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Analysis

Europe Rebounds, Oil Lower Again as Cryptocurrencies are Under Pressure Again

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Monday Market Recap

Asset Current Value Daily Change
S&P 500 2433 0.17%
DAX 12834 Closed
WTI Crude Oil 47.17 -2.42%
GOLD 1284.00 0.45%
Bitcoin 2779 -4.23%
EUR/USD 1.1202 0.07%

The US Dollar and European stocks markets are in the center of attention in today’s quiet session in financial markets. The Greenback is once again trying to rally against its major peers, but it’s struggling to gain momentum, only managing to stop de long-term decline. The DAX and the Euro Stoxx 50 got a boost from the slight weakness in the Euro nonetheless, as the central bank’s future policies still drive the major moves in all of the major asset classes. US stock markets are showing relative weakness in early trading, as the NASDAQ short-term downtrend continues to weigh on equities.

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Oil has been the most volatile global asset so far, as it dipped below $44 per barrel once again following up on Friday’s steep decline. Gold remains close to the $1200 level, as precious metals are still wounded since last week’s silver flash-crash, and the recent surge in yields across the globe. Copper is still heading south, since our short recommendation, as industrial metals are once again showing weakness, with the disappointing Chinese CPI release putting downside pressure on the segment today.

Copper 4-Hour Chart Analysis

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Cryptocurrencies

Selling pressure returned today in earnest in the crypto segment, as once again, small cap coins and Ethereum are leading the decline, while BTC is still holding above primary support, with Litecoin and Dash also showing strength amid the broad headwind. Double-digit losses are the norm in the volatile small cap coins, as the long-term correction is still intact following the huge late-spring rally in the segment. The majors might test their correction lows in the coming days, but the long-term overbought readings are cleared and a successful test could signal the end of the correction.

Bitcoin, Daily Chart Analysis

Technical Picture

The NASDAQ is still in a precarious technical situation near its flash-crash lows and the rising long-term trendline. The next few sessions will be critical, as if the tech index can recover above the short-term trendline, an advance to new highs could begin while the anew swing low would mean a deeper correction. The latter scenario is more likely given the internal weakness in the market and the negative trends in global stocks as well.

NASDAQ 100, 4-Hour Chart Analysis

Key Economic Releases on Monday

Time, CET Country Release Actual Expected Previous
3:30 CHINA CPI Index 1.5% 1.6% 1.5%
3:30 CHINA PPI Index 5.5% 5.5% 5.5%

Key Economic Releases on Tuesday

Time, CET Country Release Expected Previous
3:30 AUSTRALIA NAB Business Confidence 7
14:15 CANADA Housing Starts 200,000 195,000

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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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