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Daily Analysis: Pound Skyrockets as Theresa May Calls For UK Election

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Tuesday Market Recap

Asset Current Value Daily Change
S&P 500 2341 -0.15%
DAX 12043 -0.54%
WTI Crude Oil 52.80 -0.27%
GOLD 1283.50 0.22%
Bitcoin 1210 2.71%
EUR/USD 1.0690 0.44%

 

Global stocks are slightly lower today following the long Easter weekend, as political news have been dominating headlines. The North Korean tensions continue to build, while the controversies regarding the Turkish referendum and today’s announcement by PM added more uncertainty to the mix. Turkish assets are still slightly higher than their pre-election levels, as investors fear that the current situation is far from stable. European stocks continue to underperform their US peers in the short-run, while the Japanese Nikkei is still the weakest major benchmark, as the Yen remains strong.

The Pound rocked the forex market today with a powerful bullish move after the shocking May statement. All European currencies are trading higher following the news, but the shines the most, being almost 1.5% higher than the USD and close to 1% higher than the Euro. The currency already found relative strength before this week, but the snap election gave another boost to the Pound. Gold got close to the $1300 level yesterday amid the political fears, but the Shiny Metal entered a correction following a bounce in stocks, with crude oil also drifting lower after a blowout week.

GBP/USD 1-Hour Chart Analysis

Ethereum is still among the most promising cryptocurrencies today, as it continues to flirt with the $53 resistance, probably preparing for a major move higher. Bitcoin also seems to give another try to the $1215 resistance after getting close to $1150 over the long weekend. A break-out above last week’s highs could quickly lead to an assault on the $1300 level. Dash also built up some relative strength last week after its deep correction, and it’s now back near the $75-$78 resistance zone. Litecoin is still below its prior high as, continuing its sideways consolidation, similarly to Monero.

Ethereum 4-Hour Chart Analysis

Technical Picture

S&P 500, 4-Hour Chart Analysis

The S&P 500 continues to trade in the broad consolidation pattern that started in early March, with the 2350 level still being in focus. The low volume breakdown on Friday was followed by a bounce yesterday, as the lows from March are still holding firmly. Bears are slightly running out of time here, as the declining trendline is approaching a current price. If the bearish momentum fades, we could see a rally towards the prior all-time highs as early as next week.

Key Economic Releases on Tuesday

Time, CET Country Release Actual Expected Previous
14:30 US Building Permits 1.26 million 1.25 million 1.22 million
14:30 US Housing Starts 1.22 million 1.25 million 1.30 million
15:15 US Industrial Production 0.50% 0.50% 0.0%

 

Key Economic Releases on Wednesday

Time, CET Country Release Expected Previous
11:00 EUROZONE Final CPI 1.50% 1.50%
16:30 US Crude Oil Inventories -2.2 million
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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4.6 stars on average, based on 293 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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4 Comments

4 Comments

  1. Ershad

    April 18, 2017 at 5:27 pm

    Hi mate,

    What price should we wait for before entering the ethereum market? And what price should we sell at?

    Kind regards

  2. Mate Cser

    April 18, 2017 at 6:04 pm

    Hi Ershad,

    The long-term trend in Ethereum looks safe above the $38 support if you are holding a core position. Short-term it’s still a range market with a potential break-out above $53. Buying a break-out and easing up around $60 is a plausible strategy. As always, be careful with position sizing, altcoins can have violent corrections, make sure that a 10-15% stop-loss might be required to keep you in the “game”.

  3. miguelangmoli

    April 19, 2017 at 4:48 am

    Hi mate, could you please advise on Ripple? Looks like the 666 crypto is trying to deceive us on a downward direction prior to go upwards 4000 in a short-time period. It happens always like this. I think with this one, you can’t really use any prediction apart from Fibonnaci.

