Daily Analysis: Euro Slumps on ECB Tapering, Amazon Jumps after Earnings

Thursday Market Recap

Asset Current Value Daily Change
S&P 500 2561 0.13%
DAX 13,133 1.39%
WTI Crude Oil 52.76 1.12%
GOLD 1269.00 -0.76%
Bitcoin 5856 3.78%
EUR/USD 1.1742 -0.20%

On the busiest trading day in a while, European stocks got a huge boost from the cautious tapering plans of Mario Draghi and the ECB that sent the Euro tumbling and hitting an almost 5-month low against the Dollar. European equities tackled their all-time highs after the announcement, but the stretched rally is still in danger and a bull trap is likely to form, just as a bear trap formed at the end of the last intermediate bottom, that said if the Euro remains under pressure, it could mitigate the next major leg lower in European stocks.

EUR/USD After the ECB-Decision, 4-Hour Chart Analysis

In the US, the aftermarket action was the most interesting as both Amazon and Google’s parent Alphabet came out with their quarterly numbers. Both behemoths beat the consensus estimates, and especially Amazon’s shares got bid higher in after-hours trading, surging back above the $1000 level. The tech index is still the weakest major benchmark regarding the short-term picture, despite the negative releases, and the broad market still seems wildly overbought.

Amazon (AMZN), 4-Hour Chart Analysis

Currencies had another active day, not just because of the Euro’s sharp drop, as the Canadian Dollar and the New Zealand Dollar also lost significant ground yet again, while the Pound and the Swiss Franc was dragged lower by their European big brother too. Safe-haven assets also got under pressure following the dovish central bank decision, although in the long run, it should be a bullish sign for both the Yen and Gold.

USD/CAD, 4-Hour Chart Analysis

Cryptocurrencies

Bitcoin’s volatile session made headlines in the cryptocurrency segment, as the dominant coin overcame yet another hard fork unscathed, and recovered up to the $6000 level after the recent short-term correction. The long-term picture remains dangerously overbought for the currency, but another short-term leg higher is still possible, despite the widespread bubble worries and high correction risk.

Altcoins were virtually unchanged amid the BTC rally, as Wednesday’s decline lost steam and the most traded coins settled down. IOTA was the most active yet again, as it continued lower after the huge rally earlier on this week. Litecoin and Ethereum showed some relative strength but the moves were minuscule compared to the recent swings. With most of the majors still consolidating the post China-crash gains, more choppy trading is expected, especially given the rising volatility in BTC.

BTC/USD, 4-Hour Chart Analysis

 

Key Economic Releases on Thursday

Time, CET Country Release Actual Expected Previous
13:45 EUROZONE ECB Rate Decisiion 0.00% 0.00% 0.00%
14:30 EUROZONE ECB Press Conference
14:30 US Unemployment Claims 233,000 236,000 222,000
16:00 US Pending Home Sales 0.0% 0.7% -2.6%

Key Economic Releases on Friday

Time, CET Country Release Expected Previous
14:30 US Advance GDP 2.7% 3.1%

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Author:
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.