Yesterday’s Market Wrap
The USD started to reverse higher at the end of last week after being on a retreating period for several weeks and on Monday we saw a continuation of the bullish momentum on the USD, as China pushed for further coronavirus restrictions and lockdowns during the weekend, hurting risk sentiment in financial markets. Yesterday that stopped and the USD retreated lower, while risk sentiment improved somewhat.
Stock markets ended the day higher, especially US equities, as did commodity Dollars. In Japan, we saw a jump in core consumer inflation CPI from 2.0% to 2.7% which comes after Shinzo Abe’s murder while retail sales in Canada came out negative, although that didn’t stop the CAD from advancing against the USD as crude Oil also advanced higher after the rollercoaster ride on Monday.
Today’s Market Expectations
Today the economic calendar is full of events, having started early this morning with the Reserve Bank of New Zealand raising interest rates again for the ninth time in a row, this time by 75 basis points (bps) to 4.25% as it increases the pace, probably before slowing down. European manufacturing and services PMI reports were released this morning showing that these sectors remain in contraction. Later we have the US manufacturing and services reports, with services expected to remain in contraction while manufacturing activity is expected to fall in stagnation at 50.0 points this month.
On Monday we had a great day with our forex signals as the USD advancement continued, so we closed the day with 6 winning signals. We remained long on the USD but the bearish reversal yesterday caught us on the wrong foot with several signals, although we also had some long term winning signals.
Selling GOLD at the 50 SMA
Gold has been on a strong surge earlier this month as the USD retreated lower. Although the climb has stopped and Gold has been retreating since late last week, with the 20 SMA (gray) turning into resistance in the H4 chart. We opened a sell Gold signal at this moving average yesterday as it was rejecting the price.
XAU/USD – H4 chart
Buying USD/JPY Again at the 50 SMA
USD/JPY crashed lower early this month as the USD retreated down and sentiment improved, but has been reversing higher since last week. The 50 SMA (yellow) has turned into support on the H1 chart and we decided to open a buy forex signal here yesterday after the retreat.
USD/JPY – H1 chart
Cryptocurrencies turned bullish in October as risk sentiment improved but the bullish momentum has ended. They have turned bearish on the FTX news and after the bearish move earlier this month, yesterday we saw another decline, which sent them to the lows from early November, as the sentiment turned negative.
MAs Keeping [[Bitcoin] Bearish
Bitcoin retested the lows on Monday after turning bearish earlier this month as it fell to around $15,600 from $22,000 after the bankruptcy of FTX exchange. The price consolidated for a couple of weeks, but the decline resumed again as the 50 SMA (yellow) caught up with the price on the H4 chart and on Monday sellers retested the previous low, which held. We saw a bounce yesterday, but the 20 SMA (green) stopped the climb.
BTC/USD – H4 chart
ETHEREUM Falling Below $1,200 Again
The FTX bankruptcy sent Ethereum crashing lower and despite attempts to turn bullish, sellers still remain in control. There was a consolidation here for a few weeks as well, but the 200 SMA (purple) caught up on the H1 chart and pushed the price lower. On Monday ETH/USD fell below $1,100 again but yesterday we saw a reversal, so buyers are still alive.