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Analysis

Daily Analysis: Stocks Rise on Jobs Friday as the Cryptocurrency-Boom Continues

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Friday Market Recap

Asset Current Value Daily Change
S&P 500 2387 0.10%
DAX 12683 0.48%
WTI Crude Oil 46.06 -1.05%
GOLD 1228.00 -0.12%
Bitcoin 1585 1.60%
EUR/USD 1.0935 0.03%

The rebound in US economic numbers continued today, as the employment report showed strong gains in the number of jobs, while the Unemployment Rate ticked lower to 4.4%, and wages grew in line with expectations. The major US indices pushed slightly higher after the release, although they still underperform European and Japanese equities. The DAX hit another all-time high this morning and the Euro STOXX 50 also rose to its maximum since 2007. On an interesting note, even the NASDAQ is lagging its European peers, trading a bit below its all-time highs.

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Currencies are little changed today, despite the usually volatile Jobs Friday, as the release didn’t change interest rate expectations substantially.  The Great British Pound is near its multi-month highs against the USD following a week of strong economic numbers in both countries. The EUR/USD pair is also edging towards 1.10 while the Yen remains under pressure across the board although the momentum of the decline is waning. Industrial commodities are still sold, as the fears regarding China persist, and gold is also near its two-month lows, with safe haven demand still being low.

Commodities Severely Lagging Stocks, 4-Hour Chart Analysis (NASDAQ Comparison)

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Cryptocurrencies

Cryptocurrencies are at it again with explosive gains for several coins, especially Ripple and NEM, which are up by 40% and 30% respectively. Bitcoin spiked lower yesterday, but it recovered well today, although it remains slightly below its highs from yesterday. Ethereum breached the $100 level for the first time, as the second largest cryptocurrency is getting close to $10 billion in capitalization. Litecoin is also up by more than 20% again, while Monero blew through the $30 level, while Dash also hit $100, despite lagging the other majors again.

Litecoin, 4-Hour Chart Analysis

Technical Picture

The NASDAQ lost its position as the leading global index this week, as the main European markets outperformed the technology-heavy US benchmark. The technical position is still bullish, although the momentum-divergence in the MACD indicator led to a short-term correction in the index. The benchmark might be ready for a deeper pull-back, as the broader indices failed to follow the NASDAQ higher this week, following the surge to new highs after the first round of the French election. The short-term levels to watch are near 5570 and 5530.

NASDAQ 100 Futures, 4-Hour Chart Analysis

Key Economic Releases on Friday

Day Country Release Actual Expected Previous
3:30 CANADA Employment Change 3,200 20,000 19,400
10:30 CANADA Unemployment Rate 6.50% 6.70% 6.70%
14:30 US Employment Change 211,000 194,000 98,000
14:30 US Unemployment Rate 4.40% 4.60% 4.50%
14:30 US Hourly Earnings 0.3% 0.30% 0.20%
20:00 US FED Chair Yellen Speaks

 

Key Economic Releases on Monday

Time, CET Country Release Expected Previous
3:00 CHINA Trade Balance 164 bill
8:00 GERMANY Factory Orders 3.40%
9:30 UK Halifax HPI 0.0%
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Analysis

Long-Term Cryptocurrency Analysis: Bitcoin Flirts with $8000 as Altcoin Bull Persists

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Bitcoin’s swift recovery was the main topic of the week, as the most valuable coin not just regained its steep losses, but hit a marginal new high towards the end of the period. The entire segment is experiencing capital inflows as the total value of the coins climbed above $230 billion for the first time ever after finally leaving the vicinity of the $200 billion mark.

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BTC breached the $8000 level before turning slightly lower on Friday, but despite the severely overbought daily chart, it is still trading near its all-time highs. As the long-term picture still suggests a deeper correction, investors should wait with opening new positions and traders should also control position sizes here. Key support levels are found at $7700, $7000, and $6700, while the recent key break-out level at $5000 still hasn’t been re-tested.

BTC/USD, Daily Chart Analysis

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Dash is still the most bullish altcoin from a technical standpoint, despite this week’s short-term correction, as the coin is trading above its prior all-time high, and this weekend, it looks ready to test the break-out high near $500. Support levels are still found at $400, $360, and $330, and as the long-term picture is approaching overbought territory, investors should only hold on to their positions here.

DASH/USD, Daily Chart Analysis

The other major altcoins are also mostly in bullish setups, with some of them already in the latter stages of this cycle, like Monero and IOTA, but elsewhere in the segment, there are still opportunities for both traders and investors. Let’s see the detailed long-term view.

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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.

Featured image courtesy of Shutterstock.

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