Forex Signals Brief for February 21: European Services and Canadian Inflation
Skerdian Meta • 2 min read
Yesterday’s Market Wrap
The USD has been on a bullish trend since early this month, with the sentiment remaining mostly negative as markets are readjusting FED rate expectations higher after some decent economic data for January. But on Friday the situation reversed without any apparent reason and the USD has been on a retreat since then, with most major currencies advancing higher.
That sort of price action continued yesterday, although we were not in normal trading, as the US was off on a bank holiday weekend. The economic data was light, although there were some ECB members who made hawkish comments and helped keep EUR/USD bullish. Markets are also repricing a higher terminal ECB rate as well now.
Today’s Market Expectations
Today has already started with services and manufacturing data from Europe. Services have come out of contraction, but manufacturing still remains there although the activity is improving. A similar situation is taking place in the UK. Later on, we have the consumer inflation report CPI (consumer price index) from Canada, which is expected to show an increase in January after the decline in December. In the afternoon we have the US services and manufacturing PMI reports, which are interesting to watch after the jump in ISM services last month.
Forex Signals Update
Yesterday the volatility was low, although we opened several trading signals, as we saw some good trading opportunities after the retrace in the USD. Although, we left most trades open since the price action died out in the US session.
Selling GOLD at the 50 SMA
Gold continues to remain bearish after making a reversal earlier this month, as USD buyers returned and it continues to slide lower. Moving averages have turned into resistance and the 50 SMA (yellow) is rejecting the price on the H4 chart. We opened a sell signal yesterday at this moving average, and now we’re waiting for the reversal lower.
XAU/USD – 60 minute chart
MAs Have Turned Into Resistance for EUR/USD
EUR/USD has also turned bearish after failing to hold gains above 1.10 earlier. The highs are getting lower and moving averages acting as resistance on the H4 chart. We opened many sell EUR/USD signals last week, most of which closed in profit as the decline continued and yesterday we opened another one at the 50 SMA.
EUR/USD – 60 minute chart
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 Sticks Close to $25,000
Bitcoin is still holding gains at it surged to $25,000. BTC 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
ETHEREUM Trading Above $1,700
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.