Inflation slowed on the GDP report

Forex Signals Brief for January 27: US Q4 GDP Gives the USD A Small Boost

Posted Friday, January 27, 2023 by
Skerdian Meta • 2 min read

Yesterday’s Market Wrap

Yesterday started with a slight bullish momentum in the USD on the European session, as we headed into the Q4 GDP report release from the US in the afternoon. In the morning the only piece of data was the unemployment rate in Spain which showed an increase last month, while expectations were for a decline.

The US GDP report showed a slight slowdown to 2.9% in Q4 from 3.2% in Q3, but growth was better than expectations of 2.6% which gave the USD a push. Although markets weren’t too certain going long on the USD, since much of that came from government spending and inventories. Besides that, the inflation figures in the GDP report ahead of tomorrow’s PCE data hinted at a soft reading. The advance trade report was also soft, so the USD is not running anywhere with this report.

Today’s Market Expectations

The Tokyo Core CPI inflation numbers started the day today, which showed another increase from 4.0% last month. Spanish Q4 Flash GDP was also released a while ago, remaining steady. In the afternoon, the personal income and personal spending numbers will be released, ahead of the UoM Consumer Sentiment and Pending Home Sales. But, the main release will be the US Core PCE Price Index, which will show how fast inflation is headed down.

Forex Signals Update

Yesterday we continued the positive momentum from earlier this week and increased the number of signals as volatility picked up. Once again we remained short on the USD after the jump on the GDP numbers and that proved to be a good strategy since we closed the day with four winning trading signals out of a total of 5.

GOLD Moves Above the 50 SMA Again

Gold touched $1,950 yesterday as the bullish momentum continued, but traders closed some of the long positions ahead of the US GDP report and Gold retreated lower, dipping below the 50 SMA. But, buyers came back and pushed the price above it again, so we decided to open a buy Gold signal after closing in profit a sell Gold signal previously.

XAU/USD – 240 minute chart 

Buying EUR/USD at the 50 SMA

EUR/USD continues to remain bullish since Occtober, increasing above 1.09 but finding it difficult to reach 1.10 at the moment. Although the 50 SMA continues to act as support on the H4 chart and we decided to open a buy EUR/USD signal yesterday after having a winning forex signal here the previous day.

EUR/USD – 240 minute chart

Cryptocurrency Update

Cryptocurrencies continue to display buying pressure and on Wednesday evening we saw another jump higher, which was more evident in Bitcoin. So, digital currencies continue to push to new highs and we remain bullish on major crypto coins.

BITCOIN Pushes to $23,800

Bitcoin was consolidating early this week, as traders were waiting for the US GDP report, although we saw a spike to $23,800 in BTC/USD right after we opened a buy BTC signal, which shows that buyers are in charge. The price retreated off the highs but the 20 SMA (gray) is acting as support.

BTC/USD – 240 minute chart

 ETHEREUM Bouncing Off the 100 SM

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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