Forex Signals Brief for September 8: Can the ECB 75 BPS Hike Keep the Euro Up?

Yesterday’s Market Wrap

Yesterday the Australian and European GDP showed that these economies were stable in Q2, with the Australian Q2 GDP coming at 0.9% as expected while the Eurozone GDP was revised two points higher. This was enough to turn the market bullish on the Euro, thinking that the Eurozone economy can support another strong hike after the 75 bps rate hike planned for today. That sent EUR/USD around 100 pips higher.

Risk sentiment improved somewhat, sending stock markets higher although crude Oil couldn’t keep the gains it gained after news that the Iran nuclear deal has been paused. It lost around $6.50 heading to $80, with the Atlanta FED GDP for Q3 being revised lower. Bank of Canada delivered a 75 bps rate hike and info leaked that they keep the pace, as did FED members.

Today the economic data has been light, with the Japanese Q2 GDP revisions and comments from RBA Governor Lowe holding a speech. Although, markets have been preparing fr the European Central Bank (ECB) meeting which will be held later in the European session. The ECB is expected to pick up the pace of rate hikes and deliver a 75 bps rate hike, taking them from 0.50% to 1.25%. Although the statement and the press conference will be the ones to watch out for, because that’s where the comments about the future of rate hikes will be.

Forex Signals Update

Yesterday we had a good day, as the volatility picked up, although we mainly traded crude Oil, since it was crashing down and we decided to sell retraces higher. We opened two sell trading signals in crude Oil, both of which closed in profit, while the forex signals remained open until today.

Selling WTI Oil During the Crash

Crude Oil went through a crash yesterday losing around $7 from top to bottom. It has been totally bearish this month, losing around $16 since the beginning of September, and yesterday’s price action showed that sellers are in control in crude Oil. We decided to open two short-term sell Oil signals during retraces higher, which closed in profit as the crash continued.

US Crude Oil – 240 minute chart

Giving EUR/USD A try at Parity

EUR/USD fell below parity last year, but the area above 0.99 turned into a support zone, holding the price for around two weeks, before sellers made a move last week, sending the price to 0.8865, although that’s still not too far. yesterday we saw a retrace higher and hesitation from buyers at the parity level, so we decided to take our chances and open a sell forex signal.

NZD/USD – 240 minute chart

Cryptocurrency Update

Most cryptocurrencies were trading in a range for about a week after the latest bearish move more than a week ago. Some of hem such as Ethereum and Litecoin were even showing bullish bias, as they crawled higher. But yesterday we saw another sudden bearish move in the crypto market, which sent Bitcoin bhelow $19,000.

The Decline in BITCOIN Has Stalled

Bitcoin turned bearish after trading on a bullish channel for two months, falling below moving averages, which were acting as support before. Now they seem to have turned into resistance at the top, particularly the 50 SMA (yellow) on the H4 chart, which has been rejecting buyers and yesterday we saw and on Tuesday below $18,500s during the bearish move in the crypto market. e decided to open a buy signal near the lows and hope that this reversal higher continues.

BTC/USD – H4 chart

Closing Ethereum Before the Reversal

Ethereum was showing decent buying pressure from the middle of June, but went through another decline last month, after briefly climbing above $2,000. The price fell below the 200 SMA (purple) which has turned into resistance at the top and yesterday we saw a decline after the last rejection. Although we closed the signal in profit before the reversal. The decline has stalled already and now Ethereum is crawling higher again.

ETH/USD – Daily chart