Bank of Canada is slowing its policy

Forex Signals Brief for January 25: Can a 25bps BOC Hike Keep the CAD Bullish?

Posted Wednesday, January 25, 2023 by
Skerdian Meta • 2 min read

Yesterday’s Market Wrap

Yesterday markets were cautious to start with, albeit with a slight bid in the USD. traders were focused on the services and manufacturing data for January, which showed that the activity in the service sector started expanding again in the Eurozone. In the UK services fell deeper into contraction, suggesting that the UK economy is heading into a recession, which weighed on the GBP.

The US flash services and manufacturing PMI also came better than expected, showing a slight improvement this month, which sent the USD 30 pips higher, in hopes that the US economy will avoid a deep recession. But, both sectors still remain in contraction, so the USD reversed back down and risk assets back up, so stock markets closed another bullish day despite opening with a bearish gap.

Today’s Market Expectations

Today started with the Australian CPI (consumer price index) report which was released early in the morning. The Q4 consumer inflation fell from 1.8% to 1.6% while the annualized inflation grew instead. The German Ifo Business Climate showed an improvement this month while later in the afternoon we have the Bank of Canada (BOC) meeting, They are expected to deliver a 25 basis points (bps) rate hike, taking them from 4.25% to 4.50%, although we’ll see if the CAD will keep the bullish momentum after this rate hike.

Forex Signals Update

Yesterday our forex signals service was back running, after a technical glitch in the feed on Monday. We opened several trading signals, all of them short-term and short on the USD, after the jump that followed the services and manufacturing reports. All of them closed in profit eventually as the USD retreated lower.

GOLD Bouncing Again Off MAs

Gold continues to remain quite bullish and yesterday we saw a new high as XSAAU reached above $1,940.  Yesterday we saw a dip lower after the US data, but the 200 SMA (purple) held as support on the H1 chart as it has done lately and buyers resumed control. So we will try to buy pullbacks lower again.

XAU/USD – 60 minute chart 

Booking Profit on [[AUD/USD] 

AUD/USD has also been bullish  and yesterday buyers tested last week’s high. We saw a retreat in the first part of the day, but the 50 SMA (yellow) held as support on the H1 chart. We decided to open a buy forex signalo at this moving average and booked profit after the bounce.

AUD/USD – 60 minute chart

Cryptocurrency Update

Cryptocurrencies continue to display buying pressure, as they still trade near the highs, while the bids keep getting bought pretty fast. They were bearish since November 2021, but the decline might have ended. We have seen some bullish pressure so far this year and in the last three weeks, we have seen the uptrend pick up pace further.

The 20 SMA Keeping BITCOIN Bullish

Bitcoin has been in a consolidation in the last several days after the last bullish wave. The price is moving up in waves, and retraces have been either very shallow or we have seen consolidation periods, such as now. That shows that buyers are quite strong and we will probably see new highs.

BTC/USD – 60 minute chart

Can the 50 SMA Keep ETHEREUM Supported?

Ethereum was showing selling pressure last year but in the last two weeks, we have seen some strong buying momentum which sent the price above $1,600. Moving averages were doing a great job acting as support on the H4 chart and the latest bounce came at the 50 SMA (yellow). But buyers are retesting that moving average again, so let’s see if it will hold this time.

ETH/USD – H4 chart
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