Last Week’s Market Wrap

The calendar was light yesterday again, so the focus was on the market sentiment and the impact it will have on risk assets, as well as the USD, after Monday’s crash in stock markets and the cryptocurrency market. The US Dollar has been bullish for months and continues to keep the bullish bias after closing near the highs yesterday, while commodity dollars continue to remain bearish, since the risk sentiment remains negative.

The ZEW economic sentiment from the Eurozone improved somewhat this month, but it remains negative, which is an indicator for a possible recession, with some analysts predicting a global recession soon. Crude oil continued lower today after the bearish reversal yesterday, as US WTI fell below $100.

The Data Agenda Today

Once again, the risk sentiment will take the attention today after the deterioration yesterday. We will see if the decline in stock markets, commodities and commodity dollars will continue. Inflation increased in China as the CPI report released overnight showed, although it remains way below the rest of the world, despite the surge in producer prices.

In the US session, the CPI (consumer price index) inflation report is expected to show a slight cool off on a monthly basis, but it still remains high. US crude oil inventories are expected to turn negative which would help prices in normal times, but these are not normal times.

Forex Signal Update

NZD/USD – Sell Signal 

 NZD/USD has also been quite bearish trend for about a year and the decline has picked up pace recently as shown on the H1 chart below, with the USD having turned quite bullish. The NZD has bearish on the other hand as commodity dollars get hammered on China recession fears, despite rate hikes from the RBNZ. So, we have been selling this pair as it retraces higher and we decided to do so again yesterday at the 20 SMA (gray) which has been acting as resistance.

NZD/USD – 240 min chart

USD/JPY – Buy Signal

Yesterday we decided to buy this pair after the retrace lower to the 50 SMA (yellow). We have been buying USD/JPY since it has been on a strong bullish trend for a long time and the buying pressure has picked a strong pace in recent month after the conflict in Ukraine started, when the JPY should have turned bullish as a safe haven and this pair bearish. Our signal closed in profit after the reversal off the 50 SMA.

USD/JPY – 240 min chart

Cryptocurrency Update

Cryptocurrencies have resumed the selling pressure again, after retracing higher in March. The decline picked up an incredible pace on Monday, after the break of major support levels in many digital currencies. Although yesterday the selloff stalled somewhat.

Looking for Another Terra LUNA Buy Signal

Last month we decided to buy the Terra LUNA token since this cryptocurrency was the most bullish among major crypto coins for many months, as it continued to make higher highs until late March. LUNA/USD almost reached $120 that month but retreated lower again.

We decided to open a buy signal at the 100 SMA (green) which held as support initially but was eventually broken as Terra LUNA crashed lower, breaking below the 200 SMA. The support zones were broken so the LUNA coin trades below $20. $2 is the next support which would be a great place to buy.

LUNA/USD – Daily chart

Should We Buy BTC Around the $30,000 Support?

BTC/USD made a new record high last November, as it reached $69,000, but since then sellers have been in control. The last attempt to turn bullish ended at the 200 daily SMA (purple) and the price returned below $40,000 again. Now the price is trending around $30,000 where the main support zone stands before the next one at $20,000.

Will the support hold for Bitcoin?