Daily Analysis: Stocks Bounce, Pound Surges as Bitcoin Enters Hyperspace

20:59 07/12/2017

Thursday Market Recap

Asset Current Value Daily Change
S&P 500 2636 0.29%
DAX 13045 0.36%
WTI Crude Oil 56.62 1.22%
GOLD 1247.00 -1.61%
Bitcoin 15,300 22.89%
EUR/USD 1.1774 -0.17%

Cryptocurrencies

Bitcoin’s biggest day ever; and that is for an asset that is already known for its volatility and had its strongest rally ever. Probably we are not the only ones shocked by the parabolic rise, but for sure we are experiencing something extraordinary, even if the end of the party is likely a crash that will be a stark lesson for the late bulls of this cycle. As of now, the cryptocurrency market is worth more than $400 billion even as altcoins suffered significant losses amid the BTC frenzy.

BTC/USD, Daily Chart Analysis

Bitcoin passed the $13,000, $14,000, $15,000 and on some exchanges the $16,000 mark in not much more than one day, and it alone got well above the $250 billion level in market capitalization, getting close to the top 10 of the S&P 500 index. The most valuable coin’s dominance is back to levels not seen for around half a year, with almost two-thirds of the market being attributed to it. Anyone who called the top in the last two weeks, including us, has been proven wrong, but the current pace of the rally is definitely unsustainable.

IOTA/USD, Daily Chart Analysis

Stocks and Currencies

Stocks rebounded globally after the recent weaker spell as the Asian sell-off calmed down and tech-stocks regained some of their lost ground. That said, participation in the rally is still weak, Europe and Asia remains well behind the US, so another wave of selling is likely in the coming period, even if the bull market is not in any danger from a technical standpoint. Tomorrow’s US employment report has the potential of changing sentiment, but larger moves are expected in the bond market that has been much more active lately.

Commodities had a mixed session, with oil rebounding slightly after yesterday’s decline, while gold continued to lose ground, dipping below $1250. Industrial commodities were stable following the recent Asian led sell-off, but the short-term technicals remain wounded, and especially copper seems likely to stay under selling pressure.

The Great British Pound remained in the center of attention in the fiat currency world, with the Brexit process still moving the currency in its generally rising trend. The EU and the UK reached an agreement on a very delicate issue regarding the European Court of Justice that boosted the currency today, and the GBP/USD pair got back to the 1.35 level after the recent correction.

GBP/USD, 4-Hour Chart Analysis

Key Economic Releases on Thursday

Time, CET Country Release Actual Expected Previous
2:30 AUSTRALIA Manufacturing PMI 0.11 bill 1.37 bill 1.60 bill
10:30 UK Halifax HPI 0.5% 0.2% 0.3%
15:30 US Unemployment Claims 236,000 239,000 238,000
17:00 CANADA Ivey PMI 63.0 62.7 63.86
18:00 EUROZONE ECB President Draghi Speaks

Key Economic Releases on Friday

Time, CET Country Release Expected Previous
1:50 JAPAN GDP 0.4% 0.3%
Tent. CHINA Trade Balance 231 bill 254 bill
11:30 UK Manufacturing Production 0.1% 0.7%
15:30 US Hourly Earnings 0.3% 0.0%
15:30 US Non Farm Payrolls 198,000 261,000
15:30 US Unemployment Rate 4.1% 4.1%

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