Weekend Market Wrap

Yesterday was a quiet day with certain countries closed for May 1 and the market was focused more on manufacturing reports, especially after the dive in Chinese manufacturing and services that we saw over the weekend, as highlighted in yesterday’s market brief.

Most manufacturing reports showed a slight cool-off in April, apart from Germany and Switzerland. The decline in US ISM manufacturing was most notable. Although, the dive in Chinese data was the reason for the bearish reversal in crude oil yesterday which was the biggest mover.

The Data Agenda Today

Today China and Japan are still off for Constitution/Labor Day, so the Asian session was slow, although we had the rate decision from the reserve bank of Australia (RBA) early this morning. They decided to increase interest rates by 15 bps, from 0.10% to 0.25%. 

The unemployment rate and the producer price index (PPI) will be released shortly for the Eurozone, with the PPI expected to show a major jump in March, from 1.1% to 4.9%, which supports the jump in prices that month. It will be interesting to see what the Economy and Finance Ministers from the Eurozone will decide regarding Russia, while the US JOLTS jobs openings won’t have much impact despite the figures.    

Forex Signal Update

Yesterday we opened only one new signal, since the price action was pretty slow in most markets due to some countries being on a bank holiday. On both trades, we were short on the Euro. 

EUR/GBP – Buy Signal 

In the last two months, we have seen EUR/GBP bounce up and down in a range that stretches roughly between 0.8250 and 0.85. We decided to open a buy signal in this pair last Friday, as the price was retreating lower and now this pair has bounced off the 200 SMA (purple) on the H4 chart, which is acting as support.

USD/JPY – 240 min chart

EUR/USD – Sell Signal

We decided to sell EUR/USD again, considering that this pair has been quite bearish since the beginning of March. Last Friday we saw a retrace higher but it seems to be over as well, with the 20 SMA (gray) acting as resistance on the H4 chart, so we decided to sell this pair.

EUR/USD – 240 min chart

Cryptocurrency Update

Long on THORChain from $8.26

RUNE began a strong uptrend last month, which sent it more than 400% higher as THORChain made some important upgrades. Although the highs still keep getting lower on a larger scale. We decided to open a buy signal last month, after the pullback to the 200 SMA (purple).

The price started to bounce off that moving average and we were well in profit for some time, but the bearish sentiment in the crypto market has sent RUNE/USD lower. Although we are holding on to our signal and might add further lower toward support, since fundamentals are strong for THORChain.      

RUNE/USD slipping below moving averages

Keeping Our Terra LUNA Buy Signal As the 100 SMA Holds

We decided to buy Terra LUNA token since this cryptocurrency has been the most bullish among major ones for many months, as it continues to make higher highs until last month. LUNA/USD retreated in January, falling to the low $40s, but the 200 SMA (purple) held as support twice and buyers resumed the uptrend again.

Luna almost reached $120 earlier this month but retreated lower again although this time it was the 100 SMA (green) which held as support where we decided to open a buy signal. LUNA/USD strted to bounce off this moving average but the 20 daily SMA (gray) stopped the bounce and now the price has returned back down to the 100 SMA.

Will the 100 SMA hold as support for LUNA token again?