Forex Signals Brief for April 28: US Core PCE Inflation Closing the Week

Yesterday the US Q1 GDP slowed down, but the GDP Price Index increased, so today's PCE price index will give a better picture of inflation

Skerdian Meta•Friday, April 28, 2023•3 min read

Lower core PCE inflation helping stock markets

Yesterday’s Market Wrap

This week we have seen some ups and down in all currencies, as events follow each-other, first with the First Republic bank vowes which sent the USD higher and risk assets lower on Tuesday, followed by the weaker US GDP report for Q1, which was released yesterday, but the first reaction in the USD was still up. The US GDP came in lower-than-expected at 1.1% but core PCE was higher, which meant that core inflation remains elevated. That has sent the US yields to the upside and the US dollar higher in early US trading.

Besides high prices for everyday goods, the consensus for the headline GDP figure was 2.0% but the later estimates, including the Atlanta Fed GDP number, were lower so this wasn’t a huge surprise and that’s why USD was stronger after the report. Although, the Pending Home Sales posted a major decline of 5.2% which cooled off the initial USD hype.

Today’s Market Expectations

Today we had the Tokyo core inflation which held steady in April, although retail sales slowed, while the Bank of Japan held its meeting a while ago. There were fears of policy change, but they kept rates on hold at -0.10% as inflation has also steadied. The German CPI inflation released a while ago showed a slowdown, while the Eurozone flash prelim GDP to be released shortly, with expectations for a 0.2% expansion. Canada GDP is also expected to have expanded by 0.2% in February, but the US core PCE inflation is the most important data of the day, and it is expected to remain steady at 0.3%.

Forex Signals Update

Yesterday markets the volatility picked up somewhat, especially after the US GDP repoet which sent risk assets lower and the UD higher for a while. Yesterday we saw a comeback in risk currencies while the USD declined. We opened four trading signals, closing the day with three winning forex signals and a losing one.

The 100 SMA Still Keeping GOLD Down

Gold prices rose yesterday as a softer USD in the European session which brought back some of the bullion’s appeal for overseas buyers, while investors braced for a host of U.S. economic data ahead of a crucial Federal Reserve policy meeting next week. Spot Gold rose 0.4% to $1,997.59 but the 100 SMA (green) stopped the climb and we saw a reversal after the US GDP report, which sent XAU to the 200 SMA.

XAU/USD – 240 minute chart

Booking Profit in USD/JPY Yesterday

USD/JPY continues to remain bullish, with moving averages acting as support on the H4 chart, particularly the 100 SMA (green). We predicted a continuation of the uptrend after the retreat to this moving average earlier this week and yesterday buyers pushed the price close to the 50 SMA (yellow) again.

USD/JPY – 240 minute chart

Cryptocurrency Update

BITCOIN Jumping Up and Down

Recently, the price of Bitcoin and other cryptocurrencies had been decreasing since mid-April. However, during the European trading session yesterday, there was a sudden increase in the price of Bitcoin, which pushed it above $30,000. Unfortunately, the gains were short-lived as the price quickly reversed later in the evening, causing Bitcoin to lose around $2,500 and fall back to the 50-day simple moving average (which is represented by the yellow line on many price charts). Despite the drop, the moving average held, and Bitcoin managed to climb back above $30,000 before retreating once again.

BTC/USD – Daily chart

ETHEREUM Stuck Between 2 MAs Now

The retreat last week sent the price below $1,900 but the 50 daily SMA held as support right at $1,800 and we opened a buy Ethereum signal which was looking good as the 50 SMA held the retreat. Yesterday we saw a jump toward $2,000 but the 20 SMA (gray) stopped the climb and ETH reversed back down to the 50 SMA.

ETH/USD – 240 minute chart

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ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.