Yesterday’s Market Wrap

Yesterday the economic calendar was light, apart from the Reserve Bank of Australia meeting and rate decision in the early hours of the morning. The RBA raised interest rates by 0.25% which was the 8th consecutive hike and kicked off the central bank bonanza for these two weeks. The 25 bps hike was fully priced in, but the interest was on the statement, which would indicate what path the RBA would follow in the coming meetings.

The main comment on the statement was: “The Board expects to increase interest rates further over the period ahead, but it is not on a pre-set course.” So, they are still hiking and suggesting that more rate hikes are to follow, even though they hinted that rates reached neutral a couple of months back. Nevertheless, that couldn’t help the Aussie much as the sentiment remained negative, despite China hinting at reopening as well. So, all risk assets declined against the USD yesterday after the strong bearish reversal on Monday.

Today’s Market Expectations

Australia opened the calendar again today, with the Q3 GDP report which showed a slight slowdown from the previous quarter. The German Industrial Production numbers were released a while ago, showing a contraction in November. The revised Eurozone GDP for Q3 remained unchanged at 0.2%, although the major event today will be the Bank of Canada rate decision and the statement release later in the day. The BOC is expected to raise interest rates by 0.50% which will take them to 4.25%, although the statement will be more important.   

Forex Signals Update

Yesterday the volatility declined as markets settled after Monday’s strong ISM non0-manufacturing numbers. The USD resumed the upside momentum, although it was much slower, so we opened four trading signals in total, two Gold signals and two forex signals, all of which closed in profit.

Playing Both Sides in GOLD

Gold turned bullish in November and XAU/USD reached $1,810, where it met the 200 SMA on the daily chart. Then came the reversal after the US ISM services report on Monday and lost around $45, falling to the 200 SMA (purple) on the H1 chart below. The price bounced off that moving average and my colleague Arslan opened a buy signal while I opened a sell signal at the 100 SMA (green), both of which closed in profit.

XAU/USD – 60 minute chart

Selling EUR/GBP at the 500 SMA

EUR/GBP has turned bearish since the middle of last month and moving averages have been acting as resistance on the H4 chart, the 20 SMA (gray) at first then the 50 SMA (yellow) as the pace of the decline slowed. On Monday we opened a sell EUR/GBP signal below the 50 SMA and yesterday booked profit on it as the decline resumed despite having pierced this moving average a few times to the upside.

EUR/GBP – H4 chart 

Cryptocurrency Update

Cryptocurrencies seem to have regained the status of risk assets again, after the headwind from the FTX crash was over. They have been crawling higher since the middle of November, as risk sentiment has been mostly positive while the USD has been weak. But on Monday we saw a bearish reversal and yesterday there was almost no action.

BITCOIN Remains Supported by the 50 SMA

Bitcoin formed a support zone around $15,600 where it started bouncing from and after finding some resistance at MAs, buyers pushed above them eventually as the sentiment turned positive in the last two weeks. But, the 200 SMA (purple) still remained as the last man standing and stopped the bullish momentum. This moving average rejected the price on Monday but yesterday BTC was leaning on the 50 SMA (yellow) for support and stayed there the entire day.

Yesterday’s Market Wrap

Yesterday the economic calendar was light, apart from the Reserve Bank of Australia meeting and rate decision in the early hours of the morning. The RBA raised interest rates by 0.25% which was the 8th consecutive hike and kicked off the central bank bonanza for these two weeks. The 25 bps hike was fully priced in, but the interest was on the statement, which would indicate what path the RBA would follow in the coming meetings.

The main comment on the statement was: “The Board expects to increase interest rates further over the period ahead, but it is not on a pre-set course.” So, they are still hiking and suggesting that more rate hikes are to follow, even though they hinted that rates reached neutral a couple of months back. Nevertheless, that couldn’t help the Aussie much as the sentiment remained negative, despite China hinting at reopening as well. So, all risk assets declined against the USD yesterday after the strong bearish reversal on Monday.

Today’s Market Expectations

Australia opened the calendar again today, with the Q3 GDP report which showed a slight slowdown from the previous quarter. The German Industrial Production numbers were released a while ago, showing a contraction in November. The revised Eurozone GDP for Q3 remained unchanged at 0.2%, although the major event today will be the Bank of Canada rate decision and the statement release later in the day. The BOC is expected to raise interest rates by 0.50% which will take them to 4.25%, although the statement will be more important.   

Forex Signals Update

Yesterday the volatility declined as markets settled after Monday’s strong ISM non0-manufacturing numbers. The USD resumed the upside momentum, although it was much slower, so we opened four trading signals in total, two Gold signals and two forex signals, all of which closed in profit.

Playing Both Sides in GOLD

Gold turned bullish in November and XAU/USD reached $1,810, where it met the 200 SMA on the daily chart. Then came the reversal after the US ISM services report on Monday and lost around $45, falling to the 200 SMA (purple) on the H1 chart below. The price bounced off that moving average and my colleague Arslan opened a buy signal while I opened a sell signal at the 100 SMA (green), both of which closed in profit.

XAU/USD – 60 minute chart

Selling EUR/GBP at the 500 SMA

EUR/GBP has turned bearish since the middle of last month and moving averages have been acting as resistance on the H4 chart, the 20 SMA (gray) at first then the 50 SMA (yellow) as the pace of the decline slowed. On Monday we opened a sell EUR/GBP signal below the 50 SMA and yesterday booked profit on it as the decline resumed despite having pierced this moving average a few times to the upside.

EUR/GBP – H4 chart 

Cryptocurrency Update

Cryptocurrencies seem to have regained the status of risk assets again, after the headwind from the FTX crash was over. They have been crawling higher since the middle of November, as risk sentiment has been mostly positive while the USD has been weak. But on Monday we saw a bearish reversal and yesterday there was almost no action.

BITCOIN Remains Supported by the 50 SMA

Bitcoin formed a support zone around $15,600 where it started bouncing from and after finding some resistance at MAs, buyers pushed above them eventually as the sentiment turned positive in the last two weeks. But, the 200 SMA (purple) still remained as the last man standing and stopped the bullish momentum. This moving average rejected the price on Monday but yesterday BTC was leaning on the 50 SMA (yellow) for support and stayed there the entire day.

BTC/USD – H4 chart

LITECOIN Overcoming the 50 SMA

Litecoin has been making gains since June and the FTX event which sent the crypto market through another crash didn’t affect LTC too much. In the last several weeks we have seen some bullish momentum which has pushed the price above the 20 SMA (gray). This moving average has turned into support now while the 50 SMA (yellow) turned into resistance but buyers managed to push LTC above it yesterday, which ended up with gains after all.

LTC/USD – Weekly chart