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Analysis

Stocks Flat while Cryptocurrencies Rise on Independence Day

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Tuesday Market Recap

Asset Current Value Daily Change
S&P 500 2430 Closed
DAX 12473 -0.02%
WTI Crude Oil 47.23 -0.32%
GOLD 1224.00 0.45%
Bitcoin 2619 2.13%
EUR/USD 1.1349 -0.13%

Today’s very quiet trading day has been dominated by a North Korean test missile launch that underlines the growing tensions between the new president, the Chinese leadership, and the communist state. Despite the initial overnight dip in stock futures, global markets recovered and most of the major benchmarks are hovering around unchanged in the low volume low volatility environment. Busy trading is expected to resume on Wednesday, hen some fireworks are expected in stock, currency, and commodity markets alike, as the quarterly rebalancing operations often launch new trends.

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AUD/USD, 4-Hour Chart Analysis

The Australian Dollar has been very active today, as the RBA delivered a slightly dovish message after the central banks rate decision. The Aussie fell sharply after the announcement despite the much better than expected Retail Sales data, and the recent bounce in the price of oil that usually helps the commodity currency. The Canadian Dollar is also active, but in a bullish way, as it is still boosted by the recent positive surprises in the economy, the Bank of Canada’s optimistic views, and the oil-rally.

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The Chinese market has been consolidating in a narrow range for more than a week now, with the stability helping industrial commodities in staying strong, but the Shanghai comoposite might have hit strong resistance and today’s weakness could be a start of at least a re-test of the lower boundary of the rising wedge formation that it has been trading since the lows in May.

Shanghai Composite 4-hour Chart Analysis

Cryptocurrencies

The crypto market continues to show signs of healing, with the majors all drifting lower, correlations breaking down further, and some of the smaller coins rallying hard. While volumes are low and the current moves mostly lack strong momentum amid the weekend-like environment, Litecoins break-out to new highs definitely signals that the selling pressure that dominated last week’s trading eased somewhat, despite the fact that Ethereum is still stuck below $300, and Bitcoin is just barely above the crucial $2600 resistance.

Litecoin, 4-Hour Chart Analysis

Key Economic Releases on Tuesday

Time, CET Country Release Actual Expected Previous
3:30 AUSTRALIA Retail Sales 0.6% 0.3% 1.0%
6:30 AUSTRALIA RBA Rate Decision 1.50% 1.50% 1.50%
6:30 AUSTRALIA Monetary Statement
10:30 UK Construction PMI 54.8 55.2 56.0

Key Economic Releases on Wednesday

Time, CET Country Release Expected Previous
10:30 UK Services PMI 53.5 53.8
16:00 US Factory Orders -0.4% -0.2%
20:00 US FOMC Meeting Minutes

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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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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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