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Weekly Analysis: 5 Things to Watch the Coming Week

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Asset Current Value Weekly Change
S&P 500 2398 0.88%
DAX 12675 1.76%
WTI Crude Oil 46.47 -5.75%
GOLD 1228.00 -3.21%
Bitcoin 1570 16.11%
EUR/USD 1.0998 0.91%

5 Things to Watch Next Week

  1. More new all-time highs ahead for stocks?

While several cracks appeared under the surface of the current rally globally—the Chinese woes, the weak performance of the broad US indices, and the slowing US economic growth, the NASDAQ and German equities continued to trend higher to new all-time highs. The leadership of the advance is narrowing, and although that doesn’t mean that a decline is imminent and another leg higher following today’s French is possible, this is definitely not the best time to buy stocks.

  1. Will the cryptocurrency market hit the $50 billion mark?

Litecoin and Ripple are the stars of the weekend so far among the coins, but Bitcoin is also holding up well despite the volatile correction towards the end of the week. The historic $50 billion level in capitalization is less than 10% away, and it’s hard to believe that the current boom won’t carry the market above that in the coming days, with more and more smaller coins popping up on the radar with stellar gains, like Bytecoin, Dogecoin, Steem, and Stratis.

  1. Is the sell-off in oil over?

Oil fell almost 20% in three weeks after a strong rebound in March, as US production keeps on rising and the recent geopolitical woes failed to prop up the market. Also, the North-Korean and Syrian tensions eased somewhat, even though the verbal bouts continued, and China increased the pressure on the communist regime. An escalation could propel a strong rebound in the Black Gold, as it got clearly oversold, even if the fundamentals remain bleak.

  1. Gold turning higher again?

Sentiment towards precious metals turned negative following the first round of the French election, and the confident words of the Fed pushed gold even lower in the second half of the week. Gold is now almost $80 lower than two weeks ago and that could mean that the metal is close to ending the current correction.  If stocks turn lower next week, gold might quickly snap back above the crucial $1240 level

  1. The Pound in the spotlight as the Bank of England holds meeting

The GBP has been one of the strongest currencies since Theresa May announced a snap election three weeks ago, pushing the GBP/USD pair towards the 1.30 level. The Pound also held up well compared to the surging Euro, despite the ongoing dispute regarding the Brexit process that points more and more to a “hard” version of the break-up. With the Pound being stronger the pressure to protect the currency is lower on the BOE, so it’s easy to imagine that the central bank will rather try to boost growth, even if just verbally, causing a correction in the GBP.

The Pound in a strong uptrend against the US Dollar, 4-Hour Chart

In Focus: Cryptocurrencies

 

Weekly performance comparison of the major cryptocurrencies, Hourly Chart

Bitcoin took center stage this week, even considering the HUGE rally in Ripple and Litecoin, as the main cryptocurrency stormed to new all-time highs, hitting the $1600 level that seemed so distant just over a month ago, amid the hard-fork fears. BTC breached the $25 billion level this week for the first time in its history, and although a correction is a real possibility here, the currency is hovering just below its highs this weekend. Ripple and Litecoin are on the move once again with LTC copying its weekend break-out from two weeks ago, while Ripple doubled in the course of the last week. The market capitalization list was little changed despite the strong moves although Dash is sliding lower with NEM and ETC both on its neck after the crazy period.  With buy signals all over the market traders were able to ride major break-outs almost on a daily basis, and hopefully, the favorable conditions will persist throughout the next week as well.

Currency Weekly Volume Monthly Volume Market Cap
Bitcoin 4,370 11,044 25,664
Ethereum 1,475 3,721 8,769
Ripple 652 1,157 5.041
Litecoin 988 2,767 1,531
Dash 126 462 729
NEM 52 151 689
Ethereum Classic 339 830 654
Monero 90 247 429


Key Economic Releases of the Week

Day Country Release Expected Previous
Monday CHINA Trade Balance 197 bill 164 bill
Monday GERMANY Factory Orders 0.70% 3.40%
Monday UK Halifax HPI 0.1% 0.0%
Tuesday AUSTRALIA Retail Sales (monthly) 0.3% -0.1%
Tuesday AUSTRALIA Annual Budget
Tuesday CANADA Building Permits (monthly) 0.40% -2.50%
Tuesday US JOLTS Job Openings 5.67 mill 5,74 mill
Wednesday CHINA CPI Index 1.10% 0.90%
Wednesday CHINA PPI Index 6.8% 7.6%
Wednesday EUROZONE ECB President Draghi Speaks
Wednesday US Import Prices (monthly) 0.2% -0.2%
Wednesday US Crude Oil Inventories  – -0.9 mill
Thursday SWITZERLAND CPI Index 0.20% 0.20%
Thursday UK Manufacturing Production -0.20% -0.1%
Thursday UK Service PMI 54.6 55.0
Thursday UK Official Bank Rate 0.25% 0.25%
Thursday UK Monetary Statement
Thursday UK PPI Index 0.2% -0.1%
Thursday CANADA NHPI Index 0.3% 0.4%
Friday GERMANY Prelim GDP 0.6% 0.4%
Friday US CPI Index 0.20% -0.30%
Friday US Core CPI 0.2% -0.1%
Friday US Retail Sales (monthly) 0.60% -0.20%
Friday US Core Retail Sales 0.50% 0.00%
Friday US UOM Consumer Sentimnet 97.0 97.0
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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Altcoins

Zcash Price Analysis: What is Behind the Recent Surge in Price?

