Daily Technical Analysis by XtreamForex

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BITCOIN CASH, LITECOIN AND RIPPLE DAILY ANALYSIS – 10/07/18

It’s been a bearish start to the day, with Monday’s late sell-off continuing into the early hours of this morning to test investor resolve. Some recovery is to be expected, though whether resistance levels can be tested remains to be seen.
Bitcoin Cash in the Hands of the Bears
Bitcoin Cash fell by 2.68% on Monday, following on from Sunday’s 3.31% slide, to end the day at $729.

Upward momentum through the first half of the day saw Bitcoin Cash move through to $750 levels, following an early dip to sub-$740 levels, before pulling back through the second half of the day, with Bitcoin Cash falling through the first major support level at $730.1 to an intraday low $725.7 late in the day.

A spike ahead of the day’s low saw Bitcoin Cash briefly strike $760 levels with an intraday high $761.9 that fell short of the day’s first major resistance level at $774.1 and saw Bitcoin Cash fail to hit $800 levels for a 5thconsecutive day.
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AUD/USD PRICE FORECAST – AUSTRALIAN DOLLAR RALLIES TO START THE WEEK

The Australian dollar rallied to start the week, reaching towards the 0.75 level which of course is always going to be psychologically important. Beyond that, there is structural support and resistance at that level, so I think that it’s likely that we will continue to see this area cause a bit of a reaction.

The Australian dollar rallied significantly during the day on Monday as traders came back from the weekend, but the 0.75 level continues to be major resistance. I think it’s going take a significant amount of bullish momentum to finally break above that level, and I don’t consider it broken until we break above the 0.75 level on a daily close. Until then, I think that short-term traders will continue to push and try to break out to the upside, but if we were to turn around and break below the 0.7450 level, it’s likely that the Australian dollar will rollover and go looking towards the 0.74 level.
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GOLD PRICE PREDICTION – PRICES MOVE HIGHER AS MOMENTUM TURNS POSITIVE

Gold prices moved higher on Monday but close off session highs. Prices were buoyed as the Euro initially generated gains following the stronger than expected German trade surplus. Solid exports busted the Euro which paved the way for higher gold prices. This comes despite Friday’s stronger than expected payrolls report, which saw U.S. yields drop weighing on the dollar.

Gold prices bounced near support at the 10-day moving average at 1,253. Resistance on the yellow metal is seen near the 50-day moving average at 1,287. Momentum on gold prices has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line).
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BITCOIN AND ETHEREUM PRICE FORECAST – BTC PRICES SLIDE

The prices have come under pressure, though for no specific fundamental reason, and this continues the range and consolidation in this market.
The BTC prices fell back into range and as we have been saying many times over the last few days, this is likely to continue in the short and medium term as well. We do not find any reason for the prices to make a breakout on either side of the range and hence the prices are only going to consolidate in the coming days. The prices are back below the $6500 region and though there might be a temptation to find a reason for the fall, we would advise our readers to not to try and look at it too much as this has been the case over the past several weeks. The market has become settled more or less over the last few weeks and we are seeing increasing signs of maturity, unlike the same time last year where even little bits of news were met with the prices moving up very quickly or moving down very quickly as well.
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S&P 500 PRICE FORECAST – S&P 500 CONTINUES TO BUILD UPWARD PRESSURE

The S&P 500 market has drifted a bit higher during the trading session on Tuesday, reaching towards the 2800 level above. I think that the market is trying to build up enough momentum to finally break out above there, but it’s going to take quite a bit of bullish pressure to do so.

The S&P 500 has gone a little higher during the trading session on Tuesday, as it looks like we are ready to reach towards the 2800 level. I think that if we can break above that level, it’s likely that we are going to continue to go higher. Short-term pullbacks are buying opportunities, and with that being the case it’s likely that the 2770 level underneath will offer support, and most certainly the 2750 level will as well.

If we do break above the 2800 level, the market is very likely to go higher, perhaps reaching towards the 2850 level over the longer-term. The S&P 500 will of course offer buying opportunities on these dips as the market certainly favors the upside overall. That’s not to say that it will be easy, but I think eventually we will go higher. Ultimately, the S&P 500 is a great barometer on the global market risk appetite, which seems to be doing a bit better over the last several days. The jobs number last week of course helped, so I think that the S&P 500 will continue to find plenty of value hunters on dips.

I have no interest in shorting whatsoever, and I believe that it is only a matter of time before being patient will offer a nice opportunity to take advantage of a strong trend. We’ve heard a lot of “doom and gloom” when it comes to the stock markets, but the resiliency is obvious.
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AUD FALLS ON CHINA GDP AS NBS SEES EXTERNAL UNCERTAINTIES AHEAD

TALKING POINTS:
Australian Dollar depreciates despite solid Chinese second quarter GDP
Weaker industrial production amidst US Chinese import tariffs hurt AUD
China’s NBS does see more external uncertainties for the economy ahead
The Australian Dollar depreciated against its major counterparts despite some relatively solid Chinese second quarter growth statistics. China’s economy expanded 6.7% y/y which was in line with expectations and slower than the 6.8% growth seen in the first quarter. Quarter-over-quarter, China’s GDP was 1.8%. This was better than the +1.6% estimate and up from 1.4% prior.

Overall, these economic growth statistics were largely as expected and nothing extraordinary out of the realm of possibilities. Yet, what could have caused some weakness in the Aussie Dollar? And for that matter, the New Zealand Dollar as well? Look no further more than the industrial production figures which also crossed the wires simultaneously with the GDP data.

