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Daily Analysis: Cryptocurrencies Take Center Stage as Stock Rebound Continues

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Tuesday Market Recap

Asset Current Value Daily Change
S&P 500 2419 -0.21%
DAX 12436 -0.05%
WTI Crude Oil 44.84 1.06%
GOLD 1213.00 0.05%
Bitcoin 2350 -3.05%
EUR/USD 1.1428 0.25%

Financial markets are mixed today with no clear trends in the major asset classes. The major stock indices are little changed, with the European and US benchmarks trading slightly higher for the second day in a row before the recent nosedive. The sudden fall was caused by the release of some of Donald Trump Jr. private emails, which confirmed a controversial meeting with a Russian lawyer. The NASDAQ and the DAX, the two leaders of the current correction are still in short-term downtrends despite the morning bounce, and with no major economic releases coming out today, the market has been back to its low-volume low volatility state, despite the recent volatile period.

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The US Dollar is losing ground once again to the Euro, although it trades higher compared to most of the majors in the trendless environment. The Canadian Dollar is slightly lower today before tomorrow’s expected rate hike by the Bank of Canada, as investors took a step back following the strong rally in the “Loonie”. The major commodities are choppy but mostly unchanged, as oil and gold both continue to trade near their recent lows, while industrial metals are a tad higher after drifting lower so far in July.

Oil, 4-Hour Chart Analysis

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Cryptocurrencies

The crypto-segment ruled the mainstream media today, as Ethereum hit a more than one-month low below $200, with small cap coins losing a large chunk of their value as well. The panicky move might set up a meaningful bottom in the sector, as several majors show positive divergences, and the long-term picture is looking more constructive for the coins. The one-month long correction carried the momentum indicators back to neutral for the majors, with Ethereum nearing oversold territory after the recent decline.

Ethereum, 4-Hour Chart Analysis

Technical Picture

The German index is still trading inside the crucial support zone that we have been monitoring last week, despite the brief spike above the upper boundary of 12,500. The benchmark is still in a short-term downtrend, and as the MACD is almost back to 0, the next leg lower, or at least a re-test of the lows, could start soon.

DAX, 4-Hour Chart Analysis

Key Economic Releases on Tuesday

Time, CET Country Release Actual Expected Previous
3:30 AUSTRALIA NAB Business Confidence 9 7
14:15 CANADA Housing Starts 206,000 200,000 195,000

Key Economic Releases on Wednesday

Time, CET Country Release Expected Previous
10:30 UK Average Earnigns 1.8% 2.1%
10:03 UK Unemployment Rate 4.6% 4.6%
16:00 CANADA BOC Rate Decision 0.75% 0.5%
16:00 CANADA Monetary Statement
16:00 UK Janet Yellen Testifies
16:30 US Crude Oil Inventories -3.2 mill -6.3 mill

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Analysis

Technical Analysis: Bitcoin Up Again as Altcoins Mixed in Volatile Trading

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Bitcoin is at a new all-time high today, although the momentum of today’s move is far below from what we saw recently, and the coin only managed to reach a marginal record high yet again. BTC is now worth $300 billion, and it is still trading right at the short-term trendline, inside a rising wedge pattern that shows a clear momentum divergence.

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With the short-term trend still being intact further gains are still possible, but as all the majors are overbought from a long-term perspective, we still advise investors to wait for a better buying opportunity before adding to their holdings. Primary support is still found near $13,000, with further levels at $11,300, $10,000, $9000, and stronger levels at $8200 and $7700.

BTC/USD, 4-Hour Chart Analysis

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 XRP entered a volatile short-term correction after its two-day surge after giving a short-term sell signal yesterday, and the coin spiked back towards $0.60 before settling down just below yesterday’s highs. The long-term setup also turned overbought thanks to the almost 300% rally, and now investors should reduce their holdings, even as further gains are still possible. 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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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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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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