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

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Thursday Market Recap

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.

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%
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 466 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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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

Crypto Update: Bitcoin Touched $4000 as Broad Rally Continues

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Yesterday’s break-out to new short-term highs continued today in the cryptocurrency segment, with Bitcoin’s push towards the $4000 making headlines in the segment. The most valuable coin surged past the $3850 level, dragging most of the majors higher, but Ethereum and most of yesterday’s leaders lagged behind BTC during today’s session.

That said, the short-term trend remains positive in case of the majority of the coins, and even though some of the top currencies are overbought, the counter-trend move could continue. In light of the increased activity, trading volumes, and volatility in the market, the majors might be in for a more sustained bullish, move, and as now only Ripple is showing clear signs of relative weakness, despite today’s rally, the leadership of the short-term move looks healthy.

While the long-term picture is still clearly negative in the segment, until the newly established short-term uptrends remain intact, traders could still play the move, sticking to strict risk management rules and relatively small position sizes.

BTC/USD, 4-Hour Chart Analysis

While Bitcoin left behind the initial resistance level near $3850, and quickly rallied up to the strong longer-term zone between $4000 and $4050, it might need to consolidate before another push higher. BTC is slightly overbought from a short-term perspective, and given the significance of the resistance, traders could exit a part of their positions here.

The $4000-$4050 zone stopped the year-end rally (outside of a brief, failed break-out), and a move above it could open up the road towards the $4250 and the crucial $4450 levels. Below $3850, further support is found near $3600 and just above $3450, and our trend model remains on a short-term buy signal and long-term sell signal.

ETH/USD, 4-Hour Chart Analysis

Ethereum continues to trade near the $145 resistance level following yesterday’s surge, and bulls are still eyeing a test of the next major resistance zone near $160, which marked the top of the previous counter-trend move in the coin.

While the coin is still overbought form a short-term perspective, given the momentum if its recent move, the rally could continue after a brief consolidation period. The newly-established uptrend is intact in ETH, and traders could enter new positions should the overbought readings got cleared, with support levels found near $130 and $112.

XRP/USDT, 4-Hour Chart Analysis

Although Ripple continues to be relatively weak compared its major peers, today it spiked to a new 5-week high, riding the market-wide trend and testing a strong declining trendline in the process. The coin triggered a short-term buy signal in our trend model by topping its January swing high, but given its relative weakness, traders should focus on the more bullish coins during the current counter-trend move.

The long-term setup remains negative, and from a broader perspective, odds still favor the test of the key long-term $0.28 and $0.26 levels, with further support levels found near $0.32 and $0.30, and with short-term targets being ahead near $0.3550, and $$0.3750.

EOS Continues to Lead but Litecoin Struggles to Gain Ground

LTC/USD, 4-Hour Chart Analysis

LTC continues to trade slightly above last week’s highs but compared to the leaders of the current leg of the rally it remained relatively weak today. With that and the still negative long-term setup in mind, traders should exit a part of their positions here, even as the short-term uptrend is intact and a push towards the next major resistance level near $51 is still possible. Our trend model is still on a buy signal, as a failed break-out is not yet confirmed, with support levels still found near $44, $38, and $34.50.

EOS/USD, 4-Hour Chart Analysis

EOS remained relatively strong today, spiking above the $3.80 level after leaving behind the $3.50 resistance. Now, the coin is clearly overbought from a short-term perspective, and that led to a downgrade in our trend model as a pullback is now likely.

The short-term trend remains bullish despite the correction risks, and should the coin clear the overbought momentum readings traders could reenter their position following strict risk management rules. Support is now found near $3.50, $3, and $2,80 while strong resistance is ahead near $4.50 and $5.

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 466 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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Altcoins

XRP Price Analysis: Explosive Breakout from Pennant Confirmed; SBI Holdings CEO Bullish on XRP

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  • XRP/USD is enjoying three consecutive sessions of gains, having jumped around 17%.
  • SBI Holdings CEO believes XRP market capitalization will be higher than bitcoin’s.

Ripple’s XRP price has been enjoying a decent move to the north over the past few sessions, as life flows back into the bulls. XRP/USD is currently running at a third consecutive session in the green, having gained around 17% within this period. The explosion of buying pressure came after the price managed to escape a bullish pennant pattern.

XRP/USD: Price Recap

XRP/USD had initially been cooling since the big bull run at the back end of 2018. The price rallied on 24th December up to a high of around $0.4670, before quickly losing upside momentum. It was then forced to trade within the confinements of a descending wedge pattern. XRP lost over 30% in value before it was able to break out from the wedge.

On 8th February a chunky push higher from the bulls was observed, resulting in a breach of the upper acting trend line. XRP/USD jumped around 10% on this day but then eased south to retest the trend line for a few sessions. During the cooling period, price action has formed a pennant structure which saw an eventual big breakout to the upside, as described earlier.

