Consumer inflation expected to increase further as PPI increases too

Forex Signals Brief for November 15: Eurozone Q3 GDP and US Producer Inflation

Posted Tuesday, November 15, 2022 by
Skerdian Meta • 3 min read

Yesterday’s Market Wrap

Yesterday we saw a slowdown from last week’s enormous volatility, which came after the US CPI inflation report showed a cool-off in October, offering some relief for the FED to slow down with rate hikes. The USD gained some ground after last week’s crash, but it started reversing lower again in the US session.

So, it was a quiet day for the most part, as the post-CPI relief rally met a pause to start the new week. Stock markets were slightly bullish, as the positive sentiment prevailed again, while bonds traded sideways. So, the early jump in the USD was more of a dead-cat bounce. The comments from FED’s Brainard stoked some USD selling as she didn’t choose to push back against fading market expectations for rate hikes. The terminal rate sits at 4.93% now.

Today’s Market Expectations

Today the economic calendar is more interesting, having started with the meeting minutes from the RBA which also indicated a slowdown. The UK Average Earnings Index as well as unemployment claims were released a while ago, while later the second reading for the Eurozone Q3 GDP will be released, which is expected to remain unchanged at 0.2%. The US producer inflation report PPI and the Empire State Manufacturing Index will be released as well, which might have a say on the risk sentiment.

Forex Signals Update

Yesterday the USD started reversing higher after last week’s crash, but the sentiment turned positive during the US session, which means that there were two reversals. We flopped positions twice and ended up with two winning and two losing signals, although we had a long term signal in Gold which closed in profit.

Trying the Upside in USD/JPY 

USD/JPY lost more than 8 cents as it crashed lower last week after the softer US inflation report, with the 20 SMA (gray) acting as resistance on the H1 chart. But yesterday this pair opened with a bullish gap above the 20 SMA and that moving average turned into support. Buyers pushed above the50 SMA (yellow) as well, but the situation is still undecided.

USD/JPY – H1 chart

Buying the Retreats  in GOLD at MAs

Gold reversed higher on Friday in the week before last one, bouncing from $1,615 to $1,771, where it closed last week.  The 50 SMA (yellow) seems to have turned into support and yesterday we decided to open a long term buy Gold signal during the retrace to this moving average, which eventually closed in profit as the uptrend resumed.

XAU/USD – H1 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 make up for it this week.

Dead Cat Bounce in BITCOIN?

BTC crashed lower last week to around $15,600from above $20,000. There was an attempt for a reversal toward the end of last week, but the bullish momentum ended and the decline resumed again. Yesterday we saw a bounce but that ended at the 100 SMA (green) on the H1 chart and sellers returned.

BTC/USD – H1 chart

ETHEREUM Buyers Trying to Get It Together 

Ethereum pushed higher in the last two weeks as the sentiment in the crypto market remained positive, making higher lows and pushing above $1,660. Although the FTX bankruptcy sent ETH crashing lower and despite attempts to turn bullish, sellers still remain in control, but buyers are slowly regrouping.

ETH/USD – Daily chart   
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