Will Powell leave rate hikes in the mercy of the data again?

Forex Signals Brief for February 7: Can Powell Shift Markets Today?

Posted Tuesday, February 7, 2023 by
Skerdian Meta • 3 min read

Yesterday’s Market Wrap

The theme of the last several months has been the retreat in the USD, as the FED softened the speech on lower inflation and slower growth numbers recently. Risk sentiment has been positive as a result, with stock markets making decent gains since October. Last week the FED sowed further with a 25 basis points hike and left the future path at the mercy of the economic data and last Friday we saw some really strong employment and services numbers from the US.

That reversed the risk trade and the USD has been surging in the last two trading days, while risk assets have been retreating lower. Yesterday we saw a continuation of that theme in financial markets, as the USD pushed higher, while stock markets slipped lower. EUR/USD headed toward 1.07 despite an improvement in German factory orders and Eurozone Setix investor confidence.

Today’s Market Expectations

Today started with the Reserve Bank of Australia meeting, which produced a 25 bps hike, although that was widely anticipated so the AUD didn’t take much advantage of that. During the day the economic calendar is light, with only German Industrial Production during the European session. In the US session, the FED president Jerome Powell will hold a speech at the Economic Club of Washington DC, which might turn the USD around, so we’ll follow that speech.

Forex Signals Update

Last week the volatility was enormous and we saw a few price reversals across all markets toward the end of the week, after the meeting by the three main central banks, which caught traders wrong on some trades. We had a mixed week and tried to make a comeback yesterday, opening three trading signals, and ending up with one losing and two winning forex signals.

MAs Turning Into Resistance for GOLD?

Gold made a very strong rally since the middle of November, but might be turning bearish now after the last few trading days. The bullish has faded and the price reversed at $1.960 on Thursday morning as the USD started to turn bullish. The selling picked up and Gold has broken below the 2o0 SMA (purple) which seem to have turned into resistance.

XAU/USD – H4 chart 

Selling Extend in WTI Oil

Crude Oil has made a bearish reversal since late January, displaying weakness even when the sentiment was positive in financial markets. It has accelerated the decline this month as the USD resumes the uptrend and yesterday we decided to open another long term sell Oil signal, which closed in profit.

US Oil – 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.

Is the Retreat Over for BITCOIN?

Bitcoin is in a retreating phase right now, as the price was slipping lower, but it still 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 but the 100 SMA (green) is holding as support on the H4 chart.

BTC/USD – 240 minute chart

 ETHEREUM Heading for $1,700 Again?

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
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