Forex Signals Brief May 31: A Sneak Peek Ahead of Tomorrow’s Eurozone Inflation

Yesterday’s Market Wrap

Yesterday began with a strong performance by the US dollar, but its gains were limited due to an emergency meeting between Japanese financial authorities which sent USD/JPY lower from 140.90 to 130.70s during the European session.

Equities started off positive, with some decent buying momentum driven by the performance of tech stocks. But, then they reversed back down to end the day little changed. US futures opened higher, while Treasury yields dropped after the long weekend, which put further pressure on the dollar but then we saw a reversal in the US session. EUR/USD rallied around 70 pips higher, increasing above 1.07 again after falling to 1.0670s. The sentiment turned slightly negative later in the US session and the USD claimed back some of the losses, while crude Oil fell to $69.

Today’s Market Expectations

Today started with a speech from RBA Gov Lowe ahead of the consumer inflation report CPI from Australia which picked up again. Services and manufacturing PMI reports from China were little changed, with manufacturing activity remaining in contraction. We also get a preview today of the main CPI (consumer price index) number from the Eurozone with the German, French and Italian CPI reports for May. In the US session, we’ll have the GDP report from Canada for April and the JOLTS job openings from the US.

Forex Signals Update

Yesterday we started it well, with our long term sell Gold signal reaching the take profit target as the USD continued higher in the Asian session. But, got caught on the wrong side during the USD pullback in the European session, having two losing signals, although we made up for it with two more winning forex signals in the US session as the retreat stopped.

MAs Keeping GOLD Down

Gold continued the decline lower yesterday in the Asian session, with moving averages continuing to act as resistance at the top on the H4 chart. The 50 SMA (yellow) has been acting as resistance lately but yesterday buyers managed to push the price above it. Although Gold stalled there and we decided to open a sell Gold signal as stochastic became overbought.

XAU/USD – 240 minute chart

Remainning Long on USD/JPY

USD/JPY has been bullish and buyers are gaining further strength after the break of the major level at 140 last week. This pair has climbed more than 10 cents since the last retreat below 130 and now it is within reach of 140. We booked profit on our short signal during the retreat and turned bullish after that with a buy USD/JPY signal.

USD/JPY – 60 minute chart

Cryptocurrency Update

BITCOIN Sticking to the 50 SMA Initially

Over the weekend, the cryptocurrency market experienced a bullish turn, leading to a recovery in prices. One notable development was the price of Bitcoin (BTC) surpassing the 100-day Simple Moving Average (SMA) indicator and reaching a peak above the 50 SMA, represented by the yellow line. However, the price failed to stay above that level. Given this situation, it remains to be seen if buyers will return in the near future to support the price.

BTC/USD – Daily chart

The 50 SMA Hold As Support for [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 complete as the 100 SMA (green) held as support for ETH/USD and buyers pushed the price above the 50 SMA as well. Now it seems that this moving average has turned into support.