Yesterday’s Market Wrap

Yesterday markets started with a bearish tone for the USD in Asian trading and a positive tone for risk assets, after Jerome Powell mentioned rate cuts, following the 25 bps rate hike by the FED, which was a slowdown from the previous 50 bps hike in December. We saw a second bearish leg in the USD during the Tokyo session an EUR/USD finally pushed above 1.10, but it started retreating ahead of the European Central Bank meeting.

Bank of England started off with another 50 basis points rate hike, but the GBP ended up around 150 pips lower, even though the BOE mentioned further rate hikes. a similar scenario happened to EUR/USD, which returned back below 1.09 after the ECB delivered a 50 bps rate hike and Christine Lagarde pledged further hikes ahead. Gold also turned bearish after touching $1,960, and headed for $1,900.

Today’s Market Expectations

Earlier today we saw the final numbers for European services, with the UK services remaining largely unchanged in contraction while Eurozone services PMI has just returned into expansion. The Eurozone producer price index (PPI) inflation is expected to show a 0.6% decline, which will help soften the consumer inflation CPI further in the months ahead. Later on we have the earnings and unemployment reports from the US, followed by ISM services for January which are expected to show a return into expansion again.

Forex Signals Update

Yesterday the volatility was decent again, before and especially after the BOE and ECB meetings and the rate hikes. The GBP and the Euro went against the action but we adjusted our trades accordingly and ended up with four winning trading signals and two losing ones, out of six trades. All our three long term trades closed in profit as well.

Strong Bearish Reversal in GOLD 

The bullish momentum picked up again this week in Gold and it pushed up to $1.960 in early Asian trading yesterday as the USD resumed the decline after the FED. But eventually, everything turned upside-down and Gold has broken below the two moving averages now.

XAU/USD – 60 minute chart 

EUR/USD Heading Down to the 20 SMA    

USD/JPY – H4 chart

Cryptocurrency Update

Cryptocurrencies have turned bullish, as dips keep finding buying pressure. They retreated lower on Monday after buyers had another go at the upside over the weekend, but the decline stopped and yesterday buyers returned after the FED risk event was removed, living the sentiment positive.

BITCOIN Returns Above MAs

Bitcoin turned quite bullish last month and pushed close to $24,000 after completing three bullish waves. But these moves were getting smaller and on Monday the bearish reversal came. The 50 SMA (yellow) which was acting as support on the H4 chart was broken and it was acting as resistance but yesterday buyers returned and pushed BTC above all moving averages.

BTC/USD – 240 minute chart

 ETHEREUM Breaches $1,700 

Ethereum has been trading sideways for the last two weeks, but it seems like the buying pressure is picking up again, which sent the price above $1,700 yesterday. Moving averages were doing a great job acting as support on the H4 chart and the latest bounce came at the 100 SMA (green) after the retreat.

ETH/USD – H4 chart