Yesterday’s Market Wrap

The Federal reserve raised interest rates on Wednesday evening, although markets saw that as a dovish hike and the USD ended up around 150 pips lower after the hike, while risk assets surged higher. In the last hours of the evening we saw a slight retreat, but the bullish momentum resumed again in risk assets as the USD started to slip lower again, which was the theme for most of the day yesterday, although we saw some exhaustion in the US session and the volatility declined.

The rate hike bonanza continued yesterday as well, with the Swiss National Bank delivering a 50 basis points (bps) hike in the morning, although the CHF traders weren’t too impressed with the statement and press conference, and the CHF ended up lower initially, but USD/CHF resumed the decline as the USD weakness returned. The Bank of England raised rates by 25 bps to 4.25%, but the price action in GBP was similar.

Today’s Market Expectations

Today started with the national core CPI inflation in Japan which showed a slowdown, falling below 4%, while manufacturing improved from last month, although it still remains in contraction. We have more manufacturing reports to be released today from Europe and the US, which are expected to show a similar situation as in Japan, with activity expected to remain in contraction. Services returned to expansion and are expected to remain little changed this month.

Forex Signals Update

Yesterday the volatility slowed compared to the post-FED move, but it was enough for us to we opened six trading signals. Risk assets continued higher after the retreat in the first part of the day while the USD slipped lower. We closed the day with three winning signals, two of them in Gold, while the other three remained opened.

GOLD Returns to $2,000 in No Time

It looked like the interest for Gold was over earlier as the banking crisis abated, but it is showing that it remains very bullish as it heads for $2,000 again. The price reversed above the 50 SMA (yellow) on the H4 chart as the USD turned bearish and now it seems like Gold will hold above $2,000.

XAU/USD – 240 minute chart 

EUR/USD Remains Supported   

EUR/USD fell around 200 pips lower last week as the Credit Swiss bank failed, but made a reversal on Friday and  has been bullish since then, making steady gains, supported by moving averages on the H1 chart. On Wednesday the price surged 150 pips higher after the 25 bps FED rate hike, sending the price above 1.09 but then it started to retreat lower. The 20 SMA held as support and we remain long on this pair, although the buying pressure is slowing as we approach 1.10.

EUR/USD – 60 minute chart

Cryptocurrency Update

Cryptocurrencies continue to show strong buying pressure, as they return to this year’s highs after the dip following the FED rate hike. They continue to take advantage from all the uncertainty in the financial sector and started moving higher again yesterday.

BITCOIN Returns Above $28,000

Bitcoin retreated lower on Wednesday evening, falling below $27,000 but the 200 SMA (purple) held as support on the H1 chart. The retreat stopped there and we saw a reversal early yesterday, while in the US session the price surged higher, pushing above the other moving averages and trading above $28,000 again, so $30,000 is not too far away now.

BTC/USD – 60 minute chart

Booking Profit on ETHEREUM As it Makes New Highs

Ethereum made quite a bullish reversal in January as it pushed above moving averages, which soon turned into support, particularly the 20 SMA (gray) on the daily timeframeH4 chart. This moving average turned into support, holding ETH/USD during retreats lower while earlier this week the support above $1,700 held and yesterday we saw a strong bounce, so we booked profit on our buy ETH signal.

ETH/USD – H4 chart