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Daily Analysis: Stocks Shed Early Gains as Yield Curve Re-Collapses

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Wednesday Market Recap

Asset Current Value Daily Change
S&P 500 2685 -0.07%
DAX 13070 -0.02%
WTI Crude Oil 59.59 -0.62%
GOLD 1291.00 0.61%
Bitcoin 15,145 -6.30%
EUR/USD 1.1899 0.31%

US markets finished today’s session virtually unchanged, despite the early gains in the major indices as steady selling pressure dragged stocks lower. The benchmarks are still trading near their all-time highs, even as participation in the rally remains tepid, and outside the indices, life is less rosy on Wall Street.

S&P 500 Futures, 4-Hour Chart Analysis

It’s been a very quiet day in equity markets, but not so much in bonds, as the dominant trend in the US Treasury markets, namely the collapse of the yield curve resumed after the pre-holiday counter-trend move. To be precise, both short- and long-dated Treasuries rallied today, but the longer end of the curve fell much more, with short-term yields only falling slightly.

TLT, (Long-Dated Treasury ETF), 4-Hour Chart Analysis

While the inversion of the curve, a major recessionary sign in the previous, non-QE dominated economic cycles, at this rate we could be facing that in a matter of months. Stocks got slightly spooked by the sizeable moves in Treasuries, and as Apple (AAPL) failed to rebound after yesterday’s sell-off, the NASDAQ continued to lag the other indices a bit.

Forex markets returned to volatility, as trading centers all over the globe re-opened, and the recent short-Dollar trade remained in the center of attention, with especially some of the commodity-related currencies gaining ground on the Greenback. The Aussie shot up by almost 1%, as both oil and gold have been pushing higher in the last couple of weeks, while the Canadian Dollar also continued its rally.

AUD/USD, 4-Hour Chart Analysis

As currencies reacted to the recent commodity trends, crude oil actually corrected somewhat after the recent run-up, although gold added to yesterday’s gains, edging ever closer to the $1300 level.

Gold, 4-Hour Chart Analysis

Cryptocurrencies

Trading activity picked up in the crypto segment as expected, and while the broad bounce continued in early trading, Bitcoin and most of the altcoins turned lower in the second half of the session. BTC hit an intraday high at $16,500 but fell by $2,000 end it’s still hovering around the $15,000 mark following the end of the US session.

BTC/USD, 4-Hour Chart Analysis

Most of the major altcoins are also lower after an active, but still low-volume day, with Ripple standing out once again, hitting a new all-time high in late-trading. The coin broke above the $1.25 level after an already strong session, and although the long-term trend in the coin is already overbought, the short-term trend is still positive, and the $1.5 level is now in sight.

Ripple/USDT, 4-Hour Chart Analysis

Monero and Ethereum are the other two relatively strong majors from a technical perspective, but as the long-term bearish pressure is still apparent in the segment, investors should wait until setups with better risk/reward ratios start to pop up, as the correction runs its course.

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

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 417 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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Analysis

XRP/USD Price Analysis: Israel’s Largest Financial Services Company GMT Partnering with Ripple

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  • Ripple has another large financial firm leveraging its technology, as the list keeps on growing.
  • XRP/USD will search for buyers within $0.3000-$0.2500 range initially, ahead of possible $0.2000 return.
  • XRP/BTC looks surprisingly encouraging, subject to a potential breakout to the upside.

XRP in line with the rest of its peers across the cryptocurrency market remains firmly on the back foot. XRP/USD is running at its third consecutive session of losses. At the time of writing, the pair has dropped 7% over this mentioned period. A renewed wave of selling pressure hit the market after the price was allowed some time to consolidate. The market was very much within range-bound mode, before the bears struck again. As a result, XRP has firmly given up the $0.3000 mark.

Israel’s GMT to Utilize Ripple Technology

The largest financial services organization in Israel, GMT, has announced a partnership with Ripple. They will be utilizing Ripple’s technology for their cross-boarder payments.

GMT said via their latest blog update: “GMT is joining companies like MoneyGram, AmericanExpress, CIBC, Earthport, AKBANK and many more, who are already authorized to use Ripple’s platform. This partnership is establishing GMT’s place in the forefront of the Israeli Fintech industry, also allowing us to work side by side with some of the leading companies in the world.”

