday

Time, CET Country Release Expected Previous
1:30 JAPAN Core CPI Index 0.4% 0.4%
1:30 JAPAN Unemployment Rate 3.0% 3.1%
1:30 JAPAN Household Spending 0.6% -0.1%
1:30 JAPAN Retail Sales 2.3% 2.15
9:00 GERMANY Prelim CPI 0.2% 0.2%
9:00 SPAIN GDP 0.9% 0.8%
14:30 US Advance GDP 2.5% 1.4%
14:30 CANADA Monthly GDP 0.2% 0.2%

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Author:
Trader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.