Yesterday’s Market Wrap
The USD decline stopped in December and we saw a consolidation in most assets during the last month, but it resumed again on Friday last week after the fall in contraction in US ISM services, which should slow the FED hikes. On Tuesday we saw another decline in the USD, while risk assets rallied higher, but yesterday most major currencies traded sideways, as we await the US CPI (consumer price index) inflation report for December to be released later today.
The Australian consumer inflation posted an increase in December, beating expectations as well, while prices are falling elsewhere. Stock markets pushed higher still, after opening with a slight bullish gap in the morning. Crude Oil also showed some decent bullish momentum yesterday, despite the huge buildup in EIA inventories, which was already anticipated as refineries closed in the US due to extreme cold weather in the previous week.
Today’s Market Expectations
Today started with the Chinese CPI consumer inflation which showed a 2-point increase in December, but at 1.8% it still remains under control. Later on, the US consumer inflation report will be released. The headline CPI YoY is expected to slow down to 6.5% from 7.3% in November, which would relieve some of the pressure from the FED to keep tightening. The core CPI MoM is expected to show a 0.1% decline, but core CPI MoM is expected to increase from 0.2% to 0.3% in December, which shows that prices are still increasing despite the cool-off in energy prices.
Yesterday the volatility was low again but most markets apart from indices were uncertain, so there was action in both directions. We opened six trading signals, closing the day with three losing and two winning signals, while one still remains open.
Keeping Long in GOLD
Gold continues to remain bullish as it pushed toward the major level at $2,000, although yesterday we saw a retreat ion the European session. We opened three buy Gold signals, one of them closed in profit before the retreat, one closed in loss during the retreat and the last one we opened after the retreat ended on the H1 chart as the 100 SMA (green) provided support.
XAU/USD – 60 minute chart
USD/CHF Overbought at the 200 SMA
USD/CHF has been on a bearish trend and we have been selling this pair, but yesterday we had a losing signal here as the price surged higher. The warm weather in Europe has lowered energy prices. but buyers ran into the 200 SMA (purple) on the H4 chart, which is acting as resistance. So, we are thinking about opening a sell forex signal here.
USD/CHF – 240 minute chart
Cryptocurrencies continue to show buying pressure since the very last days of last year and they have been crawling higher. This week we have seen some decent buying pressure as risk sentiment turns positive on climb US data, while the USD is declining. Yesterday the USD traded mostly sideways, but crypto coins continued to surge despite that.
MAs continue to Support BITCOIN
Bitcoin reversed higher by the middle of December and moved above moving averages earlier this week. Now those moving averages have turned into support on the H1 chart, with the 50 SMA (yellow) holding the dip yesterday and the buying momentum has picked up, so our buy BTC signal is heading toward the take profit target.
BTC/USD – 60 minute chart
ETHEREUM Leaning on the 20 SMA Again
Ethereum crashed lower by the middle of December as the sentiment turned positive after the last central bank rate hikes back then, but has been bullish for more than a week. Moving averages are providing support during retraces lower with the 20 SMA (gray) holding on the H4 chart. Now Ethereum is above $1,300.