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Daily Analysis: Dollar Up Again as Stocks Grind Higher

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Tuesday Market Recap

Asset Current Value Daily Change
S&P 500 2484 0.27%
DAX 12293 0.32%
WTI Crude Oil 49.42 0.02%
GOLD 1260.00 -0.45%
Bitcoin 3402 1.23%
EUR/USD 1.1740 -0.47%

It’s a mixed and choppy day once again for traders, with only the Dollar providing some excitement in the US trading session. The Greenback is testing its Friday highs against the Euro on a better than expected Job Openings Data report added to the optimism regarding the labor market after last week’s decent Employment Report. The greatly oversold currency still has ample room to rally, and that could help European stocks which were pushed lower by the strength of the common currency in recent weeks.

EUR/USD, 4-Hour Chart Analysis

That said, US stocks are also holding up well today, with the DOW continuing its unprecedented winning streak in the thin-volume environment. The mega cap index could close on a record high for the 10th day in a row, although the broader indices are still suspiciously weak. The Dollar strength and the record low volatility is weighing on Gold after the precious metal’s nice rally to $1275, and it’s now back to $1250 despite the overnight strength.

Gold, 4-Hour Chart Analysis

Asian markets were dominated by the Chinese Trade Balance release that showed a larger than expected surplus but a decline in the overall volume of trade, in line with the fears regarding the growth in the second largest economy in the world. The Shanghai Composite declined somewhat on the news, but the index is trading just below the upper boundary of its long-term trading range, after two months of gains.

Shanghai Composite, 4-Hour Chart Analysis

Cryptocurrencies

The major coins are still broadly bullish, with Ethereum hitting the $285 target today, taking over the role of short-term the leader from Bitcoin. BTC hit a marginal new high this morning once again, but the weekend’s momentum is clearly gone, and the most valuable coin will likely consolidate its lofty gains. Monero and NEM also had nice runs lately, while the other majors are trading sideways in narrow ranges, with ETC and Ripple still being the weakest regarding their short-term technical positions. We expect more rotation between the majors and that could mean strong moves in the previously weaker coins in the coming period.

ETH/USD, 4-Hour Chart Analysis

Key Economic Releases on Tuesday

Time, CET Country Release Actual Expected Previous
3:30 CHINA Trade Balance 321 bill 294 bll 294 bill
14:15 US JOLTS Job Openings 6.16 mill 5,74 mill 5.70 mill

Key Economic Releases on Wednesday

Time, CET Country Release Expected Previous
3:30 CHINA CPI Index 1.50% 1.50%
3:30 CHINA PPI Index 5.60% 5.50%
14:15 CANADA Building Permits 54.4 54.3
14:30 US Nonfarm Productivity 0.8% 0.0%
16:30 US Crude Oil Inventories -2.6 mill -1.5 mill

Featured image from Shutterstock

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 378 rated postsTrader 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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Analysis

Pre-Market Analysis And Chartbook: Stocks Turn Lower as Treasury Yields Eye Multi-Year Highs Again

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Thursday Market Snapshot

Asset Current Value Daily Change
S&P 500 2,791 -0.91%
DAX 30 11,664 -0.43%
WTI Crude Oil 69.16 -1.30%
GOLD 1,227 0.16%
Bitcoin 6,438 0.01%
EUR/USD 1.1486 -0.11%

Equities are broadly lower after the opening bell on Wall Street, with the selloff in China and the rise in US Treasury yields setting the tone for the day so far. The risk-off shift that dragged even the mighty US stock market lower last week continues to dominate trading globally, and while volatility is well below its recent peak, bulls are on the defensive with regards to the majority of risk assets.

Shanghai Composite Index CFD, 4-Hour Chart Analysis

The Shanghai Composite hit yet another 4-year low today, amid rumors on forced liquidations following the hawkish surprise of yesterday’s Fed meeting minutes. The Chinese index confirmed its bear market again, and as the trade war rhetoric of the Trump administration will likely heat up before the midterms in November, selling pressure could remain strong.

