Forex Signals Brief for August 9: Risk Assets Bullish, As Markets Eye US Inflation Figures

Yesterday’s Market Wrap

Yesterday the Eurozone Sentix investor confidence indicator was expected to deteriorate, which would have weighed further on the Euro, but it posted a small improvement, although it remains deeply negative. Markets weren’t too concerned about it though. After the US ISM non-manufacturing report which was released late last week, the risk sentiment deteriorated as odds of another strong rate hike of 0.75% by the FED jumped higher again.

But, that sort of market sentiment wore off as soon as this week started and traders shifted the focus to the US CPI (consumer price index) and the PPI (producer price index) reports which will be released later this week. Markets are anticipating some lower readings which would lower the odds of another 75 bps FED hike, which was pushing risk assets such as stock markets and commodity dollars higher.

Today the economic calendar is quite light once again, with the US QoQ prelim non-farm productivity and the prelim unit labor costs which are expected to show a cool-off, which would be another positive signal for the FED and negative for the USD, since it would mean that the labour market is cooling off as well, so the odds of another 75 bps FED hike would decline. That would improve the risk sentiment further, keeping stock markets and cryptocurrencies bullish, as well as commodity dollars.

Forex Signals Update

Yesterday markets reversed once again, and risk assets made some decent gains as the attention moved from the US ISM services report to inflation numbers which will be released further ahead this week. As a result, we got caught on the wrong side with some of our forex signals, but also made some good profit, particularly with Oil trading signals.

USD/JPY – Buy Signals

USD/JPY has been on one of the strongest uptrends since March, although we saw a decent retreat in July. The retreat seems to be over since this forex pair has been moving higher since early this month, so we have resumed buying the retraces lower here against moving averages and will do so again this week if buyers remain in control.

USD/JPY – 240 minute chart

WTI Oil – Sell Signals

We keep selling crude Oil has s it continues to be on a declining trend since the middle of June. The price fell below the moving averages which had been working as support during the uptrend, but have turned into resistance since the reversal. We continue to sell US WTI Oil during the retraces higher, which has proved to be a good strategy so far, as Oil sellers continue to prevail and lows keep getting lower. Yesterday we opened two sell forex signals here, both of which closed in profit.

WTI Crude Oil – 60 minute chart

Cryptocurrency Update

Cryptocurrencies continue to be on a bullish momentum as buyers keep pushing higher, although the crypto market is not as volatile as it used to be. Ethereum (ETH) pushed above $1,800 yesterday, while Bitcoin (BTC) climbed above $24,000 again, so we decided to open another buy crypto signal which we will highlight below.

Buying [[THORChain]] Rune After the Break of the 100 SMA

THORChain went through a decent crash earlier this year, but in March we saw a decent bounce as well. Bu the bearish momentum resumed and RUNE coin fell to $2.40. Although it has been pushing higher and we decided to open a buy after the recent upgrades and the break of the 100 SMA.

RUNE/USD – Daily chart

ETHEREUM Pushing Above $1,800

Ethereum has finally pushed above the 100 SMA (green) on the daily chart, as we predicted, after being squeezed between this moving average and the 20 SMA (gray) for some time. This coin fell below $1,000 in June during the last crypto crash but turned bullish by the middle of July and continues to remain bullish. Now the break of the 100 SMA is another bullish sign.

ETH/USD – Daily chart