Forex Signals Brief June 19: Market Tension to Continue with BOE and SNB
Last week the FED, the ECB and the BOJ held their meetings, while this week we have the Bank of England and SBN expected to hike by 25 bps
Last Week’s Market Wrap
After the surprise rate hikes by the Bank of Canada and the Reserve Bank of Australia in the first week of June, markets were focused on the next three major central bank meetings this week, which started with the FED. Following the Federal Reserve’s rate decision announcement on Wednesday evening which kept rates at 5.00% as expected, the US Dollar gained momentum as expectations are from two more rate hikes until the end of the year, as the dot plot showed.
The European Central Bank kept the hawkish tone and raised rates by 25 bps to 4.00% on Thursday. On Friday the focus shifted to the monetary policy announcement by the Bank of Japan (BoJ). It was widely expected that the BoJ would maintain its ultra-accommodative stance by keeping its benchmark interest rate and yield curve control program unchanged. The BoJ’s decision to maintain its current policy indicates that they are continuing with their accommodative approach to support the Japanese economy.
This Week’s Market Expectations
This week starts light in the first two days, with the US on a bank holiday weekend until Monday, but it [picks up on Wednesday with the UK consumer inflation expected to slow down further to 8.4% ahead of the Bank of England meeting on Thursday, which is expected to produce a 25 bps rate hike, taking them to 4.75%. Before that the Swiss National Bank which is also expected to take rates 25 basis points higher to 1.75%. On Friday, the Manufacturing and services report will be released from Europe and the US, but they’re not expected to show much change.
Forex Signals Update
This week we saw a lot of volatility in the markets, with the USD turning soft ahead of the FOMC meeting, before reversing and moving higher after the meeting on Wednesday evening. Although it didn’t last long and the USD reversed again, ending the week down. We opened 26 trading signals in total, ending with 9 losing trades and 17 winning forex signals.
GOLD Returns to the Range
Gold has been finding support at moving averages for more than a month. On Thursday morning, there was a false breakout of the 100 SMA (green), but it rebounded again following the reactions to the rate decisions made by the FED and the ECB this week. So, the downside seems to be protected by the 100-day SMA, which has provided support on many occasions. On the other hand, the 50-day SMA has been acting as resistance, rejecting the price on Friday, particularly after some hawkish comments by the FED.
XAU/USD – Daily chart
Remaining Long on USD/JPY
Based on the chart analysis you provided, it seems that the USD/JPY currency pair experienced a significant increase in value following the announcement of the Federal Reserve’s rate decision. The USD gained momentum and as a result, the USD/JPY pair surged approximately 200 pips, moving from around 139.50 to approximately 141.50.
USD/JPY – Daily chart
Cryptocurrency Update
BITCOIN Facing MAs on the Way Up
Bitcoin fell below $25,000 last week after going through a bearish phase since April, with prices making lower lows after a bullish period in the first quarter. Last week the decline accelerated and Bitcoin quickly triggered the stop loss target of our buy BTC signal, before reversing back up and trading above $26,000. Although it failed at the 50 daily SMA (yellow) so let’s see if BTC can push above this moving average.
BTC/USD – Daily chart
ETHEREUM Rebounding Off the 200 SMA
ETHEREUM made a break of the resistance and support area above $1,700 as the price fell below $1,630s, but the 200 SMA (purple) was waiting there, which stopped the decline. This moving average acted as support on the daily chart, and the price formed a doji candlestick above it, which is a bullish reversing signal, followed by a nice bullish candlestick on Friday. We decided to open a buy Ethereum signal.
ETH/USD – Daily chart
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