The FED is looking at inflation and jobs numbers for policy decisions

Forex Signals Brief for November 2: Will the FED Pivot After Today’s Hike?

Posted Wednesday, November 2, 2022 by
Skerdian Meta • 3 min read

Yesterday’s Market Wrap

Yesterday started with the Reserve Bank of Australia, which delivered a 25 bps rate hike, bringing them to 2.85%. That came after the Q3 consumer inflation CPI remained elevated last week, against a cool-off expected. The Aussie turned bullish during the Asian and the European session as a result, being helped by the relaxation of the coronavirus restrictions in China.

Later in the US session, the ISM manufacturing beat expectations, although it cooled off in October. But, the JOLTS job openings came out much better than expected for last month, while September was revised higher as well. This shows that the employment sector is still strong in the US, which might justify the FED keeping up the pace of rate hikes after today’s 75 bps planned hike. That sent the USD higher and risk assets lower, although today will be the decisive day.

Today’s Market Expectations

Last night the RBNZ highlighted that households and firms will be challenged by the rising interest rate environment, after the employment report. This indicates that they might continue to raise rates further. The Eurozone manufacturing report showed that this sector remains in recession, while later we have the US ADP employment figures, ahead of the big event for the week. A 75 bps hike is a done deal, but markets are more interested in future rate decisions, whether the FED will slow down or continue to hike by 75 bps.

Forex Signals Update

Yesterday there was some decent volatility, although the price action was all over the place, as markets reversed a couple of times, catching traders on the wrong side. We opened five trading signals, three forex signals, and two Gold signals, ending up with three winning signals, one of which a long-term trade in Gold.

Opening Two Signals in GOLD 

Gold turned bullish yesterday during the European session, as risk sentiment improved and my colleague Arslan opened a long term buy Gold signal, which closed in profit as buyers pushed the price to the 100 SMA (green) on the daily chart. Then the price reversed back down, but the 20 SMA (gray) turned into support.

XAU/USD – H1 chart

Selling EUR/GBP at the 20 SMA 

EUR/GBP surged higher in September as UK gilt yields surged higher too, sending the GBP crashing lower. Although, with the Bank of England intervening this pair has reversed lower and has been bearish since then. Yesterday we decided to open a sell forex signal here as buyers were failing at the 20 SMA (gray).

USD/JPY – 240 minute chart

Cryptocurrency Update

Cryptocurrencies made a nice bullish move last week, followed by another push higher toward the end of the week as Elon Musk took over Twitter, sending Dogecoin higher, which pulled up other cryptocurrencies. In the last few days the buying pressure has stalled, btu they’re not giving up the gains, which is a bullish signl.

The 200 SMA Holding for BITCOIN

Bitcoin pushed the price above the top of the range last week, after trading in a range for nearly two months. The price moved above $21,000, although buyers have failed to make further gains in recent days. But on the other hand, BTC is still holding above $20,000, which is a good sign.

BTC/USD – H4 chart

[[Dogecoin]] Keeps Making Gains

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 after pushing higher yesterday to $0.1575.

DOGE/USD – H4 chart    
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