Last Week’s Market Wrap
Last week was mostly about manufacturing and services, with the European and US reports being released by the middle of the week. Europe saw a slight improvement in activity for both sectors in November, although they remain in contraction. The US manufacturing PMI was expected to fall flat at 50 points, but came out weaker at 47.6 points, which means contraction.
Services fell even deeper in contraction, so the US economy is headed for a recession again. That sent the USD lower again after making a small comeback in the previous weak, and the FOMC minutes from the last meeting weighed on the Buck as well, as they sounded less hawkish, implying a slowdown in rate hikes. The Reserve Bank of New Zealand delivered a 75 basis points rate hike, so NZD/USD had a couple of reasons to run higher, as did most risk assets apart from crude Oil which continued to decline.
This Week’s Market Expectations
This week we’ll see how the US ISM manufacturing number comes out, which is expected to show a contraction at 49.8 points, although it might be deeper after seeing last week’s manufacturing PMI. The Eurozone CPI (consumer price index) report on Wednesday is expected to show a cool-off from 10.7% to 10.4% in consumer inflation during October, while the US Q3 GDP is expected to be revised slightly higher.
Forex Signals Update
At the beginning of last week, we turned bullish on the USD, as it reversed at the end of the previous week, although the Buck turned bearish again and we reversed course, which proved to be a good decision. We opened 24 trading signals in total, in cryptocurrencies, commodities and forex. 15 of them were winning signals, giving us a 64/36% win/loss ratio and we also had more long term winning signals too.
WTI Heading for $70?
Crude Oil turned bearish earlier this month, before other risk assets and it continues to remain bearish last week despite the positive risk sentiment in financial markets which sent commodity dollars higher. The 20 SMA (gray) has turned into resistance on the H4 chart and we remained bearish on Oil.
US Crude Oil – H4 chart
GOLD Resuming the Upside Momentum
Gold has been on a bearish trend since March after failing to hold gains above $2,000, but turned really bullish early in November as the USD turned bearish lower and moving averages were broken, apart from the 200 SMA (purple) on the H4 chart, which rejected the price initially. ALthough the 20 SMA (gray) held as support and now Gold has reversed back up.
XAU/USD – H1 chart
Cryptocurrencies continued to decline early last week, with Bitcoin making a new low for the year at around $15,500 while Ethereum fell below $1,100 again. Although we saw some improvement as the week progressed, with the sentiment being positive in financial markets.
[[Bitcoin] Consolidating at Moving Averages
Bitcoin turned bullish last week after retesting the lows on Monday at around $15,500 pushing below the post FTX exchange crash. The price moved above the 20 SMA (gray) and the 50 SMA (yellow) but the 100 SMA (green) is still holding as resistance, so we’ll see if the bullish momentum will continue this week.
BTC/USD – H4 chart
ETHEREUM Finding Support at MAs
The situation in Ethereum is similar to that of Bitcoin, having crashed after the FTX bankruptcy and moving averages turned into resistance. Although it didn’t make a new low this week and now the price has broken the MAs which were acting as resistance, so now they have turned into support.