    • Mate Cser

      April 19, 2017 at 3:56 pm

      Hi Miguel,

      Ripple is tricky currently, and you ae right with the recent volumes, manipulation is a clear risk. A brief spike down below $0.03 (3000) would be a good point of entry, but things can get wild. The market followed Fibonacci levels very nicely, so I would pay attention to the 0.025 (2500) level, the 78.6% retracement of the break-out. I wouldn’t trade into this sideways mess though, rather wait for a spike lower or a break-out. Be safe out there!

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Market Overview

DJ King Crypto Banker

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Hi Everyone,

If you’re reading this, you probably agree that the old school financial industry is in need of a shakeup. It seems that Goldman Sachs agrees.

This hit track is a remix of the old Fleetwood Mac song “Don’t Stop Thinking About Tomorrow.” It was created by Goldman’s incoming CEO David Solomon (AKA: DJ D-Sol). Named after two ancient kings and an angel, Solomon will assume the throne on October 1st.

Current CEO Lloyd Blankfein was famously indecisive about cryptocurrencies, yet over the last few months, it’s become clear that the bank is ramping up their cryptotrading activities in a big way.

Solomon has been a lot more clear on crypto and has gone on record saying that Goldman is focused on crypto due to a high level of demand from their clients.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Dollar Climbs – Gold Falls
  • Bitcoin Party Time
  • Double Double Crypto Day

Please note: All data, figures & graphs are valid as of July 18th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

President Trump admitted yesterday to making a mistake. After causing a global stir backing Putin over the FBI at the Helsinki summit, Trump has now walked back his comments and even admitted for the first time that he agrees with the assessment that Russia was indeed behind the meddling in the 2016 elections.

Though many remain unconvinced, the markets remain unfazed and instead the focus from many analysts remains on the possibility of a ramped up trade war with China and on the Fed’s actions.

In his testimony yesterday, Fed Chair Jerome Powell did his best not to be political but did note that the effects of further tariffs would likely be felt throughout the US economy. Today Powell testifies before the House Financial Services committee. We can probably expect further questions from the House regarding the specific reaction the economy might have to said tariffs.

Stocks are rather mixed today but we do have notable moves in the currency market where the US Dollar is gaining strength.

The US Dollar Index is once again bumping up against resistance at 95 points. If this level is passed, it could lead to further gains, especially since the United States seems to be a lot more aggressive than the rest of the world on their plans to raise interest rates.

In line with the stronger Dollar, the metals have continued to decline. Gold is now the cheapest it’s been in over a year.

Bitcoin Surge!!

After more than a month of doing nothing, bitcoin broke out yesterday rising $656 in 40 minutes, bringing life and optimism back into the market.

Here we can see the strong break above the key resistance level of $6,800, clearing quickly past $7,000 then spending a short time above $7,500 before a retracement.

By looking at the volumes, it seems that the cause of the surge was from some fresh money entering the market. This graph from www.cryptocompare.com shows the incredible volume spike at the time of the surge.

This one shows the volumes by currency. The blue circle is the exact time of the surge. Notice the spike in USD volumes?

Lately, we’ve been seeing a trend that Tether (USDT) has been becoming more prominent in overall volumes. Tether volumes generally indicate cryptotraders speculation on the exchanges. The fact that this surge happened on USD and not Tether might indicate that it is due to fresh money coming in.

Double Double Crypto Day

Today the US Congress is set to hold not one, but two separate hearings that relate to cryptocurrencies. This is a clear sign that the US government is taking the crypto industry seriously and it seems that point of both hearings will be to help not harm innovation in the space.

The double-header comes as the SEC’s mailbox is reportedly inundated with letters from citizens urging them to approve VanEck’s Bitcoin backed ETF at their hearing on August 10th.

Shifting over to Wall Street, it seems that the bitcoin monthly futures contracts on both the CME and the CBOE group will expire today. As we’ve stated before, there is nothing to fear from the expiration of these contracts. The chances that any large player is trying to manipulate the markets using them is very slim.

