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Analysis

Daily Analysis: Ripple Explodes Again as EUR/USD Surges Past 1.10

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Tuesday Market Recap

Asset Current Value Daily Change
S&P 500 2401 0.10%
DAX 12825 0.15%
WTI Crude Oil 48.95 0.18%
GOLD 1234.00 0.30%
Bitcoin 1744 -0.82%
EUR/USD 1.1070 0.85%

 

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The major stock markets continue to trade in a narrow range near their all-time highs after the slight overnight weakness. The performance of the global benchmarks evened out following last week’s strong divergence although the NASDAQ is still the clear leader. The Chinese market is still in a correction, and that helps the US and European indices so far this week. It should come as no surprise that the Chinese authorities revealed that they injected a whopping $25 billion of liquidity to restore confidence in the troubled banking system. Economic numbers once again disappointed in the US and that weighs heavily on the USD, together with the renewed fears regarding Trump’s Russian connections. Building Permits Housing Starts both showed the cooling of the housing market, while Industrial Production was slightly above the consensus estimate.

Shanghai Composite, 4-Hour Chart Analysis

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The Euro is the biggest winner of the Dollar slump among the major currencies, while the Pound is relatively weak despite some favorable British economic reports earlier today. Meanwhile, the Chinese market remained stable, despite the weak industrial production data, helping the rally in commodities and related assets. The Yen, the Swiss Franc and gold are also surprisingly strong against the Dollar, while commodity-currencies are boosted by the continued strength in crude oil and the Chinese rebound.

Cryptocurrencies

Ripple continues to dominate the cryptocurrency market this week, as it completed the break-out above the $0.25 level and is currently trading near $0.33 after a rise of more than 35%. XRP reached a market capitalization of $12 billion, pushing Bitcoin’s market share below 50%. BTC rebounded off the $1600 support once again, as the choppy correction continued in the currency. The other majors remained weak, expect the rising star Stellar Lumen, with Litecoin falling the most once again, correcting back below the $25 level. NEM fully decoupled from Ripple, being down by another 5% today, while Ethereum, Ethereum Classic, Dash, and Monero are all drifting lower as well.

Ripple, 4-Hour Chart Analysis

Technical Picture

The NASDAQ continues to hit all-time highs on a daily basis, led by the big six, Amazon, Apple, Google, Facebook, Microsoft, and Netflix.  The benchmark established an advancing trend channel, although the broader indices are still suspiciously lagging the tech segment despite the more balanced performances this week. The European exchanges also gave up their relative strength, but they are still hovering just below their recent highs, as volatility remains very low, and trading volumes are also muted.

NASDAQ 100 Futures, 4-Hour Chart Analysis

Key Economic Releases on Tuesday

Time, CET Country Release Actual Expected Previous
3:30 AUSTRALIA Monetary Meeting Minutes
10:30 UK CPI Index 2.7% 2.6% 2.3%
11:00 EUROZONE Flash GDP 0.50% 0.50% 0.50%
11:00 GERMANY ZEW Economic Sentiment 20.6 22.3 19.5
14:30 US Building Permits 1.23 mill 1.27 mill 1.27 mill
14:30 US Housing Starts 1.17 mill 1.26 mill 1.22 mill
15:15 US Industrial Production 1.00% 0.4% 0.5%

 

Key Economic Releases on Wednesday

Time, CET Country Release Expected Previous
10:30 UK Average Earnings 2.4% 2.3%
10:30 UK Unemployment Rate 4.7% 4.7%
11:00 EUROZONE Final CPI 1.90% 1.90%
14:30 CANADA Manufacturing Sales 0.40% -0.20%
16:30 US Crude Oil Inventories 55.0
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2 Comments

2 Comments

  1. [email protected]

    May 17, 2017 at 12:01 am

    Litecoin is at $24USD? should I buy more or sell out?

    • Mate Cser

      May 17, 2017 at 12:51 am

      Hi, regarding cryptocoins, I suggest following Jim Fredrickson’s posts and advice. In my opinion, LTC is still in an uptrend, possibly close to the end of the current correction, I would be looking for buy signals rather than sell signals here. As always, keep your position sizes manageable, especially in such volatile trends. Great trading!

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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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