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Forex Signals Brief for January 18: Will US Retail Sales Surprise in December As Inflation Slowed?

Yesterday’s Market Wrap

Yesterday the USD resumed the decline again during the Asian and European sessions, with risk sentiment remaining positive, which sent risk assets higher on the other hand. Most of the major currencies continued to push higher against the USD even during the US session, but the Euro, Gold and stocks reversed down.

One of the reasons for this was the sharp decline in the US Empire manufacturing index for January to -32.9 points vs -9.00 points estimated. Besides that, the Euro lost around 100 pips after reports that the ECB policymakers are planning a slower pace of hikes than previously thought and the idea of a slower move in March is ‘gaining support’. Canadian consumer inflation CPI cooled off in December but came above expectations, which kept the bid on for the CAD.

Today’s Market Expectations

Today started with the monetary policy by the Bank of Japan, which started to shift its policy in the previous meeting, although much slower than other central banks and the IFM is supporting that. UK consumer inflation numbers were also released earlier today, showing a slowdown, but it still remains really high. There are not expected to be any changes in the Eurozone final CPIP for December, while in the afternoon we have the US retail sales and producer inflation PPI (which are expected to decline).

Forex Signals Update

Yesterday the  USD continued the decline against most major currencies, with the JPY and the CHF leading the way, while stock markets also increased. We opened many trading signals and closed the day with four winning and four losing signals at the end, while a few still remain open.

We Shifted to Bearish in GOLD Yesterday

Gold has turned bearish this week despite it remaining bullish on the longer term charts. Sellers have pushed the price below the 50 SMA (yellow) which was acting as support on the H1 chart. So, we decided to open two sell Gold signals yesterday, even though the price bounced off the 10 SMA (green).

XAU/USD – 60 minute chart 

Buying GBP/USD 

GBP/USD has been bullish since the end of September after the intervention by the Bank of England, although it retreated lower in the last week of December. But buyers came back this year and have pushed the price above moving averages, so we decided to open a buy signal yesterday at the 20 SMA (gray) on the H1 chart.

USD/CHF – H4 chart

Cryptocurrency Update

Cryptocurrencies are still displaying buying pressure after the surge that we saw last week when they made some decent gains as the sentiment improved and the USD resumed the decline. The pace of the uptrend has slowed, but we’re still seeing cryptos make new highs almost every day.

MAs Supporting BITCOIN

Bitcoin is making a real bullish move, the first since the last decline in November as it fell below $16,000. Last week the buying pressure was really strong which sent BTC/USD above $20,000 but this week it has slowed. Although buyers still remain in charge and yesterday we saw the price reach $21,500.

BTC/USD – H1 chart

ETHEREUM Peaking Above $1,600

Ethereum has also been showing some decent buying pressure in the last two weeks, as the sentiment improves while the USD resumed the decline. The 20 SMA (gray) has been doing a great job as support on the H4 chart and yesterday we saw another bounce off this moving average, which sent the price briefly above $1,600.

ETH/USD – H4 chart
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Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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