Forex Signals Brief June 29: Powell Speaks Again Ahead of Last GDP Reading

Yesterday the USD founds some decent bids as FED's Powell commented on further hiking and today he's speaking again ahead of the GDP report

Skerdian Meta•Thursday, June 29, 2023•3 min read

Yesterday’s Market Wrap

On Monday and Tuesday, we observed a reversal in price action across various currency pairs, resulting in a weakening of the US dollar (USD). However, the situation changed yesterday when the USD unexpectedly turned bullish during the US session, without a clear explanation. Commodity dollars and the GBP in particular suffered some heavy losses.

USD/JPY also rallied to the highest level since the crash in November last year. This was particularly surprising considering the release of strong economic data from the US on Tuesday, when the USD lost value instead. Although Jerome Powell’s comments might have helped somewhat, when he said that they believe there is more restrictive policy coming since looking at the data over the last quarter, numbers on jobs, inflation and activity have been all strong.

Today’s Market Expectations

Today we have the German regional CPI (consumer price index) figures which will be released throughout the European session and are expected to show an increase this month. FED Chairman Powell will speak again, this time in Madrid, so we will follow his comments if he speaks about the policy again. That comes ahead of the unemployment claims from the US, the last GDP revision for Q1 and the GDP price index.

Forex Signals Update

Yesterday the volatility picked up, particularly in risk currencies although it was one-way traffic, as most traders leaned on the USD. We were short on the USD from the previous day, as the Buck was declining so we got caught on the wrong side in the first part for the day, but reversed trade and made up for it in the US session. We had six trading signals in total, ending up with three losing and three winning forex signals.

GOLD Knocking on $1,900

Gold has been experiencing continued weakness, with sellers consistently reemerging after each upward retracement. This pattern of lower highs indicates a bearish momentum in the market, and the moving averages are acting as resistance levels. Yesterday, a bearish reversal occurred, resulting in the price closing at the lows seen last week. As a result, it appears that Gold is headed toward the $1,900 level after reaching $1,903 yesterday. So, the plan is to take advantage of any upward retracements in Gold by initiating selling positions.

XAU/USD – 240 minute chart

Booking Profit on USD/JPY Longs Again

USD/JPY has displayed remarkable resilience, transitioning into a bullish trend at the end of April and consistently recording significant gains throughout this month. It has climbed approximately 15 cents from its lows. The moving averages, particularly the 20-day Simple Moving Average (SMA) represented by the gray line, have served as reliable support indicators, further confirming the strength of the upward trend. Consequently, the plan is to take advantage of any downward retracements in USD/JPY by considering buying positions.

USD/JPY – 240-minute chart

Cryptocurrency Update

BITCOIN Holds Above $30,000 But Can’t Hold Above $31,000

Bitcoin underwent a rapid reversal towards the end of the previous week, following a brief dip below the $25,000 level. Buyers stepped in and pushed the price above the moving averages on the daily chart. As the week drew to a close, Bitcoin managed to reach a new high for the year, surpassing the $31,000 mark. Although, buyers haven’t been able to push much higher and we are seeing consolidation, with the price dipping below $30,000 again.

BTC/USD – 4 hour chart

ETHEREUM Breaks the 50 SMA but the 200 SMA Holds

Last week we witnessed a surge in cryptocurrencies, with ETH/USD moving above $1,900. However, it fell short of reaching our take-profit (TP) target, and after some consolidation, the price starts to retreat lower. The 50 SMA (yellow) held as support for some time, but it was broken although the 200 SMA (purple) stopped the decline.

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.