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Daily Analysis: What’s the FED Up To?

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Wednesday Market Recap

Asset Current Value Daily Change
S&P 500 2505 0.01%
DAX 12571 0.08%
WTI Crude Oil 50.77 1.72%
GOLD 1290.00 0.61%
Bitcoin 3992 0.17%
EUR/USD 1.1998 0.02%

While the Fed-Day, the interest rate decision of the US central bank, is usually an important event, today’s meeting is even more so, with the trends of the coming months being in the hands of Janet Yellen & Co. There is a huge amount of confusion among investors and bond traders about the future of the US interest rates and the Fed’s balance sheet, and a lot of the bank’s plans should be revealed today. We expect a hawkish Fed tonight, but the current rate hike cycle will probably be the weakest in history, as the mountain of debt is still hanging over the global economy.

The QE operations drove market returns in the last 8 years while fueling a yield-seeking speculative episode in several asset classes. With that in mind, the reversal of those operations will likely have a profound effect on the returns of the next years, even though we expect a quick return to money printing on the first sign of trouble. That thought has been boosting the price of gold and, in part, cryptocurrencies, in recent months, as the trust in fiat currencies continues to erode.

Gold, Daily Chart Analysis

Global stock markets are close to their all-time highs before the Fed, and although valuations are sky high in the US, the rising trend are intact and bears are nowhere to be seen. Most of the major indices are unchanged today, as the Volatility Index (VIX) shot up again as hedging continued in earnest. Forex markets have been choppy and mixed, as expected with the Aussie, the New Zealand Dollar, and the Great British Pound gaining some ground, as British Retail Sales came in well above expectations. Oil is also higher after the US inventory release, while gold ticked up before the key announcement.

S&P 500, 4-Hour Chart Analysis

Cryptocurrencies

Most of the major coins are stuck in narrow trading ranges after last week’s crazy price action. Dash, Bitcoin, and IOTA are still showing strength while NEO lost some of its short-term momentum after the huge bounce off the crash lows on Friday. The segment calmed down considerably after last week’s storm, as the majors settled down following the post-crash surge. While the short-term declining trends are mostly intact in the most valuable currencies, there has been no clear trend in the last couple of days, as the market settled down before the next major move. A move lower is still the most likely scenario, despite the recent crash, although durable new lows are not expected in the segment.

ETH/USD, 4-Hour Chart Analysis

Key Economic Releases on Wednesday

Time, CET Country Release Actual Expected Previous
10:30 UK Retail Sales 1.0% 0.2% 0.3%
16:00 US Existing Home Sales 5.35 mill 5.46 mill 5.44 mill
16:30 UK Crude Oil Inventories 4.6 mill 2.8 mill 5.9 mill
20:00 US FOMC Rate 1.25% 1.25%
20:00 US FOMC Statement
20:30 US FOMC Press Conference

Key Economic Releases on Thursday

Time, CET Country Release Expected Previous
Tent. JAPAN BOJ Rate Decision -0.10% -0.10%
Tent. JAPAN Monetary Statement
14:30 CANADA Wholesale Sales -0.9% -0.5%
14:30 US Unemployment Claims 300,000 284,000
14:30 US Philly Fed Index 17.2 18.9

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 392 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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Crypto Update: 5 Altcoins to Watch This Week

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Last week, we covered large cap altcoins such as Bitcoin Cash (BCH/BTC), Monero (XMR/BTC), and Ethereum (ETH/BTC). Many of the alts that we’ve covered in this series have moved according to expectations. However, there are those like Haven Protocol (XHV/BTC) and (DOCK/BTC) that have moved strongly in the last weeks and exceeded expectations. We hope that we deliver more of these gems in this installment.

In this article, we deliver a fresh batch of 5 altcoins to watch this week.

Quarkchain/Bitcoin (QKC/BTC)

Quarkchain broke out of a falling wedge on the 4-hour chart on November 8, 2018 when it broke out of the falling wedge and took out resistance of 650 satoshis. The breakout generated tremendous momentum as the market printed volume that’s over 300% of its daily average. This sparked a rally to 876 satoshis on November 11.

