Forex Signals Brief for September 1: Global Manufacturing to Remain Weak

Yesterday’s Market Wrap

Yesterday was another choppy day in financial markets in general, as uncertainty prevailed. The focus ws in Europe with the CPI consumer inflation data for August, in which we saw another record reading. The annualized headline figure came in at 9.1% and that just puts more pressure on the ECB to act aggressively next week, although policymakers have already talked that up in the past few days.

The euro rallied around 100 pips higher but the outlook still looks bleak, with soaring energy prices continuing to be a problem with flows along the Nord Stream pipeline halted for the coming days and Gazprom also cutting off gas supplies to French utility, Engie, citing a payment dispute.

The dollar was initially softer but regained some poise during the day against most major currencies apart from the Euro, as the back-and-forth trading continues, with the main focus staying on Friday’s US jobs report. Stock markets were higher to start the day but saw gains evaporate, with European and US indices futures turning lower by the end of the day.

Today is a manufacturing day, with Australian, Japanese, and Chinese Caixin manufacturing activity still remaining pretty slow, but above contraction. Swiss CPI inflation is expected to show another increase in August by 0.2% after falling flat in July. The final European manufacturing reading for August remained below contraction, while later we’ll have the US ISM manufacturing report, which might have a positive impact on the USD if it comes stronger than last month, with expectations for a slowdown.

Forex Signals Update

Yesterday markets were quite as uncertainty prevailed, despite the jump in Eurozone inflation to record levels. As a result, the number of signals we opened was low, just three, two of which closed in profit, while one closed in a loss as the USD gained momentum later in the US session and AUDUSSD reversed lower.

Buying0 [[AUD/USD]]

AUD/USD  has been on a bearish trend, making lower highs, but buyers have also been quite active, pushing the price up from time to time. Yesterday this pair turned quite bullish during the European session and my colleague opened a buy forex signal here. But, the 200 SMA (purple) rejected the price and the bearish reversal came, closing our trade in a loss.

AUD/USD – 60 minute chart

USD/JPY Buy Signal Again

We continue to buy the dips in USD/JPY which remains on a bullish trend. Yesterday we decided to open another buy forex signal here, after doing so on Tuesday at the 50 SMA (yellow) on the H1 chart. Buyers kept the buying pressure on and we booked profit toward the end of the US session.

USD/JPY – 60 minute chart

Cryptocurrency Update

Cryptocurrencies continue to display uncertainty in the last several days, after the weakness we saw in the last two weekends, which sent bitcoin below $20,000. BTC has traded above and below that levels, so there’s no direction at the moment.

ETHEREUM Finding Support at the 20 SMA

Ethereum was finding support at moving averages on the H4 chart, as it was moving higher earlier tin August, but the trend has reversed since the middle of August. Moving averages have been all broken and they have turned into resistance at the top. The 50 SMA (yellow) is capping the price, while the 20 SMA (gray) was acting as support yesterday. So, the breakout could be at any direction.

ETH/USD – H4 chart

BITCOIN Returns Below $20,000 Again

Bitcoin formed an ascending range as buyers remained in control for two months, following the last crash in June. We kept buying BTC at the bottom of the range, but buyers gave up when the price reached the 100 SMA (green) on the daily chart and BTC broke the range to the downside.

We were looking to buy close to $20,000, but the buying pressure remains really weak so we stayed on the sidelines after the break below $20,000. Now, after many weak stops were flushed below that major level, BTC is back above it.

BTC/USD – 240 minute chart