Yesterday’s Market Wrap
The USD has been trying to get back on its feet in the last two weeks, but eventually, sellers have won as the risk sentiment has been mostly positive, due to the FED turning less hawkish and protests in China which will lead to some kind of reopening. That has been weighing on the USD which is the only safe haven remaining right now and in the last two days, we have seen some large moves after Jerome Powell’s comments on Wednesday evening.
The first decline in the USD came after his speech, while the other came yesterday. Risk assets such as stock markets benefitted on Wednesday, but yesterday there was no continuation like we saw in currencies. The slowdown in the US core PCE price index and the decline in the contraction of the US ISM manufacturing added further to the USD weakness.
Today’s Market Expectations
Today the main factor will be the sentiment surrounding risk and the USD. We will see if the USD resumes the strong decline for a third day. We already had a plethora of central bankers speaking at the Bank of Thailand 80th Anniversary Conference, in Bangkok such as ECB President Lagarde, BOJ Gov Kuroda, RBNZ Gov Orr etc. In the afternoon we’ll have the employment report from Canada and the non-farm payrolls from the US, which might have some effect on risk sentiment.
Forex Signals Update
Yesterday the volatility declined somewhat, particularly in the stock markets which stagnated, so there was uncertainty and we tried to keep it low for some time. We opened only two trading signals, one in commodities and one in forex, both against the USD which closed in profit eventually.
Turning Bearish Again on USD/JPY
USD/JPY has turned really bearish and lows around 17 cents since it topped at 152 before the decisive intervention from the Bank of Japan. This week the decline resumed again after trading sideways last week and we have turned bearish again here, booking profit on a sell signal yesterday.
GBP/USD – H4 chart
Remaining Long on GOLD
Gold has resumed the upside again after turning really bullish early this month as the USD turned bearish and this market sentiment still continues. On Wednesday we opened a long term buy Gold signal which closed in profit after the surge and we decided to do so again yesterday after the 50 SMA (yellow) caught up with the price.
XAU/USD – 15 minute chart
Cryptocurrencies traded sideways yesterday after trying to get back on their feet, following the decline in the previous weeks. This week they have been making progress steadily as the risk sentiment in financial markets continues but yesterday we saw another bullish move after Powell’s speech.
Buying the Retrace at the 50 SMA in [[Bitcoin]
Bitcoin has bounced from the support zone it formed at around $15,500. The price has moved above the moving averages on the H1 chart which have been acting as support now, particularly the 20 SMA (gray) and yesterday we opened another buy BTC signal after the pullback at the 50 SMA (yell0w).
BTC/USD – H1 chart
[[Dogecoin]] Finding Support at 200 SMA
Dogecoin surged higher after Elon Musk took over Twitter, but declined with the whole crypto market after the ETX event. Although it stopped declining and turned bullish again last week, gaining more than 50% as it pushed above all moving averages on the H4 chart. Now the 200 SMA (purple) has turned into resistance so buyers are in control.