Just to get a picture of the volumes of these markets, I’ve pulled the following graph from the Bloomberg terminal for you. This shows the daily volumes on the CBOE’s XBT futures since inception.

The small white line shows the average daily turnover, which is just under 5,000 BTC.

Even though the volumes on the CME are higher, it’s less significant for this analysis since they are using a more complex index as a reference rate for contract settlement and thus would be much more difficult for anyone to try and manipulate.

As always, let me know if you have any questions, comments, or feedback. I’m always happy to hear them. Let’s have an excellent day ahead!

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Best regards,
Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: @MatiGreenspan | Twitter: @MatiGreenspan | LinkedIn: MatiGreenspan | Facebook:MatiGreenspan

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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Market Overview

Market Update: U.S. Stocks Rise After Fed Chairman Testimony; Earnings in Focus

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U.S. stocks rebounded Tuesday after Federal Reserve Chairman Jerome Powell told Congress that economic growth and inflation should keep the central bank on track to raise interest rates later this year.

Stocks Rise

All of Wall Street’s major indexes reported gains on Tuesday, with the Nasdaq Composite Index returning to record territory. The technology-focused average climbed 0.6% to 7,855.12.

The broader S&P 500 Index rose 0.4% to close at 2,809.55, with seven of 11 primary sectors finishing in positive territory. Materials stocks were the biggest gainers, rising 1.3% as a cluster. Technology, consumer staples and healthcare stocks also outperformed the broader market.

Dow industrials gained 55.53 points, or 0.2%, to close at 25,119.89.

Expectations of 30-day volatility drifted toward six-month lows on Tuesday in a sign of prevailing calm on Wall Street. The CBOE VIX Volatility Index declined 6% to 12.06.on a scale where 20 represents the historic average.

Powell Testifies

Fed Chair Jerome Powell’s Congressional hearings began Tuesday in a session chaired by the Senate Banking Committee. Though not appearing overly hawkish, the Fed leader indicated that short-term interest rates are likely headed higher in the coming months.

“Overall, we see the risk of the economy unexpectedly weakening as roughly balanced with the possibility of the economy growing faster than we currently anticipate,” Powell said.

He added: “The unemployment rate is low and expected to fall further. Americans who want jobs have a good chance of finding them.”

The Fed’s policy-setting board is scheduled to meet July 31 but is not expected to raise interest rates again until the September gathering. Policymakers and investors have priced in two more upward adjustments this year to the federal funds rate.

Powell will resume his testimony on Wednesday.

Earnings in the Spotlight

With corporate earnings season in full swing, investors are closely monitoring top- and bottom-line results of S&P 500 companies.

Netflix (NFLX) reported weaker than expected subscriber growth late Monday, sending share prices sharply lower. According to The Wall Street Journal, the stock was poised for its single-worst session in two years.

Goldman Sachs Group Inc. (GS) posted bottom-line results that were higher than expected, but rising legal costs weighed on share prices. The Wall Street giant reported per-share earnings of $5.98, crushing forecasts for $4.66. Organization-wide revenue jumped 19% to $9.40 billion, compared with estimates for $8.74 billion.

The earnings season is off to a positive start with roughly nine of ten S&P 500 companies posting stronger than expected profit results. However, as of Friday, only 5% of the S&P 500’s constituents had reported.

Despite the robust results, half of the S&P 500 companies that reported as of Friday said currency swings had a negative impact on their business. After a disastrous start to the year, the U.S. dollar index has returned more than 6% over the past three months. DXY rose half a percent on Tuesday.

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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4.6 stars on average, based on 499 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Market Overview

The King is a Fink

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Hi Everyone,

It’s true, I’ve always enjoyed reading the paper. When I was younger I used to track the price of gold daily in my grandfather’s copy of the Wall Street Journal. Before that though, I was drawn to the funnies.

