Last Week’s Market Wrap

Last week was all about risk sentiment as it has been in recent weeks, as central banks start to slow down with rate hikes. The US midterm Congressional elections were held which helped improve the sentiment, despite still not producing final results. Chinese officials gave contradicting signals as well, commenting on reopening and bringing and end to the Covid-0 policy, while closing Guangzhow, although they will have to reopen fully soon.

On the Other hand, the US consumer inflation CPI declined to 7.8% from 8.2% in September, against 8.0% expected, which helped fuel further the optimism in financial markets and sending risk assets higher. The USD crashed on the other hand and continues to remain weak, so we’ll see of that price action will continue this week.

This Week’s Market Expectations

This week the main theme will be the risk sentiment once again, which is negatively correlated to the USD sentiment. The Buck crashed lower last week, so we will see if the positive risk sentiment will continue this week, which will also be linked to China’s reopening. Although, we have some infltion reports on schedule, starting with the US producer inflation PPI on Tuesday, whichwill be an indication of consumer inflation CPI for the coming months, although a large part of the surge in CPI is due to major multinational corporations just hiking prices. Then theUK CPI report which is scheduled for Wednesday is expected to show further increase to 10.5% in October, as is the Canadian inflation scheduled for Thursday.

Forex Signals Update

This was a difficult week for traders, as the volatility picked up immensely, sending the USD crashing lower, whilerisk assets surged higher, including Gold and the JPY. We opened 2 trading signals in total, in forex, commodities such as Gold, as well as in cryptocurrencies. We closed this week in brekeven, with 11 winning signal and 11 losing ones, which makes this the most difficult week for us.

The 200 SMA Will Decide the Trend for EUR/USD 

EUR/USD has been bearish for more than a year and it fell below parity in August, which was a major event. The 50 SMA (yellow) was doing a great job in providing resistance for this pair, but that moving average was broken and it turned into support. Last week the price closed right at the 200 daily SMA (purple), which will be a deciding factor regarding the major downtrend.

EUR/USD – Daily chart

Keeping Long on GOLD 

Gold reversed higher on Friday in the week before last last one, boucning from $1,615 to $1,771, where it closed last week.  The 100 SMA (green) which used to act as resistance since June was broken without much hassle and it turned into support immediately. The 100 SMA (green) was broken as well, but now buyers are facing the 200 daily SMA (purple) above.

XAU/USD – Daily chart

Cryptocurrency Update

Cryptocurrencies were enjoying a nice bullish run but it has ended with a crash and the FTX exchange being forced to sell off, which seems like another attack from the financial establishment on the crypto market. FTX sold off to Binance, with FTX’s token FTT falling below $2. That crash got us on the wrong side since we were long on a few crypto coins, so we had a bad week here, although we’re hoping to makeup for it this week.

The 20 SMA KeepingBITCOIN Down

Bitcoin was finally showing some bullish pressure above $20,000 until the FTX drame hit the markets, which sent BTC crshing lower to around $15,600. We saw a reversal toward the end of last week, but the 20 SMA (gray) turned into resistance which stopped the climb and it is pushing BTC lower, so sellers remain in control.

BTC/USD – H4 chart

The 200 SMA Still Keeping ETHEREUM Down

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 $1,070. Although yesterday we saw a reversal which pushed ETH above $1,300, but sellers have returned and are still pushing the price down.

ETH/USD – Daily chart