Yesterday’s Market Wrap

In the second half of last week and early this week, we saw some increased volatility, as three major central banks raised interest rates while making some dovish remarks, followed by some great employment and services numbers from the US. On Monday markets continued that mode from last week and on Tuesday FED chairman Jerome Powell left the monetary policy to the economic data.

The recent numbers are showing improvement in the US which are helping the USD, but it is still too early. Yesterday we had a number of FED members speaking, with FED’s Williams saying that they still have some work to do to get inflation under control, while Cook added that inflation is still running too high, even if it has moderated. So, traders are waiting for more facts from the economic data and markets have calmed down, with most assets trading in a range yesterday.

Today’s Market Expectations

Today and tomorrow the economic calendar is light again, so we won’t see major moves until the end of this week. The German Prelim CPI numbers are expected to show a 0.9% increase after a 0.85 decline previously, which would mean that consumer inflation is picking up again. Later we have the EU economic forecasts, while the US unemployment claims will close off the day.

Forex Signals Update

Yesterday the volatility was low, so we decided to trade mostly short-term charts, with short-term signals, although we did open a long-term trade in Oil. We opened six trading signals in total three in forex and three in Gold, four of which closed in profit, one in loss while one still remains open from yesterday.

The 200 SMA Has Turned into Resistance for [[Gold]

Gold has broken below all moving averages on the chart below, which indicates a trend reversal after making a very strong rally since the middle of November. The bullish momentum has faded and buyers are failing at moving averages. This week we have seen the test the 200 SMA (purple) on the H4 chart, but have failed again and again.

XAU/USD – H4 chart 

Going Short on WTI Oil at MAs

Crude Oil has turned bullish this week and has reached the 100 SMA (green) on the H4 chart, which is acting as resistance and the last two candlesticks have closed as dojis, which are bearish reversing signals after the bullish move that we have seen so far this week. Stochastic is also overbought, so we decided to open a sell Oil signal up here, hoping for a bearish reversal, especially after the buildup in EIA Oil inventories yesterday.

US Oil – H4 chart

Cryptocurrency Update

The retreat we saw in cryptocurrencies over the weekend might have come to an end since we saw some decent gains yesterday. Overall, they continue to display bullish momentum, as they keep the gains after the bearish reversal in risk currencies in the second half of last week, as dips keep finding buying pressure.

Buyers Still Showing Resilience in BITCOIN

Bitcoin has retreated off the highs in recent days but buyers still look strong, after bouncing off the ascending trend line yesterday. The price was slipping lower over the weekend, but BTC remained well-supported by moving averages and the ascending trendline which continues to act as support. Although, buyers will have to take out the 50 SMA (yellow) for the bullish momentum to continue.

BTC/USD – 240 minute chart

 ETHEREUM Still Supported by MAs

Ethereum has been trading sideways for the last two weeks after the bullish run last month, but the lows keep getting higher so it seems like the buying pressure is picking up again, which is pushing the price above $1,700. The 100 SMA (green) held as support on the H4 chart, which shows decent buying pressure.

ETH/USD – H4 chart