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Dollar and Oil Jump as Gold Smacked Lower

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Dollar and Oil Jump as Gold Smacked Lower

Introduction

This article was posted on Monday, 17:04, UTC.

Monday Market Recap

Asset Current Value Daily Change
S&P 500 2433 0.153%
DAX 12475 1.22%
WTI Crude Oil 46.77 1.56%
GOLD 1224.00 -1.45%
Bitcoin 2550 3.52%
EUR/USD 1.1364 -0.54%

The suspicious Friday session turned out to be a short-term bottom at least, for the US Dollar, with the Greenback rallying against the Euro, back to the pre ECB pump levels. While the advance started after the worse than expected European Manufacturing PMI’s, we will have to probably wait until Wednesday, the end of the long US “weekend’, to get a clear picture of extent of rally. Stock markets are quiet, with very low volumes, and that will likely be the case tomorrow as well, but these low volume days are often great tells about the underlying trends, as the big “algorithmic” firms cause less noise, revealing more of the basic price pressures.

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Dollar Index 4-Hour Chart Analysis

Oil’s rally continues to dominate the commodity segment, while gold got hit hard once again, falling below its recent low as the central banks’ supposed tightening cycle remains the main topic. That is also reflected in bonds, as US Treasuries are falling for the second week in a row, with short-term yields still outpacing the longer end of the curve, flattening the already unhealthy yield curve. “Flat “ yield curves are usually signaling a weak economic environment, and this trend might continue, especially if the coming economic numbers will keep on disappointing in the US.

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Cryptocurrencies

The crypto market is still consolidating after the strong moves of last week, although bullish signs are popping up across the board, and sentiment is also getting pessimistic enough for a major low to develop. The next two days might be crucial for the market, as s new swing higher could kick-start a rally, but another downswing would mean more frustrating sideways action in the major coins. Litcoin is moving up towards its prior highs today, while Bitshares, Antshares, Dash, and Stratis are also moving higher, as correlations are back to normal following the concerted moves of late last week.

Litecoin, 4-Hour Chart Analysis

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Technical Picture

The DAX bounced back to the crucial support resistance zone that it violated on Friday, as the Euro’s weakness helps European equities today, and the bounce in US equities also provides a good background. That said, the short-term trend remains clearly negative and more corrective action is likely, but the bounce could last for a couple more days, until normal trading resumes on Wednesday.

DAX 4-Hour Chart Analysis

Key Economic Releases on Monday

Time, CET Country Release Actual Expected Previous
1:50 JAPAN Tankan Manufactring Index 17 15 12
1:50 JAPAN Tankan Services Index 23 24 20
3:45 CHINA Caixin Manufacturing PMI 50.4 49.9 49.6
8:00 SPAIN Manufacturing PMI 54.7 55.6 55.4
9:30 UK Manufacturing PMI 54.3 56.4 56.7
16:00 US ISM Manufacturing PMI 57.8 55 54.9
16:00 US Vehicle Sales 16.7 mill

Key Economic Releases on Tuesday

Time, CET Country Release Expected Previous
3:30 AUSTRALIA Retail Sales 0.3% 1.0%
6:30 AUSTRALIA RBA Rate Decision 1.50% 1.50%
6:30 AUSTRALIA Monetary Statement
10:30 UK Construction PMI 55.2 56.0

 

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Mate Cser

Mate Cser

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.

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