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Daily Analysis: Cryptocurrencies Surge and Stocks Rise as Fed Leaves Rate Unchanged

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Daily Analysis: Cryptocurrencies Surge and Stocks Rise as Fed Leaves Rate Unchanged

Introduction

This article was posted on Thursday, 16:24, UTC.

Thursday Market Recap

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Asset Current Value Daily Change
S&P 500 2385 0.14%
DAX 12620 1.05%
WTI Crude Oil 46.55 -2.38%
GOLD 1229.00 -1.52%
Bitcoin 1565 6.80%
EUR/USD 1.0935 0.30%

The Federal Reserve didn’t surprise the market yesterday evening, as it left its benchmark rate unchanged, although the central bank called the current weakness in economic numbers “transitory’ causing a brief rally in the Dollar and a dip in stocks. Rate hike odds for the next meeting are now above 90%, as Janet Yellen & Co. are expected to raise rates two more times this year. The major global indices are up today despite yesterday’s weakness, as European stocks are boosted by the conclusion of the French presidential debate, with Macron still being an overwhelming favorite before Sunday’s run-off. US Stocks are also slightly higher, despite Facebook’s disappointing earnings report, although the S&P 500 and the DOW are still lagging the global leaders.

Forex trends haven’t changed drastically since the Fed decision, as the weakness in the Yen, the Dollar, and most prominently commodity-related currencies remain weak. The US Dollar is trading near the 1.09 level compared to the Euro, despite the slightly better economic releases this week, such as the ISM Non-Manufacturing PMI and today’s new Jobless Claims number. Industrial metals and crude oil are falling alarmingly, as the weakness in China continues to weigh heavily on the segment. WTI Crude hit another 6-month low, and it’s getting close to the November lows near $46. Safe-haven assets are also under pressure, with gold dipping below the key $1240 level for the first time since mid-March.

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Gold below its rising trendline, 4-Hour Chart Analysis

Cryptocurrencies

Crytocurrencies have a blowout session so far, as Bitcoin left the $1500 mark behind with ease, although the current parabolic rise could warn of a blow-off top in the near future. Litecoin, Ethereum, Ripple, and Monero are leading the way for the other major coins today, with double-digit gains and new highs for all of them. Dash, Ethereum Classic, and NEM are also up, but they remain near their previous highs, after the brief correction of the previous few days.

Ripple, 4-Hour Chart Analysis

Technical Picture

DAX, 4-Hour Chart Analysis

The DAX jumped higher today, as the French election now looks like a sealed deal, and it hit a new all-time high on the back of the positive sentiment. The MACD indicator is in overbought territory and the price just hit the upper boundary of the rising trend channel, so it’s definitely not the best time to jump on the trend. That said, further gains might be ahead in the coming days, but the weakness in some of the main US indices still warns of a looming correction. A re-test of the prior high near the 12,375 level is likely during the correction, although the 12.250 level could also be in play.

Key Economic Releases on Thursday

Day Country Release Actual Expected Previous
3:30 AUSTRALIA Trade Balance 3.11 bill 3.3 bill 3.57 bill
10:30 UK Service PMI 55.8 54.6 55.0
14:30 CANADA Trade Balance -0.1 bill 0.3 bill -1 bill
14:30 US Initial Jobless Claims (weekly) 238,000 246,000 257,000
14:30 US Trade Balance -43.7 bill -44.9 bill -43.6 bill
18:30 EUROZONE ECB President Draghi Speaks

 

Key Economic Releases on Friday

Time, CET Country Release Expected Previous
3:30 CANADA Employment Change 20,000 19,400
10:30 CANADA Unemployment Rate 6.70% 6.70%
14:30 US Employment Change 194,000 98,000
14:30 US Unemployment Rate 4.60% 4.50%
14:30 US Hourly Earnings 0.30% 0.20%
20:00 US FED Chair Yellen Speaks
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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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