In June, Chinese industrial production increased only 6.0% y/y versus 6.5% anticipated and 6.8% in May. That was the weakest outcome since March and continues a trend of slowing expansion since April. Perhaps the tariffs US applied on China could be having some effects here. In fact, accompanying the slew of data were some comments from the National Bureau of Statistics of China.
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AUD/USD AND NZD/USD FUNDAMENTAL DAILY FORECAST – TRADING SLIGHTLY BETTER AHEAD OF SLEW OF CHINESE ECONOMIC DATA

Look for the return of volatility at 0200 GMT when China releases its economic reports. GDP is expected to come in at 6.7%, down slightly from 6.8%. Fixed Asset Investment is expected to come in at 6.0%, down slightly from 6.1%. Industrial Production is estimated to have risen 6.5%, down from 6.8%. Retail Sales are expected to come in at 8.8%, up from 8.5%. Last month’s Unemployment Rate was 4.8%.
The Australian and New Zealand Dollars are trading slightly higher early Monday as investors await the release of a slew of economic data from China. The data includes reports on Gross Domestic Product, Fixed Asset Investment, Industrial Production, Retail Sales and the Unemployment Rate. There will also be a NBS Press Conference. The reports are expected to be released at 0200 GMT.
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BITCOIN AND ETHEREUM PRICE FORECAST – BTC PRICES SURGE

The prices have surged higher due to support from some large investors and the improvement of fundamentals in the market.
The BTC prices have got a boost over the last 24 hours and now the bulls are beginning to look quite threatening. The prices have been buoyant over the last week or so when compared to the previous weeks and over the last week, we have seen the prices make a move to push through the $6800 region a couple of times as well. They have been rejected so far but the point to note here is that the correction following the rejection has been pretty slow and shallow and the rebound has been quick and strong which shows that the bulls are slowly beginning to take control of the market. But the prices are still below the important resistance region of $6800 and this region is going to witness a huge battle between the bulls and the bears for control.
BTC Prices Looking to Break Range
The push higher has come due to some strong buying from some large investors and also with the reports of the entry of some large investors into the crypto market. We also saw that the tie taken for mining between 2 blocks of BTC took almost an hour and this has led to a slowdown in the mining and with the supply getting limited, the natural consequence of that is the fact that the prices have to move up and this is what we saw yesterday. But though the prices have risen, as long as there is no breakout from the range, the bears continue to be in control and the bulls have to do a lot more to take control but we are going to see soe interesting price action ahead.
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GOLD PRICE FORECAST – GOLD SLUMPS AFTER INITIAL RALLY ON MONDAY

Gold markets initially rallied during the day, reaching towards $1245 level before finding sellers again. Now that we have broken down after that initial rally, it looks as if there is still bearish pressure in the Gold markets that could come into play.
Gold markets initially rallied to start the week, but ran into trouble at the 50 hour EMA, one of my favorite indicators. The slope of the moving average is lower, and it certainly looks as if the $1245 level is offering short-term resistance. However, I do see that there is a certain amount of demand near the $1238 level, so while I do think that we continue to go a bit lower, I think that it is a slow descent that we are probably going to see.

Keep in mind that the US dollar has its part to play, so if it starts to strengthen, that will put bearish pressure on gold as well. I believe that the currency markets will continue to be very noisy, and with interest rates rising in the United States, it’s very likely that Gold will continue to struggle to make longer-term gains, at least at the moment. I believe that we will eventually see a turnaround, but I think it’s probably closer to the $1200 level where the longer-term players come into put money to work.

Market participants continue to be very erratic, because there are a lot of different moving pieces out there that can move precious metals in the greenback, not the least of which would be trade tensions, and of course the Brexit. Ultimately, I think that gold will find value hunters, but it’s probably not in this neighborhood quite yet. I believe that the $1250 level above would be resistance as well.
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FX WEEK AHEAD: CAD, GBP, JPY, AND NZD INFLATION; AND AUSSIE JOBS

Talking Points:

– Data releases are thinning on the calendar this week, with speeches from central bank policymakers making up three of the remaining eight ‘high’ rated events through Friday.

– Inflation data in focus this week with New Zealand (Monday), British (Wednesday), Japanese (Thursday), and Canadian (Friday) CPI reports due out in the coming days.

– The June Australian labor market report (Thursday) is the only non-inflation ‘high’ rated data release due the rest of the week.

New Zealand is due to see a meaningful rise in Q2’18 inflation figures, lifted by the base effect from higheroil prices as well as a weaker trade-weighted New Zealand Dollar year-over-year. As a result, we’re looking for the Q2’18 New Zealand CPI figure to come in at +1.6% from +1.1% (y/y), the first rebound in three quarters. Nevertheless, inflation is due to remain below the RBNZ’s medium-term target of +2%,leaving little opportunity for 2018 rate hike expectations to rebound in a meaningful way. Currently, rates markets are not pricing in any RBNZ policy tightening in 2018; instead, a 10% chance of a 25-bps rate cut is priced-in for December 2018.

A consensus forecasts are calling to see inflation having increased by +0.2% from +0.4% (m/m) and by +2.6% from +2.4% (y/y). Core CPI is expected to have stayed on holdat +2.1% unch (y/y). The report is expected to show the first tick higher in headline inflation since November 2017 (when it moved from +3.0% to +3.1% (y/y)). Now that Bank of England policymakers are embracing the point of view that the Q1’18 growth slowdown was transitory, signs are pointing to a 25-bps rate hike in August. According to overnight index swaps, rates markets are pricing-in 91% chance of a hike next month. As such, given the limited upside in pricing in a hike, a miss could leave a bigger impact on GBP-crosses than a beat.
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