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Analysis

Gold Surging on Safety

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Though many market analysts and commentators may be afraid to say it, the markets are showing very clear signs of FEAR.

Sign 1: Gold surging past $1270. Now at levels not seen since the US election results came out on November 9th.

Sign 2: Yen surging. This is the purest safe haven currency. It has now broken below 110 Yens to the Dollar, a significant level we’ll explore below.

Sign 3: The VIX popped up yesterday. The fear index is now reading 15.07, also the highest level since the US elections.

Sign 4: Stocks falling. Almost all major global indices are red. The DAX in Germany fell more than 1% yesterday before making a weak recovery to close at a loss of 0.5%. The Nikkei 225 is down more than 1% so far today.

That should be enough to confirm the above statement but I’ve got one more for you.

The price of Oil is rising. Since the Trump attack on Syria, we’re noticing a slow but steady gain in the price of Oil. Now, this may have to do with expectations of lower output in the future but current stockpiles have not waned. Since the source of the fear is the Middle East, escalating tensions give oil traders a good incentive to be on the buy side.

 

Chart for Yen

The Blue line is the 110 level. Now there is no real support left until around 105.

This is not a great sign for clients in eToro who have been long on the USDJPY pair for the past few weeks. At the moment, Stop Losses are getting eerily close. With the average stop loss for buy positions as close as 108.90, just 65 pips away from the current price.

Focus now on Russia

The United States has made their move in Syria. Now it’s Russia’s turn to respond.

Today, Trump’s Secretary of State Rex Tillerson is visiting Moscow and the number one question is who will he be meeting?

Traditionally, a new US Secretary of State visiting Russia should meet with the head of state. However, there has been a lot of speculation in the media as to whether Putin is willing to meet with Tillerson. If he declines, this could represent a turn not only on Syria but could be an end to the Trump-Putin bromance.

In fact, Putin has already put out a statement comparing the US allegations that Assad was responsible for the chemical attack to the time that US intelligence claimed that Sadam Hussein possessed weapons of mass destruction.

At the moment, the Ruble is in a position of strength as analysts were expecting sanctions to be eased by the Trump administration. However, if we see a quick policy turn around here the pair is likely to get very volatile in the coming days.

In the meantime, the White House is taking it on the chin in social media over comments from WH Press Secretary Sean Spicer, who said that “even Hitler didn’t use chemical weapons.” The entire world said, wait… what?

He was, of course, quick to apologize for the statement but it’s a bad day for any public figure when you’re drawing criticism from the Anne Frank Center.

What’s next?

More Trump of course. The Donald will appear on his favorite news station, Fox Business. For some strange reason, the interview is going to be at 6 AM EST. So most Americans will be asleep when it happens.

Trump, of course, will be talking about his favorite subject… himself. Expect to hear comments on everything from Healthcare to tax reform, to the situations in the Middle East and North Korea. This oughta be fun.

This content is for information and educational purposes only and should not be considered investment advice or an investment recommendation.

Past performance is not an indication of future results. All trading carries risk. Only risk capital you’re prepared to lose.

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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4.6 stars on average, based on 135 rated postsSenior Market Analyst at Etoro.com.




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2 Comments

2 Comments

  1. Ershad

    April 12, 2017 at 2:24 pm

    Hi Mati,

    What price would you recommend selling gold at ? Are we likely to sell $1300 in the near future or a pullback ?

    Kind regards
    Ershad

  2. Mati Greenspan

    April 12, 2017 at 3:23 pm

    Sell Gold??? Ershad!

    Perhaps, if you’re a short term high leverage cowboy. You may be able to catch it on a retracement for $10 or $20.

    Over the long term, the price of gold always rises. The best strategy that I’ve seen for gold is “buy the dips.”

    Mati

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Altcoins

Stellar Price Analysis: XLM/USD Pullback Means Bulls Can Run Free

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  • XLM/USD has seen the required retest of the broken pennant pattern, leaving the door open to greater upside.
  • Technically the price developments appear to be stacked in the favor of the bulls.

Recent Price Developments

XLM/USD daily chart

Stella’s XLM is on its way back up to the north. XLM/USD is running at two consecutive sessions in the green. The price having gained over 17% in the past three sessions, moving back into a bullish trend. Given the recent technical price developments, this current push higher could prove to be sustainable in efforts for a longer-run.

XLM/USD had initially been moving within a pennant pattern structure; this was the case from June until early November. The price was contained within for 19 weeks, a long period of consolidation, after the heavy sell off from April up to June. Furthermore, as seen from the daily chart view, bulls managed to break free and close above the mentioned pattern on 4th November.

The market bulls went on to drive the price to its highest level seen since 24th September, jumping above the $0.28 territory. XLM/USD found its somewhat exhausted, after running into some known strong resistance. This was and still is notable at the 61.8% Fibonacci, the price had also faltered here during the run seen at the back end of September.

Given above-mentioned rejection at the 61.8% Fibonacci, XLM/USD was sent back south. The price was forced to retreat on top of the breached pennant pattern. This move, as described, playing out to the textbook. A breakout to the upside was seen from the pennant, which the retest having now been seen. As a result, a move which is now very likely to invite further buying pressure.

Upside Targets

The first major challenge for the bulls, will be to break down the $0.28 price territory. As mentioned above, the area that has caused an issue the past two occasions, where the price has met with the resistance. Should the bulls manage to gain enough momentum, a break will likely be seen. This could bring in play a return to $0.30.

Further to the north, eyes will be on the $0.35 area and beyond. XLM/USD was last seen up at these heights in the back-end of July. It had peaked here on 26th July, before then entering quite a steep bearish trend. The price had fallen a chunky 45%, up until the early part of August, where some stabilization then formed.

