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Daily Analysis: Bitcoin Rallies as Dollar Slammed on Yellen

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Daily Analysis: Bitcoin Rallies as Dollar Slammed on Yellen

Introduction

This article was posted on Friday, 18:48, UTC.

Friday Market Recap

Asset Current Value Daily Change
S&P 500 2443 -0.99%
DAX 12203 -0.45%
WTI Crude Oil 47.12 0.72%
GOLD 1290.00 0.61%
Bitcoin 4258 -0.89%
EUR/USD 1.1742 -0.20%

Financial markets turned more volatile today, as the Jackson Hole symposium reached its busiest phase, with the speech of FED Chair Janet Yellen, who failed to help the struggling Dollar that got close to its 12-month lows after the speech. Mrs. Yellen signaled caution regarding inflation and growth and the reduction of the central bank’s balance sheet, and that was enough to spark selling in the battered currency, although the banker stated that the FED made substantial progress towards its goals. As the speech mostly focused on regulatory issues, stocks barely budged, and the main indices are little changed after a brief rally. With volumes still being very low, and the major benchmarks being in a short-term trading range, market action is expected to pick up next week

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Dollar Index (DXY), 4-Hour Chart Analysis

Besides the Dollar’s decline currencies are virtually unchanged, with only the Yen showing some weakness again. Gold breached the $1300 level yet again after a sharp drop to $1280 in the low-liquidity environment, but it still failed to break-out from its long standing trading range. The precious metal is still expected to move higher thanks to the favorable long-term fundamentals. Oil is slightly higher, thanks to the fears regarding Hurricane Harvey’s possible effects on supply. The WTI contract has been hovering around the $47.50 level for almost two weeks now, and as the commodity failed to recapture the $50 per barrel level, odds still favor a move towards the lower end of the long-term trading range near $42.

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Gold, 4-Hour Chart Analysis

Cryptocurrencies

The crypto-segment is very active and mostly bullish today, with the majority of the largest coins gaining ground, thanks to the rally in BTC. Bitcoin is edging closer to $4500, and that could lead to another interesting weekend, although the overbought long-term picture still suggests a deeper correction in the currency soon. Monero and Dash are the other two notable positive outliers, with XMR trading just below the $100 level again, after hitting a new all-time high in the area earlier on during the week. Dash is also drifting towards its break-out highs, while Litecoin, Ethereum, and NEM are also higher. Ripple got smacked lower by 30% after reaching $0.30 following its break-out, with Ethereum Classic still being stuck near its correction lows.

BTC/USD, Daily Chart Analysis

Technical Picture

The S&P 500 recovered from its marginal correction lows this week, but the index is still trading in a short-term downtrend, just below the key 2450 level. The long-term uptrend remains intact for now, despite the weak market internals, but as volatility is expected to increase in September the advance could be in serious jeopardy. The benchmark faces strong resistance near 2460 as well, with strong support below at 2420.

S&P 500, 4-Hour Chart Analysis

Key Economic Releases on Friday

Time, CET Country Release Actual Expected Previous
10:00 GERMANY IFO Business Climate 115.9 115.0 116.0
14:30 US Core Durable Orders 0.5% 0.4% 0.1%
All Day US Jackson Hole Symposium

Key Economic Releases on Monday

Time, CET Country Release Expected Previous
10:00 EUROZONE M3 Money Supply 4.9% 5.0%

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Mate Cser

Mate Cser

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.

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