Forex Signals Brief for December 23: Canada October GDP Closing A Crazy Year

Yesterday’s Market Wrap

Yesterday was supposed to be a quiet day, with the third and last Q3 GDP revisions for the US and UK. Markets were trading sideways during most of the European session, after a decline in the USD during the Asian session as risk sentiment improved. The UK Q3 GDP report was revised lower to -0.3% from -0.2%, which kept the GBP heavy.

Later in the US session, the last reading for the Q3 US GDP showed an improvement from 2.9% to 3.2%, which improved the situation for the USD. The Buck started turning bullish, while risk sentiment turned negative, sending stock markets and commodities such as Gold and crude Oil lower. Market odds for the FED to continue with rate hikes increased, which was the reason for the bullish move in the USD.

Today’s Market Expectations

Today is the last day of decent economic data being released for 2022, starting with the National Core CPI inflation in Japan which ticked higher, as well as the Monetary Policy Meeting Minutes from the Bank of Japan, which come after the latest policy change. The important numbers will come in the US session, starting with the October GDP report from Canada, followed by the US durable goods orders, Core PCE Price Index, personal spending and income, and closing it off with the revised UoM Consumer Sentiment and Inflation Expectations.

Forex Signals Update

Yesterday markets continued to trade with a choppy price action, which kept most forex pairs and other assets trading in a tight range, until the US Q3 final GDP report was released and risk sentiment turned negative. We already closed a forex signal in profit ahead of the US GDP report and then deiced to trade with long term signals, as the volatility picked up.

 Booking EUR/GBP Continues the Bearish Reversal 

EUR/GBP turned bullish by the middle of this month as the GBP started to reverse lower after making some massive gains for more than two months. Moving averages have been acting as support on the h1 chart, particularly the 100 SMA (green) and we decided to open a buy EUR/GBP signal yesterday after the retrace to the 20 SMA (gray) which closed in profit as the bullish momentum picked up again.

EUR/GBP – 60 minute chart

Will MAs Hold in GOLD  

The USD turned bullish yesterday after the GDP report, which is a rare market move for the reading on the GDP. The idea is that higher GDP figures raise the odds that the Fed will follow through on rate hikes and raise the terminal top rate. GOLD fell below $1,800 again, after making a swift reversal down from $1,820 where it was trading before the US GDP report. We were thinking about buying Gold at $1,800 after the recent surge, but we waited until it reached the 100 SMA (green) lower, which has acted as support before on the H4 chart, as shown in the image above.

XAU/USD – 240 minute chart 

Cryptocurrency Update

Cryptocurrencies stopped declining earlier this week after turning bearish last week as the risk sentiment turned negative in financial markets. But, the decline resumed after the US GDP revision yesterday so at the moment they remain bearish.

BITCOIN Slides As Sentiment Deteriorates

Bitcoin has resumed the decline after climbing above $18,300 early last week, following the soft US consumer inflation report but reversed back down later after rate hikes from central banks and fell to $16,000 lows until Tuesday evening. We saw a quick reversal after that but buyers failed to push the price above the 200 SMA (purple) although the 200 SMA (green) was holding as support. But, that moving average was broken yesterday.

BTC/USD – 60 minute chart

The 200 SMA Rejects ETHEREUM

Ethereum had formed a resistance zone around $1,300 for about a month until earlier last week when buyers gave a decisive push, sending the price above that area. But, sellers returned again as the sentiment turned negative in financial markets and pushed ETH/USD below moving averages. Now the 200 SMA (purple) has turned into resistance for Ethereum.

ETH/USD – 240 minute chart