Forex Signals Brief for August 22: Manufacturing and Services This Week After the Improvement in Retail Sales

Last Week’s Market Wrap

The main event for traders last week was the release of the meeting minutes from the FED. Expectations were for some hawkish comments during the last 75 bps rate hike, which would a slower pace, but there were no such comments which benefited the USD. The risk sentiment turned negative in financial markets, although risk assets and stocks turned bearish, ending the week lower.

The week didn’t start well either, with a round of economic data from China missing expectations and showing that there’s major economic distress there. The UK inflation jumping above 10% added further to that, but the improvement in the retail sales toward the weekend was positive, but risk assets closed the week bearish nonetheless.

Today the economic calendar is almost empty, but tomorrow we have a major round of manufacturing and service data from Europe and the US. It will offer a clearer picture of where the global economy is right now on this downward spiral where it has been since the beginning of the year, as central banks turned aggressively hawkish. On Wednesday we’ll have the US durable goods orders, while on Thursday the Q2 GDP is expected to be revised a tick higher to -0.8%.

Forex Signals Update

Last week the sentiment in financial markets turned negative, particularly after the FOMC meeting minutes didn’t offer any hawkish hints. We took advantage of that and remained long on USD and short on risk assets which prove to be a good decision as we had many winning forex signals. We had six losing signals out of 24 trading signals in total, which were across most main financial markets, such as forex signals, crypto signals, commodity signals, etc., with a 75%-25% win/loss ratio.

Selling GBP/USD 

GBP/USD has been on a bearish trend since late last year and it has resumed the decline again this month, particularly last week. We continue to keep a bearish bias for this pair and last week opened several sell signals here, all of which closed in profit as the downtrend escalated again.

GBP/USD – Daily chart

GOLD – Sell Signals

Gold turned bearish in the last two weeks and we have been opening sell signals as we have decided to remain bearish here too. The 20 SMA (gray) has turned into resistance on the daily chart, pushing the price down and it hasn’t been able to catch up in the last several trading sessions.

Gold XAU – 240 minute 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 Breaking the Channel

Bitcoin was bullish for two months since June, as the sentiment improved in the crypto market. A bullish channel formed on the daily chart, following the last crash in early June, and we have been buying BTC/USD during pullbacks lower. We opened a signal at the bottom of the range after the rejection at the 100 SMA, hoping for another bounce,  but the breakout happened.

BTC/USD – Daily chart

Buying ETHEREUM Again

Ethereum remains one of the most bullish cryptocurrencies, despite the last pullback lower. The decline stopped at moving averages which are acting as support and we decided to open another buy Ethereum signal since the stochastic indicator is oversold as well on this timeframe.

ETH/USD – Daily chart