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Daily Analysis: Summer Trading is Back with Cryptocoins Still on the Move

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Monday Market Recap

Asset Current Value Daily Change
S&P 500 2475 0.15%
DAX 12257 -0.32%
WTI Crude Oil 48.80 -1.92%
GOLD 1264.00 -0.03%
Bitcoin 3360 3.48%
EUR/USD 1.1782 0.07%

With most of the trading desks closing for vacations after Jobs Friday, and with only a few major economic releases coming out during the week, low volumes are almost certain. Today’s session already reflects that as moves in the major asset classes are muted, and even the recently active forex market quiet. The New Zealand Dollar is the only exception as the Kiwi is tanking before the RBNZ’s rate decision that is scheduled for Wednesday, as inflation expectations came in below the consensus today. Oil and the whole energy complex is also active today, with crude oil being down by 25 after hitting resistance near $50 last week.

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NZD/USD, 4-Hour Chart Analysis

The US Dollar is still in the center of attention following the strong bounce on Friday, but so far the move has stalled and the currency is trading in a narrow range today against its most important peers. Stocks are little changed today, with a slight outperformance for the NASDAQ and more weakness from the DAX, thanks to a negative surprise in German Industrial Production. Day traders should be aware that this week could continue to be choppy, without clear trending moves, and a better environment for range trading strategies.

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Cryptocurrencies

Bitcoin made headlines with its new all-time highs during the weekend, and the currency rallied again today in early trading, hitting $3400 for a new high. The most valuable coin now surpassed $55 billion in capitalization, while the total market got close to $120 billion as confidence returned after the deep correction and the Bitcoin Fork last week. That said, the second largest coin, Ethereum is still more than 30% off its high, Ripple is still trading at less than half of its maximum and the other majors are also shy of their highs. With the overall long-term picture being bullish, we expect more upside in the coming weeks, as only Ripple and ETC are still in downtrends among the majors.

BTC/USD, 4-Hour Chart Analysis

Technical Picture

The NASDAQ is trading slightly higher today, but it’s still within a narrow range around the 5915 level after a period of negative weakness last week. The 6000 level is still ahead as primary resistance, while a break below 5850 would signal a deeper correction, with a target zone around 5725. Trading volumes are very low today, and that could lead to a low volatility drift until Friday, when the CPI reading hits the wires.

NASDAQ 100, 4-Hour Chart Analysis

Key Economic Releases on Monday

Time, CET Country Release Actual Expected Previous
1:30 AUSTRALIA AIG Construction Index 60.5 56.0
7:00 JAPAN Leading Indicators 106.3% 106.2% 104.6%
9:15 SWITZERLAND CPI Index -0.3% -0.3% -0.1%
9:30 UK Halifax HPI 0.4% 0.3% -1.0%
10:30 EUROZONE Sentix Investor Confidence 27.7 27.8 28.3

Key Economic Releases on Tuesday

Time, CET Country Release Expected Previous
3:30 CHINA Trade Balance 60.2 65.7
14:15 CANADA Housing Starts 206,000 213,000

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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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