Last Week’s Market Wrap

This was another extraordinary year, as global inflation surged to levels never seen before and central banks went into the fastest pace of interest rate hikes ever. Inflation was already increasing quite fast last year, but this year it reached double-digit figures in most developed countries, but not in Japan, China etc, where consumer inflation still remains at normal levels. The Federal Reserve led the way with several 0.75% rate hikes, which kept the USD extremely bullish until October.

But, the FED slowed down to 50 bps (basis points) hikes in December, which brought an end to the USD rally. Although despite the strong retreat in Q4, the USD ended 2022 as the strongest currency by far. Commodities made a run in Q1 of last year, then we saw a bearish reversal in Q2 and Q3 as the USD rallied, only to turn back up in Q4, with Gold and crude Oil ending the year almost unchanged. Stock markets also made a comeback in October and November, but they ended 2022 at loss.

This Week’s Market Expectations

Speaking of stock markets, the reversal in the last two months seems to have ended and we saw a bearish reversal in the last 2-3 weeks of last year, as the signs of a global recession increased. So, the main issue for 2023 will be the global economy and a probable recession, with some arguing for a deep one. inflation has started to come down and it will likely slow further in 2023 but still remain above normal levels. China is starting to open up, even though the economic figures for December were horrible, so this will further improve risk sentiment, which will help risk assets.

Forex Signals Update

Last week was pretty quiet as this season of the year usually is, although we saw enough price action to keep the flow of forex signals going almost normally and ended the month with 17 trading signals in total. 14 of them were winning signals, while only three ended up at loss, which gives us an almost 17/83% win/loss ratio. We played both sides in forex but remained long on Gold, which proved to be a good strategy.

 USD/JPY Resumes Downtrend 

USD/JPY has been on a bearish trend since it reversed in late October after the intervention from Japanese officials and has lost more than 20 cents. In the previous week we saw a retrade higher after the latest crash as the BoJ pivoted and we turned bullish, but last week we reversed back to bearish as the decline resumed. We had three successful USD/JPY buy signals last week.

USD/JPY – 240 minute chart

Buying GOLD Proved to Be A Good Strategy in December   

Gold turned bullish in November with the USD declining, so we decided to turn bullish on Gold as well last month which brought us many winning trading signals. The pace of the uptrend slowed down, but moving averages held as support and we kept buying against the 100 SMA (green), booking profit as buyers pushed the price higher.

XAU/USD – 240 minute chart 

Cryptocurrency Update

Cryptocurrencies started 2022 on a bearish foot, after the strong reversal down in November 2021, and the pressure has remained bearish throughout the year. In fact, the decline has escalated as the sentiment remains mostly negative in financial markets, while the war on cryptocurrencies by the financial establishment continues. As a result, it has been a tough year for crypto investors, although let’s see what 2023 has on its sleeve.

BITCOIN Falling from $48,000 at the Start of 2022

Bitcoin made a bearish reversal in November 2021 as it was trading jut below $70,000, so it was looking already bearish when it started 2022 at around $48,000. That has been the high during last year and now BTC/USD is trading below $17,000 as sellers remain in control.

BTC/USD – Daily minute chart

 ETHEREUM Trading at $1,200

Ethereum was trading just below $4,000 at the beginning of last year, revesing from below $5,000 in November the previous year and it has beenmaking lower highs since then. Moving averages are providing resistance recently while buyers are active at $1,000-$1,100.

XRP/USD – 240 minute chart