Forex Signals Brief for May 1: 25 BPS Hikes from the FED and ECB This Week
Last week the economic data from the US showed mixed results, while this week the FED will shed some light for traders, followed by the ECB
Last Week’s Market Wrap
Markets have shown uncertainties in recent weeks, as the economic data from the US such as manufacturing has shown mixed figures. Last week the uncertainty continued, with risk sentiment turning on and off as the economic figures kept coming in mixed. Durable goods orders showed a jump in March in the US in Wednesday’s report, while the US Q1 GDP on Thursday showed a considerable slowdown to 1.1% against 2.0% expected, although inventories made up for much of the slowdown, otherwise it would have come at 3.36%.
The employment cost index showed an increase though, as did the GDP Price Index, as well as the PCE price index, showing that inflation remains high. The new governor at the Bank of Japan, Ueada, didn’t change much in the policy from his predecessor Kuroda, which sent the JPY lower, but the return of the banking sector vowes with the resurfacing of the First National bank problems revered the price for the JPY on Friday.
This Week’s Market Expectations
Today markets will likely be quiet, as most countries are on holiday for May 1, although later in the evening we have the US ISM Manufacturing PMI which might offer a positive surprise after the jump out of contraction in PMI manufacturing last month. The Reserve Bank of Australia meeting is on Tuesday morning but they are expected to keep rates on hold at 3.60%. The ISM Services PMI will precede the FED meeting on Wednesday, when a 0.25% rate hike is priced in, although it is not certain. The ECB will follow on Thurday with a 25 bps hike.
Forex Signals Update
Last week the volatility was decent, with some nice moves although there were several reversals, which caught traders on the wrong side. We opened 28 trading signals in total last week, ending up with 11 losing and 17 winning forex signals. Gold and crude Oil signals were the two most profitable assets for us last week.
GOLD Consolidating
Gold has been gaining in recent months as the USD has gotten weaker, while the uncertainty has increased the demand for Gold. XAU/USD surged above $2,000 earlier in April, but retreated back and last week we saw a consolidation, as traders remain in doubt about what the FED will fo after this week’s rate hike.
XAU/USD – 240 minute chart
Remaining Long on USD/JPY After the BOJ Surge
USD/JPY has been bullish since the last week of March, but now after the BOJ meeting and the 200 pip surge last week, buyers look even more confident. Moving averages have been acting as support on the H4 chart, particularly the 200 SMA (purple). On Friday we had tow USD/JPY buy signals so we will keep long this week too.
USD/JPY – 240 minute chart
Cryptocurrency Update
BITCOIN Jumping Up and Down
Bitcoin surged above $30,000 last month, as the uncertainty in the traditional banking sector and regarding the global economy kept the demand on for cryptocurrencies. In the previous week we saw a retreat lower, but that was a good opportunity to open another buy BTC signal and cryptocurrencies resumed the bullish trend again last week.
BTC/USD – 20 minute chart
ETHEREUM Remains Below MAs
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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