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  • Zcash had jumped over 17% over the period of 12-18th October, before running into sellers.
  • The foundation set to launch the Sapling protocol upgrade. To improve efficiency for shielded transactions.

Zcash over a 6-day period from 12-18th October gained a whopping 17%. Moving quickly from as low as $108, to then be above $126. Since, the price has run into some sellers and touted profit-takinggiven the large run in such as short time frame.

What Is This ‘Zcash’ (ZEC)?

Zcash was a hard fork of Bitcoin in 2016. Unlike the number one ranked crypto by market cap, privacy is ensured via Zcash. Personal and transaction data are kept confidential. This being facilitated through zero-knowledge proofs, allowing conducted transactions to go through verification without any required details about the sender, receiver as well as the transacted amount.

Zcash Set to Launch Sapling Protocol Upgrade

The Zcash foundation recently updated via their blog ‘Sapling Transaction Anatomy’. Full breakdown details can be read there as they are set to launch the Sapling protocol upgrade.

Sapling, this will be a network upgrade that aims to substantially improve efficiency for shielded transactions – paving the way for broad mobile, exchange as well as vendor adoption of Zcash shielded addresses. Their motivations for the Sapling upgrade are to increase speed on these shielded transactions.

Coinbase Speculation Continues to Do Rounds

The community around Zcash continues to speculate on whether the privacy-focused crypto will be added to Coinbase. Earlier in the year, Coinbase said they were exploring the possibility of listing Zcash and others, such as Cardano, Basic Attention Token, Stellar Lumens and 0x on its platforms. This covered back in July and does not guarantee it will be added, but the hope still appears to be flowing through the community.

Zcash Jumps to 20th Largest by Market Cap

Earlier this week, Zcash managed to break into the top 20 cryptocurrencies by market cap. It overtook Dogecoin. The current market cap at time of writing seen at $588,429,693, ahead of DOGE at $513,884,230.

Technical Review – Daily Chart

ZEC/USD daily chart

ZEC/USD has been cooling over the past two sessions, after its recent 17% price run. It isn’t too much of a surprise to see the current easing, given the fast surge higher. Near-term support can be found around $115 area, then further south within a demand zone tracking from $110-105. Looking to the upside, sellers are camped heading into the $130 territory. A higher near-term target would be eyed at $145, price last traded here on 28th September.

This year Zcash is still down some 80% from the highs in January, up over the $800 price level. It has failed to sustain any upside momentum, rallies continue to be sold by the bears. This is something that has been seen across the other cryptocurrecies, not just Zcash. The market continues to search for a bottom.

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 33 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

Pre-Market Analysis And Chartbook: Risk Assets Higher Thanks to Chinese Bounce

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Friday Market Snapshot

Asset Current Value Daily Change
S&P 500 2,797 0.81
DAX 30 11,568 -0.18%
WTI Crude Oil 69.61 1.35%
GOLD 1,230 0.16%
Bitcoin 6,379 -0.24%
EUR/USD 1.1480 0.24%

Risk assets are having an active and already very busy day after yesterday’s tumultuous session, as volatility continues to be high, especially in equities. All eyes were on Chinese stocks and the Yuan today in early trading, as several key economic numbers were published in the country. Chinese officials lived up to the occasion, doing everything in their power to prop up the market verbally and most likely more directly too.

USD/CNH, 4-Hour Chart Analysis

Chinese stocks started the day lower due to yesterday’s broad global selloff, and although they surged higher towards the end of the session, erasing their early losses, the main benchmarks remain in steep downtrends on all time-frames, and the Yuan is also very close to its cycle lows.

Shanghai Composite Index CFD, 4-Hour Chart Analysis

The quarterly GDP and industrial production came in slightly below expected, continuing the deterioration of the recent quarters, while retail sales beat the consensus estimate, as the consumer segment is still outperforming.

 While the official numbers are far from disastrous, it’s hard to trust the government statistics, given the history of “controlled” releases, and looking at the unofficial indicators, the country’s economy and financial system are under larger stress than reported.

EuroStoxx50 Index CFD, 4-Hour Chart Analysis

Global stock futures celebrated the Chinese rally for a few hours, but a large chunk of the gains is already gone near the end of the European session, and the focus is back on the Italian budget crisis and the looming Brexit deadline.

The Italian banking sector is under heavy pressure on rumors suggesting increased capital flight from the country and although the Euro is stable, the risk-off trade is well and alive on the Old Continent.

