Last Week’s Market Wrap

Central banks returned again largest week, with three major ones planning to raise interest rates again, following the tightening course from last year, although expectations were for a dovish FED meeting. The FED slowed further to 25 bps this time and Jerome Powell commented on rate cuts down the road if the economic data warranted it. This sent the USD on another bearish leg, while risk assets surged higher as risk sentiment improved, but it didn’t last long.

The European Central Bank and the Bank of England hiked interest rates the next day, keeping the pace of 50 bps from the last meeting, but mentioned stopping at some point as the economy and inflation have been slowing. That turned markets upside-down, with the USD turning bullish while risk assets tumbled lower, particularly the Euro and the GBP, although stock markets kept rallying until Friday, when we saw some really positive numbers from US employment and ISM services, which posted a decent jump in January, leaving behind doubt of a recession. The USD surged higher on hopes that the FED will continue to hike, although it is still too early to tell.

This Week’s Market Expectations

This week the economic data is light, particularly from the US, so there won’t be any major market movers, with only Jerome Powell’s speech who is Due to participate in a moderated discussion at the Economic Club of Washington DC on Tuesday. Earlier tomorrow, we have the rate decision by the RBA, which is expected to deliver a 25 bps hike, which would take the cash rate to 3.35%. Later down the week we have the EU economic forecasts, followed by the UK GDP report for Q4 and December, which is expected to show a slowdown.

Forex Signals Update

Last week started slow but eventually, the volatility picked up and we saw some huge moves. First the USD tumbled lower and other currencies surged, then the reversal came and the USD surged while other currencies surged. Oil also tumbled lower, but had a few spikes. We opened 23 trading signals in total, 14 of which closed in profit while nine hit the SL.

GOLD Turning Bearish?

it seems like Gold might be turning bearish now after the last two days of last week. The bullish momentum picked up early in the week and buyers pushed the price to $1.960 on Thursday morning as the USD resumed the decline after the FED. But, everything turned upside-down and Gold has broken below the 20 SMA (gray) which used to act as support in the last three months.

XAU/USD – Daily chart 

Only the 200 SMA Left to Support EUR/USD

EUR/USD reversed below 0.95 as the sentiment improved and the USD turned bearish, but was finding it hard to push above 1.10. Buyers broke above that level after Powell mentioned rate cuts, but we saw a strong bearish reversal on Thursday which escalated further on Friday and this pair closed below 1.08.

USD/JPY – H4 chart

Cryptocurrency Update

Cryptocurrencies continue to display bullish signs, as they keep the gains after the bearish reversal in risk currencies in the second half of last week, as dips keep finding buying pressure. They retreated somewhat but held much better than other risk assets, so it seems like the market has turned bullish on cryptocurrencies.

BITCOIN Remains Supported

Bitcoin remains well-supported after turning bullish last month. Moving averages continue to act as support and last week buyers pushed close to $24,000 after completing three bullish waves. We did see a pullback on Friday but the 200 SMA (purple) was holding as support on the H4 chart.

BTC/USD – 60 minute chart

 ETHEREUM Remains Above $1,600 

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 on Thursday, although it retreated lower on Friday. But 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