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Daily Analysis: Oil and Gold Sink as Stocks Rebound after Dismal Payrolls Report

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Friday Market Recap

Asset Current Value Daily Change
S&P 500 2543 -0.27%
DAX 12945 -0.15%
WTI Crude Oil 49.30 -2.93%
GOLD 1275.00 0.16%
Bitcoin 4380 1.46%
EUR/USD 1.1734 0.18%

This month’s Job’s Friday was not as eagerly awaited as usual following September’s crucial Fed meeting, as analysts didn’t expect a significant policy reaction. That effect was even magnified by the by last month’s Hurricane hits in Texas and Florida, as the payrolls number was heavily influenced by the natural disasters. The uncertain report came in even below the subdued expectations, but the market’s reaction was shallow and brief, and the rate hike odds regarding December’s FOMC meeting remained elevated. With the VIX still near record lows today, the most important equity indices will likely close the week at or near their all-time highs.

DXY, 4-Hour Chart Analysis

Currencies had a very active week, and although today’s session was relatively eventless, especially for a Job’s Friday, the trends of the past few sessions remain dominant. The Catalonian situation and the political storm in the UK continue to weigh on the Euro and the Pound, while the US Dollar keeps on flexing its muscles. The Aussie, the Yen, and the Kiwi all lost ground to the Greenback, but the decline in gold and crude oil are the most significant moves of the day. The precious metals failed to hold the $1275 support, further deepening its correction, while oil is still trending lower despite the otherwise bullish environment.

WTI Crude Oil, 4-Hour Chart Analysis

Cryptocurrencies

The major coins started out the day in a bullish fashion, and despite a slight dip in the beginning of the US session, most of them are holding on to their modest gains. The week was so far dominated by a shallow short-term correction that fizzled out near the key support levels in Bitcoin and Ethereum. BTC held above the $4150 level, while Ethereum successfully tested the $285 level. Ripple is leading the rally, together with BTC, and the volatile NEO, while the rest of market is showing weak momentum so far. That said, some explosive moves could be waiting for traders in the thin weekend environment, and the general picture remains bullish in the segment.

Ripple/USD, 4-Hour Chart Analysis

Technical Picture

The DAX mostly ignored the week’s European political woes, and got very close to the historic 13,000 level while hitting new all-time highs. That said, the short-term picture looks stretched and a correction is likely, with primary support at 12,850 and further levels at 12,650 and near 12,500. The divergent MACD is also in overbought territory, and a bounce in the slightly oversold Euro is also in the cards in the coming days.

DAX, 4-Hour Chart Analysis

Key Economic Releases on Friday

Time, CET Country Release Actual Expected Previous
9:30 UK Halifax HPI 0.8% 0.0% 1.1%
14:30 CANADA Employment Change 10,000 13,900 22,200
14:30 CANADA Unemployment Rate 6.2% 6.3% 6.2%
14:30 US Employment Change -33,000 88,000 156,000
14:30 US Unemployment Rate 4.2% 4.4% 4.4%
14:30 US Hourly Earnings 0.5% 0.3% 0.1%
16:00 CANADA Ivey PMI 57.2 56.3

Key Economic Releases on Monday

Time, CET Country Release Expected Previous
2:30 AUSTRALIA NAB Business Confidence 5
10:30 UK Manufacturing Production 0.5%
10:30 UK Goods Trade Balance -11.6 bill
14:30 CANADA Building Permits -3.5%

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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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Analysis

Pre-Market Analysis And Chartbook: Brexit Chaos Sparks Turmoil Across Markets

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Thursday Market Snapshot

Asset Current Value Daily Change
S&P 500 2,685 -0.63%
DAX 30 11,360 -0.47%
WTI Crude Oil 56.40 0.71%
GOLD 1,215 0.31%
Bitcoin 5,389 -3.72%
EUR/USD 1.1302 -0.04%

The Brexit process continues to be the main driver in financial markets across asset classes, and the situation in the UK could be best described as chaotic at the moment. While yesterday the British Cabinet’s approval of the draft Brexit plan sparked a brief risk rally, with the Euro the Pound and equities rising hand-in-hand, today, the plan is in serious jeopardy. Several ministers, including the Brexit-Secretary resigned, and the outcome of vote in the Parliament seems doubtful, at best.

GBP/USD, 4-Hour Chart Analysis

The Pound lost significant ground against all of its peers, with the currency’s losses also being exaggerated by the much worse than expected British Retail Sales data. The GBP/USD pair hit its lowest level this month, touching the 1.2750, while the Euro is relatively strong today, the Dollar’s broad rally still seems intact, and a no-deal Brexit could push the Cable back towards its historic low near 1.20 from late 2016.

Dow 30 Futures, 4-Hour Chart Analysis

While equities are little changed so far today, the charts still look wounded globally and even the relatively strong US benchmarks are likely headed for, at least, a test of their lows from October. Economic numbers were mixed today in the US, with the Retail Sales report beating the consensus estimates across the board, but with the Philly Fed Index showing an unexpected slowdown in the manufacturing sector.

The Dow, which has been the strongest benchmark recently is hovering near the 25,000 level, after underperforming the broader market yesterday, and with the other indices being in even worse technical shape, the coming days could see another surge in volatility, despite the pullback in Treasury yields across the curve.

Heavy Trading Continues in Commodities

WTI Crude Oil, 4-Hour Chart Analysis

Oil finally found support following two months of steep losses and Tuesday’s liquidation event, with the WTI contract rising above the $57 per barrel level yesterday, before a late-day pullback. Today the crucial commodity is performing relatively well in the nervous environment, and although bulls are still not out of the woods, we still expect a bounce above $60 in the coming week.

