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Analysis

Daily Analysis: Cryptocurrencies Still in Correction amid Post-Fed Turmoil

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Thursday Market Recap

Asset Current Value Daily Change
S&P 500 2424 -0.44%
DAX 12691 -0.89%
WTI Crude Oil 44.52 -0.42%
GOLD 1257.00 -1.45%
Bitcoin 2278 -7.23%
EUR/USD 1.1145 -0.67%

The Dollar is up and everything is down after the Fed decision, that’s the short summary of the day, so far, although not all markets agree with the consensus. The US bond market still sees very low rates going forward, despite the Fed’s intentions. Global stock markets are broadly lower, with the NASDAQ leading the way once again, as the tech giants are back in the crosshairs. Banks are outperforming the major indices, and that helps the S&P 500 in holding up well compared to the tech benchmarks. The weakness of the Yen supports the Japanese markets, while European shares are among the weakest globally.

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EUR/USD, 4-Hour Chart Analysis

The Great British Pound is among the best performing major currencies of the day following the Bank of England’s monetary meeting that delivered a very surprising vote (looks like British voting patterns are quite confusing…), with Pound surged after the decision, as the central bank proved way more hawkish in the uncertain environment than expected. Commodities are hit hard by the Dollar rally, with precious metals, oil, and the industrial segment all experiencing losses.

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Cryptocurrencies

The crypto-correction continued in earnest today, as the majors were all headed sharply lower again, experiencing 30+% losses. Bitcoin fell as far as $2150, while Ethereum dipped $130 and bottomed near $270, so far. NEM and Monero are also in deep correction, hitting short-term lows together with the two most valuable coins. Ripple and Litecoin are showing signs of relative strength in the correction, Dash and ETC are only trading near their weekend break-out levels, while Bitshares is holding strong against BTC.

Ethereum, 4-Hour Chart Analysis

Technical Picture

The NASDAQ resumed its correction following the Fed decision, but the Monday lows held during the US session, so far. We still expect a test of the long-term trendline and the 5600 level during the correction, with a possible spike to the key support zone slightly below the 5500 level. The 5775 level is the primary resistance right now, and below that the short-term downtrend remains intact.

  NASDAQ, 4-Hour Chart Analysis

Key Economic Releases on Thursday

Time, CET Country Release Actual Expected Previous
3:30 AUSTRALIA Employment Change 42,000 10,300 37,400
3:30 AUSTRALIA Unemployment Rate 5.5% 5.7% 5.7%
9:30 SWITZERLAND SNB Monetary Statement
13:00 UK BOE Monetary Statement
14:30 US Philly Fed Index 27.6 25.5 38.8
14:30 US Initial Jobless Claims 237,000 241,000 245,000
15:15 US Industrial Production 0.0% 0.2% 1.0%

Key Economic Releases on Friday

Time, CET Country Release Expected Previous
Tent. JAPAN Monetary Statement
Tent. EUROZONE Final CPI 1.4% 1.4%
14:30 US Building Permits 1.25 mill 1.23 mill
14:30 US Housing Starts 1.17 mill

 

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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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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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