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Forex Signals Brief for March 13: Hot US Data to Provide Volatility This Week

Posted Monday, March 13, 2023 by
Skerdian Meta • 2 min read

Last Week’s Market Wrap

Last week started slow but the volatility picked up after Powell’s first day of testimony in the US Congress. He mentioned higher rates which sent the USD higher and risk assets lower, but on Wednesday he didn’t offer a decisive answer to the 50 bps hike question for this month. He left it on the data and the data showed mixed signs for February.

ADP and NFP employment numbers increased, but the increase in earnings slowed and the unemployment rate jumped by 2 points. Markets were expecting a 50 bps hike this month but at the end of the week expectations for such a hike declined and now most analysts expect a 25 bps hike. The RBA delivered another 50 bps hike early last week, while the Bank of Canada kept rates unchanged at 4.50%, although both currencies ended up lower last week.

This Week’s Market Expectations

This week we have many economic releases from the US, which should provide enough volatility for traders. It kicks off with the most important metric at the moment, the US CPI (consumer price index) inflation, which is expected to slow to 6.0% in February from 6.4% in January, although after January’s number which missed expectations, markets in dilemma. Producer inflation PPI is expected to show a bigger slowdown on Wednesday, while retail sales are expected to fall. The ECB is expected to raise rates by 50 basis points to 3.50% on Thursday, followed by the US UoM Consumer Sentiment which is expected to remain unchanged on Friday.

Forex Signals Update

Last week the volatility provided some good trading opportunities during Powell’s comments on Tuesday and Wednesday which sent the USD higher and then down. We opened 25 trading signals in total, with only six losing signals and 19 winning ones, giving us a 76/24% win/loss ratio.

Playing Both Sides in [[Gold]

We have had a very positive run in Gold, although last week we opened five Gold signals in total, and closed the week with three winning Gold signals and two losing ones. The volatility increased enormously in Gold after Powell’s comments but we ended up with positive results once again.

XAU/USD – 240 minute chart

EUR/USD Fails at Resistance

EUR/USD turned bearish again last week, continuing in February’s footsteps, and Powell’s comments on Tuesday sent it toward 1.05. But, the soft data from the US sent the USD lower and this pair higher, particularly on Friday, but the resistance zone around 1.07 held and the price pulled back lower to close the day around 1.0650.

EUR/USD – H4 chart

Cryptocurrency Update

Cryptocurrencies turned bearish since the last week of February, after displaying strong buying momentum in the during January and most of February. BTC slipped below $20,000 after failing to hold gains above $25,000 three times, while ETH fell below $1,400. Although we saw a reversal over the weekend and now cryptos are looking bullish again.

BITCOIN Bounces Off the 200 SMA

Bitcoin showed decent buying momentum in the first two months of this year, but started retreating in late February. The 50 SMA (yellow) was broken on the daily chart, while the decline escalated and BTC fell below $20,000 eventually. But the 200 SMA (purple) held as support and we decided to open a buy BTC signal.

BTC/USD – Daily chart

ETHEREUM Returns Above 1,500

Ethereum pushed above moving averages in January which soon turned into support. Last week sellers pushed the price below the 50 daily SMA (yellow) as well as below the 200 SMA (purple). But, buyers came back and closed that day as a hammer candlestick, which is a bullish reversing signal. Over he weekend ETH has turned bullish and is now trading above $1,500 again.