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 54 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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Altcoins

Ethereum Price Analysis: ETH/USD Has Big Opportunity to Fly Again

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  • ETH/USD is running at seven consecutive sessions of losses, dropping as much as 25%.
  • Price action is moving within a strong demand area, which could very well see the price rocketing again.

Current Price Action

ETH/USD is stuck within a stubborn downward trend. The price is running at a seven consecutive session losing streak. During this time period, ETH/USD has dropped as much as 25%, falling from $226, down to recent lows of $171.95. This is the biggest weekly loss seen since the bear market back in September.

The price was trading in a consolidation manner; this had been the case after the above-mentioned bear market drop. ETH/USD at the time had dropped as much as 45%, before finally staging a recovery. Since the bounce on 12th September, price action began to form a bearish pennant pattern, which was then firmly broken on 14th November.

ETH/USD daily chart

Buying Opportunity  

At the time of writing, ETH/USD is seen trading deep within a known demand area. Buyers last pilled in and drove the price north, back on 12th September, as detailed above. It had gone on to gain a whopping 50%, following the hammer candlestick reversal confirmation. The demand can be eyed around the $170 territory.

Eyes should be on indications of a reversal, the potential for a signal from a candlestick formation, similarly to the prior mentioned recovery. In terms of the RSI via the daily time frame, ETH/USD is very much in oversold territory. The index seen around the 27 level at the time of writing, which could see the price soon bottoming out.

Upside Targets

Should life be kicked back into the bulls, another retest of the breached pennant pattern would likely be seen. Resistance underneath the pennant should be noted at the psychological $200 mark. The bears firmly ran through this price level on 14th November. Further north, another barrier can be observed at $230 area, a known supply zone.

There has been much debate over the past couple of months, as to whether the cryptocurrency market has hit the bottom. Many believed that this was the case, after the deep September drop. While some were still calling another corrective fall. Once some stabilization from the bulls is seen and recovery picks up momentum, this may be the last of the bears for 2018.

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 54 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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Analysis

Bitcoin Update: Bull and Bear Scenarios

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To say that the last two days in crypto have been a bloodbath would be an understatement. Many altcoins have broken critical support areas. Some cryptos even registered new yearly lows. One of those is Bitcoin (BTC/USD).

Bitcoin dropped to as low as $5,188 on Coinbase and lost as much as 20% of its value within 48 hours. The move forced numerous retail traders and long term hodlers to give up their digital assets. It also reinvigorated bears who felt ecstatic that $6,000 support crumbled into pieces. Their renewed confidence gave them the voice to spread fear, uncertainty and doubt (FUD). The chatter of Bitcoin trading at $2,000 – $3,000 has been the noisiest in the last 48 hours.

If you’re an ordinary investor who believes in the revolutionary power of Bitcoin, the amount of FUD out there might shake your beliefs. However, is there a grain of truth in what bears are yapping? In this article, we reveal the possible bull and bear scenarios to prepare you for whatever comes next.

The Bullish Scenario

Bulls have a simple task ahead in the next few days. They just need to take Bitcoin above $5,800 before the week closes to preserve the weekly support. This has the potential to invalidate the descending triangle breakdown and create a bear trap. However, with heavy bearish pressure, this is easier said than done.

With that being said, the key levels to watch in addition to $5,800 are 5,500, 5,300, and 5,190. The line in sand is 4,800. Below that, we’ll very likely experience a full-blown and painful bear winter.

As of this writing, Bitcoin is working really hard to establish support at $5,500. This is a positive signal. It works well with our bullish scenario of an inverse head and shoulders reversal pattern on the 15-minute chart.

BTC bullish scenario

In this scenario, bulls have two great chances to make this work. They can create a bullish higher low setup at $5,500 or at $5,300 to complete the right shoulder.

Another play would be a quick relief rally between $5,600 to $5,700. From there, we would likely experience a heavy volume dump to prices between $4,800 – $5,190. With this scenario, we’ll get a solid double bottom structure in the 15-minute chart where bulls can stage a reversal.  

BTC double bottom

This double bottom scenario is where many hodlers would capitulate and at the same time, it would exhaust many sellers. For this to manifest, however, bulls must show that they’re ready to battle to the bitter end so they can close the week above $5,777. Otherwise, bears will continue to rampage unchecked.

The Bearish Scenario

From a technical perspective, the descending triangle breakout has an ultimate target of $2,800. In addition, Bitcoin has firm weekly and monthly support levels at $3,000. These are the reasons that fuel calls for Bitcoin trading at $3,000.

Bitcoin bear scenario

It’s safe to say that this is not a pretty sight.

For this to happen, Bitcoin must close below $5,800 this week and then retest $5,800 – $6,000 next week. This price action would confirm that $6,000 is now a resistance. Therefore, bears would be able to use all the strength of $6,000 as support and flip it into a heavy resistance area.  

If this happens, there’s a strong possibility of a long and painful Bitcoin bear market that can extend for many months. During this period, the market may range trade between $3,000 – $6,000. This is not the scenario that we’re looking for. However, it is always better to prepare for such possibilities.

Bottom Line

Richard Wyckoff said: “The more compact the trading range is, the more likely the stock is under control by professionals, and the greater the possibility for the swift explosive move upward following a spring or a shakeout…watch for them”. This is why we remain bullish in Bitcoin despite the massive dump. After the compact trading range in the last few months, we believe that this is the spring or the shakeout before the explosive move upward.

At this point, we are rooting for the bull scenarios mentioned above but we’re also seriously considering the bearish case. In short, we’re hoping for the best but also preparing for the worst.

 

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 271 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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