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Daily Analysis: Canadian Dollar Explodes on Rate Hike as Traders Await the ECB

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Wednesday Market Recap

Asset Current Value Daily Change
S&P 500 2465 0.24%
DAX 12214 0.75%
WTI Crude Oil 49.12 1.05%
GOLD 1333.00 -0.55%
Bitcoin 4614 6.80%
EUR/USD 1.1915 0.02%

With tomorrow’s looming European Central Bank meeting, traders might have expected a less busy session today, and for the most part that proved correct. Forex markets experienced turmoil as another central bank, the BOC, stirred the pot when it unexpectedly hiked its benchmark rate by 0.25%. While only a handful of analyst predicted the move, the Loonie has already been among the strongest major currencies in recent months, as the Canadian economy remained very strong compared to its peers. The USD/CAD pair fell as low as 1.2130 after the decision, the lowest level since mid-2015.

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USD/CAD, Daily Chart Analysis

Stock markets recovered well off the North Korea-Hurricane lows as President Trump hit a less aggressive tone regarding the situation, while also reaching a short-term deal on the matter of the debt ceiling with the Democrats (but opposed by the Republican leadership). Safe haven assets tumbled on the de-escalation, while global equities drifted higher throughout the day. Gold is back near the $1330 level, and given the recent lofty gains in the commodity, more correction is likely. Oil is still headed higher in the meantime, getting closer to the $50 per barrel once again.

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NASDAQ, 4-Hour Chart Analysis

Cryptocurrencies

Most of the segment is well above the Monday mini-crash lows, with only NEO struggling to hold its ground after its huge losses. Bitcoin led the charge higher, together with Litecoin, as the other majors are still well off their previous highs despite the rebound, and the improved sentiment. While the long-term picture remains overbought in the case of the majority of the largest coins, more top-building could be in the cards after the broad and very strong rally. The next couple of sessions will be crucial for the sector, as the oversold short-term condition is now cleared and bulls will battle with bears for control near the current key price levels.

BTC/USD, 4-Hour Chart Analysis

Technical Picture

The German DAX index has confirmed the bear trap that we have been monitoring last week, and it has now broken out of the dominant downtrend as well, despite the still strong Euro that pushed European equities lower in recent months. The benchmark is testing the 12,250 level currently, and we still expect a rally to at least 12,375, with a more likely target of 12,500. The ECB decision could change things, but the current setup is encouraging for bulls.

DAX, 4-Hour Chart Analysis

Key Economic Releases on Wednesday

Time, CET Country Release Actual Expected Previous
3:30 AUSTRALIA GDP 0.8% 0.8% 0.3%
14:30 CANADA Trade Balance -3.0 bill -3.8 bill -3.6 bill
14:30 US Trade Balance -43.7 bill -44.6 bill -43.6 bill
16:00 CANADA Rate Decision 1.00% 0.75% 0.75%
16:00 CANADA Monetary Statement

Key Economic Releases on Thursday

Time, CET Country Release Expected Previous
3:30 AUSTRALIA Retail Sales 0.2% 0.3%
3:30 AUSTRALIA Trade Balance 0.95 bill 0.86 bill
9:30 UK Halifax HPI 0.2% 0.4%
13:45 EUROZONE ECB Rate Decision 0.00% 0.00%
14:30 CANADA Building Permits 2.2% 2.5%
14:30 EUROZONE ECB Press Conference
14:30 US Unemployment Claims 245,000 236,000
16:00 US Crude Oil Inventories -5.4 mill

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Analysis

Technical Analysis: Bitcoin Up Again as Altcoins Mixed in Volatile Trading

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Bitcoin is at a new all-time high today, although the momentum of today’s move is far below from what we saw recently, and the coin only managed to reach a marginal record high yet again. BTC is now worth $300 billion, and it is still trading right at the short-term trendline, inside a rising wedge pattern that shows a clear momentum divergence.

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With the short-term trend still being intact further gains are still possible, but as all the majors are overbought from a long-term perspective, we still advise investors to wait for a better buying opportunity before adding to their holdings. Primary support is still found near $13,000, with further levels at $11,300, $10,000, $9000, and stronger levels at $8200 and $7700.

BTC/USD, 4-Hour Chart Analysis

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 XRP entered a volatile short-term correction after its two-day surge after giving a short-term sell signal yesterday, and the coin spiked back towards $0.60 before settling down just below yesterday’s highs. The long-term setup also turned overbought thanks to the almost 300% rally, and now investors should reduce their holdings, even as further gains are still possible. Major support is still found at the prior high near $0.4250 and in the $0.30-$0.32 range.

