Last Week’s Market Wrap

Last week was supposed to be a quiet one, after the last major events for 2022 already took place in the previous two weeks, with the US consumer inflation report and the rate hikes from several central banks, which left markets uncertain in the end. But, we were wrong as the volatility seems to continue until the end of 2022 which reshuffled markets but in the end, everything is still uncertain.

It kicked off with the Bank of Japan which kept interest rates unchanged but the JPY surged 7 cents higher after a surprise change to their yield curve control policy and the announcement to increase bond purchases to 9 trillion yen per month, up from 7.3 trillion yen. On Thursday the US final Q3 GDP number was revised higher from 2.9% to 3.2% which sent the USD higher, with the idea that the FED will continue to raise rates further ahead in 2023. Then on Friday, we saw a reshuffle after the PCE Price Index which showed a declining trend.

Today’s Market Expectations

This week is supposed to be slow since we’re in the period between Christmas and New Year, but after last week anything can happen. The liquidity will surely be low, which means that smaller events can trigger larger moved, so be careful. Monday and Tuesday are mostly off although Asian markets will remain open, on Wednesday we have the US pending home sales, while on Thursday unemployment claims are on schedule, with the Chicago PMI closing off 2022 on Friday.

Forex Signals Update

This week the sentiment in financial markets remained uncertain with choppy price action. We had to adapt to market conditions so we changed direction many times in forex, but remained long on Gold since it kept the bullish momentum going, despite retreating below $1,800. The GBP turned bearish on the other hand, so we kept short on this pair.

Turnign Bearish on GBP/USD 

GBP/USD has been really bullish since the end of September as the sentiment improved in financial markets after the intervention by the Bank of England and this pair surged more than 30 cents higher since then. Although the sentiment has turned negative for this pair now as the UK economy heads into a recession, so we shifted to bearish and had a couple of winning GBP/USD signals last week.

GBP/USD – 240 minute chart

Remaining Bullish in GOLD  

Gold has also been bullish in recent months as the sentiment turned positive. Moving averages such as the 100 SMA (green) have turned into support and have been holding during retraces, pushing the lows higher. We have been buying pullbacks against moving averages and currently are holding a buy Gold signal.

XAU/USD – 240 minute chart 

Cryptocurrency Update

The uncertainty in financial markets continued last week which is displayed by the slow price action in the crypto market. Cryptocurrencies traded in a very tight range, although we are heading toward the end of the year and volatility has declined, so this week is expected to be even quieter.

BITCOIN Trades Sideways

Bitcoin stopped the decline last week coming from above $18,300, following the rate hikes by central banks in the previous week. The price traded in a tight range ss uncertainty continued last week and risk sentiment flipped on and off. We have an open BTC/USD signal so we remain slightly bullish.

BTC/USD – 240 minute chart

ETHEREUM Climbing Above $1,200

Ethereum climbed above $1,300 early this month but turned bearish like Bitcoin and fell close to $1,100 as the sentiment turned negative after the last central bank rate hikes this month. It has managed to climb above $1,200 again but the 200 SMA (purple) remains as resistance at the top. so until buyers push the price above it, ETH/USD remains bearish.

ETH/USD – 240 minute chart