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Forex Signals Brief for November 11: Risk Sentiment Soars After Softer US CPI

Yesterday’s Market Wrap

The US Dollar has been showing weakness recently as central banks start to slow down with rate hikes and the risk sentiment improves, benefiting risk assets. Although during the European session yesterday the USD was making a comeback ahead of the US CPI (consumer price index) report, which shook the markets.

Traders went into the inflation report with a binary “one way or the other” mindset. If numbers came in strong the USD would go up as the FED would remain hawkish, while stocks would go lower, as well as commodities. But the  CPI number was weaker than expectations coming in at 7.7% against 8.0% expected, down from 8.2% previously. So the USD tumbled lower, as did rate expectations, while all other assets surged higher.

Today’s Market Expectations

Today the UK GDP report for September was released earlier, showing another month of contraction, which suggests that the UK economy is falling into a recession, after the contraction in August. The Q3 GDP numbers also came in negative which confirms the recession scenario. Later on, the EU economic forecasts will be displayed while in the US session the prelim UoM consumer sentiment is expected to cool off too.

Yesterday was a rough day for traders, as we saw a sudden surge in most assets after the USD CPI inflation report, while the USD crashed lower. The USD was progressing in the European session so we opened a couple of buy signals, but then it reversed quickly and crashed lower, so we ended the day with two winning and three losing signals.

The 200 SMA Turns Into Resistance for USD/JPY 

USD/JPY has been on the strongest bullish trend ever this year as the FED keeps raising interest rates pretty fast while the Bank of Japan is keeping everything on hold, with inflation being under control there. Although, we were seeing highs get lower after the intervention from the BOJ and yesterday we saw a big crash that sent this pair from 146.60 to 140.20, hitting the stop loss of our long term buy signal.

USD/JPY – 240 minute chart

Catching the Spike in GOLD Again

On Thursday last week Gold reversed higher and on Friday Gold surged higher to $1,680, but buyers were hesitating at that previous support. On Friday though we saw a big surge and Gold surged above $1,700 where it consolidated. Yesterday we decided to open a long term buy signal after a small retreat overnight and booked profit during the spike after the US CPI report.

XAU/USD – 15 minute chart

Cryptocurrency Update

The nice bullish run in the crypto market has ended with a crash and FTX was forced to sell off. FTX halted withdrawals and then sold off to Binance, with FTX’s token FTT falling below $2. We decided to open a buy signal in Ethereum on Tuesday evening after the crash stopped, but yesterday it resumed again, so cryptocurrencies remain bearish.

 ETHEREUM Trying to make A Quick Reversal?

Ethereum pushed higher in the last two weeks as the sentiment in the crypto market remained positive after Elon Musk purchased Twitter, making higher lows and pushing above $1,660. Although the 200 SMA (purple) held as resistance and yesterday we saw a sudden reversal, which initially stopped at $1,430, but resumed again and pushed ETH/UD down to $1,070. Although yesterday we saw a reversal which pushed ETH above $1,300.

ETH/USD – Daily chart   

 Can BITCOIN Overcome the 20 SMA?

Bitcoin was trading in a rage above and below $20,000 for a few months, but the range was broken as buyers took control but the FTX event sent cryptos crashing and Bitcoin Fell to $15,500. Although, it reversed higher yesterday and gained around $2,000, but it is facing the 20 SMA (gray) on the H4 chart.

BTC/USD – Daily chart

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