Last Week’s Market Wrap

Last week markets came after the Federal Reserve had raised interest rates by 50 basis points (bps) in the previous week, which is a slowdown from the last several 75 bps rate hikes, although they still keep an opinion of inflation remaining high despite slowing down to 7.1% last week, so they will continue further with rate hikes. UK consumer inflation CPI also cooled off somewhat last week, which were the last major economic releases before the central bank bonanza started with the FOMC meeting on Wednesday evening, followed by the Swiss National Bank, The Bank of England and the European Central Bank on Thursday, all of which raised interest rates by 50 basis points.

They did give some dovish remarks, although they were more hawkish than expected, as the ECB president … pressed on the inflation problem and pledged on continuing with rate hikes. Although the probability of the ECB returning to 75 bps rate hikes is very low as ECB policymaker, Mario Centeno said. That has left markets a bit confused so we have seen USD buyers make a comeback, although we won’t know until next year.

This Week’s Market Expectations

This week central banks continue their show, starting with the monetary policy meeting minutes from the Reserve Bank of Australia on Tuesday morning, followed by the Bank of Japan meeting, although the BOJ is not expected to change anything. From the US we have the CB Consumer Confidence report on Wednesday and the Core PCE Price Index which is the preferred measure of inflation for the FED, so that might have some impact on the USD and the risk sentiment. The CAD is also under scrutiny this week, with Oil and energy prices remaining volatile, while the retail sales on Tuesday, the consumer inflation CPI report on Wednesday and the GDP report on Thursday.

Forex Signals Update

Last week the volatility picked up after the US CPI consumer inflation on Tuesday and gained even more pace after the “soft” FED rate hike on Wednesday. The volatility continued on Thursday with more rate hike for three major central banks and we also saw some reversals during last week. We increased the number of signals, with 25 trading signals. The first part of the week started well, but we got caught on the strong reversal in the last two days, ending up with 15 winning forex signals and 10 losing ones.

Can EUR/USD Hold the Bullis Trend?

EUR/USD has been bullish since October, after coming back from the dead as it was trading just above 0.94 at the end of September. During this time moving averages have turned into support, with the 50 SMA (yellow) acting as such in recent weeks, indicating decent buying pressure. Last Friday we saw a retrace lower so let’s see if the 50 SMA will continue to hold as support.

EUR/USD – 240 minute chart

MAS Keeping GOLD Bullish 

Gold surged higher last month, reaching $1,824 which means gaining more than $200 from $1,615. Moving averages provided some resistance on the way up, but they were eventually broken. Although buyers couldn’t hold the gains above $1,800 and it has continuously retreated back below. Although highs keep getting higher and so are the lows, which means that the trend is still bullish and moving averages are acting as support, with the price bouncing off the 20 daily SMA (gray) and 200 daily SMA (purple) on Friday.

XAU/USD – 240 minute chart 

Cryptocurrency Update

Cryptocurrencies were displaying bullish pressure after reversing early in November, following the FTX drama in the crypto market. The sentiment has improved in financial markets as central banks start to slow down and the bullish momentum continued this week, especially after the slowdown in US inflation, but yesterday we saw a strong bearish reversal after the FED rate hike.

BITCOIN Trading Below $17,000

Bitcoin was trading sideways below $16,000 after the crash at the end of November but turned bullish by the middle of last month and it gained momentum early last week as inflation slowed in the USD, which improved the sentiment. But, central banks didn’t convince the market, so risk sentiment turned negative and risk assets such as stock markets and cryptocurrencies reversed lower.

BTC/USD – 240 minute chart

[[Dogecoin]] Remains Supported buy the 100 SMA

Dogecoin turned quite bullish after Elon Musk bought Twitter for $44 billion and surged from around $0.055 to around $0.16 at the end of October, but then the FTX drama came and Doge reversed down. It lost most of the gains but still trades higher and the 200 daily SMA (purple) in acting as support. Now the 100 SMA (green0 is helping as well, so the price is starting to bounce.

Doge/USD – Daily chart