Yesterday’s Market Wrap

Risk sentiment has been negative for most of the last two months, weighing heavy on risk assets such as stock markets, commodities, and cryptocurrencies. Although on Friday we saw an improvement in market sentiment which has continued this week so far. Although, the bullish move in cryptocurrencies ended on Monday so they haven’t benefited from this improvement in sentiment.

Today the economic calendar started with the minutes report from the last meeting of the RBA when they hiked interest rates, which leaned on the hawkish side, so they helped improve the sentiment further for the AUD. In the European session, the Eurozone Q1 GDP was revised higher to 0.3% from 0.2% previously while UK earnings surged to 7.0% against the 5.4% expected. The US retail sales and industrial production for April exceeded expectations, so all this positive data helped the risk sentiment, while the USD retreated which was long due after such a bullish trend in previous weeks.

The Data Agenda Today

Today started with the quarterly and yearly GDP reports from Japan which showed a contraction in the first quarter. The UK inflation report was also released earlier this morning, showing another increase in CPI (consumer price index) inflation last month. The Eurozone final CPI reading is expected to remain unchanged, so it won’t have an impact on the Euro but the CPI inflation report from Canada might send the CAD higher since it is expected to show a cool off.

Forex Signals Update

Yesterday’s improvement in the risk sentiment sent risk currencies higher, where we were short on, since the main trend is bearish for them. But, we got caught on that move and had a number of losing signals in the morning, although we tried to recuperate later in the US session.

 NZD/USD – Buy Signal

The main trend remains bearish for NZD/USD and yesterday we had the first losing signal here after many winning ones, as the retrace stretched higher. Although we decided to use this bullish momentum and bought this pair as it retraced to the 20 SMA (gray) on the daily chart.

NZD/USD – H1 chart

 SILVER XAG – Sell Signal

Silver and Gold have been really bearish since last month, losing considerable value as they continued to slide lower until late Friday. That’s when the market sentiment started to improve and the USD started to retreat, which has led to a bullish reversal in safe-haven metals, when they should have remained bearish. Anyway, we decided to open a sell signal at the 20 SMA as the price started to reverse lower, but buyers cam in again and pushed Silver above that moving average and the 50 SMA (yellow). 

Silver – 240 min chart

Cryptocurrency Update

Cryptocurrencies turned bullish over the weekend as risk sentiment improved, after being really bearish in recent weeks as Terra LUNA and its stablecoin UST crashed. We have opened to crypto signals, one of which closed in profit yesterday.

Closing the BITCOIN Signal 

BTC/USD has been bearish since the beginning of April, when the bullish retrace ended. Moving averages have turned into resistance one after another, recently the smaller ones taking over, which suggests that the bearish trend has been picking up pace. The $30,000 level was pierced last week but we have seen a retrace higher. Although we decided to sell BTC as it failed twice to push above the 50 SMA (yellow) and now we have booked profit.

The 50 SMA pushing Bitcoin down

 ETHEREUM Making Higher Lows

Ethereum has been bearish since early April as well and the 20 SMA has been acting as resistance lately here, which means that the downtrend has been even stronger here. Although, the decline stopped just above the major support level at $1,700 and this cryptocurrency has been making higher lows since then. However, we missed the chance to buy Ethereum lower closer toward $1,700.

ETH/USD – H4 chart