Forex Signals Brief June 26: Central Banks Are Not Done With Rate Hikes

Last week the Bank of England and dhe SNB raised rates again, suggesting that central banks will continue tightening further

Skerdian Meta•Monday, June 26, 2023•3 min read

Today we get to see the meeting minutes from the RBA, the BOE and the FED

Last Week’s Market Wrap

Last week traders were focused on Jerome Powell’s testimony at the US Congress, with some slightly hawkish expectations, since the FED DOT PLOT from the last meeting showed two more rate hikes this year after pausing in June. But, the comments FED chairman weren’t as hawkish as expected on the first day, which sent the USD lower on Wednesday. Although buyers returned after the second day of testimony and the USD ended the week higher against most of the major currencies.

In the UK, consumer inflation CPI remained unchanged at 8.7% year-on-year, while expectations were for a slowdown. The Bank of England delivered a 50 bps rate hike the following day, with a bullish outlook, although GBP/UD ended the week lower. The Swiss National Bank also raised interest rates, by 25 basis points. On Friday the services and manufacturing PMI numbers from Europe and the US all missed expectations, which left markets with a sour sentiment.

This Week’s Market Expectations

This week starts with the CPI consumer inflation from Canada on Tuesday, which will be followed by the CPI report from Australia. Expectations are for another slowdown in both countries, although after seeing the UK inflation last week, we might get a surprise here too. On Wednesday we also have a number of central bankers participating in a panel discussion titled “Policy panel” at the ECB Forum on Central Banking, in Sintra. The US and Canadian GDP reports are expected to be positive, although markets will be more interested in the PCE core price index on Friday, which gives a good glimpse of consumer inflation in the US.

Forex Signals Update

Last week started pretty slow, but the volatility picked up and we opened 28 trading signals in total in forex, commodities and cryptocurrencies. The USD declined in the first part of the week, but it started to find some bids, which led to a market reversal. We had nine losing trades with the rest closing in profit, so we ended up with a win/loss ratio of 68/32%.

Selling the Jump in GOLD

Recently, Gold has been showing increased weakness after failing to print a new record high last month. This downward trend seems to be persisting and moving averages are acting as resistance. The 100 Simple Moving Average (green) stopped the climb on Friday after a sudden surge, and we decided to open a sell Gold signal which closed in profit.

XAU/USD – 240 minute chart

Booking Profit on USD/CHF at the 50 SMA

USD/CHF currency pair transitioned into a bearish phase after a period dominated by buyers, as the value of the USD began to weaken. During this bullish trend, the 50-day Simple Moving Average (SMA), represented by the yellow line on the chart, acted as a support level, reinforcing the upward momentum. However, the price of USD/CHF experienced a decline below this moving average, with the 200 SMA (purple) acting as resictance, indicating a shift in sentiment. Consequently, a sell signal for USD/CHF was initiated which closed in profit.

USD/CHF – 240-minute chart

Cryptocurrency Update

BITCOIN Makes New Highs for the Year

Bitcoin made a quick reversal at the end of the previous week, after experiencing a brief drop below $25,000 recently. Buyers pushed above moving averages on the daily chart and toward the end of last week BTC printed a new high for the year, as the price increased above $31,000.

BTC/USD – Daily chart

ETHEREUM Hanging Above $1,900

Ethereum experienced a decline below the $1,630s level, but the presence of the 200-day Simple Moving Average (SMA) (represented by the purple line) provided support and halted the downward movement. This moving average acted as a support level on the daily chart, and the price formation above it resulted in a doji candlestick pattern, which is considered a bullish reversal signal. Subsequently, last week we saw abune off that moving average and ETH/USD moved above $1,900 but missed our TP target.

ETH/USD – Daily chart

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ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.