Forex Signals Brief May 16: Inflation Expected to Slow in Canada
Today the CPI inflation in Canada is expected to show another slowdown, while retail sales are expected to turn positive in the US in April
Yesterday’s Market Wrap
Yesterday was quiet during most of the day, with a slight bearish momentum in the USD. In the European session, we saw a 4.1% decline in the Eurozone industrial production which shows that the global economy is slowing as central banks keep raising interest rates.
Nonetheless, crude Oil continuedthe retrace higher, which sent the price of US WTI close to $72. In the US session the Empire State Manufacturing Index fell to -31.8 points this month, showing that manufacturing activity contracted in the New York area, although this is a volatile indicator. Risk currencies tumbled for a moment, but they recuperated after that.
Today’s Market Expectations
Today started with the Industrial Production and Fixed Asset Investment from China, which showed an increase from the previous month. The UK Average Earnings Index and Claimant Count Change are scheduled for this morning, with earlings expected to tick lower to 5.8%. The German ZEW Economic Sentiment which will be released shortly is expected to turn negative, while the Eurozone second GDP reading for Q1 is expected to remain unchanged at 0.1%. The important reports come in the afternoon though, with the Canadiuan CPI report, which is expected to slow to 4.3%, followed by the US Retail Sales which are expected to turn positive and show a 0.8% jump in April.
Forex Signals Update
This week was slow during the first half, with the USD being on a slight retreat, which was easy to read and trade. We had many winning trading signals during the first two days, but then the volatility increased after the US inflation report on Wednesday. In the end, we opened 24 forex signals, 15 of which reached the take profit target while 9 closed in a loss.
MAs Keeping GOLD Bullish
Gold has been bullish since the retrace in Febriary ended and moving averages have been doing a good job keeping it supported. Smaller MAs such as the 50 SMA (yellow) and the 100 SMA (green) were acting as support earlier, while recently the 200SMA (purple) has taken over and yesterday we saw a bounce off this moving average after the retreat last week.
XAU/USD – 240 minute chart
WTI Oil Fails at the 100 SMA
Crude Oil turned bearish last month after a filed attempt to turn bullish, which sent the price above $80. Since then WTI crude has been declining as the global economy weakens, and last week US Oil fell close to $63. It has retraced higher since then, but moving averages are eating as resistance and yesterday the 100 SMA rejected the price.
US Oil – 60 minute chart
Cryptocurrency Update
BITCOIN Starting the Bounce?
Cryptocurrencies were making higher highs until the middle of April when Bitcoin pushed above $31,000. But, in the past two weeks, Bitcoin has been experiencing a decline. During this period, the 50-day Simple Moving Average (yellow) has been acting as a support level. It has been preventing further downward movement and pushing the price lows higher.
However, despite the support from the 50 SMA, the highs of Bitcoin have been gradually decreasing. This indicates a potential weakening of the bullish momentum. Last week, we observed a break below the 50 SMA, which has now transformed from a support level to a resistance level. This break suggests a shift in market sentiment, with sellers gaining more control. Although the 100 SMA (green line) has been holding as a support level, there was no significant bounce or upward movement in the price. This lack of a strong rebound indicates a possible lack of buying interest or selling pressure overpowering the buyers.
BTC/USD – Daily chart
MAs Holding As Support in ETHEREUM
In recent weeks, the buying pressure for Ethereum has slowed down, and we have witnessed a retreat in its price over the last few days. However, the correction appears to be nearing completion as the BTC/USD 50 SMA (yellow) is holding as support. Additionally, the stochastic indicator is showing an oversold condition. Considering these factors, we decided to open a buy signal for ETH some time ago.
ETH/USD – Daily chart
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