The EuroStoxx 50, which has been performing relatively well form a long-term standpoint failed to leave the vicinity of the spring lows, and the mega-cap index is now threatening to join the long-term breakdown of the DAX after the decline of the past couple of sessions.

US Stocks Rebound as Dollar Rally Pauses

Dow 30 Futures, 4-Hour Chart Analysis

The major US indices opened modestly above yesterday’s closing levels, as Treasury yields settled down following the volatile post-Fed-minutes period. The Dow, the S&P 500, and Nasdaq are all stuck in declining short-term trends, and despite the recent strong bounce, last week’s panic lows are still close.

The Volatility Index (VIX) fell back below 20 today, small caps are performing in line with the broader market, so while we remain bearish form a broader perspective, the immediate outlook for equities is mixed, with no strong divergences before the last session of the week.

Today’s bounce is helped by the better-than-expected earnings report of Procter & Gamble (PG), which opened 6% higher, and the slight pullback Dollar, which got close to its 2-month highs today in European trading. Forex markets, in general, are showing a risk-on bias today, with the Australian Dollar and the Kiwi being helped by the Chinese bounce, and with Pound being stable after yesterday’s selloff.

ChartBook

Major Stock Indices

S&P 500 Futures, 4-Hour Chart Analysis

Nasdaq 100 Futures, 4-Hour Chart Analysis

VIX (US Volatility Index), 4-Hour Chart Analysis

DAX 30 Index CFD, 4-Hour Chart Analysis

FTSE 100 Index CFD, 4-Hour Chart Analysis

Nikkei 225 Futures, 4-Hour Chart Analysis

EEM (Emerging Markets ETF), 4-Hour Chart Analysis

Forex

EUR/USD, 4-Hour Chart Analysis

USD/JPY, 4-Hour Chart Analysis

GBP/USD, 4-Hour Chart Analysis

EUR/GBP, 4-Hour Chart Analysis

AUD/USD, 4-Hour Chart Analysis

Commodities

WTI Crude Oil, 4-Hour Chart Analysis

Gold Futures, 4-Hour Chart Analysis

Copper Futures, 4-Hour Chart Analysis

Featured image from 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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4.6 stars on average, based on 379 rated postsTrader 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.




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Analysis

Ethereum Price Analysis: ETH/USD Coming Towards the End of Triangular Pattern, Breakout is Around the Corner

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  • Ethereum’s Annual Devcon is just under two weeks away, to be kicked off from 30th October – 2nd.
  • ETH/USD price action has been narrowing within a triangular pattern, subject to a breakout.

Ethereum’s Blockchain Upgrade Faces Delay

Just a few days ago, Ethereum’s software upgrade, had a failure, as Constantinople – proposed hard fork did not activate on the test network Ropsten. Ethereum has been planning to implement the Constantinople upgrade in November. However, given the failed attempt seen in the testing stage of the upgrade, this appears to have now shifted plans. The Ethereum infrastructure organization, Infura tweeted: “Due to a consensus issue with the Constantinople fork, Ropsten is currently not usable. The Ethereum dev community is investigating. Until further notice please utilize one of the other Ethereum testnets.”

As a result, the developers at Ethereum had released a patch, to fix the bug problem. An independent developer working on the project, Lane Rettig, commented on the delay, noting that they are investigating the failure to upgrade. Rettig said: “I would expect it to get delayed to 2019.”

Wave IV of Grants Program Distributed for Ethereum Development

Millions of dollars have been distributed by the Ethereum Foundation to projects that are contributing to the development of Ethereum. A full breakdown of the grants distributed can be viewed in their latest blog post. The funds totaling over $3 million, were sent out to 20 individuals and groups, that are working on the Ethereum blockchain.

Ethereum Annual Developer Conference

It is not long now until Etheruem’s Devcon 4, which will be held from Oct 30th–Nov 2nd in Prague.

Devcon is Ethereum’s “family reunion.” It is hosted to educate and empower their community to build decentralized applications, bringing Ethereum protocols, tools, and culture to the world.

The annual conference is for “builders: designers, UX researchers, smart contract devs, blockchain researchers, client implementers, test engineers, infrastructure operators, community organizers, and even artists in the community.”

Technical Review – 4-hour Chart

ETH/USD 4-hour chart

ETH/USD has been stuck trading within a triangular pattern, since mid-September. The price has swung between a low seen around $170 up to a high within $255 territory, within this period.  Over the past three weeks price action has been narrowing. As a result, ETH/USD is moving closer towards the end of the pattern, looking very likely of a breakout. On 15th October, the price saw a large surge in volume, which as a result saw a quick upper wick spike outside of the pattern. However, on the close of that candle, the price was back within the triangle.

Furthermore, resistance to the upside is eyed at $215, the upper trend line of the pattern. A break north will likely see the above supply zone tested again, $250-255 region. Finally, in terms of support, this can be seen at the lower part of the pattern, just below the $200 mark at $197. Consequently, should bearish momentum push for a breach, a below demand zone will likely come into play at $180-165 area.

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 33 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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