SBI Holdings CEO Bullish on XRP

The SBI Holdings CEO, Yoshitaka Kitao, was recently speaking on XRP and said this year is a significant one for the so-called banker’s cryptocurrency. He believes that the market capitalization of XRP is likely to dwarf bitcoin’s at some point in the future. Kitao has firm belief in the future sucess of XRP and can see it being adopted on a global scale. He was quoted saying:

“Because XRP is already beginning to become international, xRapid will be used for fund transfers in 2019. By increasing the so-called XRP’s plastic use, we anticipate that the XRP market capitalization will easily exceed the market capitalization of bitcoin.”

SBI has many joint ventures set up with Ripple across the blockchain industry; it’s therefore not too surprising to see such comments. The organization will also be launching its very own cryptocurrency exchange called VCTRADE, scheduled for March. Deposits and withdrawals for bitcoin, XRP, and Ethereum (ETH) are already available on the platform.

Technical Review – XRP/USD

XRP/USD daily chart.

Given current upside, eyes must now be on the next likely barriers of resistance for the bulls. A supply area noted from $0.3450 up to $0.3600 is the next target; XRP has not traded comfortably above this region since 10th January. A break above this zone should put the bulls in an excellent position to retest the $0.4000 area. On several occasions, this price territory has caused issues for the bulls in their attempts to push further north. In terms of support, this is seen back down at the psychological $0.3000 mark. If that fails to hold, then there is a demand which runs from $0.3000 down to $0.2500.

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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4.6 stars on average, based on 124 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

3 Things You Need to Know About the Market Today: New High in Gold, Dow 26,000?, Euro Weakness

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1, Gold Jumps to 9-Month High, $1360 in Sight

Gold Futures, 4-Hour Chart Analysis

We have been following the resurrection of gold in the past few months, and since fundamentals just got better for the precious metal, the current technical strength is great news for long-term investors. Today, gold quietly reached a new 9-month high, despite the still ongoing risk rally and the relative strength of the US Dollar.

The metal topped the $1330 level, and with the next major resistance level being found near $1360, a quick surge to the vicinity is in the cards in the coming days. We continue to advise holding gold for the long run, and for now, the short-term technicals also remain bullish. Should the risk rally finally roll over, the uptrend could even accelerate, with longer-term targets being found near $1400 and $1550.

2, US Stocks Drift Lower After Long Weekend as Trade Talks Resume

Dow 30 Futures, 4-Hour Chart Analysis

US stocks are having a quiet start for the day, with the major indices drifting slightly lower following the long weekend. The US economic calendar is empty today, and all eyes will be on the trade talks with China which are set to resume today in Washington in the wake of the unexpected extension of last week’s round of negotiations in Beijing.

The Dow, which approached the 26,000 level last week during the Friday surge to new 9-week highs, is lower today, in-line with the market-wide trends. The mega-cap index could get a lift in early trading thanks to the better-than-expected quarterly report by Walmart (WMT). The firm’s holiday-quarter sales topped estimates, despite the reports regarding the widening growth-gap between online and brick-and-mortar stores, and in light of the positive guidance by the company, the pre-market surge in the stock is no surprise.

With the week’s main economic releases coming in the second half of the period, today we could be in for another choppy session on Wall Street. That said, the momentum of the recovery-rally continues to be suspicious, and especially given the weakness in the Nasdaq, investors should pay close attention to the Volatility Index (VIX), market internals and other under-the-hood indicators for signs of negative divergences.

3, Euro Under Pressure Again, Despite Sentiment Beat

EUR/USD, 4-Hour Chart Analysis

While the Dollar’s break-out to new multi-year highs still didn’t happen last week, technicals continue to agree that the long-term uptrend in the reserve currency will continue. The Euro, on the other hand, is still showing signs of broad weaknes, drifing lower against the Dollar and the Pound today, despite the better-than-expected German Zew Economic Sentiment report.

The indicator is still deep in negative territory, and together with the recent weakness in the Eurozone PMIs and industrial production, recessionary fears seem to be legit in Europe.

We will have a new batch of PMIs coming out tomorrow, and together with the Fed minutes a huge day could be ahead for forex markets and especially for the EUR/USD pair. The 1.12 level could be tested in the case of another negative surprise in the PMIs, while the Fed minutes will be under scrutiny even more than usual following the sharp dovish shift by the Central Bank.

ChartBook

Major Stock Indices

S&P 500 Futures, 4-Hour Chart Analysis

Nasdaq 100 Futures, 4-Hour Chart Analysis

VIX (US Volatility Index), 4-Hour Chart Analysis

DAX 30 Index CFD, 4-Hour Chart Analysis

FTSE 100 Index CFD, 4-Hour Chart Analysis

EuroStoxx50 Index CFD, 4-Hour Chart Analysis

Nikkei 225 Futures, 4-Hour Chart Analysis

Shanghai Composite Index CFD, 4-Hour Chart Analysis

EEM (Emerging Markets ETF), 4-Hour Chart Analysis

Forex

USD/JPY, 4-Hour Chart Analysis

GBP/USD, 4-Hour Chart Analysis

EUR/GBP, 4-Hour Chart Analysis

AUD/USD, 4-Hour Chart Analysis

Commodities

WTI Crude Oil, 4-Hour Chart Analysis

Copper Futures, 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 466 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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