Forex Signals Brief for November 18: USD Turns Up on More China Covid Measures - Forex News by FX Leaders
China's covid-0 policy hurting the sentiment

Forex Signals Brief for November 18: USD Turns Up on More China Covid Measures

Posted Friday, November 18, 2022 by
Skerdian Meta • 3 min read

Yesterday’s Market Wrap

The US Dollar has been retreating in the last two weeks, as inflation slows down in the US, which relieves the FED from the pressure to keep raising interest rates at a fast pace. The terminal top for rates fell to 4.87% from around 5.09% before the consumer inflation CPI report. This has been keeping the USD bearish and the broader sentiment in financial markets positive, pushing risk assets such as stock markets and commodity dollars higher.

In the last two days, we have seen a reversal of that, as the risk sentiment turns negative again. On Wednesday the impressive retail sales for October started the reversal in the sentiment, followed by more covid restrictions pushed by the state media. So, risk assets have turned lower, with Gold losing around $20 yesterday while stock markets opened with a bearish gap. The Philadelphia FED manufacturing index fell further into negative territory, but it didn’t stop the USD from pushing higher.

Today’s Market Expectations

Today the economic calendar is light once again, having started with the GfK Consumer Confidence early in the Asian session, which remained deeply negative, while the retail sales turned positive in October after declining in the previous two months. Later on, we have the existing home sales from the US, so the sentiment will be driving markets around today again and the sentiment will be decided by comments from central bankers and China covid restrictions.

Forex Signals Update

Yesterday the volatility picked up again and we had a tough day, after the signals we had opened in the previous days short on the USD closed yesterday as the USD gained more than 100 pips against most assets. So, we shifted the strategy and closed the day with two winning signals.

Is the Trend Changing for EUR/USD

EUR/USD came back from the abyss where it fell last month, at around 0.95 and gained around 10 cents, as the USD retreated lower. So, the trend has been bullish for this pair and moving averages such as the 50SMA (yellow) have been doing a good job as support on the H1 chart. But that moving average was broken which is the first sign of a trend reversal, especially if it turns into resistance.

EUR/USD – H1 chart

Shifting to Short in GOLD 

Gold had been bearish since March when it peaked above $2,000 for a while, but couldn’t hold the gains. Although it turned bullish early this month and the 50 SMA (yellow) has turned into support on the H4 chart. We have been using this moving average to buy retreats in Gold, although the price has fallen below three moving averages now triggering the SL of our last buy signal after many several successful ones, so we shifted to shorts toward the end of the day.

XAU/USD – H1 chart

Cryptocurrency Update

Cryptocurrencies attempted to turn bullish in October but it ended with a crash as the FTX exchange was forced to sell off to Binance, with FTX’s token FTT falling below $2. Since then buyers haven’t got it together, but the selling has stopped and crypto coins are trading in a range again.

Buyrs trying to Push BITCOIN Above MAs

Bitcoin crashed lower early last week as it fell to around $15,600 from $22,000, after having traded in a range around $20,000 for more than two months. The 20 SMA (gray) turned into resistance on the H4 chart and was pushing the price lower, but yesterday buyers pushed BTC above that moving average. Although the 50 SMA (yellow) turned into resistance, which gave BTC another push lower but the price is sticking to the 50 SMA (yellow) so it will be broken as well soon.

BTC/USD – H4 chart

ETHEREUM Testing the 50 SMA

Ethereum pushed above $1,660 early last week before the FTX bankruptcy sent ETH crashing lower and despite attempts to turn bullish, sellers still remain in control, but buyers are slowly regrouping. They have tested the 50 SMA (yellow) on the H4 chart, but it rejected the price and now is stands as resistance.

ETH/USD – Daily chart   
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