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Daily Analysis: Stocks Volatile Before Easter as Dollar Slammed by Trump

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Thursday Market Recap

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Asset Current Value Daily Change
S&P 500 2341 -0.32%
DAX 12120 -0.21%
WTI Crude Oil 53.23 -0.34%
GOLD 1284.75 0.55%
Bitcoin 1195 -1.43%
EUR/USD 1.0619 0.06%

 

Global stocks took a hit yesterday, as the geopolitical tensions remained in focus. China might be getting ready to send troops to the North Korean border, while the negotiation between Vladimir Putin and US secretary of State Tillerson didn’t help the mood between the two powers concerning Syria. Safe-haven assets remained strong throughout the day and today in early trading, with the Japanese Yen and gold still being favored by traders. Japanese equities are once again the weakest globally, but the European and US indices are also under pressure.

Donald Trump delivered a surprising blow for the US Dollar, as he voiced his concerns about the currency being “too strong” while reassuring Janet Yellen in her position as the chair of the Federal Reserve. Gold got close to the $1300 level after following Trump’s words, and even the Euro jumped higher despite the persistent pressure on the common currency. Oil drifted lower yesterday as well, and now WTI Crude stabilized near the $53 per barrel level. The Australian Dollar is among the winners today after the bullish employment report, while the Dollar also recovered as the unemployment claims number and the consumer sentiment index were both favorable.

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Gold, 4-Hour Chart Analysis

Ethereum and Dash moved higher by double digits so far today, as Dash rebounded off the strong 6o support once again while Ethereum is edging closer to its highs above the $50 level. Bitcoin turned lower off the resistance zone near $1215 that we have been monitoring in recent days, and it might be in for a consolidation period after the recent rally. The other major cryptocurrencies are still trading sideways, with Ripple, Monero, and Litecoin still awaiting the next significant move.

Technical Picture

S&P 500, 4-Hour Chart Analysis

The S&P 500 is still in a holding pattern near the 2350 level despite touching the 2332 support yesterday. The MACD is still well in neutral territory, while the dominant megaphone pattern is also intact. It will be interesting to see how stock markets will behave as the Easter-weekend is drawing closer, and liquidity is expected to dry up tomorrow. Short-term traders should expect choppy conditions and a hard to trade environment until Tuesday.

Key Economic Releases on Thursday

Time, CET Country Release Actual Expected Previous
2:30 AUSTRALIA Employment Change 60,900 20,300 -6,400
2:30 AUSTRALIA Unemployment Rate 5.90% 5.90% 5.90%
3:30 CHINA Trade Balance 164 billion 76 billion -60 billion
14:30 CANADA Manufacturing Sales -0.20% -0.40% 0.6%
14:30 US PPI (monthly) -0.10% 0.00% 0.3%
14:30 US Initial Jobless Claims (weekly) 234,000 242,000 234,000
15:00 US UOM Consumer Sentiment 98.0 97.1 96.9

 

Key Economic Releases on Friday

Time, CET Country Release Expected Previous
2:30 US Core CPI 0.00% 0.20%
2:30 US Core Retail Sales 0.20% 0.20%
2:30 US Retail Sales 0.10% 0.10%
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2 Comments

2 Comments

  1. Ershad

    April 13, 2017 at 4:42 pm

    Hi Mate,

    Regarding the upcoming french election, would you recommend selling gold when it reaches somewhere between $1300-1315 or would you recommend waiting and seeing how the french elections effect the price of gold?

    kind regards
    Ershad

    • Mate Cser

      April 13, 2017 at 5:00 pm

      Hi Ershad,

      great timing, a comprehensive post regarding the opportunities of the French election will be posted before the weekend. For now, I would say that follow the charts for trading and lighten your position as gold rises, yes. Still, gold is a great hedge against political risk so I would definitely hold a core position.

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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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Analysis

Technical Analysis: Bitcoin Grinds Higher as Records Tumble in Altcoins

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The historical surge in the segment, which is the second such move this year, continued today, with another round of break-outs in some of the major altcoins and tepid gains for BTC investors. Ethereum, Ripple, Dash, and first and foremost Litecoin was leading the charge, with the recent star LTC topping $300, just after a day of hitting the $200 mark.

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Litecoin defied all odds after reaching extremely overbought readings, and the coin rode the speculative wave, turning exponential, not unlike IOTA and Bitcoin previously. With the coin being stretched in an unprecedented way on all time-frames, investors could even consider selling their core positions at the current levels, as a deep correction is almost granted in the coming period. The first meaningful support level is found at $125, and a re-test of the $100 level is probable during the next major correction.

LTC/USD, 4-Hour Chart Analysis

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Ripple finally ended a long period of relative weakness today, and the only major on a long-term by signal jumped over primary resistance at $0.26 and crossed the $0.30-$0.32 too in the euphoric sentiment. As the coin is not long-term overbought following the 6-month long consolidation, the buy signal in XRP remains intact, with the only major resistance level being found at the all-time high near $0.425.

XRPUSDT/USD, 4-Hour Chart Analysis

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