The Wizard of ID is a classic. For those of you who aren’t familiar, it’s about a tyrannous but stout dictator, who hated it when people would call him a “fink,” even though the term has many meanings.

Speaking on Bloomberg yesterday, Blackrock’s CEO Larry Fink weighed in on many important issues including the ongoing trade wars as well as shooting down recent rumors that Blackrock is about to get into crypto.

The full video can be found here:

With $6.28 trillion under management, Blackrock is one of the largest financial institutions in the world and Fink is definitely the king. So it pays to listen to what he sees from this unique point of view.

@MatiGreenspan
eToro, Senior Market Analyst

Today’s Highlights

  • Trumputin Turning Heads
  • Earnings Season (New Tool)
  • 75 Lambo Traffic Jam (New Research Paper on ADA)

Please note: All data, figures & graphs are valid as of July 17th. All trading carries risk. Only risk capital you can afford to lose.

Traditional Markets

Shock and awe were witnessed on the global main stage yesterday at the Helsinki Imperial Palace, where President Vladimir Putin and Donald Trump made jaws drop by aligning themselves on more than a half dozen hot button issues.

Picking up the most headlines was this statement, where Trump seemed to side with Putin over his own Intelligence Agency. Yet, despite the calls of “treasonous trump” from both Democrats and Republicans, the best the American people can hope for are some fair and compelling conclusions from special investigator Robert Mueller.

Meanwhile, stock markets are firmly in the red in Asia and Europe this morning as talk of a trade war and Fed tightening overshadow bullish investor sentiment.

Later today, about 30 minutes after the opening bell on Wall Street, we’ll get a special spectacle. Fed Chair Jerome Powell will be in front of the US Senate Banking Committee, in addition to his prepared statement, there’ll also be a Q&A session. Should be fun to watch.

Earnings Season Underway (New Tool)

For those of you holding individual stocks, which I hope is most of you, earnings reports are important. Yesterday, some sour earnings sent Netflix down by nearly 15% after hours.

In order to help you keep better track of these opportunities, we’ve put together a nifty tool to help you keep track of which companies are about to publish their results.

Please bookmark this page: https://www.etoro.com/investing/earnings-reports/

Simply scroll down to see the schedule, as well as the forecasted EPS. If you’re interested in a specific stock, you can click the “+” button to add it directly to your watchlist. As well, you can search directly for upcoming announcements by company or by a future date.

Ether Spammer

Five million green teas, 75 Lambos, 25 Coinbase seed rounds, or 0.9% of the Telegram ICO.

According to Vitalik Buterin, that’s what it’s costing someone to spam the Ethereum network. On Sunday, the Ethereum network was clogged pretty much the entire day reaching a peak of 62,715 unconfirmed transactions at one point.

The miners were able to get that number down to under 10,000 this morning but the two nasty spikes last night along with Vitalik’s tweet indicate that some malicious player may be intentionally creating activity on the network in order to slow it down.

While Ethereum is by far the most popular platform for dApps at the moment, it’s clear that if they don’t scale quickly it may not stay that way forever.

New Research Paper (ADA)

Several blockchain 3.0 competitors are already under construction and after looking at all the top contenders, we’ve found that one of the most promising ones is Cardano.

For your convenience, we’ve put together the following research paper in order to assist you to make the best possible investment decisions when considering this unique and exciting token for your portfolio.

Please find the new research paper at: eToro.tw/Research-ADA

As with all emerging technologies investing in this project may be risky. Because the network is still in its infancy, we really have no way of pinpointing exactly what each ADA token should be worth and so should only be used as a small part of a well-diversified portfolio.

Let’s have an awesome day ahead!

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.

The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.

Best regards,
Mati Greenspan
Senior Market Analyst

Connect with me on….

eToro: @MatiGreenspan | Twitter: @MatiGreenspan | LinkedIn: MatiGreenspan | Facebook:MatiGreenspan

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 115 rated postsSenior Market Analyst at Etoro.com.




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