Yesterday’s Market Wrap

The US Dollar has been beaten up for the last two months, as risk sentiment turned positive on softer tones from central banks, which led to a slowdown in rate hikes last week. Stock markets, cryptocurrencies and other risk assets on the other hand have been bullish and we saw a pop last Tuesday after the softer iS consumer inflation CPI. The FED and the ECB made some less hawkish remarks, but that didn’t convince the markets, which are pricing in that the FED funds peak at 5.00-5.25%.

So, risk sentiment turned negative in the last two days of last week and yesterday we saw a continuation of that, which gave the USD another push higher. Stock markets and cryptocurrencies continued the slide, although it was a bumpy ride overall, which shows that markets right now are uncertain and worried to some degree about a global recession coming up.

Today’s Market Expectations

Today started with the minutes from the last Reserve Bank of Australia meeting which still sees a difficult situation ahead. The Bank of Japan also held its meeting early this morning, although they were not expected to move interest rates since inflation remains under control in Japan, which confirms that the hikes are arbitrary, as major multinational corporations’ profits soar.

They did keep things unchanged with a -0.10% target for short-term rates and a 0% cap for the 10-year bond yields, but widened the 10yr JGB band to 0.50% from 0.25% which sent USD/JPY more than 400 pips lower and risk assets higher against the USD, but the jump faded and the USD is back up, apart from the JPY. Later on, the retail sales will be released from Canada, which are expected to turn positive in October after a decline in September.

Forex Signals Update

Yesterday we didn’t start the day well, as we went long on the USD after the bullish reversal at the end of last week, while the sentiment turned positive in the European session and risk assets jumped higher. But we made up during the US session and closed the day with three losing and four winning trading signals.

 USD/JPY Crashes Again

USD/JPY used to be bearish in the first two trading sessions yesterday as the sentiment turned positive and moving averages were acting as resistance. But, buyers came back in the US session and moving averages turned into support, so we decided to open a buy USD/JPY signal which closed in proft before the BOJ meeting and the crashthat came after that.

USD/JP – 240 minute chart

Trying Both Sides in GOLD  

Gold continues to remain bullish on longer term charts, with moving averages such as the 100 SMA (green) acting as support at the bottom, where my colleague Asrsla opened along term buy Gold signal yesterday. I Opened a short term sell Gold signal against the 50 SMA (yellow) which closed in profit, so we’re keeping the long term signal open.

XAU/USD – 240 minute chart 

Cryptocurrency Update

Cryptocurrencies turned bearish last week after the risk sentiment turned negative in financial markets, following the rate hikes from four major central banks. Yesterday they continued to slide lower although the decline stopped at some point and we saw buyers make a small comeback, so let’s see if they continue to push higher today.

20 SMA Keeping BITCOIN Down

Bitcoin surged to $18,300 early last week after the soft US consumer inflation report, following a slightly bullish month. But reversed back down, following stock markets as sentiment turned negative late last week. The price consolidated for a couple of days but yesterday the 20 SMA(gray) caught up with the price and the decline resumed again

BTC/USD – 240 minute chart

The 200 SMA Remains the Last Support for [[Dogecoin]] 

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 200 SMA (purple) is the last support indicator for Dogecoin.

Doge/USD – Daily chart