Forex Signals Brief for April 24: Focus Is on the BOJ, US GDP and PCE Prices
Last week markets reversed a few times as the data from the US gave mixed signals, especially manufacturing numbers
Last Week’s Market Wrap
Last week, most assets experienced small changes, with the exception of the CAD but the volatility was decent. The US Empire State Manufacturing Index released on Monday showed a significant increase in activity after four months of contraction. The April headline number rose to 10.8 points from -24.6 in March, following a jump in UoM Inflation Expectations the previous Friday. This positive surprise improved the sentiment for the USD, suggesting that the Federal Reserve might continue with rate hikes after May.
However, the decline in the Philly Fed Manufacturing Index on Thursday prompted speculation that the Federal Reserve would definitely stop rate hikes in May, causing the USD to fall again. Nevertheless, on Friday, the US services and manufacturing PMI reports, released by S&P Global, showed positive results, leading to a USD rally. USD/JPY gained more than 100 pips, and the report had surprisingly high numbers on new orders and price pressures that few analysts predicted.
This Week’s Market Expectations
This week starts slowly, with the US CB Consumer Confidence and New Home Sales on Tuesday afternoon, to be followed by CPI consumer inflation report from Australia on Wednesday morning, which is expected to show a slow down to 6.6% from 6.8%. Although the heavy data comes on Thursday with the US Advance GDP and the GDP Price Index for Q1. The Bank of Japan won’t change the policy Rate on Friday, but they might surprise in the press conference. We have some prelim GDP figures from Europe that day, before the US Core PCE Price Index and employment costs close the week.
Forex Signals Update
Last week the USD started strong in the first day, but then reversed lower on softer manufacturing numbers from the US, to end the week almost unchanged. So, there was enough and we opened 20 trading signals in total, ending the week with 14 winning forex signals and 6 losing ones, which gave us a 70%30% win/loss ratio.
GOLD Broke Below the 20 Daily SMA
Gold surged above $2,000 earlier this month, but fell back below that level last week as the economic numbers from the US showed a slowdown. Buyers came back as the 20 SMA (gray) held as support on the daily chart and pushed the price above $2,010 but on Friday everything reversed and Gold finally broke below this moving average.
XAU/USD – Daily chart
EUR/USD Still Remains Bullish
EUR/USD has been bullish since October, with moving averages acting as support on the daily chart. The 100 SMA (purple) took over after the price retreated lower on February as the USD started to gain some momentum, but the uptrend resumed again and the 20 SMA (gray) is not acting as support on the daily chart.
AUD/USD – 240 minute chart
Cryptocurrency Update
BITCOIN Dives to $27,000
It seems like cryptocurrencies are in the middle of a retreating period right now. Bitcoin has headed toward $27,000 after climbing above $30,000 last week. The 20 SMA has been broken after the steep retreat, but the 50 SMA (yellow) hold as support on the daily chart, which is a good sign.
BTC/USD – 240 minute chart
ETHEREUM Falls Below $2,000 Again
Last week, Ethereum experienced a steep decline after some decent buying momentum in the previous week and which sent it above the $2,000 level. This came after a period of consolidation the week before. Our buy signal for ETH/USD hit the take profit target as it moved above $2,100. But, the retreat has sent the price below $1,900 now.
ETH/USD – 240 minute chart
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