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Daily Analysis: Oil Surges on OPEC-Deal Extension as Ripple Tests Highs

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Monday Market Recap

Asset Current Value Daily Change
S&P 500 2397 -0.43%
DAX 12760 -0.05%
WTI Crude Oil 49.55 3.24%
GOLD 1235.00 0.60%
Bitcoin 1753 -2.05%
EUR/USD 1.0979 0.43%

 

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Stock markets shrugged off one of the biggest hacker attacks in history as a non-event, despite the broad coverage by the media, as the main global benchmarks opened the week virtually unchanged, with some notable weakness in Europe. Saudi Arabia and Russia provided the news of the day so far, as the two energy ministers announced a 9-month extension of the OPEC’s crude oil production cut, causing an almost 4% rally in oil futures. The deal helped the battered energy segment and commodity-related currencies as well, while the US Dollar got under pressure following the announcement.

WTI Crude Oil Futures, 4-Hour Chart Analysis

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Meanwhile, the Chinese market remained stable, despite the weak industrial production data, helping the rally in commodities and related assets. The Euro, the Pound, and the Swiss Franc are all up compared to the USD; while the Yen is drifting lower thanks to the surprisingly positive sentiment. The weak US-ES Manufacturing Index also weighs on the USD, as the economic numbers continue to disappoint across the board. Gold is showing strength once again, as it decoupled from the Yen and got close to the key resistance level near $1240.

Cryptocurrencies

Ripple is still the best-performing cryptocurrency, trading more than 10% higher, just below the key 0.25 level, while the other majors are generally weak. Ethereum and Ethereum Classic are up slightly, but Litecoin, Dash, NEM, and Monero are following Bitcoin lower. Litecoin is down by the most dipping below $27 in early trading. NEM is diverging from Ripple after a period of strong correlation, which might be an indication of further weakness ahead. BTC is still in a volatile correction, although it’s holding up above the crucial short-term support level near $1600, despite the three weeks of parabolic advance since breaking out to new all-time highs.

Ripple, 4-Hour Chart Analysis

Technical Picture

The US financial sector is still showing weakness despite the global rally in stocks, while the S&P 500 and the DOW is still stuck below their recent highs. The short-term resistance in the XLF near the $24 level still holds the lower, although the long-term rising trend hasn’t been in danger so far. The mostly worse than expected economic numbers decreased rate-hike odds recently and that weighs heavily on the segment, as the hikes would boost the profitability of the major banks. This week might be crucial for the sector and the US market, as the divergence between the bullish NASDAQ and the rest of the market will likely resolve.

XLF (US Financial Sector ETF), 4-Hour Chart Analysis

Key Economic Releases on Monday

Time, CET Country Release Actual Expected Previous
4:00 CHINA Industrial Production (yearly) 6.5% 7.0% 7.6%
9:15 SWITZERLAND PPI Index -0.2% 0.00% 0.10%
14:30 US ES Manufacturing Index -1.0 7.6 5.2

 

Key Economic Releases on Tuesday

Time, CET Country Release Expected Previous
3:30 AUSTRALIA Montery Meeting Minutes
10:30 UK CPI Index 2.6% 2.3%
11:00 EUROZONE Flash GDP 0.50% 0.50%
11:00 GERMANY ZEW Economic Sentiment 22.3 19.5
14:30 US Building Permits 1.27 mill 1.27 mill
14:30 US Housing Starts 1.26 mill 1.22 mill
15:15 US Industrial Production 0.4% 0.5%
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Analysis

Cryptocurrency Analysis: Ripple Continues Rampage as Litecoin and Ethereum Enter Correction

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Ripple remained in the center of attention in the segment after breaking out to a new all-time high yesterday, and the coin almost doubled in value, climbing above the $0.80 level. The currency concluded a 6-month long consolidation pattern with the move after being the only major on a long-term buy signal in our trend model.

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XRP gave a short-term sell signal today, while turning neutral regarding the long-term setup. Investors now shouldn’t add to their positions, although further gains are still possible, and reducing holdings somewhat is a good idea here. Major support is still found at the prior high near $0.4250 and in the $0.30-$0.32 range.

XRP/USDT, 4-Hour Chart Analysis

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While Bitcoin stagnated, and Bitcoin Cash jumped, Ethereum, Litecoin, Dash, and IOTA has been drifting slightly lower, although the recent gains are still mostly intact, and the basic setup in the segment is unchanged.

Litecoin fell below the $300 level after yesterday’s consolidation, and the coin faced strong selling pressure in the latter half of the session. The currency remains extremely stretched regarding the long-term momentum indicators, and although the short-term uptrend is still intact, a deeper correction is likely in the coming weeks, with key support levels found at $125 and $100, and weaker levels at $260 and $170.

LTC/USD, 4-Hour Chart Analysis

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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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