FTSE 100 Index CFD, 4-Hour Chart Analysis

With the likelihood of a no-deal Brexit increasing, nervous trading continues on the related assets, with especially British equities feeling pain lately. The FTSE 100 has been lagging even the relatively weak European markets, and although the benchmark is trading above its spring lows, thanks mostly to the long-term weakness in the Pound, short-term technicals are very weak, and a breakdown below to a new almost 2-year low looks imminent.

Economic numbers have been mixed today, with British Retail Sales missing the consensus estimate by a mile, while the US Philly Fed Manufacturing Index came in slightly better than expected. The negative surprise added to the pressure on British stocks, although forex markets are little changed and the Pound remained relatively stable.

US Stocks Lower Again amid Choppy Consolidation

S&P 500 Futures, 4-Hour Chart Analysis

The major US indices opened lower and extended their losses in the first hour of trading, with the S&P 500 still trading in a clear short-term downtrend following last week’s plunge. Treasury Yields, particularly on the short-end of the curve are aback near their multi-year highs after yesterday’s Fed surprise, and that weighs heavily on investors sentiment.

Philip Morris (PM) is up by more than 3% following its earnings report, as the company continued the quarter’s trend of positive surprises, but the broader market is still largely ignoring the bullish news, as US investors are focusing more on the mounting funding risks and the strengthening international headwinds.

Copper Futures, 4-Hour Chart Analysis

While currencies are relatively calm today, commodities are having an active session, and crude oil and copper are both headed lower amid the fresh risk-off shift, while old is flat thanks to safe-haven flows. WTI crude hit another one-month low today after yesterday’s breakdown, falling below $69 per barrel and copper is also in a precarious technical position.

The volatility compression pattern looks to be ending in the industrial metal, as we expected, given the weakness in China, it’s no surprise that the commodity moved below its short-term range. A drop below the strong support near $2.70 could mean that copper resumed the broad downtrend, and that would be a bearish sign concerning the global economy.

ChartBook

Major Stock Indices

Nasdaq 100 Futures, 4-Hour Chart Analysis

Dow 30 Futures, 4-Hour Chart Analysis

VIX (US Volatility Index), 4-Hour Chart Analysis

DAX 30 Index CFD, 4-Hour Chart Analysis

EuroStoxx50 Index CFD, 4-Hour Chart Analysis

Nikkei 225 Futures, 4-Hour Chart Analysis

EEM (Emerging Markets ETF), 4-Hour Chart Analysis

Forex

EUR/USD, 4-Hour Chart Analysis

USD/JPY, 4-Hour Chart Analysis

GBP/USD, 4-Hour Chart Analysis

EUR/GBP, 4-Hour Chart Analysis

AUD/USD, 4-Hour Chart Analysis

Commodities

WTI Crude Oil, 4-Hour Chart Analysis

Gold Futures, 4-Hour Chart Analysis

Featured image from Shutterstock

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 378 rated postsTrader 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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Altcoins

Monero Price Analysis: XMR/USD is Stable and Gunning for Potential Gains on “Bulletproofs” Technology Update Day

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  • Monero developers have released an updated version to their protocol, implementing “Bulletproofs”.
  • XRM/USD is within a range block, with price behavior suggesting of a potential imminent breakout higher.

Monero Becoming First Crypto Over Billion-Dollar Market Cap Implementing “Bulletproofs”

Developers at the Monero foundation, have released an updated version to the protocol. This will be live from 18th and 19th October. They are becoming the first network to try out “bulletproofs”. The goal of this technology is to significantly decrease the weight of confidential transactions. From today, 18th October, the privacy-focused cryptocurrency will be testing this.

The move from Monero will make them the first crypto with over a billion-dollar market cap, to try out the “bulletproofs” technology. Over the past year, the foundation has been working on cutting the size of its confidential transactions, by at least 80 percent.  A full overview of the upgrade was posted in a blog post by Monero.

The purpose of bulletproofs are to facilitate confidential transactions. Senders and recipients addresses will remain visible, but the amounts being sent is concealed. The technology also aims to reduce transaction times and fees.

