Draghi Flip-Flops Twice as Bitcoin Surges Past $2500

Thursday Market Recap

Asset Current Value Daily Change
S&P 500 2474 0.11%
DAX 12522 0.56%
WTI Crude Oil 47.67 0.61%
GOLD 1239.00 -0.25%
Bitcoin 2575 12.11%
EUR/USD 1.1562 +0.42%

Well, that was quick; the European Central Bank backtracked from its recent hawkish position today, as the President of the central bank announced in its monetary statement that the ECB is ready to expand its Quantitative Easing program in “time and extent” if needed. The move was probably fueled probably by the Federal Reserve’s change in rhetoric in reaction to the soft economic data in the US. Later on, The ECB continues its “Fed-dependant monetary policy, while the recent surge in the Euro is also likely to pose a problem for the European policy makers.

Financial markets reacted in line with the ECB’s announcements, with the common currency first turning lower, especially compared to the Dollar, while the most important European indices recovered strongly with the DAX rallying past the 12,500 level. The moves were mostly retraced following the press conference, but the DAX and the Euro Stoxx 50 both remained in the green. US indices continued slightly higher after hitting new all-time highs yesterday, with the NASDAQ still leading the way, after the recent correction. As the US earnings season is heating up, we expect volatile overnight moves in the major indices in the coming period.

EUR/USD, 4-Hour Chart Analysis

Currencies are very active today, as expected, as the Euro’s volatility is accompanied by the Yen’s choppy reaction to the mixed BOJ monetary statement. The bank raised its GDP forecast but lowered its inflation projection, while leaving its monetary policies unchanged. The Pound also fell despite the better than expected British Retail Sales report, while the Aussie and the Canadian Dollar declined slightly compared to the Greenback. Commodities are mixed amid the forex volatility, with oil still being strong and gold consolidation its recent gains.

Cryptocurrencies

The crypto market continued its strong rebound today, with Bitcoin leading the way higher, still boosted by the bullish sentiment and the oversold conditions. Dash is also among the strongest majors, nearing the $200 level during the European session. Monero and Stratis also posted a higher high today, as the broad based recovery of the segment continues following the weekend’s panicky moves. Ethereum is consolidating below its highs, and while Bitcoin is breaking out of its declining trend, in line with our previous projection for the correction, ETH is still stick below the long-term trendline.

Bitcoin, Daily Chart Analysis

Technical Picture

The DAX remains the weakest major global index, as the ECB’s announcements failed to break the short-term trend, despite the strength in US equities. That said, a move above the declining trendline and the 12,650 level, and could set up a move towards 13,000. The crucial support between 12,350 and 12,500 is still in focus, and another move lower is more likely, given the relative weakness of the benchmark.

DAX, 4-Hour Chart Analysis

Key Economic Releases on Thursday

Time, CET Country Release Actual Expected Previous
3:30 AUSTRALIA Employment Change 14,000 14,400 42,000
3:30 AUSTRALIA Unemployment Rate 5.6% 5.6% 5.5%
Tent. JAPAN BOJ Interest Rate Decision -0.1% -0.1% -0.1%
Tent. JAPAN BOJ Monetary Statement
13:45 EUROZONE ECB Rate Decision 0.0% 0.0% 0.0%
14:30 EUROZONE Monetary Statemement
14:30 US Initial Jobless Claims 233,000 245,000 247,000
14:30 US Philly Fed Index 19.5 23.4 27.6

Key Economic Releases on Thursday

Time, CET Country Release Expected Previous
10:30 UK Public Sector Borrowing -0.1% 0.1%
14:30 CANADA CPI Index -0.1% 0.1%
14:30 CANADA Core Retail Sales 0.0% 1.5%

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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.