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Daily Analysis: Catalonia Crisis Postponed

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Tuesday Market Recap

Asset Current Value Daily Change
S&P 500 2546 0.12%
DAX 12950 -0.21%
WTI Crude Oil 50.64 2.54%
GOLD 1293.00 0.58%
Bitcoin 4880 1.96%
EUR/USD 1.1806 0.57%

Financial markets are puzzled after the Catalonian president’s much-awaited speech, as Puigdemont called for a peaceful solution and a dialogue with the Spanish government, but also asked for a mandate to declare an independent Catalonia.  The Euro has been rallying throughout the day, and it climbed back above the 1.18 level against the Dollar, but safe-haven assets also advanced compared ot the Greenback in the nervous environment. Gold is now back near the $1300 level after dipping below $1275, even as global stock markets are still hovering just below their all-time highs.

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Gold, 4-Hour Chart Analysis

Besides the Euro, currencies were little changes, and equities were also trading with low volatility, despite the political tensions. The Great British Pound and other British assets continued their relief rally, as the positive surprise in Manufacturing Production helped the sentiment. The Japanese Nikkei outperformed the other major indices, as the Yen also climbed against most of its peers, but the moves remained muted. With the OPEC once again heating up the supply-cut argument, even asking the US shale producers to restrain output, crude oil jumped higher by almost 3%, but the long-term fundamental picture remains questionable

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Oil, 4-Hour Chart Analysis

Cryptocurrencies

The BTC-up-altcoin-down trend that accelerated yesterday cooled down during today’s session as Ethereum and NEO led a rebound in the segment. Despite the reversal, Bitcoin continued to show strength, topping $4900 after Puigdemont’s speech and pushing the market cap of the coins back above $155 billion for the first time since the recent crash. Ripple has been the other stand-out performer among the majors, but after the coin got short-term overbought, it entered a volatile correction, and dropped by almost 20% top to bottom before recovering a large chunk of the losses. Despite the altcoin-recovery, Bitcoin dominance is still above 52% thanks to the recent restructuring and the strong decline in the value of Bitcoin Cash.

ETH/USD, 4-Hour Chart Analysis

Technical Picture

The DAX is consolidating in a narrow range near the 13,000 level and the MACD indicator is showing a looming correction. That said, a brief break above the crucial level is possible but we expect a test of the 12,850 level before a sustained move higher. As the US indices are more stretched on every time-frame, the German benchmark should outperform them in the coming weeks, with support found near 12,650 and 12,500.

DAX, 4-Hour Chart Analysis

Key Economic Releases on Tuesday

Time, CET Country Release Actual Expected Previous
2:30 AUSTRALIA NAB Business Confidence 7 5
10:30 UK Manufacturing Production 0.4% 0.3% 0.5%
10:30 UK Goods Trade Balance -14.2 bill -11.2 bill -11.6 bill
14:30 CANADA Building Permits -5.5% -0.9% -3.5%

Key Economic Releases on Wednesday

Time, CET Country Release Expected Previous
16:00 US JOLTS job Openings 6.06 mill 6.17 mill
20:00 US FOMC Meeting Minutes

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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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Analysis

Technical Analysis: Volatility on the Rise Again, as Ripple and Ethereum Hit Targets

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Ripple has been the star of today’s session in the cryptocurrency segment, as the only major coin on a long-term buy signal in our trend model continued yesterday’s break-out, and surged to a new all-time high. The currency cleared the $0.425 level that marked the top in May, and after the more than 6-month long consolidation phase, it promptly neared the $0.50 level.

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While the short-term momentum indicators are now stretched, the coin is still in an encouraging long-term setup, although the best period to buy already passed. The coin could be dragged lower in the case of the expected broad correction in the segment, but we expect XRP to outperform in the coming period, with support levels found at the prior high and below that in the range between $0.30-$0.32.

XRP/USDT, 4-Hour Chart Analysis

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Ethereum has been the other top coin on the rise, as the second largest digital currency surged past the final range projection target of the break-out two weeks ago at $685 in the aftermath of the launch of the BTC futures on Monday. The ETH token is now also on a sell signal on all time-frames, and we advise investors and investors to wait for the next major correction to establish new positions. Support levels are now found at $575, $500, $480, and $400.

ETH/USD, 4-Hour Chart Analysis

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Analysis

Technical Analysis: Bitcoin Grinds Higher as Records Tumble in Altcoins

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The historical surge in the segment, which is the second such move this year, continued today, with another round of break-outs in some of the major altcoins and tepid gains for BTC investors. Ethereum, Ripple, Dash, and first and foremost Litecoin was leading the charge, with the recent star LTC topping $300, just after a day of hitting the $200 mark.

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Litecoin defied all odds after reaching extremely overbought readings, and the coin rode the speculative wave, turning exponential, not unlike IOTA and Bitcoin previously. With the coin being stretched in an unprecedented way on all time-frames, investors could even consider selling their core positions at the current levels, as a deep correction is almost granted in the coming period. The first meaningful support level is found at $125, and a re-test of the $100 level is probable during the next major correction.

LTC/USD, 4-Hour Chart Analysis

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Ripple finally ended a long period of relative weakness today, and the only major on a long-term by signal jumped over primary resistance at $0.26 and crossed the $0.30-$0.32 too in the euphoric sentiment. As the coin is not long-term overbought following the 6-month long consolidation, the buy signal in XRP remains intact, with the only major resistance level being found at the all-time high near $0.425.

XRPUSDT/USD, 4-Hour Chart Analysis

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