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Daily Analysis: Cryptocurrencies Dumped, Dollar Jumps as Tax Plan Date Surfaces

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Daily Analysis: Cryptocurrencies Dumped, Dollar Jumps as Tax Plan Date Surfaces

Introduction

This article was posted on Wednesday, 19:21, UTC.

Wednesday Market Recap

Asset Current Value Daily Change
S&P 500 2494 0.02%
DAX 12553 0.23%
WTI Crude Oil 49.05 1.72%
GOLD 1326.00 -0.41%
Bitcoin 3923 -6.20%
EUR/USD 1.1890 -0.64%

The autumn is definitely here, at least as far as the financial markets are concerned, as trading activity significantly increased in almost all asset classes in the last couple of weeks. Today, currencies are the most active, with the strengthening Dollar being in the center of attention. The Dollar added to its recent bounce against its major peers, as progress has been made in Washington regarding the much-awaited tax reform of the new administration, and the outline of the plan should be revealed in two weeks. With Trump planning on cutting the corporate rate to 15%, the change could mean a huge influx of Dollars and repatriated profits.

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DXY, 4-Hour Chart Analysis

Stocks also recovered off their overnight lows thanks to the news, although Apple (AAPL) is weighing on the market after yesterday’s iPhone X event, as investors are spooked by the expected supply worries of the most expensive iPhone ever. The major US indices are still hovering near their all-time highs, and with the European and Asian markets also joining the party, global sentiment is quickly improving.

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That is also apparent in the way that the negative releases are treated today, as the less than stellar British Employment Report and the lower than expected US PPI reading weren’t enough to change the trend even short-term. With that in mind, the weakness in safe haven assets is no surprise, as both the Yen and gold continue to lose ground after last week’s spike.

NASDAQ, 4-Hour Chart Analysis

Cryptocurrencies

Almost all of the major coins fell sharply after yesterday’s comments by Jamie Dimon, and the decline continued in earnest today, with Bitcoin and Ethereum both taking out their recent lows, extending the ongoing correction. Monero is the only cryptocurrency that is showing meaningful relative strength amid the broad decline, with Ripple, ETC, and IOTA also losing slightly less ground than the rest of the segment. As the long-term picture is getting favorable with every leg lower, buying opportunities will likely emerge soon in the sector, with the bull market still being clearly intact despite the current uncertainty.

ETH/USD, 4-Hour Chart Analysis

Key Economic Releases on Wednesday

Time, CET Country Release Actual Expected Previous
9:15 SWITZERLAND PPI Index 0.3% 0.2% 0.0%
10:30 UK Average Earnings 2.1% 2.3% 2.1%
10:30 UK Unemployment Rate 4.3% 4.4% 4.4%
14:30 US PPI Index 0.2% 0.3% -0.1%
16:30 US Crude Oil Inventories 5.9 mill 4.1 mill 4.6 mill

Key Economic Releases on Thursday

Time, CET Country Release Expected Previous
3:30 AUSTRALIA Employment Change 17,500 27,900
3:30 AUSTRALIA Unemployment Rate 5.6% 5.6%
4:00 CHINA Industrial Production 6.6% 6.4%
9:30 SWITZERLAND SNB Rate Decision -0.75% -0.75%
13:00 UK BOE Rate Decision 0.25% 0.25%
13:00 UK Monetary Statememnt
14:30 US CPI Index 0.3% 0.1%
14:30 US Core CPI Index 0.2% 0.1%
14:30 US Unemployment Claims 303,000 298,000

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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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