Yesterday’s Market Wrap

Yesterday started with the employment report from New Zealand, and later the RBNZ Governor Orr held a speech. Although, the NZD didn’t mind much, since the focus yesterday was on the FED rate decision and press conference. Services in Europe showed a decent expansion, as spring gets underway and people are dying to have some fun after two years of Covid restrictions and lockdowns.

In the US session, the ADP non-farm employment change and the ISM services were the last pieces of data before the FED meeting later in the evening. The FED delivered a 50 bps rate hike as expected and Chairman Jerome Powell ruled out a 75 bps rate hike, although I don’t think they were going to deliver such a rate hike. The next meeting will be in July and expectations are for another 50 bps hike, yet stock markets got excited and made quite a comeback, while the USD dived around 100 pips lower. Commodity currencies also benefited from this.

The Data Agenda Today 

The day started with the Chinese Caixin services, which were interesting to see after the deeper dive into contraction of the manufacturing and services PMI. Caixin services fell deeper into contraction as well, due to the coronavirus lockdowns in China, which will have a negative impact on commodities, hence the decline in commodity dollars.    

The OPEC-JMMC meetings are not expected to be too interesting, since OPEC+ is set to agree on another small increase of 432,000 barrels per day (bpd) for June, as expectations that sanctions will crimp Russian output further to counter demand growth concerns from Chinese lockdowns.

The most important event today will be the Bank of England meeting. The MPC Official Bank Rate Votes are 8-1 in favour of hiking interest rates by 0.25%, to 1.00%. This will be the fourth hike in a row, but the GBP hasn’t taken advantage of it. So, it will be interesting to see how the GBP will react this time.

Forex Signal Update

Yesterday we opened three new forex signals, although it was hard to pick a side due to the FED meeting later in the evening. Although we ended up with two winning trades and a losing one despite the small drama in the markets after Powell’s press conference.

USD/CAD – Sell Signal

This pair retraced has been trading in a range since August last year, with the top of the range below 1.30. Earlier this week, USD/CAD was showing weakness below that resistance level, and yesterday we decided to open a sell signal on this pair, which closed in profit as the USD tumbled after the FED meeting.

USD/CAD – Daily chart

USD/JPY – Buy Signal 

We have been long on USD/JPY on many occasions in the last several weeks, as the bullish momentum has exploded. Moving averages have been doing a great job as support indicators and we decided to buy this pair yesterday at the 50 SMA (yellow)  on the H4 chart, after the retrace lower as the USD declined. 

EUR/GBP – 240 min chart

Cryptocurrency Update

Looking to Buy Fantom FTM

FTM/USD used to be quite bullish until the middle of January as it retested the previous highs from October last year. But the Wonderland controversy weighed on the DeFi coins early this year which made Fantom join the rest of the crypto market which was on a bearish trend since November.

Then the departure of key personnel such as Andrew Cronje weighed further on Fantom which broke below $1 and below the support zone around $0.90. But the last support area above $0.60 seems to have held its ground and now Fantom is bouncing higher. We are thinking of buying this cryptocurrency, but would like to see a retest of the support zone.

The support above $0.60 held for FTM/USD 

Back in Profit on the Terra LUNA Trade

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 started 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.

The 100 SMA held again as support for LUNA token