Yesterday’s Market Wrap

On Tuesday we saw a slight bearish pressure in the USD, which sent most major currencies up against it apart from the JPY, as it continues to give back gains made after the BOJ policy change. Bank of Japan officials are giving dovish signals, cooling off the heated sentiment after the policy change. On the BOJ Summary released early yesterday, we saw that apart from the small, but huge impact, of policy tweak there is little to indicate any imminent tightening of policy, which weighed on the JPY.

Although, Takatoshi Ito, an academic who is close to BOJ governor Kuroda said that the central bank could be moving towards policy normalization. That should have been bullish but he’s not the main contestant for the top BOJ job position after Kuroda leaves. The USD was once again under selling pressure until around midday, when we saw another sharp reversal which sent it 60 pips higher across the board, showing that neither buyers nor sellers want to take the situation on their hands.

Today’s Market Expectations

Today all markets are open again, although most traders will be on holiday until Tuesday next week, so the volatility is expected to remain low again, and the price action choppy as we have seen in the last two days. There are trade opportunities so we will follow the price action, particularly in the JPY pairs and in Gold. The BOE Quarterly Bulletin should be released at some point today, while later on, we have the US unemployment claims and the EIA crude Oil inventories, which might have a decent impact on Oil prices.

Forex Signals Update

Yesterday the volatility was decent again for this time of the year and we saw a repeat of Tuesday’s price action, as risk currencies continued to push higher, only to make a sharp reversal at the start of the US session, We opened four trading signals, three of which closed in profit while the EUR.USD trade is still open.

Turning Bearish on WTI Oil

Crude Oil also turned bullish last month as risk sentiment improved and the USD declined, so we have been long on Oil most of the time in the last two months. But we saw a $4 decline yesterday which sent the price below $80 again and we decided to open a sell signal which also closed in profit.

EUR/USD – Daily chart

Holding on to Our Buy GOLD Signal   

Gold remained bearish from March until November this year, but reversed at the support after sellers failed to push below $1,600. It has been bullish since and for the last several months the 100 SMA (green) has been doing a great job as support on the H4 chart. We have been buying pullbacks lower and opened another buy Gold signal after the last pullback following the surge to $1,833.

XAU/USD – Daily minute chart 

Cryptocurrency Update

Cryptocurrencies were showing some buying momentum in late November and earlier this month, as risk sentiment improved in financial markets, although last week we saw most major crypto coins trade in a range. Yesterday though the selling pressure resumed again and cryptos started to slip lower.

BITCOIN Resyumes the Decline

Bitcoin surged higher earlier this month after showing some bullish momentum for several weeks. Buyers pushed BTC/USD above $18,300 but the reversal came and the pressure turned bearish again. BTC fell below moving averages and the 100 SMA (green) is acting as resistance on the H4 chart.

BTC/USD – 240 minute chart

 ETHEREUM Making Higher Lows

Ethereum also turned bearish two weeks ago after four central banks raised interest rates by 50 basis points. Although the decline has stopped and Ethereum is making higher lows since then, which shows buying pressure. Yesterday buyers failed at the 100 SMA (green) in the first attempt but they’re still in charge.

ETH/USD – 240 minute chart