Forex Signals Brief May 19: Powell and Lagarde to Close the Week

Yesterday’s Market Wrap

The USD continued to make gains yesterday after Dallas Fed President Lorie Logan’s comments regarding the lack of supportive data for skipping a rate hike in the next meeting. This caught the market’s attention and resulted in higher yields for US treasuries, a stronger USD, a decline in Gold prices and risk currencies, as well as an erosion of pre-market stock gains.

FED’s member Jefferson took a more neutral stance, acknowledging that inflation remains high but indicating that the full impact of rate hikes has not yet been felt. Yesterday’s US data releases showed a decrease in initial jobless claims to 242,000, which was lower than the estimated 254,000. Continuing claims also decreased slightly and have remained relatively stable over the past few months, suggesting that if jobs are being lost, workers are also being rehired.

Today’s Market Expectations

Today the GfK Consumer Confidence remained negative, showing that British consumers are feeling the weight of higher prices and rate hikes. National Core CPI posted an increase from 3.1% to 3.4% year-on-year in Japan while Tertiary Industry Activity slowed down. Although the heavy events come later, with Retail sales from Canada which are expected to show another decline, while FED Chair Powell and ECB President Lagarde are holding speeches later in the evening to close the week.

Forex Signals Update

Yesterday markets started slow again with Europe being on Ascension Day, but the volatility picked up later in the US session after hawkish comments from FED members which sent the USD higher. We opened five trading signals, three forx signals and two gGold signals, all of which closed in profit.

GOLD Breaks the Support

Gold has was displaying bullish momentum until last week as buyers pushed toward the all time high, receiving support from various moving averages. Initially, the 50-day and 100-day simple moving averages (SMA) provided support, followed by the 200-day SMA. However, the 200-day SMA was breached on Wednesday as buyers of the US dollar reentered the market and yesterday sellers pushed the price below the support zon around $1,975.

XAU/USD – 240 minute chart

USD/JPY Breaking Above This Year’s Highs

USD/JPY has experienced a strong rally this week, breaking through two significant technical levels: the first near 136.60 and the second at 137.05. This bullish development has added to the upward momentum, bringing the pair close to its peak in 2023, just below the key psychological level of 138.00. Yesterday buyers pushed above the 138.00 mark and reach new yearly highs, now pushing towards 140.00 in the near term.

USD/JPY – 240 minute chart

Cryptocurrency Update

The 100 SMA Still Holding in BITCOIN

Bitcoin has been bearish since reversing from above $31,000 in April and sellers pushed the price below the 50 SMA (yellow). Although the 100 SMA (green line) held as support. The bounce which started in the last few days stalled on Tuesday but yesterday buyers came back again and started to push the price higher again.

BTC/USD – Daily chart

ETHEREUM Buyers Not Feeling Confident Yet

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.