Forex Signals Brief May 25: US Prelim GDP to Remain Unchanged

Yesterday’s Market Wrap

Yesterday the highlight of the day were expected to be the RBNZ rate hike and the FOMC minutes from the last meeting, when the FED delivered the last rate hike according to most people back then, but now it’s not so certain. The Reserve Bank of New Zealand raised interest rates by 25 basis points again to 5.25%, although the NZD ended up around 150 pips lower, as some economists were expecting a 50 bps cut.

The UK CPI took the spotlight though, showing that consumer inflation remains high in the UK, which is an indicator for most of the developed world in the West, but not Japan and China where inflation remains under control. HeadlineCPI slowed below 10% for the first time in almost a year, but came 5 points above expectations at 8.7% which is still very high, while core CPI increased to 6.8% this month from 6.2% previously. FED minutes showed that officials generally agreed that the extent of further hikes is less certain., but the USD ended the day up nonetheless.

Today’s Market Expectations

Earlier today the German Final GDP for Q1 remained unchanged at 0.0% as in the previous meeting, while the GfK Consumer Climate improved a bit, but remains deeply negative. Later in the US session, we have the Prelim GDP for Q1 which is expected to remain unchanged at 1.1%, while Unemployment Claims are expected to show a slight increase. Although the GDP Price Index might steal the show if there are any surprises.

Forex Signals Update

Yesterday the volatility was not high, but there was enough action in markets for us toopen several trades. The USD continued the bullish momentum, which made it easier for traders and we opened six trading signals in total. Four of them closed in profit while to close in loss.

The 100 SMA Turning Into Resistance for GOLD

The price of Gold reached its highest point yesterday at $1,985.27. It then encountered resistance at its 200-hour moving average, which was approximately $1,985.62 at that time. However, the price was unable to surpass this moving average, resulting in increased selling pressure. The combination of the stronger US dollar, rising yields, and the failure to exceed the moving average likely prompted sellers to drive the price of gold lower.

XAU/USD – H1 chart

WTI Oil Failing at the 200 SMA

Yesterday crude Oil increased by $1.43 during the European session, reaching $74.34/barrel. The price of Brent crude for July delivery rose by $1.52, reaching $78.36 per barrel. The major drawdown in US EIA crude inventories by 12.5 million barrels last week helped price initially, but then we saw a reversal as the sentiment deteriorated and risk assets tumbled lower.

US Oil – Daily chart

Cryptocurrency Update

BITCOIN Falls Below the 100 SMA

The sentiment in the crypto market continues to remain soft and yesterday we saw a reversal lower after the jump late on Tuesday. Bitcoin was finding support at the 100 SMA (green) for about two weeks, but this moving average was broken yesterday which opens the door for $25,000.

BTC/USD – Daily chart

ETHEREUM Rejected by the 50 SMA

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.