Forex Signals Brief for June 13: Four Central Bank Meetings This Week, Cryptos Break Support
Major central banks have been increasing rates in recent months, with the FED and the BOE expected to do so again this week
Last Week’s Market Wrap
Last week the RBA delivered the second interest rate increase, this time by 50 basis points (bps) although the AUD and all risk currencies made a bearish reversal by the middle of the week and ended it pretty bearish, as comments of further lockdowns in Shanghai turned the sentiment negative. The ECB added further to this, after Christine Lagarde didn’t sound too hawkish after the 50 bps hike for next month, which is a done deal.
Markets were expecting Lagarde to announce more 50 bps rate hikes after July, but she didn’t deliver on those expectations, which sent the Euro down. This should have been good news for stock markets, but they turned pretty bearish as well on risk sentiment reversal. The BOJ kept the dovish bias, not planning any rate hikes at all which is the right to do right now, which sent USD/JPY above 134. The positive news last week was the upward revision in UK services, which means that the fast monetary policy tightening from the BOE hasn’t hurt the sentiment so much.
The Data Agenda This Week
This week we have a number of central banks holding meetings but only two of them are planning to increase rates, such as the FED which is expected to deliver another 50 bps rate hike, which would take them to 1.50% and the BOE which is expected to deliver the fifth hike in a row, taking rates to 1.25%. The Swiss National Bank (SNB) is expected to remain on hold again since they are closely following the ECB, with policy rates at -0.75%. Bank of Japan made it clear last week that they won’t tighten the policy any time soon, so they are expected to keep rates to -0.10%.
Forex Signals Update
Last week was very dynamic in terms of price action with many smaller reversals and a larger one as risk sentiment turned negative. We had some difficulty in the earlier part of the week, but got adjusted to the market moves and had a very good run in the second part of the week, getting many winning trades and closing the week in profit.
WTI Crude Oil – Buy Signal
Crude Oil has been displaying strong bullish pressure, particularly since March, as the establishment is pushing for green energy and sending Oil prices higher to drive the public into electric cars. As a result, Oil has been making large gains in recent months when it should have been declining on central bank monetary policy tightening, Chinese lockdowns and global economy slowing down. We issued two buy signals in WTI crude Oil last week, both of which closed in profit, but they appeared as losing signals in our signals history due to a technical fault in our feed.
WTI Oil – 240 minute chart
USD/JPY – Buy Signals
This forex pair has been bullish for two years, although the bullish momentum has picked up pace, with the lows getting higher, as it heads to 2002 highs. In the last two weeks, the uptrend picked up an incredible pace, and USD/JPY pushed above the previous high. In the last two days of the previous week, sellers tried their luck, but eventually, the price closed near the highs, so we continue to remain bullish on this pair and will try to pick bottoms again this week during pullbacks l0wer. Â
USD/JPY – Daily chart
Cryptocurrency Update
Cryptocurrencies traded in a range for about a month, with several attempts to turn things around from buyers. But those attempts looked pretty weak and all faded, which indicated buyer exhaustion and seller supremacy. Last week the selling resumed again and we are seeing many cryptos break some major support zones, so the bearish momentum continues in the crypto market.
Booking Profit on ADA/USD
The Cardano token ADA displayed some bullish momentum last week, as Cardano prepares for the launch of the Vasil hard fork at the end of this month. It held the gains better than most other cryptos during the last bullish attempt last week and it is still trading above the resistance after the rejection by the 50 SMA (yellow) and the bearish reversal. We decided to sell ADA/USD below this moving average last week and booked profit as the price slipped lower.
The 50 SMA Rejecting Cardano Again
Ethereum Breaking Below the Major Support Zone
Ethereum has had many drawbacks since May last year, but the support zone around $1,700 has held on multiple occasions. So, that was the line in the sand for ETH/USD, but that support level has been broken now and sellers are in total control. Now the next support zone come at around $1,400 where we will see how the price action will behave.
ETH/USD – Daily chart
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