Forex Signals Brief June 15: Hawkish FED Dot Plot Brings USD Buyers Back

Yesterday’s Market Wrap

Yesterday started with the UK GDP figures which showed growth again and the GBP rallied higher toward 1.27 as Bank of England remained hawkish. In the US session we had the producer inflation report form the US which showed a slowdown, giving the USD another reason to slide lower ahead of the FED rate decision.

The FED kept interest rates on hold at 5.25% as expected, but the dot plot was more hawkish. The dot plot indicated that the median of policymakers see rates at 5.6% at year end. That would imply two more rate hikes before the end of 2023. That sent the USD 50-70 pips higher across the board, after two days of retreating lower.

Today’s Market Expectations

Today started with the GDP report from New Zealand, which showed an improvement in Q1, coming from a 0.6% contraction in Q4 of last year, which was welcomed by the NZD. Employment remained steady in Australia during May as today’s numbers showed while China’s industrial production slowed down. Later the highlight of the day will be the ECB meeting which is expected to raise rates by 25 bps to 4.00% although markets have anticipated this and a hawkish statement.

Forex Signals Update

Yesterday the price action was decent across the board, with the USD falling initially after the softer PPI inflation numbers. But then the situation reversed and USD buyers returned after the FED dot plot was hawkish, despite keeping rate on hold.

MAs Continue to Keep GOLD Down

Gold has been bearish for more than a month and the price fell below moving averages on the H4 chart, which seems to have turned into resistance, keeping the price subdued. Although the selling pressure has eased in the last three weeks, but Gold buyers can’t turn the trend bullish and sellers return every time. Yesterday we booked profit on two Gold signals as the 100 SMA continued to provide resistance.

XAU/USD – H4 chart

Booking Profit in AUD/USD

In early May, the AUD/USD currency pair experienced a bearish trend as there was an increase in demand for the US dollar. Consequently, the pair reached its lowest level around 0.6460 by the end of the previous month. The downward pressure was further intensified by various moving averages, especially the shorter ones. However, there has been a recent shift in momentum, with buying activity picking up. As a result, the price has risen above most moving averages, which are now acting as support levels. Based on this development, a decision was made to initiate a buy signal for the AUD/USD pair yesterday which closed in profit.

AUD/USD – 60 minute chart

Cryptocurrency Update

BITCOIN Sliding Lower

Bitcoin has experienced a bearish phase for the past two months, with prices making lower lows after a bullish period in the first quarter. However, the overall trend for Bitcoin remains bullish. The cryptocurrency slipped to the 100-period Simple Moving Average (SMA) multiple times, and this level had been acting as a reliable support. However, on Monday, the support of the 100 SMA was finally broken following the Securities and Exchange Commission (SEC) filing charges against Binance. On Tuesday, we observed a reversal in Bitcoin’s price, pushing it higher and reclaiming a position above the 100 SMA. As a result, our “buy” signal for Bitcoin at the 100-period SMA remains valid. However, buyers have struggled to push the price above the 50 SMA, which has acted as a resistance level. It suggests that there might still be some hesitation or selling pressure in the market.

BTC/USD – Daily chart

ETHEREUM Buy Signals Hitting SL After the FED Meeting

In recent weeks, the selling pressure for Ethereum has increased, resulting in a decline in its price over the past few days. It appears that the correction reached its completion point, as the 100-period Simple Moving Average (SMA) represented by the green line was holding as support for ETH/USD, but it was broken on Saturday and now sellers seem in control.