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Weekly Analysis: The Trump Saga Continues, so does Ethereum’s Surge

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Asset Current Value Weekly Change
S&P 500 2344 -1.44%
DAX 12064 -0.55%
WTI Crude Oil 48.10 -1.39%
GOLD 1243.50 1.07%
Bitcoin 926 -13.57%
EUR/USD 1.0798 0.56%


5 Things to Watch Next Week

  1. The Dollar: Will the weakness continue?

The US Dollar has been in trouble since the recent Federal Reserve meeting, despite the fact that the central bank raised its benchmark interest rate. The rate hike, in theory, should help the currency, but this time, the bank’s cautious outlook, together with the preceding rally in the Dollar, the reaction was the exact opposite. A classic “buy the rumor sell the news” situation.

As the Dollar has been pushing higher against most of the major currencies since the election, there is still more room for correction in the reserve currency.

EUR/USD, Daily Chart Analysis

  1. The US GDP print and the CB consumer confidence Index: The Fed is watching

Arguably the two most important economic releases of the week could have profound effects on financial markets following the latest Fed meeting, as the rate hike schedule of the bank remains a mystery.

  1. Ethereum: New highs ahead?

Ethereum has been the star of the recent period, as it kept on delivering new highs on almost a daily basis. Although the cryptocurrency might be getting overheated, the next week could hold more fireworks for traders. The recent break-out that we correctly anticipated carried Ethereum above the resistance zone that held the currency back all week.

Ethereum on the rise, Daily Chart

  1. Oil: An industry in turmoil

Oil producing countries and companies are spooked once again by the movements of crude oil, as a 3-month long consolidation concluded with a bearish break-down two weeks ago. As US shale production is on the rise and the OPEC, especially Saudi Arabia, is cornered by the new market pressures, it’s likely that oil will experience violent moves in the coming days.

  1. Trump: Will there be a healthcare deal?

The media covered the Republican Party’s debate regarding a new healthcare bill that supposed to replace “Obamacare”. The new president was forced to retreat at the end of the week, pulling the bill ahead of a risky vote. It’s hard to imagine that Mr. Trump will not try to reach a deal again in the near future. We expect continued focus on the story, although the real impact of the bill on financial markets is questionable.

In Focus: Cryptocurrencies

 

The performance of the main cryptocurrencies in March

March has been a very active month for cryptocurrencies so far, and while Bitcoin had a highly volatile and mixed period, some of the other majors gained significant ground. Ethereum and Dash surged higher more or less in tandem, bagging close to 200% in just three weeks. Monero is also on the rise with a commendable 60% gain.

The recent week was Ethereum’s without a doubt, as Dash and Monero remained below their previous highs and Bitcoin plunged back below 1000 on Friday. Litecoin has been the most stable of the major cryptocurrrencies, although the 8% gain could be interpreted as a positive sign, given the weak performance of Bitcoin.

Monthly trading volumes reflect the price action, as Ethereum has experienced a huge jump in interest and Dash also so significant inflows.

Currency Weekly Volume Monthly Volume
Bitcoin 2116 9325
Ethereum 929 3796
Dash 181 919
Monero 69 319
Litecoin 36 180

 

Key Economic Releases of the Week

Day Country Release Expected Previous
Monday EUROZONE German Ifo Business Climate 111.2 111
Tuesday US CB Consumer Confidence 113.9 114.8
Wednesday US Pending Home Sales (monthly) 2.30% -2.80%
Wednesday US Crude Oil Inventories   5.0 million
Thursday GERMANY Prelim CPI 0.40% 0.60%
Thursday US Final GDP 2.00% 1.90%
Thursday US Initial Jobless Claims (weekly) 244,000 261,000
Friday GERMANY Retail Sales 0.70% -0.80%
Friday UK Current Account -16.3 bil -25.5 bil
Friday UK Final GDP (quarterly) 0.70% 0.70%
Friday CANADA GDP (monthly) 0.30% 0.30%
Friday US Chicago PMI 57.2 57.4

 

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 294 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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4 Comments

  1. mvppvm_07

    March 26, 2017 at 5:31 pm

    Re: summary of cryptos. Any aggregated analysis out there on the demographics of the volume by type, country or timing? Thnx for any insights.

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Analysis

Stocks Mixed as Dollar Tests Highs Again

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Choppy summer trading conditions continue to dominate traditional financial markets, with low train volumes and relatively narrow intraday ranges in most of the asset classes. Despite the low activity, there is still a clear rising trend in US markets, while the rest of the world tries to gather some bullish momentum despite the widespread technical relative weakness.

Trump’s controversial meeting with Putin still made the most headlines, although stocks largely ignored the story, while trade war fears and the Brexit drama had much stronger impacts, with especially the Pound performing weaker than its peers.

Dow Futures, 4-Hour Chart Analysis

The Nasdaq is still trading just below its all-time high, despite today’s weaker session, while the S&P 500 hit another marginal 5-month high today, with the Dow still lagging behind the rest of the market. The ongoing earnings season also adds to the choppiness of the day-to-day price action, and with the deep global divergences still present, we remain defensive towards equities here.

