Forex Signals Brief for August 20: Mixed Markets on Mixed Economic Data

Yesterday’s Market Wrap

The sentiment turned slightly bullish for the USD after the FOMC minutes on Wednesday evening, as they didn’t include any hawkish comments, which sent the odds of a 0.50% rate hike higher. FED’s Bullard even commented on another 75 bps hike yesterday.  The day started with the employment reports from Australia, which showed a 0.1% decline in the unemployment rate even though employment numbers declined.

The Eurozone CPI (consumer price index) inflation remained unchanged at 8.9%, while the Philadelphia manufacturing index made a turnaround and increased by 6 points. That came after the Empire State manufacturing index showed a further contraction earlier this week, giving mixed signals about the US economy. Besides that, the FED is happy to get a bonus as prices start to cool off, but they’re not running away with it, as the comments from FED’s George, who said that last month’s inflation number is encouraging but not time for a victory lap. So, markets remained mixed.

Today started with the GfK consumer confidence from the UK which showed that the UK consumer remains in a difficult position as wages increase at a slower pace than inflation, which jumped above 10% last month. UK retail sales remained negative too during July as well. Later in the afternoon, we have the Canadian retail sales on the schedule as well.

Forex Signals Update

The positive performance with our forex signals continued yesterday after we opened four trading signals, all of which closed in profit. We opened three forex signals and one Gold trading signal, mainly buying the USD against these assets, as the USD had a slight advantage from the previous days, post FOMC minutes.

GOLD – Sell Signal

We have been selling Gold as the price has remained bearish during most of this week and yesterday we decided to open another sell Gold signal. The price retraced higher to the 50 SMA (yellow) on the daily chart which acted as resistance, and after the upside-down hammer candlestick, we decided to open a sell signal, which closed in profit eventually as the decline resumed.

Gold XAU – 60 minute chart

Selling AUD/USD 

The situation is similar in AUD/USD, with the 50 SMA (yellow) turning from support into resistance on the H1 chart. This pair pushed below the 0.70 level on Wednesday, and yesterday we decided to open a sell signal at the 50 SMA on the H1 chart, after the retrace higher.

AUD/USD – H1 chart

Cryptocurrency Update

Cryptocurrencies remained bullish last week as they continued to make higher highs. Ethereum climbed above $2,000 while Bitcoin increased above $25,000. In recent days we have seen a small retreat, but it seems weak and we’re getting ready to buy cryptocurrencies again,

 BITCOIN Retreating Off the 100 SMA

Bitcoin has been bullish since the middle of June, as the sentiment keeps improving in the crypto market. The uptrend has been unfolding in waves and right now we are on a retreating wave after the price was rejected by the 100 SMA (green). We are already long on BTC/USD and hope that the retreat ends at the bottom of the ascending channel.

BTC/USD – H4 chart

Will the 20 SMA Hold for ETHEREUM?

Ethereum remains one of the most bullish cryptocurrencies, despite the occasional pullback lower. Ethereum buyers pushed the price above $2,000 last week, although we have been seeing a pullback over the weekend. We are following the price action to see where we can buy this digital coin, either at the 50 SMA (yellow) or the 100 SMA (green).

ETH/USD – Daily chart