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Daily Analysis: Cryptocurrencies Advance as Brexit Officially Begins

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Daily Analysis: Cryptocurrencies Advance as Brexit Officially Begins

Introduction

Wednesday Market Recap

Asset Current Value Daily Change
S&P 500 2353 0.21%
DAX 12202 0.41%
WTI Crude Oil 48.62 0.48%
GOLD 1253.50 -0.27%
Bitcoin 1044.30 0.30%
EUR/USD 1.0751 -0.58%

 

The Euro is in the center of attention today so far, as the common currency is losing ground against the majors, while stock markets are relatively stable. US stocks led a surge yesterday afternoon that carried the most important benchmarks almost 1% higher. The global indices are off their weekly highs today, but the DAX and the EuroStoxx 50 both registered all-time highs in early trading, as European equities remain relatively strong compared their US counterparts. The UK formally triggered the exit process from the EU this morning, as it was widely expected, and the Pound is well off its recent highs amid the nervous sentiment.

Oil continues to trade in a choppy consolidation, just above the prior lows, despite the rebound in the US dollar that usually hurts the commodity. The USD is trading around 1.0750 against the Euro, and the reserve currency is also gaining ground against the Pound and the Japanese Yen since the blowout CB consumer confidence reading. Rate hike odds are edging higher, although they are still lower than the pre-Fed levels two weeks ago, as FOMC member Evans reiterated that the central bank should raise interest rates one or two more times this year.

Cryptocurrencies benefited from the weakness in the Euro and the Pound, despite the volatile overnight session of Bitcoin. BTC traded close to the 1000 level earlier on, but it’s now back at 1050 after a steady recovery. Ethereum is hovering around 52 following yesterday’s quiet trading, and traders should expect fireworks if the launches a rally towards the 55 level again. Dash, Ripple, and Monero are also trading higher with Litecoin once again being the most stable of the majors.

Technical Picture

 

S&P 500 Index, Hourly Chart 

The S&P 500 shot higher and breached the upper boundary of the declining short-term channel yesterday afternoon, and it’s now trading close to the crucial resistance zone around 2355-2360. If the index manages to stay above that zone, new all-time highs will once again be in the cards, following in the footsteps of the European benchmarks. That said, the short-term setup is still somewhat bearish, and today’s session could be crucial for the market.

Key Economic Releases on Wednesday

Time, CET Country Release Actual Expected Previous
16:00 US Pending Home Sales (monthly) 5.50% 2.30% -2.80%
16:30 US Crude Oil Inventories 0.9 million 1.2 million 5.0 million

 

Pending home sales posted a strong monthly gain, despite the rising rate environment in the US that has been a huge drag on the US real estate market following the lengthy period of excessively low mortgage rates. The surprisingly good number might help the dollar and US homebuilders this week. Crude oil inventories are still on the rise, as output is steadily growing and demand remains weak.

Key Economic Releases on Thursday

Time, CET Country Release Expected Previous
10:00 GERMANY Prelim CPI 0.40% 0.60%
14:30 US Final GDP 2.00% 1.90%
14:30 US Initial Jobless Claims (weekly) 244,000 261,000
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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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