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US President Donald J Trump certainly has his fair share of critics. Even I myself am sometimes one of them. There is one thing though that he has not misled us about and that is economic growth.

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The new President has promised us a steady growth rate of 3% and the numbers out on Friday have demonstrated that despite hell and high water, floods and fires, and a multitude of other obstacles, the economy has fulfilled that promise on his behalf.

The significance of this report along with the jaw dropping revenue announcements from the US’s biggest tech firms has sent the stock markets to the moon.

@MatiGreenspan
eToro, Senior Market Analyst

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Please note that there will be no daily market update tomorrow. Myself and about 250 other eToro employees will be taking a short field trip for some much needed R&R. We will resume on Wednesday, November 1st.

 

Please note: All data, figures & graphs are valid as of October 30th. All trading carries risk. Only risk capital you’re prepared to lose.

Market Overview

The world’s largest financial institution may soon be changing ownership.

Even though central banks are supposedly separate from the government and unconnected to politics, the very nature of their business binds them to each other.

One example is the way in which Fed Bosses are chosen. When Janet Yellen’s term ends as the Governor of the US Federal Reserve, there will not be any national election to find a replacement. Rather, the President of the United States will be the one to nominate her successor. The nominated candidate will need to be vetted by Congress before being sworn in, but at that point his or her appointment is almost certain.

Trump’s administration has been mulling the decision over for several months now and according to reports are very likely to announce shortly that Jerome Powell will take over.

Powell has been on the Fed’s Governing Board since 2012 and is expected to be the best person to continue Yellen’s work on “normalizing” monetary policy and more importantly he is expected to be the best person for the roaring stock markets.

As earnings season slows down to a trickle, market participants are more likely to be focusing again on the Fed and their international counterparts and look to them for direction.

Japan

If the Fed in the US is expected to continue their path to normal monetary policy, their friends in Japan are doing just the opposite.

After PM Shinzo Abe’s sweeping victory in the national elections the Bank of Japan now has a full mandate to continue on their path to printing money and forcibly devaluing the Japanese Yen.

Until now they’ve been focused on creating money in order to buy Japanese ETFs but they may be running out of assets to buy.

As of February, the BoJ owned about two thirds of the ETFs in Japan…

According to some sources, in the past few months, their holdings have grown to 75% of the entire market.

Of course, this is unsustainable. You can’t have a free and fair market in which the central bank is holding most of the assets.

Also, the Bank of Japan is still experimenting with negative interest rates. Currently, anyone holding funds at the BoJ needs to pay 0.1% a year in negative interest. Even though many other central banks around the world are trying to raise these rates, Japan is not expected to do so for quite some time.

The market is currently giving the possibility of a BoJ rate hike in one year from tomorrow at just 33%.

The good news is that this white line is rising and that at least the markets are starting to belive that it eventually will happen.

Tomorrow morning, BoJ Governor Haruhiko Kuroda will give the interest rate decision, followed by a press conference.

In my view, this meeting has a very large chance of delivering a surprise to the markets. They do need to switch their strategy quite soon before they’ve bought up all the assets in the country and now that Abe has the power to do as he pleases, the timing is right to double down or back off their plan to send the Yen to the floor.

Japanese Traders

In Japan, day trading is a way of life. Candlestick charts were invented there as was the Ichimoku Cloud and several other technical analysis indicators.

Lately, they’ve moved on to a new asset that’s a bit more volatile than the Yen. Now they’re trading Bitcoins.

The Bank of Japan, possibly in an effort to weaken the Yen, has legalized Bitcoin completely in April and since then many major stores, websites, and supermarkets have started accepting payments in the digital currency.

In September, the country’s BTC monthly volume reached a record of 6.5 Million coins, which is roughly 70% of the entire market.

Over the weekend, the price of Bitcoin reached a new all-time high of $6,281 per coin so the number one chart today that most traders will be looking at is this one.

It will be interesting to see if the BoJ does indeed end up with a surprise tomorrow how fast traders will switch their screens to the USDJPY.

Of course, the nature of a surprise is that nobody is expecting it. So most likely they’ll simply continue on their path to buying out the market, cutting their nose off to spite their own currency. But it always pays to be prepared.

