Last Week’s Market Wrap

The main event for this week was the US CPI (consumer price index) which was expected to cool off by 0.1% after a 0.5% decline in the US PPI (producer price index) in July. But, the headline CPI increased by 0.1% as shown in the report released yesterday, while core CPI jumped 0.6% higher. The annualized inflation also came higher at 8.3% against 8.1% expected.

This sent the USD surging higher, as the odds of a strong rate hike jumped higher, with odds of a 1.00% hike this month increasing to 23% from 0% before the report. More rate hikes from the FED will put the economy in more difficulty, so the risk sentiment turned negative and stock markets turned bearish, with S&P500 losing 100 pips.

Today there are two inflation reports on the schedule, with the UK CPI consumer inflation released early this morning, which showed that prices keep increasing as inflation remains at record levels of around 10%. Later in the afternoon, we have the US producer inflation report to be released. The headline PPI number is expected to show a decline of 0.1% in August after the 0.5% decline in July, but that didn’t affect the consumer inflation which kept growing last month, so companies are pocketing all the profit.

Forex Signals Update

Yesterday we opened five trading signals in total in forex and in commodities, particularly in Gold. They all closed as the volatility picked up after the US consumer inflation (CPI ) report was released and we ended the day with four winning forex signals and a losing signal.

Reversing to Sell GOLD  

Gold has been making higher highs since the beginning of September, as it retraced higher on better risk sentiment and a weaker USD. During this time, we have been bullish on Gold, buying retraces lower although today we shifted the position after the USD CPI inflation report. We turned bearish on Gold, opening a sell Gold signal yesterday which closed in profit.

Gold XAU – 240 minute chart

 USD/JPY Continues the Bullish Momentum

USD/JPY continues to remain very bullish, as the Bank of Japan stays on hold with inflation under control over there, while the FED keeps increasing interest rates at a very fast pace. Last week we saw a retrace on this pair though, but the 50 SMA (yellow) held as support on the H4 chart and the price bounced off that moving average. We opened a buy USD/JPY signal after the US inflation report, which closed in profit.

ETH/USD – 240 minute chart

Cryptocurrency Update

Cryptocurrencies made a bullish reversal last Thursday after being bearish since the middle of August. Bitcoin moved above $22,500 yesterday while other crypto coins were also making some decent gains. But, the US CPI report raised odds of another strong rate hike from the FED which turned the risk sentiment negative, sending cryptocurrencies lower.

BITCOIN Failing at the 100 Daily SMA Again

Bitcoin reversed later last week after the selloff earlier in the week which sent BTC below the support zone at $19,000. The bullish momentum continued this week and buyers were retesting the 100 SMA (green) on the daily chart for the second time, but once again they failed and the price reversed after the US inflation report which turned risk assets lower.

BTC/USD – Daily chart

The 200 SMA Supporting Ethereum 

ETHEREUM was showing decent buying pressure during most of the summer, 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 stalled already and now Ethereum has turned bullish again, pushing above the 200 SMA, which seems to have turned into support, where we decided to open a buy signal.

ETH/USD – 240 minute chart