Daily Analysis: US Stocks Surge as War Tensions Ease

Monday Market Recap

Asset Current Value Daily Change
S&P 500 2464 0.96%
DAX 12165 1.25%
WTI Crude Oil 47.84 -2.01%
GOLD 1288.00 -0.45%
Bitcoin 4296 6.39%
EUR/USD 1.1780 -0.37%

Global stock markets opened sharply higher this week, as diplomatic options including Chinese sanctions got into the forefront of the North Korea standoff. The slight de-escalation was enough for US equities to regain most a big chunk of their losses, as volatility collapsed. European and Asian stocks are also higher, although the DAX and the EuroStoxx 50 are still relatively weak, with the Euro trading just below its recent highs against the Dollar. The Greenback bounced back after Friday’s CPI surprise, but it remains near its long-term lows, as the “weak-US- growth” trade is still on, underlined by the strength in US Treasuries.

Dollar Index (DXY), 4-Hour Chart Analysis

Gold is still stuck below the $1300 level as safe haven flows stopped helping the precious metals today, but the trend remains positive, and the ongoing Dollar-weakness might push the metal above the crucial level in the coming days. Oil received a hard blow from China, as refining in the country tumbled in July, putting the energy segments rebalancing in jeopardy. WTI Crude fell below key short-term levels, and it might be ready to test the lower boundary of its long-standing trading range.

Crude Oil, 4-Hour Chart Analysis

Cryptocurrencies

Trading has been dominated by BTC in the last two weeks, and the most valuable coin continued to draw record volumes, as it surged to new all-time highs almost every day of last week. The rest of the market has been quiet for several days now, with IOTA and NEO being in the center of attention, while the more established coins trading mostly in narrow ranges. NEM got under pressure in the low liquidity environment, as the currency retraced all of its recent gains against the high flying Bitcoin. Ethereum, Litecoin, Dash, and Monero were unchanged, but remained bullish, while Ethereum Classic and Ripple are still lagging the other majors.

BTC/USD, 4-Hour Chart Analysis

Technical Picture

The DAX spiked below 12,000 on Friday but it recovered above that and the crucial support near 12,150 today. The index is still in clear short-term downtrend, but it is showing a positive momentum divergence that could be the sign of a durable bottom. Traders could open long positions around these levels, targeting a rally towards the 12,500 resistance. Investors are still closely watching the Euro, as further strength in the currency would weigh heavily on Eurozone equities.

DAX, 4-Hour Chart Analysis

Key Economic Releases on Monday

Time, CET Country Release Actual Expected Previous
1:50 JAPAN Prelim GDP 1.0% 0.3%
4:00 CHINA Industrial Production 6.4% 7.1% 7.6%
4:00 CHINA Retail Sales 10.4% 10.9% 11.0%
11:00 EUEOZONE Industrial Production -0.6% -0.4% 1.3%

Key Economic Releases on Tuesday

Time, CET Country Release Expected Previous
3:30 AUSTRALIA RBA Meeting Minutes
8:00 GERMANY Prelim GDP 0.7% 0.6%
9:15 SWITZERLAND PPI Index 0.0% -0.1%
10:30 UK CPI Index 2.7% 2.6%
14:30 US Retail Sales 0.3% -0.2%
14:30 US Core Retail Sales 0.4% -0.2%
14:30 US Empire Manufacturing Index 10.2 9.8

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Author:
Trader 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.