Forex Signals Brief for November 24: USD Resumes Decline on Softer US Services/Manufacturing
Skerdian Meta • 3 min read
Yesterday’s Market Wrap
The USD started turning bullish at the end of last week after being on a retreating period for several weeks and on Monday we saw a continuation of the bullish momentum on the USD, as China pushed for further coronavirus restrictions and lockdowns during the weekend, hurting risk sentiment in financial markets. On Tuesday though, the sentiment started improving again and the USD retreated lower as the only safe haven remaining.
Yesterday the decline continued again, especially after the softer services and manufacturing, both of which are in contraction now. The Eurozone and UK services and manufacturing numbers came above expectations earlier in the European session, but both these sectors still remain in contraction there as well. Earlier still in the Asian session, the Reserve Bank of New Zealand raised interest rates by 75 bps, so the Kiwi remained bullish yesterday, as did most risk assets. Later in the evening, the FOMC minutes from the last FED meeting gave the USD another push lower as they implied a slowing of pace of rate hikes.
Today’s Market Expectations
Today the economic calendar is pretty light with only the German Ifo business climate as the main indicator during the day, as the US is off for Thanksgiving, so it will be a short week. The ECB monetary policy meeting accounts will be released later but will not have much effect on the Euro. Retail sales for Q3 will be released from New Zealand later in the evening which are supposed to show a positive reversal after the decline in the Q1 and Q2.
Forex Signals Update
Yesterday the USD continued the decline from the previous day, although during the Asian session USD buyers tried the upside, so our sell signals in Gold and Oil closed in profit. We ended the day with six trading signals, four winning and two losing ones.
WTI Rejected by the 100 SMA
Crude Oil crashed $5 lower on Monday on news of a production increase by OPEC but reversed after the rejection by the Saudis and continued to crawl higher. But the 100 SMA (green) rejected the price twice. We decided to open a long term sell Oil signal after the second rejection and booked profit as the decline resumed.
WTI Oil – H1 chart
Booking Profit on GOLD Before the Reversal
Gold turned really bullish earlier this month as the USD retreated lower. Although the climb stopped and Gold retreated lower since late last week, with the 20 SMA (gray) turning into resistance in the H4 chart. We opened a sell Gold signal at this moving average yesterday as it was rejecting the price and booked profit during the spike lower before the bullish reversal higher.
XAU/USD – H4 chart
Cryptocurrencies turned bullish in October as risk sentiment improved but the bullish momentum has ended. They have turned bearish on the FTX news and after the bearish move earlier this month, we saw another decline last week which sent them to the lows from early November. But they are showing some buying pressure this week, so let’s see if they can turn the tide around.
[[Bitcoin] Buyers Testing the 50 SMA
Bitcoin retested the lows on Monday after turning bearish earlier this month as it fell to around $15,600 from $22,000 after the bankruptcy of FTX exchange. The price consolidated for a couple of weeks, but the decline resumed again as the 50 SMA (yellow) caught up with the price on the H4 chart and on Monday sellers retested the previous low, which held. We saw a bounce on Tuesday and yesterday buyers were testing the 50 SMA (yellow) stopped the climb.
BTC/USD – H4 chart
ETHEREUM Returning to $1,200?
The FTX bankruptcy sent Ethereum crashing lower and despite attempts to turn bullish, sellers still remain in control. There was a consolidation here for a few weeks as well, but the 200 SMA (purple) caught up on the H1 chart and pushed the price lower. On Monday ETH/USD fell below $1,100 again but yesterday we saw a reversal, so buyers are still alive.