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Will US manufacturing numbers keep up with the rest of the data this week?

Forex Signals Brief for November 1: USD Higher on FED Not Pivoting

Posted Tuesday, November 1, 2022 by
Skerdian Meta • 3 min read

Last Week’s Market Wrap

The USD has been on a retreat in the last few weeks as the FED prepares for another 75 bps (basis points) rate hike, which might be the last one, before the FED pivots and slows down with interest rate hikes. That was the reasoning until yesterday, as the Wall Street Journal’s  Timiraos who covers the FED leaks, came out with an article arguing for higher rates for longer.

That has been encouraging for the USD which has been making gains while risk currencies have reversed lower. Yesterday the Chinese manufacturing and services PMI figures posted a further deterioration into contraction for these two sectors, which helped turn the risk sentiment negative, while the consumer inflation in Europe jumped to 10.7% this month. The Q3 Eurozone GDP on the other hand came a bit stronger than expected, showing a 0.2% expansion.

This Week’s Market Expectations

Today started with the Reserve Bank of Australia raising interest rates by 0.25% which was followed by RBA’s Governor Lowe speech. The US ISM manufacturing and JOLTS Job Openings numbers will be released later, both of which are expected to show a cool-off, with ISM manufacturing falling into stagnation. This will be important because it will be the last piece of important data from the US before the FED meeting tomorrow.

Forex Signals Update

Yesterday the volatility was low, as we head into the FOMC meeting and rate decision tomorrow. Although, the sentiment was in favour of the USD which made some gains. We opened four trading signals in total, one in Gold which closed in loss and three forex signals, which closed in profit.

Getting Caught on GOLD 

Gold has been bullish recently, as the USD retreated on FED slowing down with rate hikes. But, the USD buyers returned on Friday and Gold turned bearish after being rejected by the 50 SMA (yellow) at the top on the daily chart, following a doji candlestick which is a bearish reversing signal. Now the downtrend is resuming again, although my colleague opened a buy signal yesterday which got smoked as the 20 SMA pushed the price lower.

TradingView Chart

XAU/USD – H1 chart

Buying the Reversal in EUR/USD

USD/JPY crashed more than 5 cents lower after the second major intervention by the Ministry of Finance of Japan, but this time it continued lower during the following week as the BOJ started intervening in smaller amounts. Although it seems like the bullish momentum has returned again and the 20 SMA (gray) has turned into support on the H1 chart, so we decided to open a buy forex signal there, which closed in profit.

TradingView Chart

USD/JPY – 60 minute chart

Cryptocurrency Update

Cryptocurrencies are still showing bullish signals as buyers keep coming back and sellers are failing to rverse the momentum. They broke above the recent range early last week but pulled back lower. Although, after Elon Musk took over Twitter, Dogecoin surged around 250% higher, pulling higher Shiba Inu coin, as well as the rest of the crypto market. So, buyers seem to be stronger at the moment.

The 200 SMA Holding for BITCOIN

Bitcoin buyers pushed the price above the top of the range last week, after trading in a range for nearly two months. Moving averages were pushing the highs lower on the daily chart, but the breakout came and buyers pushed the price above them. In the last couple of days sellers have tried to push the price down but the 20 SMA (purple) turned into support yesterday.

BTC/USD – H1 chart

[[Dogecoin]] Remains Supported

Dogecoin was bearish like most other cryptocurrencies, although it was trading in a range since July. Moving averages were acting as resistance on the daily chart, particularly the 200 SMA (purple) but late last week we saw a surge after Elon Busk took over Twitter. DOGE/USD climbed above $0.15, so it is one of the most bullish cryptos right now.

DOGE/USD – H1 chart
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