Sarang Noether, a spokesperson for Monero and a key part of the bulletproof integration, was recently speaking on the upgrade. He noted that “Bulletproofs will be replacing the “zero-knowledge range proofs”, of which their confidential transactions are reliant on. The cryptocurrency will activate the technology during its next system-wide upgrade, or hard fork. An upgrade that will require nodes to adopt a new software. Furthermore, Sarang added, “hard forks are sometimes colored as a risky process. However, this upgrade is part of Monero’s bi-annual cycle to introduce new features.”

Technical Review – 4-hour Chart

XMR/USD 4-hour chart

XRM/USD for the past going on three sessions now has been trading within a tight range-block. This trading behavior coming after the aggressive movements seen just some days before. On 11th October the price had spiked over 10% lower. To then enter a tight range, which saw a huge breakout, jumping around 20% high. Over half of this spike to the upside was reversed, moving into the three-session range as mentioned above.

Looking to the upside, eyes will be on another range-breakout. Bulls will be wanting to retest the breached supporting trend line. An attempt was made during the rally seen on 15th October, however strong resistance was observed. In terms of support, this can be eyed at the lower part of the current range, around $107.50. If the bears pile enough pressure, it vcould see a fast move back to $100, then further south below demand area from $86-76.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 31 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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Analysis

Ripple Price Analysis: XRP/USD Subject to Pullback Before Another Surge; More Partners Added to xRapid and RippleNet

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  • Ripple continue to add new partnerships for both xRapid and RippleNet.
  • XRP/USD subject to a near-term pullback, ahead of any firm committed upside move.

Ripple adds Viamericas to xRapid Solution

The Ripple foundation have been extremely busy, since the official launch of xRapid earlier in the month. Viamericas, who are a “licensed money transmitter offering international money transfer.” They cover over 76,000 locations in 29 countries. Viamericas is the latest to be added to Ripple’s xRapid.

Last month, Ripple held a two-day the Swell Conference. This is where Ripple’s CEO Brad Garlinghouse unveiled xRapid. Furthermore, at the time he covered that Ripple has partnered xRapid with three firms already, Cuallix, Mercury FX, and Catalyst.

UK E-Money Firm Moneynetint Joins RippleNet

Moneynetint are the latest company to join RippleNet, after recently completing integration. The business is a UK e-money institution. They facilitate in cross-border money transfers and currency exchange for corporate and private clients globally. As a result, The CEO of Moneynetint Yishay Trif, CEO commented, “The cooperation signed with Ripple is part of the company’s strategic move to advance into innovative areas of the payments industry. To become a groundbreaking institution in the field”.

Furthermore, direct commentary from Ripple, their director of account management. Nadeem Ladki, director, added, “by leveraging Ripple’s blockchain technology, Moneynetint will now be able to simplify and reduce the FX conversion rates for their customers, Increase the speed of settlement and offer services to new markets, that would otherwise have been too difficult or too costly to reach in the past.”

Technical Review – 4-hour Chart

XRPUSD 4-hour chart

XRP/USD has been attempting a break-down of a stubborn supply area observed from $0.4800-0.5000 region. The price for now continues to face rejections. After going through a period of high volatility, XRP/USD managed to find stability. This resulted in it grinding higher within a small ascending wedge pattern, which consequently has seen a breach. Even more, looking at playing out to the textbook with a breakout south.

The below demand area will be in focus, seen within the $0.4500-0.4350 territory. If near-term downside momentum is maintains its current course, the broken descending channel will be eyed. Finally, this support could likely be seen at $0.3900, just on top of the channel.

Technical Review – Daily Chart

XRP/USD daily chart

Looking for the daily view, the significance of the mentioned above supply and below demand areas are evident. Between the period of July – August, the price was swinging between these zones. The range was narrowing. This saw an eventual breakout south from the demand area, $0.4500-0.4350. As a result, XRP/USD went on to drop almost 80% down to a low of around $0.2445, on the 14th August.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 31 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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