Forex Signals Brief June 1: Eurozone Inflation Likely Weaker in May

Yesterday’s Market Wrap

Yesterday started with some weaker numbers from China, as services PMI slowed down, while manufacturing PMI showed that activity fell deeper into contraction. This kept the sentiment negative throughout the day, with stock markets retreating lower, while safe havens such as the USD, making some decent gains. Although, Gold and the JPY benefited most of this situation.

Yesterday we got the CPI (consumer price index) numbers for May from major European countries which showed lower inflation figures reported in France, Italy, and German states. In Canada, the GDP report for March surprised with a 0.3% expansion against 0.1% expected, which helped the CAD somewhat. The JOLTS job openings from the US jumped above 10 million again, which kept the bid on for the USD.

Today’s Market Expectations

Today started with the Australian retail sales and Chinese Caixin manufacturing numbers for May, which were little changed. A while ago, the manufacturing PMI numbers from Europe were released, showing that this sector remains in contraction. Although markets are waiting to see the Eurozone CPI inflation for May, which is expected to slow to 6.3% from 7.0%. Later in the US session we have the ISM Manufacturing PMI which is also expected to remain in contraction, as well as Unemployment Claims and ADP Non-Farm Employment Change.

Forex Signals Update

Yesterday the volatility picked up, as the manufacturing data from China showed a contraction, turning the risk sentiment negative. Safe havens rallied higher, so we had two losing signals in USD/JPY and Gold, but made p with four winning signals in other currency pairs as well as in Gold again.

GOLD Breaking Above the 50 SMA

Gold has been bearish since early May, after failing below the all-time-high. The decline was steady, with the 50 SMA (yellow) acting as resistance on the H4 chart and we have been selling retraces higher. But this week we have seen a bullish reversal which pushed the price above the 50 SMA, which has now turned into support.

XAU/USD – 240 minute chart

Remaining Short on EUR/USD

EUR/USD also turned bearish in early May as USD buyers started to come back, sending this pair to 1.06 lows yesterday. The 20 SMA (gray) and the 50 SMA (yellow) have been acting as resistance at the top where we have been selling retraces higher. Yesterday we opened two sell EUR/USD signals which closed in profit.

EUR/USD – 240 minute chart

Cryptocurrency Update

BITCOIN Reversed Down After the Rejection at the 50 SMA Initially

Cryptocurrencies have been retreating lower since late April, but the crypto market experienced a positive shift in sentiment over the weekend, resulting in a bounce off the 100 SMA (green) on the daily chart. The price reached a peak above the 50 SMA (yellow) but failed to hold above it and now it has reversed down, heading for the 10 SMA again.

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.