Daily Analysis: Oil Surges on OPEC-Deal Extension as Ripple Tests Highs

Monday Market Recap

Stock markets shrugged off one of the biggest hacker attacks in history as a non-event, despite the broad coverage by the media, as the main global benchmarks opened the week virtually unchanged, with some notable weakness in Europe. Saudi Arabia and Russia provided the news of the day so far, as the two energy ministers announced a 9-month extension of the OPEC’s crude oil production cut, causing an almost 4% rally in oil futures. The deal helped the battered energy segment and commodity-related currencies as well, while the US Dollar got under pressure following the announcement.

WTI Crude Oil Futures, 4-Hour Chart Analysis

Meanwhile, the Chinese market remained stable, despite the weak industrial production data, helping the rally in commodities and related assets. The Euro, the Pound, and the Swiss Franc are all up compared to the USD; while the Yen is drifting lower thanks to the surprisingly positive sentiment. The weak US-ES Manufacturing Index also weighs on the USD, as the economic numbers continue to disappoint across the board. Gold is showing strength once again, as it decoupled from the Yen and got close to the key resistance level near $1240.

Cryptocurrencies

Ripple is still the best-performing cryptocurrency, trading more than 10% higher, just below the key 0.25 level, while the other majors are generally weak. Ethereum and Ethereum Classic are up slightly, but Litecoin, Dash, NEM, and Monero are following Bitcoin lower. Litecoin is down by the most dipping below $27 in early trading. NEM is diverging from Ripple after a period of strong correlation, which might be an indication of further weakness ahead. BTC is still in a volatile correction, although it’s holding up above the crucial short-term support level near $1600, despite the three weeks of parabolic advance since breaking out to new all-time highs.

Ripple, 4-Hour Chart Analysis

Technical Picture

The US financial sector is still showing weakness despite the global rally in stocks, while the S&P 500 and the DOW is still stuck below their recent highs. The short-term resistance in the XLF near the $24 level still holds the lower, although the long-term rising trend hasn’t been in danger so far. The mostly worse than expected economic numbers decreased rate-hike odds recently and that weighs heavily on the segment, as the hikes would boost the profitability of the major banks. This week might be crucial for the sector and the US market, as the divergence between the bullish NASDAQ and the rest of the market will likely resolve.

XLF (US Financial Sector ETF), 4-Hour Chart Analysis

Key Economic Releases on Monday

Key Economic Releases on Tuesday