Forex Signals Brief for February 20: RBNZ to Continue Rate Hikes This Week
Last week the USD resumed the bullish momentum after some decent economic data while this week the RBNZ should hike rates by 50 bps
Last Week’s Market Wrap
The USD has been on a retreat since October as the FED started softening the rhetoric and eventually slowed down with rate hikes. But, the economic data for January has been showing improvement and we saw a sharp bullish reversal for the USD at the beginning of February. Although, USD buyers weren’t convinced and they are awaiting more proof from the data, which we got in the last two weeks.
This week, retail sales showed a 3% jump in January in the US, while producer inflation PPI posted an increase, which has traders thinking that it will spill into consumer inflation in the months ahead. The USD resumed the bullish momentum again, although we saw a retreat in the US session on Friday as we headed into the weekend, after FED’s Barkin comments that they are not taking signals from jobs & retail sales due to seasonal adjustments.
This Week’s Market Expectations
The data from the US is light this week, although we have the services and manufacturing PMI numbers on Tuesday, which are expected to show contraction in both sectors. Although. after the jump in the January ISM services numbers, we might get another surprise this week, which would be welcomed by USD bulls. Tomorrow we also have the inflation report from Canada, which will have an impact on the BOC decision. On Wednesday morning, the Reserve Bank of New Zealand is expected to deliver another rate hike of 50 bps, which is the main event for the week, although the FOMC minutes from the last meeting might still things for the USD.
Forex Signals Update
This week the volatility wasn’t too high, but it was enough to provide some nice trading opportunities. We managed to pull 28 trades in total, forex, cryptocurrency and commodity markets. We ended up with 20 winning trading signals and 8 losing ones, giving us a 72%-28% win/loss ratio.
Remaining Heavy Short on GOLD
Gold made a bearish reversal earlier this month, as USD buyers returned and it continues to slide lower, making lower lows. Moving averages have turned into resistance on the H1 chart nd we continue to sell retraces higher. We still have a long term sell Gold signal opened after the retrace to the 100 SMA on Friday.
XAU/USD – 60 minute chart
EUR/USD
EUR/USD surged above 1.10 earlier but it has turned bearish for two weeks now, with highs getting lower and moving averages acting as resistance on the H1 chart. We opened many sell EUR/USD signals this week, most of which closed in profit as the decline continued.
EUR/USD – 60 minute chart
Cryptocurrency Update
Cryptocurrencies retreated earlier this month, but now it seems like they have tuned even more bullish, even though risk sentiment remains negative and the USD is progressing higher. The strong bullish run in Januar was a strong signal that the bearish period might be over, and now after last week’s surge, cryptos are looking increasingly bullish.
BITCOIN Breaks $25,000
Bitcoin continued to display strong bullish momentum last week, after the retreat in the previous week. The bullish run in January took BTC above $24,000 but we saw a retreat lower earlier this month. The price fell below the 200 SMA (purple) on the H4 chart, but buyers came back and the price surged higher, pushing above $25,000 yesterday.
BTC/USD – 240 minute chart
Will ETHEREUM Reach $2,000 Soon?
Ethereum was also showing buying pressure for most of January as the lows kept getting higher. But last week buyers gave up and sellers took over, pushing the price below $1,500. Although now buyers are back and the price is heading for $1,700.
ETH/USD – 240 minute chart
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