Forex Signals Brief for November 7: US Midterms and Inflation to Set the Tone

Last Week’s Market Wrap

Last week it was about central banks once again, as the Bank of England and the Reserve Bank of Australia raised interest rates, although they tilted to the dovish side after being extremely hawkish throughout 2022. But, the main event was the FOMC meeting on Wednesday evening, which was expected to deliver another 75 basis points (bps) rate hike, but announce a slowdown as well.

Although they kept the hawkish bias, letting traders know thy they will keep up the pace for some more time which sent the USD surging higher and all other risk assets diving lower. Although, that lasted until Friday, when rumours about a full Chinese reopening after the Covid zero policy started doing the rounds. The sentiment turned massively positive and risk assets surged higher.

This Week’s Market Expectations

So, we’re coming into the new week with a positive attitude, although let’s see if markets will keep it up. The US CPI (consumer price index) report which will be released on Thursday, is expected to slow to 8.0% from 8.2% in September and might offer some volatility since the FED is looking at the data for interest rates. But, the US midterm elections for Congress will steal the thunder. Although the results might take some time to come out.

Forex Signals Update

Last week was pretty difficult, as central banks raised interest rates but gave dovish signals for the future, while the FED hiked them by 75 bps which initially sent risk assets higher, but they turned bearish after Powell’s press conference. On Friday we had another massive and sudden reversal which sent the USD crashing lower, so there were many reversals and we closed the week with 12 winning trading signals and 13 losing ones out of 25 signals in total.

Will the Bullish Trend Continue for USD/JPY?    

USD/JPY has been on a really strong bullish trend ax highs keep getting lower, although since the intervention from the Ministry of Finance of Japan and the smaller and more frequent interventions from the BOJ the highs have also been getting lower. Although the 200 SMA (purple) is acting as support, so let’s see if it will hold, in which case we will continue to open buy USD/JPY signals.

EUR/USD – H4 chart

Turning Bullish in GOLD? 

Gold has been bearish since March after reversing above $2,000 and we have been selling retraces higher, as it kept making lower highs. Although at times we have traded the upside as well during strong retraces. On Friday we bought Gold twice during the surge, so we might remain bullish again this week if buyers remain in control.

XAU/USD – 240 minute chart

Cryptocurrency Update

Cryptocurrencies turned bullish in the previous week, after Elon Musk took over Twitter, sending Dogecoin higher, which pulled up other cryptocurrencies. The buying momentum faded during most of last week though, but on Friday we saw another surge in the crypto market as the risk sentiment improved and the USD declined.

 BITCOIN Bouncing Off $20,000

Bitcoin was trading in a rage above and below $20,000 for a few months, but it seems like the range might have been broken now, as buyers take control. In the last week of October, they pushed the price above $21,000 and the 20,000 level has turned into support now. BTC bounced off that level after the retreat and the 100 SMA (green) also helped, so buyers remain in control.

BTC/USD – H4 chart

Is Axie Infinity (AXS) Turning Bullish?

Axie Infinity coin AXS has been bearish for exactly a year, since it reversed at $165 last November and the 200 SMA (purple) has been doing a great job in providing resistance at the top during retraces higher. But, last Friday buyers pushed the price above this moving average which might have turned into support now, so we might open a buy signal here if the 200 SMA holds.

AXS/USD – H4 chart