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USD turned lower last week as inflation headed toward normal levels

Forex Signals Brief for November 10: Can Inflation Numbers Turn the USD Bullish Again?

Posted Thursday, November 10, 2022 by
Skerdian Meta • 3 min read

Yesterday’s Market Wrap

Yesterday the USD was starting to gain some ground early in the European session, but tumbled lower after news that Ukraine had made some advancements, while risk assets jumped higher and European stocks closed the day with gains. But, that’s just minor news and the risk sentiment abated again, sending the USD higher ahead of today’s CPI report, while US stocks retreated. The economic calendar was light, with only the Chinese inflation report, which remains pretty low.

The drama in the crypto market continued after the FTX selloff to Binance, with Bitcoin declining to $16,000 lows and Ethereum to $1,140. There could be a big financial hole that FTX might have left behind, which kept the sentiment negative in the crypto market. The USD ended the day higher.

Today’s Market Expectations

Today the economic calendar is light during the Asian and the European session, with only the ECB economic bulletin on schedule. In the US session we have the US consumer inflation report CPI (consumer price index), so traders are very interested to look at October’s numbers. The FED is not giving signs of slowing down, leaving the top or interest rates at the mercy of the data, so today’s report is important and might set the tone for the USD and risk sentiment for the week.

Forex Signals Update

On Tuesday we had a rough day after the surge risk sentiment the previous day which sent risk assets higher and the USD crashing lower, although we got hit hardest by the crash in the crypto market. Yesterday, we tried to make a comeback and we did good, closing with three winning signals and a losing one.

Booking Profit on EUR/GBP 

EUR/GBP has been bullish for months and in September we saw a surge as UK gilt yields surged higher, with UK 10-year yields above 4%. Although, the sentiment improved after the intervention from the bank of England and we saw a retreat, but the bullish momentum resumed again and we opened a buy forex signal here, which closed in profit.

EUR/GBP – 240 minute chart

Catching the Spike in GOLD 

On Thursday last week Gold reversed higher and on Friday Gold surged higher to $1,680, but buyers were hesitating at that previous support. On Friday though we saw a big surge and Gold surged above $1,700 where it consolidated. Yesterday we decided to open a long term buy signal after a small retreat overnight and booked profit during the spike on Ukraine news.

XAU/USD – 60 minute chart

Cryptocurrency Update

The nice bullish run in the crypto market has ended with a crash and FTX was forced to sell off. FTX halted withdrawals and then sold off to Binance, with FTX’s token FTT falling below $2. We decided to open a buy signal in Ethereum on Tuesday evening after the crash stopped, but yesterday it resumed again, so cryptocurrencies remain bearish.

 ETHEREUM Failing at the 200 SMA Again

Ethereum pushed higher in the last two weeks as the sentiment in the crypto market remained positive after Elon Musk purchased Twitter, making higher lows and pushing above $1,660. Although the 200 SMA (purple) held as resistance and yesterday we saw a sudden reversal, which initially stopped at $1,430, but resumed again and pushed ETH/UD down to $1,120s.

ETH/USD – 60 minute chart   

 BITCOIN Falling to $16,000

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 the crash all the support levels were broken and BTC fell to $16,000.

BTC/USD – Daily chart
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