Yesterday’s Market Wrap

Yesterday the European Central Bank held its meeting which was the highlight of the week, although it came after a disappointing 50 bps hike from the Bank of Canada on Wednesday, while expectations were for a 75 bps hike. The ECB delivered on expectations as they raised the main refinancing rate by 0.75%, up to 2.00%. But, the comments from ECB president Lagarde at the press conference did not convince the markets that she was “all in”. She tried to give the impression that they have to do more, but she didn’t go too far out on with any “kill inflation now” rhetoric.

Later on, several sources came out with headlines that the 75 bps hike wasn’t unanimous and that three ECB doves wanted a 0.50% hike. But, a more hawkish observation was that the ECB comments about ‘progress’ weren’t meant to imply slower hiking, which means that there can be more 75 hikes in the following meetings. Nonetheless, the Euro ended lower eventually, which ended the day below parity, losing around 90 pips.

Today’s Market Expectations

Today started with inflation data from Japan, and all three indicators showed an increase above the consensus. The Bank of Japan meeting took place later on, although no change was expected in interest rates. The Spanish and German prelim GDP reports for September were released a while ago and they showed a slowing trend which indicates recession soon. The US GDP and core price index report will be released later on, with the economy expected to have fallen flat in August.

Forex Signals Update

Yesterday was another tough day despite the low volatility. There a few reversals in risk sentiment and most assets went their own way, with Gold ending the day lower while Oil made some decent gains for example. We ended up with three winning and three losing signals after all, although the profit leaned on the positive side after the long-term Oil signal closed in profit.

Selling GOLD at the 200 SMA

Gold turned bullish earlier this week, even though this was more of a USD move, which has been retreating considerably. it made some decent gains until reaching the 200 SMA yesterday, where we decided to open a sell Gold signal which closed in profit after the rejection.

XAU/USD – 240 minute chart

Going Countertrend on WTI Oil  

Crude Oil has been showing some bullish signals recently, but the 200 SMA (purple) was acting as resistance at the top, pushing the highs lower. Although, after the breakout to the upside, buyers gained confidence and Oil surged pretty close to $90, where we decided to take a shot at the downside in hope of a retrace. That’s what happened and we booked 70 pips from that trade

AUD/USD – 240 minute chart

Cryptocurrency Update

Cryptocurrencies have been bullish in recent days, attempting to jump higher and yesterday they managed to pop up, with Ethereum peaking above $1,500 in the evening. We highlighted on our crypto signals report yesterday that there could be a bullish breakout in the crypto market and the jump higher came later, but they need to push higher in order to be considered bullish.

 BITCOIN Retreating Off the 100 Daily SMA

Bitcoin made a breakout earlier this week, after trading in a range for nearly two months, stretching from $18,000 lows up to around $20,500. The 50 SMA (yellow) was pushing the highs lower on the daily chart, but the breakout came and buyers pushed the price above the range. Our buy BTC signal hit the take profit target and we opened a sell signal, which is looking better now after the rejection at the 100 SMA (green).

BTC/USD – Daily chart

 ETHEREUM Approaching $1,500

Ethereum also made a nice bullish breakout and it almost reached $1,600 on Wednesday, where it met the 100 SMA (green) on the daily chart. That moving average provided resistance and yesterday we saw a slight reversal, although lets see if the selloff will pick up pace or if buyers will come back and push Ethereum above $1,600.

ETH/USD – H4 chart