4H chart of QKC/BTC

Currently, the market is trading in overbought territory. Therefore, we expect it to retest support number one (S1). From there, technical indicators must cool off before it can make any meaningful attempt to breach resistance number 1 (R1).

QKC/BTC shows a lot of potential, which is why we believe that it will ignite a bull run once it goes above R1.  

Red Pulse Phoenix/Bitcoin (PHX/BTC)

Red Pulse Phoenix broke out of a rounding bottom pattern on October 27 when it breached resistance of 365 satoshis. This generated a monster rally to 1,000 satoshis on the same day.

4H chart of PHX/BTC

From the looks of it, Red Pulse Phoenix is just getting started. We expect it to range trade between S1 and R1 for some time. This will enable the pair to create a new base of buyers who will help keep the market’s uptrend alive.

Bullish momentum should return once the market flips R1 into support. At that point, 1,000 satoshis is a real possibility.

Bread/Bitcoin (BRD/BTC)

Bread’s 4H chart looks messy, but that’s okay. The market broke out of a descending channel on the 4H chart. This triggered a strong rally to 7,610 satoshis on October 4.

4H chart of BRD/BTC

The market has been consolidating since, range trading between S1 and R1. This is a wide range so feel free to buy low and sell high if you get the opportunity. You can also consider the diagonal trendline as additional support.

In the end, we believe that it’s only a matter of time before Bread takes out R1 and ignites a new bull run.

CloakCoin/Bitcoin (CLOAK/BTC)

CloakCoin shares a couple of similarities with Bread. The first one is that it relies on its diagonal support to keep trending higher. The second one is that it only must take out one more resistance to launch a potentially massive bull run.

4H chart of CLOAK/BTC

Another thing going for CloakCoin is that the 200-day moving average is serving as a firm support. Since late September, the market has managed to bounce every time the candle touched the 200-day MA.

We expect CloakCoin to take out R1 soon and ascend to R2.

PO.ET/Bitcoin (POE/BTC)

We’ve been watching PO.ET from the time it claimed S1 and became bullish. From that point, PO.ET has been generating higher highs and higher lows. Currently, it is positioning to take out R1.

4H chart of POE/BTC

When the market does take out R1, it will trigger the breakout from the inverse head and shoulders pattern on the 4H chart. This will attract more traders who are watching this accumulation period from the sideline. If the breakout takes place, R2 and R3 become easy targets.

Bottom Line

Small cap altcoins with bullish potentials have taken over our watchlist this week. While many are focused on large cap altcoins such as Stellar and Ripple, the likes of Red Pulse Phoenix, CloakCoin, PO.ET, Quarkchain, and Bread are making strong bullish moves in the background.

 

NOTE: a satoshi is the smallest unit of Bitcoin, which equals to 0.00000001 BTC.

Disclaimer: The writer 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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3.7 stars on average, based on 267 rated postsKiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




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Altcoins

Bitcoin Cash Price Analysis: BCH/USD May Have to Return to $400, Before Big Bull Buying

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  • BCH/USD price action did form a potential double top formation, subject to a move back towards the neckline.
  • The RSI indicates price is oversold via the 4-hour chart view, after bouncing in early hours of Monday.

The Bitcoin Cash price remains firmly on the back foot. As a result, of a top area being produced within a heavy touted supply zone. This can be seen within the $650 price region, which as a result has caused BCH/USD bulls to falter in their tracks north. Back in the very early part of September and most recently on 7th November has seen the sellers pile in at this area.

BCH/USD daily chart

Given the current price behavior it would suggest technically, the bears are looking to force a retreat, Eyes would be towards the neckline of the set up. This would see BCH/USD returning to $410, as demonstrated during the selling pressure back in early September. A likely area to attract buyers back in, a failure however to see this area of support hold, could be very punishing indeed.

Possible Neckline Breach

BCH/USD Neckline

Should a breakout to the downside from the $410 area support occur, heavy selling pressure may be seen. Eyes would then be on for a potential steep fall, down towards $285, the next major level of support. BCH/USD last traded down here on 13th October 2017, after seeing a chunky breach through the above-mentioned neckline.

