Forex Signals Brief May 26: All Eyes on the Core PCE Price Index

Yesterday’s Market Wrap

Yesterday the risk sentiment improved somewhat, which made major currencies hold a bit better against the USD than safe havens such as the JPY and Gold which continued to crash lower. The economic data from the Eurozone was negative, with German GfK Consumer Climate missing expectations and the German Q1 GDP revised lower to -0.3% from 0.0%.

The data from the US on the other hand was positive, with Q1 GDP figures being revised higher to 1.3% from 1.1% previously, while unemployment claims were smaller compared to last week. As a result, the sentiment turned even more positive for the USD, adding here the promising comments from US politicians regarding the debt ceiling, which removes a major risk. So, the USD advanced higher while most other assets retreated lower.

Today’s Market Expectations

Early this morning we had the Tokyo Core CPI year-on-year, which remains stable and under control over there, unlike in Europe and the US. Retail Sales from Australia also remained stable while they turned positive in the UK after declining in the previous month. But the important data will be released later from the US, with Durable Goods Orders, Core PCE Price Index and Personal Income and Personal Spending.

Forex Signals Update

Yesterday the bullish momentum in the USD continued, which booked us two winning signals, one in Gold and one in USD/JPY which moved above 140. But, we had a losing cryptocurrency signal after the dive early yesterday.

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 – Daily chart

USD/JPY Moves Above 140

USD/JPY continues to move higher as buyers remain in control and moving averages act as support on the H1 chart. The 50 SMA (yellow) and the 100 SMA (green) have been doing a great job in the last two weeks, but now the upside momentum has accelerated and the 20 SMA (gray) has taken over that position. We booked a winning USD/JPY signal yesterday after buying a small dip on the 15 minute chart.

USD/JPY – H1 chart

Cryptocurrency Update

Looking to Buy BITCOIN Again

Bitcoin has been making higher highs since January and moving averages have been acting as support on the daily chart. Although they are getting broken now as we are witnessing a retreat lower, and the 100 SMA (green) was the last one to go. We had place the SL target below this moving average which was triggered yesterday, but we are looking to open another buy BTC signal.

BTC/USD – Daily chart

The 100 SMA Holds in ETHEREUM

Ethereum made a bearish reversal in April from above $2,100 and continued lower early this month, pushing below the 50 SMA (yellow) on the daily chart. But the 100 SMA (green) has held as support and ETH/USD has been trding sideways in the last two weeks, while other cryptos are slipping lower.