Yesterday’s Market Wrap

This year started with high volatility after we saw a 150 pip surge in the USD on Tuesday, although it wasn’t exactly a risk-off day as stock markets opened with a big bullish gap, while crude Oil lost $4. Yesterday we saw a reversal in the European session, as the USD turned bearish against most risk currencies, with the Canadian Dollar surging 200 pips higher, despite the decline continuing in crude Oil which lost another $4.

Again, there was no real catalyst, apart from softer inflation numbers in Europe, which improve the sentiment on one hand as it means a less hawkish ECB, but on the other hand, it is negative news for the Euro was the least bullish among major currencies, apart from the JPY, with USD/JPY surging 250 pips higher. German index DAX30 also surged higher on such news.

This Week’s Market Expectations

So, the last two days have been quite volatile and irrational, and today we’ll see if that will continue or if we will return to trading the USD as markets did last year. In a short while, we’ll see if Italian inflation is slowing in December like in the rest of Europe, which will be another bearish event for the Euro. The US employment numbers will be released later in the afternoon, with the ADP Non-Farm Employment Change, and the Unemployment Claims in the schedule.

Forex Signals Update

Yesterday the volatility and irrationality sent markets around again and most traders were caught up by the sudden moves across most markets. We lost two forex signals as the USD turned bearish after a bullish day on Tuesday but made up with two winning Gold signals.

Getting Caught During the NZD/USD Surge 

NZD/USD has been bullish until the middle of December but then it slowed down and retreated lower as USD buyers returned. But, the 200 SMA stopped the retreat and pushed the lows higher. Although on Tuesday we saw a 150 pips decline as the USD surged but yesterday buyers claimed back all the losses as this pair surged higher.

NZD/USD – 240 minute chart

Keep Buying GOLD 

Gold continues to make decent gains as it pushes toward $2,000. Yesterday we saw a surge toward $1,870 in XAU/USD during the European session and we opened a long term buy signal which closed in profit. Then we waited for a retrace lower and opened another buy Gold signal, which also closed in profit as buyers resumed the uptrend.

XAU/USD – 240 minute chart 

Cryptocurrency Update

Cryptocurrencies are trying to recover, as they made some decent gains yesterday, although they have been showing weakness as buyers fail to keep the rallies going and yesterday we saw a pullback after the jump higher. On the other hand, sellers haven’t been able to make new lows in the last two months at least, which is a positive thing so overall, cryptocurrencies have been consolidating in a tight range.

The 200 SMA Keeping BITCOIN Down

Bitcoin continues to trade in a range, mostly below $17,000, with both buyers and sellers not having the courage to take the situation on their hands. Yesterday we saw some buying but the 200 SMA (purple) held as support on the H4 hart and BTC pulled back lower.

BTC/USD – 240 minute chart

 ETHEREUM Jumping Above $1,200

Ethereum has also been showing selling pressure after falling from almost $4,000 at the beginning of last year. It has been making lower highs since then but in the last 2 months lows have been getting higher too. Moving averages are providing resistance at the top though, while buyers are active at $1,000-$1,100 and yesterday we saw a surge that pushed ETH/USD above MAs and above $1,200.

ETH/USD – 240 minute chart