Forex Signals Brief for August 11: Is US Consumer Sentiment Improving as Inflation Cools?
The US PPI inflation report showed a decline yesterday, after the slowdown in the CPI report on Wednesday, but let's see if the consumer is
Skerdian Meta•Friday, August 12, 2022•3 min read
Yesterday’s Market Wrap
Yesterday we saw a repeat of Wednesday’s price action in most markets, although on a smaller scale. Traders remained on the sidelines after the jump in risk assets following the jump in risk assets after the US CPI (consumer price index) report showed a slowdown in consumer inflation in July. Yesterday traders were mostly waiting on the sidelines during the European session, until the US PPI (producer price index) report was released.
The report showed a decline in producer prices, which confirmed the plateau in inflation. Risk assets jumped again while the USD retreated further, although the move was smaller than in the previous day and it ended sooner too, which means that the market is not convinced yet that inflation will return to normal levels soon. The FED reiterated this point as well, which will mean that the uncertainty will continue.
Earlier this morning the UK GDP reports for June and Q2 as well were released, both of which showed a contraction, as well as all other indicators such as services, manufacturing etc. Later on, we have the US prelim University of Michigan consumer confidence which will indicate if the small cool-off in inflation has helped the consumer sentiment whatsoever, while the UoM inflation expectations will indicate what economists at this survey think about prices in the coming months.
Forex Signals Update
Yesterday was another difficult day to trade, since most assets remained quiet until the PPI inflation report which showed a slowdown in July, sending risk assets higher and the USD lower. But that move ended pretty quickly and the situation reversed as we mentioned above. But we closed the day in profit nonetheless, with three winning forex signals and two losing ones.
WTI Oil – Buy Signals
Crude Oil has been on a bearish trend since the middle of June and fell below $90 earlier this week. We have opened many sell Oil signals during retraces higher and yesterday we decided to go short again in crude Oil. Although the first signal was a bit premature and it closed in a loss, while the second one closed in profit.
US crude Oil – 240 minute chart
GOLD – Sell Signal
Yesterday we opened a sell signal in Gold. The trend has been bullish for three weeks and yesterday we saw another jump higher after the US PPI inflation figures. Buy buyers couldn’t push the price above Wednesday’s high and after the pin candlestick we decided to open a sell foex signal, which closed in profit as the price reversed lower again.
XAU/USD – 60 minute chart
Cryptocurrency Update
Cryptocurrencies resumed the uptrend on Wednesday after the US CPI inflation report showed a slowdown which improved the risk sentiment, following a retreat. We booked profit on our buy Etheruem signal which we opened during the retreat. Yesterday we saw another pullback in some cryptocurrencies and we decided to open another buy signal, so let’s see how the crypto market will behave today.
Buying Retreat in BITCOIN
Bitcoin retreated below $23,000 earlier this week ahead of the UC CPI inflation report, as risk sentiment softened. BTC resumed the uptrend after the inflation figures were released but yesterday we saw another retreat lower and we decided to open a buy Bitcoin signal, hoping that the bullish trend will resume again as Ethereum was holding the gains.
BTC/USD – 60 minute chart
ETHEREUM Holding the Gains
As we mentioned above, Ethereum retreated together with the crypto market earlier this week, but yesterday it held well as Bitcoin was declining. The 20 SMA (gray) was holding as resistance on the H1 chart, and ETH/USD kept trading above $1,800, which leaves this cryptocurrency on a bullish position.
ETH/USD – 60 minute chart
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Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst.
Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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