Yesterday’s Market Wrap

After a pause in the second half of December, the theme from Q3 of last year was to sell the USD and buy everything else as the global and the US economy slowed, which meant that the FED would slow and soon stop with rate hikes. The sentiment has turned quite positive again on deteriorating economic data, which has been weighing on the USD. Inflation is slowing in the US and yesterday we saw a fall to 6.2% in producer inflation PPI (producer price index) from 6.7% previously, which will help lower consumer prices in the coming months.

So, the USD resumed the decline, although the main event to send the USD lower was retail sales, which showed a bigger-than-expected decline in December. Although the USD reversed some of the losses later as some of the declines were attributed to the freezing weather around Boxing Day. UK inflation slowed but still remains high, which is keeping the GBP bullish, while BOJ’s Kuroda gave JPY speculators a kick after mentioning further easing if necessary.

Today’s Market Expectations

Today started with the National Core CPI from Japan, which is still moving higher. The GfK Consumer Confidence in Germany showed a slight improvement, but it remains deeply negative. UK Retail Sales made a positive reversal in December after the decline in November, but the main event today will be the Philly FED Manufacturing Index which will show if this sector is improving or falling into contraction.

Forex Signals Update

Yesterday the volatility was high and markets reversed, which made it difficult to trade. The  USD resumed the decline against most major currencies, while risk assets increased but we saw a reversal later in the US session after the move following the US retail sales report.

GOLD Fails at Monday’s Highs

Gold resumed the bullish trend again today after turning bearish early this week. It still remains bullish but buyers failed to make a new high yesterday and the price reversed back down after forming a doji candlestick below Monday’s highs. Although, let’s see if moving averages will be able to keep the bullish trend going.

XAU/USD – 60 minute chart 

Booking Profit on USD/CHF As the Deline Continues

USD/CHF has been bearish and continues to make lower highs. Last week we saw a decent jump in this pair as EUR/CHF surged higher on better weather in Europe and we opened several sell USD/CHF signals and the last one closed in profit yesterday as this pair made a new low.

USD/CHF – H4 chart

Cryptocurrency Update

Cryptocurrencies were displaying buying pressure since the beginning of this year. Although after last week’s surge, the trend slowed and buyers were showing exhaustion as we mentioned on Tuesday. Yesterday we saw a bearish reversal after the initial USD fall on softer retail sales.

Turning Bearish in BITCOIN As Buying Pressure Sowed

Bitcoin made a bullish reversal early this year and last week it surged higher as the sentiment improved and cryptocurrencies gained momentum. BTC/USD pushed above $21,500 but the pace was slowing this week, which was a sign of a bearish reversal, so we decided to open a sell BTC signal ahead of the reversal yesterday.

BTC/USD – H4 chart

ETHEREUM Breaking Below MAs

Ethereum was showing some decent buying pressure in the last two weeks, which sent the price above $1,600. Moving averages were doing a great job acting as support on the H1 chart, but yesterday they were broken as the price made a bearish reversal. So, we’re watching where this decline will stop so we can go long again on Etheruem.

ETH/USD – H4 chart