Shanghai Composite, 4-Hour Chart Analysis

Asian equities experienced a bounce in the last couple of weeks, but China which has been the epicenter of the weakness in June is still struggling to join the move. The trade-war torn Shanghai Composite is still trading near its recent lows, confirming the bear market, while the Yuan hit new 12-month lows compared to the USD in the last couple of days again.

Commodities Mixed as Yuan Tumbles but Dollar Rally Looms

Emerging market currencies are generally under pressure, and the Dollar has been pushing higher against its major peers as well today, with the Great British Pound and the Euro both sliding towards their June lows, and the Yen hitting a new year-to-date low before the afternoon pullback in the Greenback.

Dollar Index, 4-Hour Chart Analysis

The Dollar’s rally, which was boosted by the lower than expected British CPI release in European trading paused somewhat in late trading, after the Dollar index got close to its 1-year high. The US housing market showed a huge drop in activity in July, with Building Permits disappointing and Housing Starts falling off a cliff unexpectedly. The rising yields, which are behind most of the moves this year, are talking a tall on the segment, and that could be a major drag on GDP growth in the coming quarter.

Gold Futures, 4-Hour Chart Analysis

Commodities posted a reversal-like performance today, with gold, oil, and copper all rebounding off their early lows, but for now, the bearish short-term trend remains dominant in the segment. The bounce in gold still left the precious metal below short-term resistance at $1240, while copper is still bouncing around just above long-term support. WTI Crude Oil which lost more than 10% in a matter of days, found support at $66 per barrel, entering a consolidation phase after the rout.

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 294 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

Technical Analysis: BTC/Tether

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Tradingview is a web application that allows full charting abilities for free. Different online brokerages have different charting abilities and tools.  Using tradingview.com, I was able to utilize Fibonacci zones with the following levels: 23.6%, 38.2%, 50.0%, 61.8%, and 100.00%. I did not set support or resistance levels because they are irrelevant to this analysis. Using indicators such as volume, moving-average convergence divergence (MACD), and Relative Strength Indicators, we are able to predict the movement in the price of Bitcoin relative to Tether. One Tether (USDT) is equal to one U.S dollar, give or take 3 cents.

This 3 day analysis uses price movements plunging into the 61.8% Fibonacci zone to trigger a buy signal. From there, we verify the buy signal with the MACD indicator below the chart. Notice how the MACD looks like a sell signal, but in fact goes back negative. Moving from a negative spread to a positive spread, triggers the buy signal as the price bounces off of the 61.8% Fibonacci level.

Following the next two days, I conducted another analysis using the same strategy. This time I inserted a support where three touches occur in the price.  Bitcoin’s price took a dive on volume pointing to a massive selloff. We were able to capitalize on this by waiting until the price crossed the Fibonacci barrier into the 61.8% zone. From there, the MACD spread checked out at -8.68. A buy signal was created and we waited until the price neared the top of the 50.0% zone.

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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1 stars on average, based on 1 rated postsMichael Genna works in Business Development at Benzinga, a financial media and technology company located in downtown Detroit. He attends Wayne State University, majoring in finance with a minor in economics.




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Analysis

Ether Price Has a Good Chance of Rising Further

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On Wed July 18, Ether is falling, although the previously formed local uptrend still looks quite sustainable. The crypto is trading around $498, says Dmitriy Gurkovskiy, Chief Analyst at RoboForex.

Today’s morning, Ether rose above $500, which helped to determine the next important resistance levels. The bullish trendline at $480 that was formed yesterday is now confirmed on H1, and in case Ether is able to go above $500 shortly, its chances for going further up will increase.

Once Ether continues rising, it will quickly reach $525, and the current support levels will go above, too. As of now, Ether has some potential to rise till $550, according to D1.

For now, the key support for Ether is at $480, and once the crypto heads up, a new support at $500 will get active. $525 is still key resistance for now. The MACD is going up on D1, still in the negatives, and is issuing a buy signal, while the Stochastic confirms it, being in the positive territory.

ether

Among fundamentals and events that are important for Ether traders, one can mention the addition of Bitcoin and Ether to Purple Group. The company believes its customers will now have more freedom in selecting payment methods for running their transactions.

Another important news item is that the brokers using MT4 began offering cryptocurrency trading (at first, only Bitcoin, but then other cryptos were added). In most cases, the clients can trade CFD’s, although some brokers allow direct cryptocurrency transactions, too. This is a very interesting opportunity, as the investors trust MT4 and consider it a secure platform, so crypto trading added to it will be trusted, too.

With more products added to the platform, both direct crypto trading and CFD’s, more people will come to MT4 in order to try it. This is positive for both Ether and other altcoins.

 

Disclaimer:

Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.

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 4 rated postsHaving majored in both Social Psychology and Economics, Dmitry went on to continue his education in post graduate. He then worked as a team lead of a tech and fundamental analysis lab in the Applied System Analysis Research Institute. This helped him to acquire all necessary skills and experience to become a successful trader and analyst, as well as a portfolio manager in an investment company. Dmitry is a pro in the financial field who authors articles for various international media. He also holds the position of Chief Analyst at RoboForex.




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