Forex Signals US Session Brief, January 10 – The USD Is Back on Its Feet, but We Can’t Say the Same for Cryptocurrenies
Skerdian Meta • 3 min read
The US Dollars seems to be back on track. The price action points up for the Buck in the near future, but we’ll explain why below. The cryptocurrencies on the other hand, don’t seem to be able to catch a break. Every rally has been met by sellers, so the bullish chart setup we talked about yesterday in Bitcoin is not really working out.
Cryptocurrencies can’t seem to make their mind up
The Price Action Looks Bullish for the USD
Yesterday the US Dollar had a strong reason to go down. The Chinese want to reduce or stop purchasing US bonds which is coming as a result of threats coming from Trump about US sanctions on China. Chinese officials said they want to diversify their FX reserves, but we know it’s not that.
That did send the USD tumbling lower for around 100 pips. But, the buyers jumped right in and took control of things in most forex majors apart from USD/JPY. Although, the JPY traders are in control in this pair, so we can’t take this into consideration.
OK, the Aussie is also higher against the Buck, but that had a reason as well. The Australian retail sales made a surprising jump last night, so that popped the Aussie higher.
The Euro and the Pound though are back where they were before that big move. GBP/USD is actually lower. It didn’t take long for these two forex majors to turn around, which makes them look bearish now.
This sort of price action tells us that the USD might have reached a bottom. It is not going down on bad news. Well, it is, but it’s not staying down. If a currency doesn’t want to stay down on negative news, then the chances are that it will go up when the fundamentals turn bullish.
Seems As Cryptos Want to Move Higher, but They Stepping Down Instead
Yesterday I posted the daily chart of Bitcoin. The price bounced off the 50 SMA and the daily candlestick was closing as a doji which is a reversing signal after a downtrend. That chart setup looked pretty bullish and I was convinced that Bitcoin was going to resume the uptrend today.
But, I woke up this morning to find that Bitcoin had returned lower again and make new lows. In fact, the entire cryptocurrency market is considerably lower today, although most of the main altcoins are fighting their way back as I speak.
The reason for that tumble earlier today came from South Korea. As my colleague Arslan highlighted in one of the previous updates, South Korean lawmakers are planning to ban cryptocurrency trading on Korean exchanges. That’s not good news for this new market. It seems as the negative news keeps coming.
So, the bullish chart pattern on the daily timeframe went out of the window yesterday. That said, the buyers are coming in on every dip. Bitcoin is back above the 50 SMA now so this moving average is not letting go yet. So, this looks like a good sign for buyers.
If the negative news for digital currencies stop, then I’m led to believe that the uptrend will resume. The technicals will get their say soon and they look bullish, especially if the 50 SMA holds in Bitcoin.
The 50 SMA is holding again
Trades in Sight
- The price is not making new lows today
- Stochastic is oversold
- The 20 SMA is providing support
The 20 SMA is holding for the moment
We opened a forex signal a while ago. We bought USD/JPY since it looks as this forex pair is not making new lows today. The 20 SMA is holding strong and the stochastic indicator is oversold. This seems like a bullish chart setup to me, so hopefully, we will see a nice jump from here soon.
The Euro just made a big jump now. The ECB minutes that were released a while ago must have had something interesting in them. So, the Euro got its Christmas present from the ECB. We will have a quick look at them and we’ll be back to you.