Forex Signals Brief November 11: US Inflation and Retail Sales Highlight the Week!
Last week all the attention was on the US presidential elections, while this week the attention shifts to US inflation and retail sales data
Last week all the attention was on the US presidential elections, while this week the attention shifts to US inflation and retail sales data. Donald Trump won the second term, while Republicans took both rooms, in a red sweep, which gave the USD a 2-3cent boost against most currencies on Wednesday as results started to come out.
However, on Thursday the situation reversed, with the USD giving back most of the gains after the strong run, while risk assets received a boost from expectations of the Chinese stimulus announcement which was due the next day. The stimulus measures from Chinese authorities didn’t satisfy the market once again, and risk assets tumbled on Friday.
We also had two central bank meetings last week, with the FED cutting interest rates by 25 basis points while the Bank of England delivered a 50 bps rate cut. The FED rate cut was a dovish one, as markets were expecting a more hawkish Powell, while the BOE cut was a hawkish one, which sent the GBP higher, however all reversed by the end of the week and the USD ended up higher, while the GBP lower.
This Week’s Market Expectations
This week starts light in the first half, with light data such as the BOJ Summary of Opinions and New Zealand Inflation Expectations today, but it kicks off later in the week, with the US CPI consumer inflation and PPI producer inflation reports.
- Monday: BoJ Summary of Opinions release (US Holiday)
- Tuesday: UK Labour Market Report, Eurozone ZEW Economic Sentiment, US NFIB Small Business Optimism Index, Fed’s SLOOS (Senior Loan Officer Opinion Survey)
- Wednesday: Japan Producer Price Index (PPI), Australia Wage Price Index, US Consumer Price Index (CPI)
- Thursday: Australia Labour Market Report, UK GDP data, Eurozone Employment Change and Industrial Production, US Producer Price Index (PPI), US Jobless Claims, Fed Chair Powell’s remarks
- Friday: Japan GDP, China Industrial Production and Retail Sales, US Retail Sales, US Industrial Production and Capacity Utilization
Last week the volatility was immense, especially on Wednesday, with many large moves and several changes in the market direction. The USDF surged higher on Wednesday but retraced some of the gains on Thursday then falling further after Jerome Powell’s dovish comments. We made it through though, opening 29 trading signals, and ending the week with 21 winning forex signals.
Gold Bounces After the Decline Stops at the 50 SMA
Global political and economic uncertainties have fueled a nearly 30% increase in gold prices in 2024, pushing them from $2,000 up to almost $2,790. Recently, however, gold has pulled back slightly, trading around $2,652. On Thursday, XAU briefly rose above $2,700 as the USD gave up some of its post-Trump gains, with the 50-day SMA (yellow) on the daily chart holding steady as support, but reversed back down closing the week at $2,684.
XAU/USD – Daily Chart
The 50 Weekly SMA Rejects USD/CAD
For over a month, USDCAD has been on an upward trend, though it has twice failed to break through the 1.40 resistance zone. Despite these setbacks, buyers have consistently returned after each pullback, showing resilience. With Canada’s economic performance still lagging, the pair appears poised to eventually break above the 1.40 level. Prior to the latest data release, the market had priced in a 40% chance of a 25 basis point cut and a 60% likelihood of a 50 basis point cut by the Bank of Canada. After the data release, the odds shifted slightly in favor of a 25 bps cut.
USD/CAD – Daily Chart
Cryptocurrency Update
Bitcoin Breaks Above the $80 Level
Bitcoin has also seen high volatility this year, with the bullish momentum persisting. After the retreat during summer, Bitcoin rebounded sharply, recovering from a drop between April and September (from above $70,000 to around $50,000) to reach a new record high at $74,000 on Wednesday after the US elections. Over the weekend, BTC continued to rally, breaking past $80,000 as strong buying momentum sustained upward movement.
BTC/USD – Daily chart
Ethereum Pushes Above $3,000
Ethereum has attracted significant buying interest as well, trading above $2,700 and breaking past its 100-day SMA. Its bullish trend was reaffirmed after it quickly regained support above the 50-day SMA, even after briefly dipping below $2,500. Following Trump’s election win, Ethereum surged, rising above $3,000 over the weekend and continuing the upward price action as market momentum persisted.
ETH/USD – Daily chart
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