GMT are the largest and leading financial services organization in Israel. They have an outreach of  250 branches spanning across the country. GMT specialize in local and international remittance services, among many other financial offerings.

In terms of which technology of Ripple’s they will exactly be leveraging, it does not appear to have been stated for now. Whether GMT will be using either xCurrent or xRapid is still subject to debate. Hacked will be sure to provide further details upon those being announced.

Technical Review – XRP/USD

XRP/USD 4-hour chart

Price behavior seems to be quite readable of late. XRP/USD is going through periods of hard selling, which is then followed by some range-bound trading. Once again, bears breakout from this consolidation mode to ignite more downside pressure. Between the 7th and 14th December, XRP/USD had formed a range-block. The sellers came piling in on the 14th December, and as a result the recent range was broken with $0.3000 giving way.

XRP/USD weekly chart

XRP/USD is now moving within a critical area. This is seen running from $0.3000 to $0.2500.  A very well-known area for big buyers coming in, as proven on occasions this year. Any failure of this initial range holding could see a free-fall down to $0.2000.

XRP/BTC daily chart

Finally, looking the daily chart of XRP/BTC, it remains somewhat encouraging. XRP is holding its ground again BTC, in comparison to many of its peers. The price is ranging for now, looking possible to see a chunky breakout to the upside. It remains trading around levels seen during the explosive run in December 2017.

Disclaimer: The author 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.

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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4.5 stars on average, based on 86 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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Analysis

Stellar Price Analysis: XLM/USD Bears Break Big $0.10 Level

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  • Fear and panic spreads as XLM takes out another big psychological level, $0.10.
  • Support of XLM continues to take place, as AlphaPoint and CoinField announce support.

Stellar’s native token XLM has been a real victim of this heavy market selling pressure. The downward trend is very much stubborn and showing lack of a shift in sentiment anytime soon. Market hopes have been dashed on numerous occasions, when the price has looked like bottoming. Each small bounce and sign of possible recovery from the bulls continues to be sold with force by the bears.

Like several of XLM’s peers, fundamental developments remain strong. There is still much in terms of positive developments surrounding the Stellar foundation. However, with the pressing lower and breaking of these key psychological levels, it only sparks more panic and fear with market participants.

XLM Support Spreads

XLM continues to be added by exchanges globally. There is certainly no shortage with the supporting developments for Stellar Lumens. This week, AlphaPoint, a white label cryptocurrency exchange platform, announced their collaboration with the Stellar foundation. They will now be supporting Lumens for their clients, covering; deposits, withdrawals, custody, and trading.

Elsewhere, CoinField, a Canadian cryptocurrency exchange, detailed via Twitter that they are launching Stellar Lumens on their platform, as an XRP based pair. They noted that the XLM/XRP pair will be available with other fiat pairings, including; USD, CAD, EUR, GBP, JPY, and AED.

Technical Review – XLM/USD

XLM/USD 4-hour chart

The bears most recently pressed for a devastating technical development as the $0.10 mark was broken to the downside, which was previously anticipated via the last article posted on Hacked. Sideways trading had initially been observed, for seven sessions, as XLM/USD formed a range-block. This technically was vulnerable to an extensive breakout south.

A bottom area was eyed at the low of 7th December at $0.1010. This was breached after sellers were penetrating the supporting area during the session of 14th December. As a result, this forced the low of the 7th December to be exposed. In addition, it caused a drop below the psychological $0.10 level.

XLM/BTC Vital Demand Zone

XLM/BTC daily chart

XLM/BTC at the time of writing is trading within a vital demand zone. This can be seen tracking from 0.00003000 to 0.00002800. Previously, the area has proven to see chunky buyers come into play in driven the price back north. As already seen this year, on two occasions, in July and also September, both going on to see around 45% bull rallies.

Disclaimer: The author 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.

