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Analysis 10.10.2017 : Pound Rises as Bitcoin Hits $4800

Monday Market Recap

AssetCurrent ValueDaily Change
S&P 5002540-0.16%
DAX129760.15%
WTI Crude Oil49.520.47%
GOLD1287.000.97%
Bitcoin48786.59%
EUR/USD1.17520.17%
Financial markets are very quiet today, with only a few assets showing increased activity. The Catalonian crisis is in the center of attention, but there is no decisive change in the situation of the region, as it still looks likely that tomorrow the local government will announce independence. From there, there are several scenarios, and some of them are in the hard negative category for the markets. That said, equities are generally unchanged, with only the recently surging small caps drifting meaningfully lower on very low volume.
Russell 2000, 4-Hour Chart Analysis
The Great British Pound regained some of its recent losses, as we speculated, with the currency advancing against all of its major peers. Turkey got in the spotlight as well, thanks to the diplomatic standoff with the US, and the Turkish Lira got smacked lower after a long period of stable prices. Gold is the other major mover, as the precious metal finally found some footing after dipping below the key $1275 level, with the rally in it being somewhat overdue. As equity markets are still in a deeply overbought state, we wouldn’t be surprised on more upside in safe-haven assets in the coming weeks, and that trend could carry the Yen higher too.
USD/Turkish Lira, Daily Chart Analysis

Cryptocurrencies

The crypto segment is two-faced today, with Bitcoin shining bright, but altcoins getting a beating, especially towards the end of the session. The major story behind the restructuring of the market is the exponential nature of the SegWit adoption that made the most valuable coin more attractive relative to the other major coins. That coupled with the size and adoption advantage of the BTC network is driving the price of the coin.
The rapid fall of Bitcoin Cash is a clear sign of the trend, but we expect the other majors to recover from the current sell-off, as the boom in the segment continues. Ripple has been rallying together with BTC, but it entered overbought territory and started a short-term correction after touching $0.28. NEO and IOTA remain the most volatile coins, while the previous leaders of the market, Dash, Monero, and Litecoin continue to lag the other majors.
BTC/USD, 4-Hour Chart Analysis

Technical Picture

The NASDAQ followed the broader market higher, although slightly lagging the other major indices, and it also got overbought in the process before the end of last week. The benchmark is now showing signs of rolling over, as the MACD indicator is showing a bearish cross in the overbought zone. The tech segment might be ready to test the rising trendline, and a deeper correction could also be in the cards, especially given the overvaluation in US equities. Primary support is found just above 6000, with further levels at 5900, 5800, and 5725
NASDAQ, 4-Hour Chart Analysis

Key Economic Releases on Tuesday

Time, CETCountryReleaseExpectedPrevious
2:30AUSTRALIANAB Business Confidence–5
10:30UKManufacturing Production0.3%0.5%
10:30UKGoods Trade Balance-11.2 bill-11.6 bill
14:30CANADABuilding Permits-0.9%-3.5%

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