Yesterday’s Market Wrap

On Wednesday we saw an unraveling of the USD gains made on the previous several days, after the FED raised interest rates by 0.75%. The Bank of England intervened in the UK bond market which reversed gilt yields down to around 4%. The USD made a steep decline while risk assets made some decent gains. That sentiment continued early yesterday as the USD retreat resumed, but eventually, it ended and stock markets turned bearish again.

Regarding the economic data, yesterday we had the US Q2 GDP revisions which remained unchanged at -0.6%, confirming the recession, while the Canada GDP for July posted a 0.1% increase instead of a contraction. US unemployment claims also fell below 200k, which shows that this sector is in a good shape. The German CPI inflation figures on the other hand showed yet another increase this month.

Today’s Market Expectations

Today we have the inflation numbers. The Eurozone CPI (consumer price index) report will be released and it is expected to increase further from 9.1% to 9.7%, while the core CPI is expected to increase from 4.3% to 4.7%, and with the German inflation increasing yesterday, the jump in the Eurozone CPI is confirmed. Later the US PCE (Personal Consumption Expenditures) report will also be released and it is expected to show an increase of 0.5% in August.

Forex Signals Update

After having a difficult day on Wednesday as the markets made a sudden reversal higher and the USD crashed lower, yesterday we tried to keep it light, trading mainly Gold. We opened three Gold signals, all of which closed in profit, so we got back on track right away.

Buying USD/JPY 

This pair has been extremely bullish until early this month, but since the second week of September, the price has been trading mostly sideways, although the range has been pretty wide. The Bank of Japan intervened which sent the price more than 500 pips lower, but buyers came back and the bullish momentum resumed although it has slowed again.

USD/JPY – H1 chart

Buying GOLD 

Gold made a sudden bullish reversal on Wednesday although the 50 SMA held as support on the first attempt, rejecting the price. We booked profit on our long tern sell Gold signal and decided to reverse to longs after the reversal higher again in Gold, opening two short term buy signals, which closed in profit as buyers pushed the price above the 50 SMA (yellow).

XAU/USD – H4 chart

Cryptocurrency Update

Cryptocurrencies continued with the rollercoaster ride yesterday as we saw a drop followed by a bullish reversal in the US session, but the volatility declined. We’re still looking to buy Bitcoin after the decline on Tuesday, but it climbed higher pretty fast so we didn’t get in on this trade.

MAs Keeping BITCOIN Down

The $18,500 zone continues to hold as a support area for Bitcoin which has been declining since the middle of August when cryptocurrencies made a bearish reversal. After the rejection at the 200 SMA (purple) on Monday, the price fell to that zone but it held as support. Although, the 20 SMA remains as resistance at the top, stopping bullish attempts, so the main trend still remains bearish.

BTC/USD – H4 chart

MAs Turning Into Support for ETHEREUM?

After the launch of the Ethereum Merge, this cryptocurrency turned bearish as the sentiment turned negative in the financial markets, instead of moving higher. The 20 SMA (gray) was acting as resistance during most of last week, showing strong selling pressure, then the 50 SMA (yellow) came into play. But yesterday buyers pushed above these two moving averages again, so let’s see if buyers can hold the price above them today.

ETH/USD – H4 chart