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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4.5 stars on average, based on 86 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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Analysis

Forex Update: Dismal Chinese Data Causes Turmoil in Markets

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Forex Market Snapshot

Asset Current Value Daily Change
EUR/USD 1.1302 -0.47%
GBP/USD 1.2571 -0.68%
USD/JPY 113.35 -0.21%
AUD/USD 0.7179 -0.66%
GOLD 1,243 -0.20%
WTI Crude Oil 51.16 -3.18%
BTC/USD 3,180 -2.54%

We continue to have an unusually active December in traditional financial markets, as the recent bearish shift, the continued Brexit woes and the slowing global economy add up to a very nervous trading environment. Volatility is especially high in stock markets compared to seasonal averages but currencies are also having very active days, with the Dollar clearly being in focus.

Today we had negative headlines in China with both industrial production and retail sales missing the consensus estimates by a mile, and the history of manufactured economic releases from the country makes that even scarier.

It’s no surprise that the Chinese stock market is leading the way lower globally, while the Chinese Yuan is also among the weakest currencies globally, even amid the improving trade-related sentiment. Risk-on currencies got it hard today, and the Dollar is defying its bearish seasonality, trading very close to its recent lows, confirming the broad risk-off shift.

Technical Analysis

GBP/USD, 4-Hour Chart Analysis

The Great British Pound continues to trade with pronounced relative weakness, and as Prime Minister Theresa May was sent home empty-handed from Brussels, with the leaders of the EU refusing to renegotiate the draft Brexit plan, the currency’s position just got even shakier.

From a technical standpoint, the Cable confirmed the key breakdown with a failed pullback in the past couple of days, and with no major support found above the generational lows near 1.20, long-term odds now favor a test of that zone, and bulls shouldn’t enter positions below the key 1.27 level.

EUR/USD, 4-Hour Chart Analysis

The EUR/USD pair dipped below the 1.13 level after yesterday’s the dovish growth and inflation forecast by the European Central Bank and today’s strong US Retail Sales report. The US economy continues to perform relatively well compared to its global peers, and although we think that the slowdown will eventually reach the US, the fiscal stimulus and the labor momentum could keep the engines going for a while.

That only adds to the buying pressure which is pushing the USD higher, and the troubles in the European financial system are also mounting, which could lead to another leg lower in the common currency next year. The main technical levels to watch are still the 1.12 support and the 1.1440 resistance, and with the broader downtrend clearly being intact in the most traded currency pair.

AUD/USD, 4-Hour Chart Analysis

The AUD/USD pair fell below the bearish wedge pattern on the negative Chinese news as we expected, and it’s now testing the 0.7165 support zone. A move towards the 0.70 level is likely in the coming weeks, should the pair violate the support zone, and the short-term trend change is close to being confirmed, while the broader downtrend is clearly intact, with strong resistance ahead near 0.7250 and 0.74.

WTI Crude Oil, 4-Hour Chart Analysis

Another rally attempt faded away today in crude oil, and the crucial commodity continues to trade in a bearish consolidation range following the series of dead-cat-bounces. The top of the range is found near the $54.25 per barrel price level, while strong support is found in the $49.50-$50 per barrel range.

Given the deeply oversold long-term momentum readings, bulls can open speculative long positions near the bottom of the range, despite the clearly intact long-term downtrend, while bears should wait for a larger scale bounce to reenter the market.

Key Economic Events on Monday

ChartBook

Forex

USD/JPY, 4-Hour Chart Analysis

EUR/GBP, 4-Hour Chart Analysis

EUR/JPY, 4-Hour Chart Analysis

AUD/JPY, 4-Hour Chart Analysis

GBP/JPY, 4-Hour Chart Analysis

USD/CHF, 4-Hour Chart Analysis

USD/CNH, 4-Hour Chart Analysis

Commodities

Gold Futures, 4-Hour Chart Analysis

Copper Futures, 4-Hour Chart Analysis

Major Stock Indices

S&P 500 Futures, 4-Hour Chart Analysis

DAX 30 Index CFD, 4-Hour Chart Analysis

Nikkei 225 Futures, 4-Hour Chart Analysis

Shanghai Composite Index CFD, 4-Hour Chart Analysis

Featured image from 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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4.7 stars on average, based on 417 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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