Wishing you an amazing week ahead.

This content is provided for information and educational purposes only and should not be considered to be investment advice or recommendation.
The outlook presented is a personal opinion of the analyst and does not represent an official position of eToro.

Past performance is not an indication of future results. All trading involves risk; only risk capital you are prepared to lose.

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Analysis

Long-Term Cryptocurrency Analysis: All Majors Stretched as Ripple Finally Breaks-Out

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Although the previous leaders of the rally started to correct or at least consolidate in the wake of the overbought long-term setups, another batch of coins turned exponential, with Litecoin, Ripple, and Ethereum all registering lofty gains this week. Bitcoin, Monero, and Dash have been holding up well, and even drifted to new marginal highs during the period, while Ethereum Classic had a more volatile week, before moving to new highs today.

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XRP left the broad trading range that has dominated its market since May, and surged to new all-time highs while almost quadrupling in the process. As the coin was the only major on a long-term buy signal according to our trend model, and the move triggered a sell signal on Thursday, now all of our tracked coins are on sell signals.

Ripple could be in for further short-term gains but long-term investors should reduce their positions after this week’s spike. Support levels are found Major at the prior high near $0.4250 and in the $0.30-$0.32 range.

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XRP/USDT, Daily Chart Analysis

IOTA, which has been leading the market higher before is down by more than 30% off its all-time high, but given the exponential move before, an even deeper correction is likely in the coming weeks, and investors should wait until a more favorable setup to add to their positions. Strong support is only found at $3 and $1.5, but potential Fibonacci support is at $2.35.

IOT/USD, Daily Chart Analysis

Let’s see how the long-term charts of the other majors look this weekend.

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Analysis

Technical Analysis: Bitcoin Up Again as Altcoins Mixed in Volatile Trading

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Bitcoin is at a new all-time high today, although the momentum of today’s move is far below from what we saw recently, and the coin only managed to reach a marginal record high yet again. BTC is now worth $300 billion, and it is still trading right at the short-term trendline, inside a rising wedge pattern that shows a clear momentum divergence.

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With the short-term trend still being intact further gains are still possible, but as all the majors are overbought from a long-term perspective, we still advise investors to wait for a better buying opportunity before adding to their holdings. Primary support is still found near $13,000, with further levels at $11,300, $10,000, $9000, and stronger levels at $8200 and $7700.

BTC/USD, 4-Hour Chart Analysis

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 XRP entered a volatile short-term correction after its two-day surge after giving a short-term sell signal yesterday, and the coin spiked back towards $0.60 before settling down just below yesterday’s highs. The long-term setup also turned overbought thanks to the almost 300% rally, and now investors should reduce their holdings, even as further gains are still possible. Major support is still found at the prior high near $0.4250 and in the $0.30-$0.32 range.

XRP/USDT, 4-Hour Chart Analysis

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Analysis

Cryptocurrency Analysis: Ripple Continues Rampage as Litecoin and Ethereum Enter Correction

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Ripple remained in the center of attention in the segment after breaking out to a new all-time high yesterday, and the coin almost doubled in value, climbing above the $0.80 level. The currency concluded a 6-month long consolidation pattern with the move after being the only major on a long-term buy signal in our trend model.

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XRP gave a short-term sell signal today, while turning neutral regarding the long-term setup. Investors now shouldn’t add to their positions, although further gains are still possible, and reducing holdings somewhat is a good idea here. Major support is still found at the prior high near $0.4250 and in the $0.30-$0.32 range.

XRP/USDT, 4-Hour Chart Analysis

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While Bitcoin stagnated, and Bitcoin Cash jumped, Ethereum, Litecoin, Dash, and IOTA has been drifting slightly lower, although the recent gains are still mostly intact, and the basic setup in the segment is unchanged.

Litecoin fell below the $300 level after yesterday’s consolidation, and the coin faced strong selling pressure in the latter half of the session. The currency remains extremely stretched regarding the long-term momentum indicators, and although the short-term uptrend is still intact, a deeper correction is likely in the coming weeks, with key support levels found at $125 and $100, and weaker levels at $260 and $170.

LTC/USD, 4-Hour Chart Analysis

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