XRP/USDT, 4-Hour Chart Analysis

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Analysis

Cryptocurrency Analysis: Ripple Continues Rampage as Litecoin and Ethereum Enter Correction

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Ripple remained in the center of attention in the segment after breaking out to a new all-time high yesterday, and the coin almost doubled in value, climbing above the $0.80 level. The currency concluded a 6-month long consolidation pattern with the move after being the only major on a long-term buy signal in our trend model.

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XRP gave a short-term sell signal today, while turning neutral regarding the long-term setup. Investors now shouldn’t add to their positions, although further gains are still possible, and reducing holdings somewhat is a good idea here. Major support is still found at the prior high near $0.4250 and in the $0.30-$0.32 range.

XRP/USDT, 4-Hour Chart Analysis

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While Bitcoin stagnated, and Bitcoin Cash jumped, Ethereum, Litecoin, Dash, and IOTA has been drifting slightly lower, although the recent gains are still mostly intact, and the basic setup in the segment is unchanged.

Litecoin fell below the $300 level after yesterday’s consolidation, and the coin faced strong selling pressure in the latter half of the session. The currency remains extremely stretched regarding the long-term momentum indicators, and although the short-term uptrend is still intact, a deeper correction is likely in the coming weeks, with key support levels found at $125 and $100, and weaker levels at $260 and $170.

LTC/USD, 4-Hour Chart Analysis

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Analysis

Daily Analysis: Dollar Falls, Gold Jumps after Yellen’s Final Move

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Wednesday Market Recap

Asset Current Value Daily Change
S&P 500 2668 -0.02%
DAX 13125 -0.45%
WTI Crude Oil 56.65 -0.68%
GOLD 1258.00 1.35%
Bitcoin 16,100 -6.32%
EUR/USD 1.1842 0.73%

The Federal Reserve hiked interest rates as expected today, and although the central bank’s monetary statement was slightly more hawkish than expected, the market’s reaction didn’t reflect the much-anticipated move. The worse than expected Core CPI reading that underlined the low-inflation narrative weighed on the recently strong Greenback, while stocks were unchanged after decision and bonds gained ground as yields retreated.

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EUR/USD, 4-Hour Chart Analysis

The major indices are hovering near their all-time highs with the DOW leading the way higher, hitting a new record for the second day in a row. While volatility Is expected to remain low as we approach the end of the year, market internals and valuation levels are still concerning from a long-term perspective, and stocks outside the US are also negatively diverging. The action in crude oil could be slightly more interesting as the commodity is starting to act in a slightly bearish manner after a grinding multi-month rally.

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WTI Crude Oil, 4-Hour Chart Analysis

The Brexit process is still in the center of attention in Europe, although volatility took a nosedive on the old continent as well, and it’s unlikely that the Christmas period will be much different, given the predictable drop in volumes and trading activity. The date of the next election in the financially and politically troubled Italy has been set to March 4th next year, and the early date caused some turmoil in the countries assets, which dragged the Euro Stoxx 50 lower today, together with the DAX and the other major indices.

Cryptocurrencies

As the total market cap of the crypto-market crossed the incredible $500 billion mark, Ripple, NEO, and Ethereum made headlines with lofty gains in the face of the severely overbought readings elsewhere in the segment. While XRP and NEO are still not overbought from an investment perspective, Ethereum reached our final target for its break-out and triggered a long-term sell signal.

ETH/USD, 4-Hour Chart Analysis

The previously surging IOTA continued its correction, Litecoin consolidated in a relatively narrow range, while Dash, ETC, and Monero scored marginal new highs before turning lower together with BTC. The most valuable coin that has lost some of its momentum “mojo” in recent days fell back below last week’s highs, and that could mark a failed break-out and a start of the deeper correction that seems more and more likely.

BTC/USD, 4-Hour Chart Analysis

Key Economic Releases on Wednesday

Time, CET Country Release Actual Expected Previous
11:30 UK Average Earnings 2.5% 2.5% 2.3%
11:30 UK Claimant Count Change 5,900 3,300 6,500
11:30 UK Unemployment Rate 4.3% 4.2% 4.35
15:30 US Core CPI 0.1% 0.2% 0.2%
15:30 US Crude Oil Inventories -5.1 mill -3.6 mill -5.6 mill
21:00 US Fed Rate Decision 1.5% 1.5% 1.25%
21:00 US FOMC Statement

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