Cryptographic update: Bitcoin drives weekend recovery while consolidation continues

December 2, 2018 Bitcoin

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Friday Market Snapshot

Well	Current value	Daily change
S & P 500	2,752	0.36%
DAX 30	11,257	-0.36%
WTI Crude Oil	50.62	-1.25%
GOLD	1,220	-0.29%
Bitcoin	3,967	-6.63%
EUR / USD	1.1311	-0.71%

Traditional financial markets have become unstable as expected before the event that could shape the coming months in most asset classes. The G20 summit and the Trump-Xi meeting, in particular, will probably have a profound effect on stocks, currencies and bonds, and with an almost unpredictable outcome it is not surprising that many traders have taken a step back before # 39; event.

Global equities have changed little despite a very weak European session which also saw a significant decline in the euro, although we are seeing a slight bearish stance on Wall Street. Even currencies and commodities have changed little, with even the still volatile crude remaining in yesterday's range.

EUR / USD, 4 hour chart analysis

The weakness of the euro is the most interesting intraday trend of the day, as the common currency has almost returned the gains accumulated following the accommodating speech by Fed chairman Jerome Powell two days ago. EUR / USD is back near the 1.13 level and even the broader dollar index is approaching its recent 16-month high, as the greenback is also against the yen, the second largest index of the dollar. # 39; s index.

Excluding an agreement between the United States and China, which would probably lead to an increase in risk assets, the broad dollar trend is expected to continue, but an agreement would probably lead to a correction, also, as we believe, the rise the fundamentals are still clearly on the side of the reserve currency.

Futures S & P 500, analysis of the 4-hour chart

The main US indices are slightly below yesterday's levels, although they recovered well from the nightfall caused by weakness in Europe. Trading is very light ahead of the important summit, with benchmarks trading at near or near resistance levels, clinging to most of the weekly earnings.

Even today, Treasury securities are stable, although credit markets continue to show signs of distress in the high yield segment, even if yields are close to their maximum of several months, especially in the long segment of the curve. All in all, only US stocks show the impact of Powell's speech, as the dollar's weakness has evaporated and returns are close to pre-talk levels.

The volatility of the shares remains high, confirming a broad risk-off shift

VIX (US volatility index), 4-hour chart analysis

We noted the possible variation of the regime in the US Volatility Index (VIX) in October, and after two months of hectic exchanges, the signals still point to a new era of risky activity, with the VIX holding close to the 20 level. widely observed.

While the VIX could head south in December, in the illiquid holiday market, we expect that regime change will persist, even in the event of a large-scale risk increase following a possible trade agreement between the United States and China. With this in mind, all advances should be treated as stock selling opportunities, and the VIX will probably not return to its pre-correction levels for a long time.

WTI Crude Oil, analysis of the 4-hour chart

In addition to equities and the dollar, oil is likely to see the greatest number of assets next week, since following the G20 meeting, which in itself could cause large fluctuations in the price of the crucial commodity, the 39; OPEC will hold a meeting on Thursday.

The WTI contract fell again below $ 50 a barrel once again today before another decided rally attempt, but it is still clearly in the strong downtrend that has remained intact since the beginning of October. If Saudi Arabia and Russia agreed on a reduction in supply before the OPEC meeting, oil could finally break the trend line and enter a stronger correction , even if the fundamentals remain weak for Black Gold.