4-hour Chart View

BCH/USD 4-hour chart

Looking via the 4-hour chart view, BCH/USD price action is moving within a descending channel formation. This is very much subject to a potential breakout to the upside; however, as described above, the price may need to retreat towards $410. Near-term resistance can be immediately seen at $530, which is the upper part of the channel.

The resistance above trend line of the detailed technical set up should this continue to hold; it raises the case to the top formation play out. A breakout to the upside now could send BCH/USD flying back for a retest of the $650 region supply. To the downside, support should be noted around the psychological $500 level.

As detailed above with the descending channel, this could also be perceived as a text book bull flag pattern. Such a move coming into play after a decent run higher, to then cool, ahead of another burst to the north. Looking via the RSI, it did hit a bottom, running into oversold territory. This occured in early hours of today – Monday 12th November.

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 49 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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Pre-Market Analysis And Chartbook: Dollar Hits 16-Month High as European Assets Fall

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Monday Market Snapshot

Asset Current Value Daily Change
S&P 500 2,771 -0.23%
DAX 30 11,381 -1.28%
WTI Crude Oil 60.95 1.79%
GOLD 1,205 -0.36%
Bitcoin 6,367 0.14%
EUR/USD 1.1265 -0.61%

It has been a choppy and somewhat bearish day so far for risk assets, with the Brexit talks making headlines yet again. European assets are under pressure, since the chances of a deal are fading, while there seems no progress in the EU-Italy debate either.

Equities in Europe are down significantly, lagging the other key markets, but the Euro and the Pound are behaving the weakest, with the common currency hitting a new 16-month low against the Dollar, and the GBP/USD getting close to 1.28 yet again.

EUR/USD, 4-Hour Chart Analysis

The break below 1.13 in the EUR/USD that we have been anticipating could be a key move in forex markets, especially if it’s followed by a quick move towards the 1.10 level. For now, a failed breakdown is still a possibility here, but given the strong broader downtrend, odds favor further new lows in the pair in the coming weeks, together with new highs in the Dollar Index, which also rallied to its highest level since mid-2017 today in early trading.

The next major support zone is found near 1.1125 in the most traded forex pair, while resistance is still ahead near 1.1440 and 1.15.

Dow 30 Futures, 4-Hour Chart Analysis

US stock futures are also pointing slightly lower after Friday’s selloff, but the pre-market losses are muted, and the resilience of the major indices could point to, at least, an initial rally after the opening bell. Today, trading volumes could be lower-than-average on Wall Street, due to the US bank holiday, but given the technical setup, we could be in for an interesting session.

The major indices are at a crucial juncture, as a move towards the October lows could confirm the deeper bearish shift in the US that already took hold of the majority of global markets, while a less likely rally to new swing highs could set up a test of the all-time highs, at least in the relatively stronger indices, the Dow and the S&P 500.

Oil Bounces but Gold Fails to Recover Despite Risk-Off Shift

DAX 30 Index CFD, 4-Hour Chart Analysis

While global equities have been mixed today before the US open, the distinct weakness in Europe points to another leg lower in the broader downtrend, and the DAX could be the most important laggard in the coming days again. While the German index is still well above its recent lows, it is also clearly below the 12,000 level that marked the potential long-term breakdown, which could be the start of a bear market.

The coming days could be crucial in deciding the fate of the current swing, which could define the end of the year across asset classes. For now, markets are quiet, with the main volatility measures being well below the levels seen in October, but should the bearish move accelerate, things could quickly get heated again, as soon as the second half of this week.

Gold Futures, 4-Hour Chart Analysis

Commodities are having a mixed day as well, with crude oil being well in the green, but with gold and copper failing to rally in the face of the Dollar’s rally. The WTI crude contract rallied above $61 per barrel in early trading, while gold fell as low as $1204, extending the breakdown of last week, as safe-haven flows weren’t enough to hold the precious metal.

All eyes are still on the $1215 level, and should gold remain below that short-term resistance, the test of the $1180 level would be likely. Bulls would need a quick rebound to keep the October break-out alive, even gold continues to outperform most of the other safe-haven assets, such as the Japanese Yen and US Treasuries.

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

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 392 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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