Forex Signals Brief May 5: US, Canada Employment to Show Signs of Weakness
Yesterday’s Market Wrap
Yesterday markets were trading in the aftermath of the FOMC meeting, which produced a 25 basis points (bps) rate hike, taking interest rates to 5.00% in the US, although this was the last one. But, FED chairman Powell didn’t mention rate cuts, which left markets confused, although the USD continued to slide lower after the FED and yesterday as well, with Gold printing a new record high at $2,080, while EUR/USD was heading for 1.11 again.
Although, the Euro turned bearish after the European Central Bank meeting yesterday. The ECB raised rates by 25 bps as well, with president Lagarde saying that they will continue to hike rates. But that didn’t satisfy the Euro traders, who were hoping for a 50 bps hike, taking the main refinancing rate to 3.75%. So, EUR/USD reversed down and ended up below 1.10.
Today’s Market Expectations
Today started with the Caixin services PMI from China which showed that activity slowed down slightly, although this sector remains in decent shape, unlike Caixin manufacturing which fell into contraction yesterday. The Swiss CPI inflation remained steady at 0.2%, while the Eurozone retail sales report will be released in a while. Although the highlight of the day will be the employment reports from the US and Canada, both of which are expected to show an increase in the unemployment rate in April.
Forex Signals Update
Yesterday the volatility in financial markets was low during most of the European session, but picked up after the ECB meeting, with the Euro tumbling lower. We were caught on the wrong side of EUR/JPY and EUR/GBP so we lost those two trades, but booked profit on the Gold signal and EUR/JPY sell signal later in the US session.
GOLD Remains Supported
It seems that the price of Gold has resumed the bullish momentum after consolidating in a range since the middle of April, but it recently experienced a bullish breakout. The 200 SMA (Simple Moving Average purple) acted as a support level, and buyers came back into the market, pushing the price up to $2,020 on Wednesday. The bullish momentum continued after the FED meeting, resulting in further gains, with the price of gold reaching $2,060.
XAU/USD – 60 minute chart
Is the Trend Changing for EUR/JPY?
EUR/JPY has been bullish since the middle of January, as the risk sentiment improved after institutions intervened to stop the banking crisis. Moving averages such as the 50 SMA (yellow) and the 100 SMA (green) have been acting as support on the H4 chart but they have been broken now as the Euro turns bearish, so it seems like the trend is changing here too.
EUR/USD – 240 minute chart
Cryptocurrency Update
The Trend Remains Bullish for BITCOIN
The daily chart shows that Bitcoin has been forming higher lows since the middle of April, which suggests that the overall trend is still bullish. Additionally, the moving averages have been providing support for the price. Last month, Bitcoin climbed above $30,000 as uncertainty in traditional banking caused investors to shift their funds toward the cryptocurrency market. However, the price hasn’t continued to rise. Nevertheless, the current chart setup indicates that there could be a resurgence in bullish momentum soon, as the 50 SMA (yellow) has caught up with the price. It’s worth noting that the cryptocurrency market can be highly volatile, and investors should always conduct their own research and consider multiple factors before making any investment decisions.
BTC/USD – Daily chart
ETHEREUM Remains Supported
Last week, the price of Ethereum dropped below $1,900, but it found support at the 50-day Simple Moving Average (SMA) at $1,800. This level acted as a support level, so we opened a buy signal for Ethereum as it looked promising. The 50 SMA provided support during the price retreat. Yesterday, Ethereum saw an increase in value, rising towards $2,000. However, the climb was halted by the 20 SMA (gray), which acted as a resistance level. This caused Ethereum’s price to reverse back down to the 50 SMA, which is still acting as a support level. It’s worth noting that technical analysis, such as the use of moving averages, can provide insights into potential support and resistance levels for a security. However, investors should always conduct their own research and consider multiple factors before making any investment decisions.
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