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Daily Analysis: Stocks and Dollar Rally on Positive Economic Numbers

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Daily Analysis: Stocks and Dollar Rally on Positive Economic Numbers

Introduction

This article was posted on Thursday, 00:14, UTC.

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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Mate Cser

Mate Cser

Trader 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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