Forex Signals Brief June 8: BOC Surprise 25 bps Hike Sends CAD Higher

Yesterday’s Market Wrap

Yesterday we came after a surprise 25 basis points rate hike by the Reserve Bank of Australia on Tuesday morning. The Q1 GDP report was released from Australia yesterday morning, which missed expectations, but the revisions for Q4 of last year were better. AUD/USD pushed above 0.67 before retreating back down as the USD found some bids in the US session.

The data during the European session was light, until the Bank of Canada decided to surprise markets with a 25 bps hike also, which sent the CAD around 50 pips higher against the USD, despite the Buck being bullish in the US session. So, the CAD was the strongest currency yesterday, also buoyed by the $2 climb in crude Oil after a small decline in EIA inventories.

Today’s Market Expectations

Today started with the Final GDP and the GDP Price Index from Japan which were little changed from the previous reading. The Eurozone Revised Q1 GDP is expected to fall flat at 0.0% from 0.1% previously. Later we have the Unemployment Claims from the US which are expected at 236K and the Swiss Nation Bank chairman Jordan holding a speech.

Forex Signals Update

Yesterday the USD was retreating lower, following the price action from Tuesday, and our sell signal in EUR/USD closed in loss. But, we remained long on the USD which paired off as the buyers returned and the Buck surged higher. We closed three trading signals in profit after that, which gave us a good win/loss ratio.

GOLD Stagnating Today

Since October, gold has experienced a bullish trend, but in early May, it turned bearish after failing to surpass its previous all-time high of $2,075. Throughout this decline, the 100-day Simple Moving Average (SMA) has played a crucial role as a support level, preventing further downward movement. Following the rebound from the 100 SMA, the price of XAU/USD (gold) approached the 50-day SMA (yellow) towards the end of last week. However, on Friday, a bearish reversal occurred as buyers of the US dollar returned. Despite this, the 100 SMA once again provided support, leading to a bounce on Monday. The upward momentum did not continue and yesterday Gold returned to test the 100 daily SMA again.

XAU/USD – Daily chart H4

MAs Keeping EUR/USD Down

In May, EUR/USD transitioned into a bearish trend as USD buyers started to emerge. As a result, the pair reached its lowest point around 1.06 yesterday. On the price chart, the 20-period Simple Moving Average (gray) and the 50 SMA (yellow) have been acting as resistance levels. Traders have been taking advantage of price retracements to sell at these levels. However, last Thursday, a bullish reversal occurred, pushing the pair above the 50 SMA. Unfortunately, the climb was halted by the 100 SMA (green), and the downtrend resumed once again.

EUR/USD – 240 minute chart

Cryptocurrency Update

BITCOIN Finding Resistance at the 50 SMA

Bitcoin has been bearish since April, making lower lows after being bullish during Q1, although the main trend is still bullish. BTC slipped to the 100-period SMA once again which held as support for several times, but finally broke on Monday after SEC filed charges against Binance. On Tuesday though we saw a reversal higher and a return above the 100 SMA so our “buy” signal for Bitcoin at the 100-period SMA still remains open. But buyers couldn’t push the price above the 50 SMA.

BTC/USD – Daily chart

The 100 SMA Holding 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.