We will still have the weekly US crude inventory data coming out during the morning session on Wall Street, and volatile trading will likely continue in the throughout the day, with the $54.50 short-term support level and the $57.50 resistance level being in the center of attention.

Gold Futures, 4-Hour Chart Analysis

Gold is also having an interesting session so far, as it is testing the short-term resistance zone near $1215 due to the Brexit uncertainty and the pullback in yields. The precious metal is still well below the consolidation pattern that developed in October, and it would need to rise above $1220 to trigger a short-term trend change, but should risk assets continue their downtrend, gold could quickly rally as high as $1250.

ChartBook

Major Stock Indices

S&P 500 Futures, 4-Hour Chart Analysis

Nasdaq 100 Futures, 4-Hour Chart Analysis

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

DAX 30 Index CFD, 4-Hour Chart Analysis

FTSE 100 Index CFD, 4-Hour Chart Analysis

EuroStoxx50 Index CFD, 4-Hour Chart Analysis

Nikkei 225 Futures, 4-Hour Chart Analysis

Shanghai Composite Index CFD, 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

EUR/GBP, 4-Hour Chart Analysis

AUD/USD, 4-Hour Chart Analysis

Commodities

Copper Futures, 4-Hour Chart Analysis

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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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4.7 stars on average, based on 394 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

Long-Term Cryptocurrency Analysis: Bear Market Continues With Major Technical Breakdown

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After months of choppy consolidation, yesterday, we saw the largest move in the cryptocurrency segment since April, which took the majors below key technical levels. Bitcoin’s drop is the most important event, since the most valuable coin violated a structurally important base support for the first time since its historic bull run to $20,000 started.

As we warned repeatedly, the market didn’t show signs of healing during the sideways drift, since no leadership developed, and the coins failed to show follow-through following the, sometimes explosive rally attempts, so our trend model remained overwhelmingly bearish throughout the consolidation.

The top altcoins completed their structural breakdowns well ahead of BTC, and the stability of Bitcoin was the most encouraging sign for crypto-bulls, so now, the broad selloff confirmed the next lower in the bear market.

BTC/USD, Daily Chart Analysis

After violating the primary support at $6275, Bitcoin’s selloff accelerated below the weaker $6000 level and the key zone near $5850 wasn’t enough to support the coin. The structural breakdown will likely lead to a test of the $5000-$5100 zone, while an unlikely recovery would be a very positive development. Primary resistance is now ahead near $5850, while further major support zones are found near $4500 and $3600, and traders and investors still shouldn’t enter new positions here.

ETH/USD, Daily Chart Analysis

Ethereum fell to a marginal new bear market low, outperforming Bitcoin from a short-term technical perspective, but that’s not enough to warrant optimism with regards to the long-term setup. ETH is still in a clear long-term downtrend despite the lengthy consolidation phase, and a test of the $160 level is likely in the coming period.

The coin is still on sell signals on both time-frames in our trend model, and traders and investors should stay away from new positions, with further support found near $130 and with resistance levels ahead near $200 and $235.

(more…)

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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4.7 stars on average, based on 394 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

XRP Price Analysis: XRP/USD Performing Better than Peers; Another New Partner Announced

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  • Ripple’s XRP weighted to the downside, but not performing as bad as some of its peers.
  • CIMB Group are the latest financial organisation to be utilizing Ripple’s technology.

XRP/USD has been firmly on the back foot during trading over the last two sessions now. Selling pressure had hit the whole market on 13th November. This went on to further intensify in the following session, 14th November. A total blood bath was observed across the board, with huge areas of support being breached. The wave hit the entire market. Ripple’s XRP has managed to hold a firmer ground, in comparison to some of the losses encountered with its peers.

Ripple Reveals New Partner – CIMB

CIMB Group, one of the largest south Asian banking organizations, are the latest to be utilize Ripple’s technology. CIMB will leverage Ripple’s technology for its SpeedSend remittance product, this coming from a joint press release. The SpeedSend product is available in a spectrum of Southeast Asian markets. Countries include: Thailand, Philippines and Vietnam. Ripple continue at a rapid pace adding large financial institutions to its network.

Ripple via their announcement stated the following: “Ripple’s blockchain-based solution has been deployed to enhance CIMB’s proprietary remittance product called SpeedSend. This service allows customers to send and receive money with direct account crediting and instant cash collection. The enhancement improves their access to cross-border remittances across the globe — both inbound into ASEAN and outbound to other countries. It is already enabling remittances to corridors such as Australia, USA, UK and Hong Kong.”

Technical Review – XRP/USD

XRP/USD daily chart

XRP/USD is running at three consecutive sessions in the red, nursing chunky double-digit losses over this period. The price dropped over 20%, a move that was very much in line with the rest of the cryptocurrency market. Price action had been moving within a triangular pattern formation, since 21st September. Thie XRP price observed much narrowing over this period. During the heavy selling pressure on 14th November, the bears had pierced the lower support of the mentioned pattern.

Despite the large lower wick seen on 14th November candlestick, the price managed to close within boundaries of the triangular formation. In terms of current price action on the latest for today, XRP/USD is seen below this area of support. Should the market bears manage to push for a breach and daily close underneath the supporting trend line, this could cause large devastation. Eyes could be on a return to the $0.3000-$0.2500 region. Lastly, worth noting, looking to the upside, the resistance would likely be seen around $0.4800, and this level is critical. This is where the lower trend line is seen tracking.

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 50 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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