Forex Signals Brief May 17: Bullish Reversing Signals in the USD
Yesterday USD buyers returned after a retreat on Monday with the economic data from the US keeping the momentum positive
Yesterday’s Market Wrap
On that particular day, the focus was on the US dollar which exhibited some strength, supported by a series of robust US economic indicators. One notable data point was the US retail control group, which rose by 0.7% compared to the expected 0.3% despite the headline figure beingsomewhat weak. The market looked beyond that and the USD gained further momentum from positive industrial production and NAHB (National Association of Home Builders) data.
As a result, commodity currencies ended up lower against the US dollar. Although, the CAD performed relatively well due to a strong CPI consumer inflation report fueled by increasing gasoline prices. Nonetheless, the initial drop in the USD/CAD close to 1.34 was completely reversed, influenced by a decline in crude Oil prices and equities. Regarding the discussions taking place, both Federal Reserve (Fed) talk and debates on the debt ceiling continued, with the volume of discussions remaining high.
Today’s Market Expectations
Today started with the Prelim GDP and the GDP Price Index from Japan, both of which showed an increase in Q1. The Wage Price Index was expected to tick higher to 0.9% in Australia during Q1, which would be bullish for the AUD. In a while, the final CPI for April is expected to remain unchanged at 7.0% in the Eurozone, while the Bank of England governor Andrew Bailey will hold a speech after that. In the US session we have the building permits and housing starts from the US, followed by the EIA crude Oil inventories which should be positive despite a drawdown expected, after yesterday’s API inventories, which showed a buildup.
Forex Signals Update
Markets were pretty quiet on Monday with the economic calendar being light. Yesterday most trading assets kept the same pace, with the USD enjoying some light bullish momentum. We opened four trading signals, but only the two short term Gold signals closed.
GOLD Falls Below $2,000
Since the retracement in February, Gold has been displaying bullish momentum, and its upward movement has been supported by various moving averages. In particular, smaller moving averages such as the 50-day Simple Moving Average (SMA) depicted in yellow, and the 100-day SMA represented in green, were providing support in earlier periods. However, more recently, the 200-day SMA, shown in purple, has taken on the role of support. But yesterday this moving average was broken as USD buyers returned.
XAU/USD – 240 minute chart
Keeping Short on WTI Oil Fails at the 100 SMA
Crude Oil was steady yesterday at the start of the new week, after retreating in the last few sessions of last week, with the US Dollar finding firmer footing and the market taking some positive news from US data. WTI retreated higher to the 50 SMA (yellow) where it found resistance ad we decided to open a sell Oil signal. Yesterday the price started to reverse, so the Oil trade looks good.
US Oil – 240 minute chart
Cryptocurrency Update
The Bounce Stalling in BITCOIN
Bitcoin pushed above $31,000 in April but it has been retreating lower since then, making lower lows. Although the 100 SMA (green line) held as a support, but the bounce which started in the last few days stalled yesterday, so we will see if buyers will resume the upside momentum again today.
BTC/USD – Daily chart
The 100 SMA Keeping ETHEREUM Bullish
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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