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Daily Analysis: Markets Settle Down ahead of the FED as Crypto-Coins Rebound

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Daily Analysis: Markets Settle Down ahead of the FED as Crypto-Coins Rebound

Introduction

This article was posted on Tuesday, 15:00, UTC.

Tuesday Market Recap

Asset Current Value Daily Change
S&P 500 2434 0.35%
DAX 12783 0.73
WTI Crude Oil 45.89 -0.42%
GOLD 1264.00 -0.45%
Bitcoin 2744 -1.51%
EUR/USD 1.1210 0.05%

The tech giants experienced a relief rally after the flash-crash on Friday, as the major global indices rebounded together with the NASDAQ. Traders took a step back before tomorrow’s key Federal Reserve meeting, causing a decline in trading volumes and volatility. Despite the snapback rally, the NASDAQ still seems wounded from a technical viewpoint and another leg lower in the correction is expected, at least testing the Monday lows. The better than expected US PPI index gave another boost to rate hike expectations and helped a slight rebound in the Dollar that has been in a gruelling downtrend in recent months thanks to the strength of the Euro and the Yen.

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Dollar Index, 4-Hour Chart Analysis

The Great British Pound rallied on a positive inflation surprise today, as the post-election sell-off ran out of steam. The other major fiat currencies are virtually unchanged in thin trading, although the Canadian Dollar continues to rally despite the weakness in oil. The production of the OPEC countries hit a new 6-month high according to the cartel’s report, painting a gloomy picture of the fate of the extended supply-cut agreement especially considering the diplomatic crisis between some of the major members. Gold is under pressure before the Fed, as the precious metals correction continues following the rally to $1300.

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Cryptocurrencies

The coins settled down after yesterday’s crazy session that brought the two giants of the segment even closer in market value. The Bancor ICO was a huge success, the biggest public offering so far, but that probably drained some liquidity away from small cap coins, leading to weakness in their prices. That said, Stratis, Steem, Siacoin, Lisk, Golem, and Zcash are all rallying today. Bitshares is consolidating its lofty gains, while Ripple and NEM are still weak. Ethereum is holding strongly below its highs from yesterday, despite the scary correction in late trading, while Bitcoin also rebounded, together with Dash and ETC.

 

Bitcoin, 4-Hour Chart Analysis

Technical Picture

The S&P 500 held up well amid the strong correction in the big tech names, as it respected the crucial support level near 2415. The short- and –long-term trends are both positive, with the all-time still being less than 0.5% above the current levels. We expect low volatility until tomorrow evening, when the Fed announces its interest rate decision, with a probable test of the all-time highs. In a bearish scenario, the 2400 level is expected to act as support, with the long-term uptrend line currently found just above 2600.

  S&P 500, 4-Hour Chart Analysis

Key Economic Releases on Tuesday

Time, CET Country Release Actual Expected Previous
3:30 AUSTRALIA NAB Business Confidence 7 13
10:30 UK CPI Index 2.9% 2.7% 2.7%
11:00 GERMANY Zew Economic Sentimetn 18.6 21.8 20.6
14:30 US PPI Index 0.0% 0.1% 0.5%

Key Economic Releases on Wednesday

Time, CET Country Release Expected Previous
4:00 CHINA Industrial Production -0.20% -0.10%
10:30 UK Average Earnings 2.4% 2.4%
10:30 UK Unemployment Rate 6.4% 6.5%
14:30 US CPI Index 0.3% 0.2%
14:30 US Core Retail Sales 0.2% 0.3%
16:30 US Crude Oil Inventories 3.3 mill
14:30 US Fed Interest Rate Decision 1.25% 1%
20:00 US Fed Monetary Statement
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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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