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Daily Analysis: Stocks and Dollar Rally on Positive Economic Numbers

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Wednesday Market Recap

Asset Current Value Daily Change
S&P 500 2455 0.53%
DAX 12002 0.45%
WTI Crude Oil 45.94 -0.04%
GOLD 1313.00 0.02%
Bitcoin 4550 -0.90%
EUR/USD 1.1892 -1.03%

Traders can conclude that another North Korea dip has been successfully bought, as the major US indices continue to shrug off every piece of negative news, while also ignoring the internal weakness that still plagues the long-term outlook for equities. The better than expected GDP reading coupled by the bullish ADP Employment Report sparked heavy buying in US stocks, while also lifting the Dollar after yesterday’s reversal. The EUR/USD pair quickly dipped below 1.19, just one day after hitting 1.2075 for the first time in more than two years. The USD/JPY pair also surged higher, as the fears regarding the North Korean missile launch faded, and risk assets rallied across the board.

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EUR/USD, 4-Hour Chart Analysis

Gold followed the Yen lower amid the risk-rally and the precious metal is probably headed back towards the $1300 level after the crucial break-out form its trading range earlier this week. Oil can’t seem to find a footing, despite the supply troubles in the Gulf area, and the favorable US inventories data, as the Dollar-bounce pushed the crucial commodity even lower, to yet another one-month low. The WTI contract looks to be on track to test the lower range of the long-term range near in the $40-$42 per barrel area. With all eyes on Trump’s tax plan, next week could bring very volatile trading in all of the main markets as the summer season ends.

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WTI Crude Oil, 4-Hour Chart Analysis

Cryptocurrencies

Ethereum, Bitcoin and, NEO were in the center of attention, as BTC traded on new all-time highs earlier on, while ETH hit a new 2-month high above the $380 target level that we have been monitoring for weeks now. NEO had two volatile sessions in a row, falling to $30 from $40 in a matter of hours and trading in a volatile range afterward. Litecoin is consolidating just below its recent highs while Dash and Monero are somewhat lower after hitting new highs over the weekend, already being overbought regarding the long-term picture. The crypto-rally might be in its final stages now, but the topping process could last for weeks, so patience will likely be required from investors in the coming period.

ETH/USD, 4-Hour Chart Analysis

Technical Picture

The S&P 500 confirmed its recent resilience today, breaking out from a short-term correction pattern despite the recent sell-off attempts. The index might be ready for a retest of the all-time highs near 2480, but before that it faces resistance just above the current price level at 2460. The rising long-term trendline is at 2420, slightly below the key 2425 support. The next weeks could be very volatile as the long-term bearish pressures clash with the short-term bullish picture.

S&P 500, 4-Hour Chart Analysis

Key Economic Releases on Wednesday

Time, CET Country Release Actual Expected Previous
3:30 AUSTRALIA Building Approvals -1.7% -5.1% 10.9%
10:00 GERMANY Prelim CPI 0.1% 0.1% 0.4%
14:15 US ADP Non-Farm Payrolls 237,000 186,000 178,000
14:30 US Prelim GDP 3.0% 2.7% 2.6%

Key Economic Releases on Thursday

Time, CET Country Release Expected Previous
3:00 CHINA Manufacturing PMI 51.3 51.4
3:00 CHINA Non-Manufacturing PMI 54.5
11:00 EUROZONE CPI Flash 1.4% 1.3%
14:30 CANADA Prelim GDP 0.1% 0.6%
14:30 US Unemployment Claims 237,000 234,00
14:45 US Chicago PMI 58.7 58.9
16:00 US Pending Home Sales 0.4% 1.5%

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Analysis

Technical Analysis: Litecoin and NEO Jump as Bitcoin Trades near $8000

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The cryptocurrency segment continued its bullish run, as the total value of the coins climbed above $230 billion for the first time ever, while Bitcoin also posted marginal new highs. The most valuable currency is still overbought regarding the long-term picture, and we continue to expect a deeper correction in the coming period, despite the recent strong rally. Support levels are still found $7700, $7000, and $6700 while the $8000 level is ahead as a major obstacle.

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BTC/USD, 4-Hour Chart Analysis

Litecoin has been the most active major besides Bitcoin, as it rallied strongly after breaking out above the key $64 resistance and it breached the next target at $75 before heading below $70 again. The coin remains in bullish long- and short-term patterns, and we expect a move above the major resistance zone ahead with the next target found at $82.50.

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Litecoin/USD, 4-Hour Chart Analysis

NEO is showing strength in the second half of the session, while Monero is recovering well from a short-term dip, similarly to IOTA and Ethereum Classic. Ethereum continues to represent stability in the segment, while Ripple failed to build up momentum so far after yesterdays spike higher. With still most of the altcoins being in bullish setups, let’s see the short-term charts.

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Analysis

XRP Looking to Make a Significant Rally

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The XRP/USD pair went into a deep correction after hitting 0.29490 a month ago. It nosedived to the major support level of 0.19052. The pair consolidated for a few weeks which gave the market the legs to test resistance at 0.22924.

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Technical indicators show that the pair was ready to breach its immediate resistance, which it did this morning. Now that resistance has broke at 0.22924, it’s time to buy. This successful breakout will take the pair to 0.23997 first and 0.26563 next before hitting the target of 0.26796 which is coincidentally a major resistance level.

Technical indicators hint that the market would most likely be overbought by the time it hits 0.26796. Should it respect the major resistance level, the likelihood of the market turning extremely bearish increases. Therefore, it is recommended to closely watch your trail stops to preserve your gains.  

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Summary of Strategy

Buy: As close to 0.22924

Support: 0.22224 and 0.20081

Target: 0.26796

Stop: If the market breaches 0.20081 as next reliable support is 0.19052

 

Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

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Analysis

Technical Analysis: Ripple Breaks Out as Bitcoin Tests Highs

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Cryptocurrencies are having another bullish session as the total value of the market surged to a new all-time high near $225 billion, with the help of the rally in BTC and Ripple, and despite the drop in the value of Bitcoin Cash. The most valuable coin its record high yet again after the brief but steep weekend correction, despite the still overbought long-term picture. We still urge traders and investors to wait for a deeper correction before entering new positions here, with support levels found at $7000, $6700, and $6000.

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BTC/USD, 4-Hour Chart Analysis

Ripple has been the other main mover of the day so far, as the coin skyrocketed on huge volume and breached the $0.26 level before turning lower and stabilizing near $0.23. The coin triggered a short-term buy signal by moving above $0.2250 and it remains bullish on both time-frames, despite the pull-back, with another major target level ahead at $0.30.

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Ripple/USD, 4-Hour Chart Analysis

The other majors are little changed expect IOTA, which further added to yesterday’s gains and reached overbought readings, while Ethereum Classic and Dash continue to drift lower in short-term correction patterns. Let’s see the detailed analysis of the short-term charts.

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