Forex Signals Brief for July 29: European Inflation Expected to Increase Further

The US economy fell in recession after yesterday's negative Q2 GDP report, while today the Eurozone inflation is expected to move higher

Skerdian Meta•Friday, July 29, 2022•2 min read

Yesterday’s Market Wrap

Yesterday markets were trading the aftermath of the FED interest rate decision, after they decided to raise them by 0.75% or 75 bps (basis points). Traders were waiting to see if Jerome Powell would soften the rate hike rhetoric which he did, as well as repeating that inflation remains quite high. That sent the USD lower and risk assets higher.

Yesterday the US GDP report showed yet another contraction in Q2, which puts the US into recession officially which is negative for the risk sentiment. That further diminished the odds of the FED raising rates by 75 bps, which is good for risk on the other side. That left most assets trading sideways yesterday as the uncertainty increased, apart from Gold and stock markets which benefited from all this.

The Data Agenda Today

Today the economic calendar started with the Tokyo core CPI (consumer price index) which ticked higher although still remaining low compared to the western countries. French prelim GDP for Q1 was revised lower into recesssion while the CPI inflation cooled off a bit last month. In a while, the Eurozone annualized inflation numbers will be released, which are expected to show a tick higher to 8.7%, and the Eurozone GDP which is expected to show a slowdown in Q2, although we might see a surprise contraction as we saw in the US.

Forex Signals Update

Yesterday we had another great day regarding our forex signals, opening nine trading signals in total and closing eight of them in profit. We traded all markets, such as commodities, cryptocurrencies, as well as forex. We concentrated on Gold and Oil in particular, which proved to be successful.

GOLD Sell/Buy Signals

Gold has been bearish since it reversed above $2,000 in March, falling below $1,700, which is a long term support zone. In the last two weeks Gold has bounced off that support zone and yesterday we had three Gold signals closed in our history, two in profit and another in a loss.

XAU – 60 minute chart

[[WTI] Oil – Sell Signals

Crude Oil used to be quite bullish until last month, when it reversed above $120 and continues to make lower highs. We keep selling Oil during retraces higher and yesterday we opened two sell signals, a short term, and a long term, both of which closed in profit as crude Oil reversed lower at the 100 SMA (green).

Crude Oil – H4 chart

Cryptocurrency Update

Cryptocurrencies are displaying bullish signals once again, as buyers returned after the FED softened the rate hike rhetoric, while the US economy fell into a recession, after the negative reading of the Q2 GDP yesterday, which puts the FED off further strong hikes. That sent risk assets such as stock markets and cryptocurrencies higher, improving the sentiment.

BITCOIN Pushing Above the Resistance Again

Bitcoin fell below $20,000 in June, but there has been no follow-through since then, which shows that the support zone is holding. BTC has been making higher highs and higher lows since then which is a bullish signal and yesterday buyers pushed above the resistance zone again, so we will try to buy the dips in BTC.

BTC/USD – 240 minute chart

ETHEREUM Pushing Above the $1,700 Resistance

Ethereum continues to remain bearish in the long term charts, but it has been showing bullish signs in recent weeks. Buyers pushed above the 20 SMA (gray) and the 50 SMA (yellow) but were having trouble at the previs support zone around $1,700. Yesterday they pushed above that level as the price bounced off the 20 SMA which has turned into support now.

ETH/USD – Daily chart

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ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.