Forex Signals Brief for July 19: The Housing Data Before FED’s Rate Decision

Yesterday’s Market Wrap

Yesterday financial markets continued the price action from last Friday, when we saw a sudden improvement in the risk sentiment and a bullish reversal in risk assets. The US retail sales exceeded expectations, but they weren’t as strong as to give the FED a reason to raise interest rates by 100 bps (1.00%), which improved the sentiment, sending the USD lower and risk assets higher.

Risk assets such as commodity dollars and stock markets continued higher during the European session, but retreated lower in the USD session. The NAHB Housing Market index posted a decline to 55 points from 67 points in the previous month. Crude Oil opened with a bearish gap lower, but turned bullish eventually as the sentiment improved and the US WTI crude pushed closer to $100.

The housing reports are the last major economic releases from the US before next week’s FED’s decision on whether to hike by 0.75% or 1.00%. Yesterday we had the NAHB Housing Market Index which was pretty bad, so chances are that today’s US building permits and housing starts might miss expectations as well. Earlier this morning we had the UK employment report being released, while the final Eurozone CPI inflation numbers for June will be released in a short while, although they’re not expected to change.

Forex Signals Update

Yesterday we opened several trading signals, in Forex, commodities, indices, and cryptocurrencies, so we covered all markets. We ended up with three winning and three losing signals at the end of the day as there was volatility both ways, with the USD reversing in the US session.

GOLD – Buy Signals

Yesterday we continued to trade Gold, opening two signals here, after opening several Gold signals last week, all of which closed in profit. Gold was bouncing between two moving averages yesterday, and we bought Gold twice when it was moving up, with one of the signals closing in profit and the other closing in a loss.

XAU/USD – 60 minute chart

EUR/JPY – Buy Signal

EUR/JPY remains bullish since March, having made some massive gains, despite the Euro being bearish as well. But, the ECB is planning to start hiking rates this week, while the BOJ is not thinking about it yet. Moving averages have provided solid support during retraces lower and yesterday my colleagye Arslan opened a buy signal here, which closed in profit as the price conitnued to move higher.

EUR/JPY – Daily chart

Cryptocurrency Update

Cryptocurrencies have been trading in a range for about a month, since the last decline ended by the middle of June, but they have been showing bullish signs which we have highlighted, such as Bitcoin making higher lows, while Ethereum broke the 50 daily SMA. Yesterday we saw another decent bullish move, so it seems like cryptocurrencies might be turning bullish on the long term charts after being bearish for a year.

BITCOIN Still Respecting the Range

Cryptocurrencies have been moving higher since early last week, after the bottom liune of the narrowing range held for Bitcoin. The price moved above the $20,000 level, and yesterday we saw BTC/USD peak above the resistance but the price moved back down, which indicates that the selling pressure is strong up there. We will try to trade the range today once again.

BTC/USD – 240 minute chart

ETHEREUM Overcomes the 50 Daily SMA

Ethereum has been showing some bullish signs after consolidating in a range for a month. Smaller moving averages such as the 20 SMA (gray) and the 50 SMA (yellow) have been acting as resistance at the top, but yesterday the price pushed above the 50 SMA which could be the beginning of a larger bullish reversal, although we have to see how fundamentals/politics evolve in the crypto market.

ETH/USD – Daily chart