Yesterday’s Market Wrap

Yesterday many were waiting to see if the Chinese service sector came out of contraction after diving deep in April, as lockdowns returned again in the Shanghai region. But, despite an improvement last month, this sector remained in deep contraction, which is a negative thing for risk sentiment. Nonetheless, crude oil continued higher above $120 in the Asian session, showing that there is someone who wants oil higher and is buying the dips.

Risk assets were bullish during the European session, with the USD retreating against most major currencies apart from the JPY, while stock markets made some gains. But the sentiment reversed in the US session and risk assets gave back the gains.

The Data Agenda Today

Japanese cash earnings and retail sales were released before the big event today which was the rate hike by the Reserve Bank of Australia. This was the second 25 bps rate hike from the RBA after the one in May, although some economists were expecting a 40 bps rate hike. The Eurozone Sentix investor confidence remained negative at the same levels this month, while later on, we have the trade balance and Ivey PMI reports from Canada.

Forex Signals Update

Yesterday we opened several forex signals, a Gold signal, and a cryptocurrency, selling the jump in Cardano. The forex trades didn’t go well, so we closed the day in loss, but we will surely make up for it during the week, as markets begin to take direction.

USD/CAD – Sell Signal

This forex pair has been bearish since the USD retreat started in the middle of May. It has fallen below moving averages which are working as resistance on the H4 chart. We decided to open a sell signal last evening after the retrace higher to the 20 SMA (gray) which has acted as resistance lately, showing that the decline has picked up pace.   

USD/CAD – 240 minute chart

USD/JPY – Sell Signal

USD/JPY has been on a bullish trend for two years but in March the uptrend picked incredible pace as the conflict in Ukraine escalated and this pair pushed above 131. We have opened many buy signals during March and April but last month we saw a pullback. Although the pullback is over now and we are bullish again on this pair after the price has moved above moving averages. Yesterday we decided to open a sell forex signal below the previous resistance level around 131.30-40, but there was no rejection and buyers pushed the price through it without problems.

USD/JPY – 240 minute chart

Cryptocurrency Update

Cryptocurrencies have been bearish since November last year and in early May we saw another leg down as sellers pushed down after the crash in Terra LUNA. But for about a month we have seen the crypto market consolidate, although there have been two bullish attempts, with the last one taking place on Sunday evening, and we are trying to pull a trade from this opportunity.

BITCOIN -Holding Gains Below Resistance

After trading sideways for a month, cryptocurrencies had a bullish attempt at the very end of last month, with Bitcoin bouncing above $30,000 again, but the resistance zone above $32,000 rejected the price and on the first day of this month BTC reversed down again. This time it seems like BTC is holding the gains while most other cryptocurrencies including Ethereum, are already giving back gains.

BTC/USD – 240 minute chart

Shorting Cardano at the 50 SMA?

ADA/USD has been bearish since September last year when it released the Alonzo upgrade, although it took some time for it to become functional and launch auctions. During this time, moving averages have been acting as resistance on the daily chart, with the 50 SMA (yellow) taking over recently, where we opened a sell signal in Cardano yesterday.

Buyers gave up at the 20 SMA again