Yesterday’s Market Wrap

Yesterday we saw a continuation of the positive momentum in risk sentiment and risk assets, with stock markets and commodity currencies completing another leg higher. The USD on the other hand continued to remain bearish, as the USD index DXY fell below 110 points. The US midterm congressional elections were held yesterday and polls favour a strong Republican win, which could be positive for risk sentiment in financial markets.

Bond yields declined which explains some of the positive sentiment, but the dollar move was outsized compared to bonds or equities. Although the stronger lending impulse in China and what could be more stimulus to come might have exaggerated the move. We also saw a crash in cryptocurrencies during the US session, as Binance acquired FTX in a deal that was consummated in a few hours. There has been a brewing fight between FTX and Binance, which are the two largest crypto exchanges, and FTX halted withdrawals for some time. Although, the crash stopped at some point, as Bitcoin fell to $17,000 lows, which is below the June low.

Today’s Market Expectations

Today the calendar is very light, with a couple of central bankers such as the RBA Governor Lowe and SNB Chairman Jordan holding speeches. Although, we will get the results of the midterm elections and a Republican win might push stock markets and risk currencies higher. We will also follow the sentiment in the traditional markets, as well as in the crypto market, if it will continue in yesterday’s footsteps.

Forex Signals Update

Yesterday was a difficult day for traders, as we saw some massive moves such as the one in Gold, which surged above $1,700, while cryptocurrencies crashed lower in two legs. We had winning signals during the European session, but then the crash escalated and we got caught in the middle with two crypto signals.

Selling USD/CAD at the 20 SMA    

USD/CAD turned bearish last week as crude Oil rallied higher while risk sentiment also improved, which sent the USD lower. Today we were seeing a consolidation during the European session but decided to sell as soon as the 50 SMA (yellow) caught up with the price on the H1 chart and the decline resumed again, so we booked profit on that trade.

USD/CAD – 60 minute chart

GOLD Surges Above $1,700

On Thursday Gold started reversing higher and on Friday Gold surged higher from $1,620, but buyers were hesitating at the $1,680 level which used to be support previously. Although, yesterday we saw another strong bullish move which sent Gold from around $1,670 to $1,716, so buyers are in control here now.

XAU/USD – 60 minute chart

Cryptocurrency Update

Cryptocurrencies have been bullish in the last two weeks, as risk sentiment improved. But, yesterday we saw a reversal lower which turned into a crash eventually as FTX halted withdrawals and then sold off to Binance, with FTX’s token falling around 80%.

 ETHEREUM Retesting the 200 SMA

Ethereum was showing buying pressure in the last two weeks, making higher lows and pushed above $1,660, but yesterday we saw a sudden reversal, which initially stopped at $1,430 where we decided to open a buy signal. But, the crash resumed again, sending ETH to $1,240, so the signal hit SL.

ETH/USD – 60 minute chart   

 BITCOIN Returning Below $21,000

Bitcoin was trading in a rage above and below $20,000 for a few months, but the range was be broken as buyers took control. In the last week of October, they pushed the price above $21,000 and the 20,000 level turned into support. But during yesterday crash all the support levels were broken and BTC fell to $17,200.

BTC/USD – H4 chart