Forex Signals Brief July 19: More Signs That Inflation Is Slowing Globally
Last week US CPI and PPI inflation slowed down, on Monday Canadian CPI fell below 4% while today New Zealand and UK inflation continued this
Yesterday’s Market Wrap
On Friday and Monday we saw some consolidation in most assets and currency pairs after the steep decline in the USD during most of last week as inflation reports showed further slowdown. Traders were waiting for more data from the US and all the attention turned to retail sales yesterday.
The headline sales for June showed a slowdown compared to May, missing expectations of 0.5% as well, but it was an increase nonetheless, which was the third in a row. Besides that, the details were stronger than expected, with the control group posting a 0.6% increase which is great.
The USD resumed the decline again, with Gold surging more than $25 and reaching $1,985. Equities rallied again for the sventh consecutive day. Now risk sentiment has turned quite positive in financial markets, as traders expected the FED to stall after this month’s rate hike and hopefully they will start cutting ratessoon next year.
Today’s Market Expectations
Today is another inflation day, after it started with more inflation reports. Erly in the morning we had the CPI (consumer price index) report from New Zealand, which showed a slowdown in Q2 from the 1.2% increase we saw in Q1. A while go the UK CPI report as released as well, indicating a slowdown in June after the sudden jump to 8.7% in May. Tbhis shows that inflation pressures are easing on a global scale and next year we will see a run from central banks to start cutting interest rates.
Shortly we will get to see the final CPI reading from the Eurozojne, although nothing is expected to change, with the headline CPI ingflation at 5.4% while core CPI at 5.5%. In the US session we have the housing starts which are epxected to cool off in the US, and building ermits which are expected to remain unchanged. Crude Oil inventories are expected to show a 2 million barrel drawdown, which would be welcomed by Oil buyers.
Forex Signals Update
The volatility calmed down from Friday until yesterday in the European session, as traders were waiting for US retail sales to get a better picture of the US economy. Yesterday the volatility picked up again after the retail sales report and the flow was one-sided, against the USD.
For more detailed updates, please refer to the section below.
GOLD Testing the 50 Daily SMA
Byers initially attempted to push the price of Gold above its all-time high but they were unsuccessful, leading to a reversal lower. However, during the retracement lower, the price found support and the last pullback below $1,900 attracted significant buying pressure.
On the weekly chart, two doji candlesticks were formed, which are considered bullish reversing signals after a retreat. In addition, the last two trading days have shown two decent bullish candlesticks, indicating a potential upward trend in the price of Gold.
Yesterday, Gold experienced a surge of over 1%, and a similar climb was observed on Monday, bringing the price above $1,985, a level not seen in more than a month. This increase was supported by a weaker USD and declining Treasury yields, likely influenced by the softer retail sales headline for June.
XAU/USD – Da60 minuteily chart
XAU/USD – Da60 minuteily chart Considering the current market conditions, we are providing a trading signal as follows:
- Gold Buy Signal
- Entry Price: $1,977.64
- Stop Loss: $1,973.64
- Take Profit: $1,980.64
USD/JPY Failing to Move Above 140
USD/JPY has been quite bullish for a few years, as the Bank of Japan has kept the policy unchanged, while the FED and other major central banks have been increasing rates at the fastest pace ever. But we saw a reversal at around 145 and last week this pair tumbled lower after softer US inflation numbers. On Friday the decline stopped and we saw an attempt to reverse the price back up. But now after several days it seems like buyers are failing as the price remains below 140, so we remain short on this pair.
USD/JPY – H4 chart
Considering the current market conditions, we are providing a trading signal as follows:
- USD/JPY Sell Signal
- Entry Price: $138.36
- Stop Loss: $139.76
- Take Profit: $137.56
Cryptocurrency Update
BITCOIN Slipps Below $30,000
Early last month, Bitcoin surged higher with the price climbing above $31,000, as the demand for cryptocurrencies returned. However, over the past three weeks, the price of Bitcoin has stabilized and has been trading within a range of approximately $30,000 to $31,500. There was a brief spike to $31,750 late last week, but it was short-lived as sellers returned and pushed the price of BTC back to the bottom of the range, briefly dipping below $30,000.
During this pullback, the 200 Simple Moving Average (purple) acted as a support level, holding the price from declining further in the first attempt. This support may potentially lead to a reversal higher from this point, especially considering that the statement mentioned being “already long on BTC,” implying that the current position is a long (buy) position on Bitcoin.
BTC/USD – 240 minute chart
We decided to open another buy Bitcoin signal on Monday, playing the range again, buying BTC/USD just above $30,000:
- Entry Price: $30,293.2
- Stop Loss: $29.490
- Take Profit: $31,493.21
The 200 SMA Holding for ETHEREUM
Ethereum has been trading on a bullish trend since the beginning of 2023, with higher lows and higher highs in the larger charts. Moving averages, particularly the 200 Simple Moving Average (purple) on the H4 chart, have been acting as support levels for this cryptocurrency.
In the last long-term signal, which was opened right at the 200 SMA, the price of Ethereum bounced above $2,000, resulting in a profitable trade. Now, as the cryptocurrency market experiences a retreat, the price of Ethereum is returning to the 50 SMA once again. Based on this information, you are considering opening another buy signal at the 200 SMA, anticipating a potential bounce from this support level.
Considering these developments, the current situation prompts whether it is an opportune time to consider buying Ethereum.
ETH/USD – Daily chart
- Entry Price: $1,860
- Stop Loss: $1,740
- Take Profit: $2,020
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I am a recent forex signals subscriber; I am wondering what is your net Profit/Loss in pips; I don’t see you mention that at all.
Hi El Hadi Ziat,
We use 30-40 pips SL and TP targets for small signals, 80-100-140 pip targets for longer forex signals, commodities and indices, while cryptos vary depending on their range.
Nothing new in your last comment; Why you don’t show the NET TOTAL Profit; which is the most important aspect; The risk to reward ratio of your trades are below 1:1 ; you risk more pips to make less pips. again, this is not an issue, but we dont know whether you are in profit or loss; you count performance like this is binary option (Green Tick or Red cross) neglecting the accumulated NET total. I did see a report from 2013 to 2020 Net total in pips; but nothing from there onwards. In other words and to sum it up, I Don’t know whether you are in profit or loss.