Yesterday’s Market Wrap

Yesterday markets were trading the aftermath of the FOMC meeting which took place on Wednesday evening. The FED raised rates by 75 basis points, but the real news was in the statement and the press conference from Powell. They left the door open for further rate hikes which is hawkish and the USD surged higher on Wednesday night. Yesterday we saw a continuation of that and the USD continued to push higher, despite the slowing ISM manufacturing.

All other assets continued the decline since the main trade now is the USD trade and everything is trading against it. Stock markets continued lower too, while Gold lost more than $50 from the top after the jump in the initial FED reaction, to the bottom. Crude Oil was the only asset that held well besides the USD. The Bank of England raised interest rates by 75 bps, but they also signaled a slowdown just like the ECB, which is weighing on the GBP as well.

Today’s Market Expectations

Today we expect a similar price action across the board, with risk assets to continue slipping lower, while the USD pushes higher. The final reading for the European services report showed that this sector remained in contraction in October, which is a negative factor for the Euro. Later in the day we have the employment reports from Canada and the US, which might have some impact on the markets since Powell is leaving future rate hikes dependent on the data.

Forex Signals Update

Yesterday risk assets continued to slide lower in the European session so we decided to remain long on the USD and short on other assets. We opened three sell forex signals in EUR/USD and one in GBP/USD although we closed the day at breakeven as we got caught during the retrace higher when the US session started with two losing signals, but booked profit on two more signals.

Selling EUR/USD Three Times

EUR/USD turned bearish last Thursday after the ECB meeting which produced a 75 bps rate hike, but signaled a slowdown in future tightening, while the FED sent the USD higher, so this pair has two strong reasons to keep declining, besides services remaining in contraction. We opened three sell forex signals here yesterday, two of which closed in profit and one closed in loss during the retrace higher.

EUR/USD – H1 chart

Opening A Long Term Sell Signal in GOLD 

Gold jumped higher on Wednesday immediately after the FED raised rates, but reversed lower as the statement was released and continued to decline yesterday in the European session. In the US session we saw a retrace higher, which looked like a good opportunity to get in on the short side and we opened a long term sell signal here.

XAU/USD – 60 minute chart

Cryptocurrency Update

Cryptocurrencies turned bullish last week, as Elon Musk took over Twitter, sending Dogecoin higher, which pulled up other cryptocurrencies. Since the weekend though, the buying momentum has faded and they have been making lower highs, although the selling pressure remain minimal, which is a sign that we might see another decent bullish move soon.

Is $20,000 Turning into Support for BITCOIN?

Bitcoin surged higher last week, pushing above $20,000  and eventually the price moved above $21,000, breaking the top of the range which lasted for two months. 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 positive sign.

BTC/USD – H1 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