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Daily Analysis: European Rebound Fizzles as Dollar Dumped After Fed Minutes

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Wednesday Market Recap

Asset Current Value Daily Change
S&P 500 2593 -0.03%
DAX 13015 -1.15%
WTI Crude Oil 58.02 1.42%
GOLD 1290.00 0.88%
Bitcoin8 8265 2.19%
EUR/USD 1.1820 0.63%

The bounce that carried European stocks above short-term resistance quickly reversed today, amid the continued woes regarding the failed German coalition. Asia started out the day on a bullish note as the Hang Seng’s new all-me high made headlines, with the main index of the Hong-Kong exchange reaching the 30,000 level for the first time ever. The day’s most awaited event was the release of the minutes of the recent Fed meeting, which revealed a dovish tilt in the central bank’s outlook, that put pressure on the Greenback towards the end of the session.

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DAX Index, 4-Hour Chart Analysis

The currency hit a new two-month low against the Yen, while falling considerably compared to all of the majors. Gold also got a boost from the Fed, the bank warned that a sudden reversal in stocks could threaten the real economy. Yields declined across the board during the session, with the flattening of the yield curve stalling for now, as short-term yields pulled-back strongly.

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Besides the Yen, the Great British Pound is also among the winners of the week, while the Euro lost ground against all the majors but the Dollar, despite the global risk-on rally. US stocks barely budged despite the European volatility, and the busy economic calendar, as volumes retreated before the Thanksgiving holiday.

USD/JPY, 4-Hour Chart Analysis

Cryptocurrencies

Monero and Dash, and towards the end of the day Ethereum, were the most active major cryptocurrencies as both of the formers hit significant new all-time highs. Dash got close to $600, almost completing a 50% rally above its prior record price level, while XMR also reaching almost 10% above its own all-time high. Ethereum also showed strength in the second half of the session, and the second largest coin finally breached the $380 resistance, as it got very close to the all-time high near $400.

XMR/USD, 4-Hour Chart Analysis

Bitcoin held up strongly amid the altcoin rally, even as Bitcoin Cash gained significant ground, and despite the stretched long-term picture, the dominant cryptocurrency continues to levitate just below its recent highs helping the total value of the segment in reaching the once elusive $250 billion mark today.

BTC/USD, 4-Hour Chart Analysis

The rest of the majors were little changed although there was a notable bullish turn towards the end of the session that lifted the previously weaker coins, such as Ripple, Litecoin, IOTA, and Ethereum Classic. NEO followed its own path yet again, as the coin held on to its bounce off the $34 support, but stayed well below its recent break-out highs.

Key Economic Releases on Wednesday

Time, CET Country Release Actual Expected Previous
14:30 US Core Durable Goods 0.4% 0.4% 1.1%
14:30 US Unemployment Claims 239,000 241,000 252,000
11:30 US Crude Oil Inventories -1.9 mill -1.4 mill 1.9 mill
15:30 US FOMC Meeting Minutes

Key Economic Releases on Thursday

Time, CET Country Release Expected Previous
10:00 GERMANY Manufacturing PMI 60.4 60.6
10:00 GERMANY Services PMI 55.2 54.7
11:00 EUROZONE Manufacturing PMI 58.3 58.5
11:00 EUROZONE Services PMI 55.3 55.0
14:30 EUROZONE ECB Meeting Minutes
15:30 CANADA Core Retail Sales 0.9% -0.7%

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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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Analysis

Technical Analysis: Bitcoin Grinds Higher as Records Tumble in Altcoins

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The historical surge in the segment, which is the second such move this year, continued today, with another round of break-outs in some of the major altcoins and tepid gains for BTC investors. Ethereum, Ripple, Dash, and first and foremost Litecoin was leading the charge, with the recent star LTC topping $300, just after a day of hitting the $200 mark.

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Litecoin defied all odds after reaching extremely overbought readings, and the coin rode the speculative wave, turning exponential, not unlike IOTA and Bitcoin previously. With the coin being stretched in an unprecedented way on all time-frames, investors could even consider selling their core positions at the current levels, as a deep correction is almost granted in the coming period. The first meaningful support level is found at $125, and a re-test of the $100 level is probable during the next major correction.

LTC/USD, 4-Hour Chart Analysis

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Ripple finally ended a long period of relative weakness today, and the only major on a long-term by signal jumped over primary resistance at $0.26 and crossed the $0.30-$0.32 too in the euphoric sentiment. As the coin is not long-term overbought following the 6-month long consolidation, the buy signal in XRP remains intact, with the only major resistance level being found at the all-time high near $0.425.

XRPUSDT/USD, 4-Hour Chart Analysis

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