Forex Signals Brief July 25: CB Consumer Confidence Expected to Improve Again
Yesterday’s Market Wrap
All the attention now is on central banks, whether they will continue tightening further or stop after the steepest policy tightening on record, particularly the FED. As a result, markets have been trading the data, the importance of which has been increasing as we approach the July FOMC meeting which will take place tomorrow.
Yesterday we had the manufacturing and services PMI reports from the US, which turned out to be positive for the US, even though they came up mixed, with manufacturing showing an improvement, while services softened further. ALthough that came after some really weak services and manufacturing numbers from Europe, which showed that services are heading toward contraction as the pandemic savings start to run out, while manufacturing fell deeper into recession. The Euro and particularly the GBP headed south after the numbers.
So, USD traders were sort of prepared for a soft reading, and services didn’t disappoint as they headed into contraction too. But manufacturing showed a decent improvement as it approaches the 50 points breakeven level. Besides that, prices for services increased during June, whjcih might be an excuse for the FED to maintain a wait-and-see approach for the Speptember meeting, since a 25 bps hike is all prices in for tomorrow. The USD turned bullish after an initial dip and ended the day making advances.
Today’s Market Expectations
Today the economic calendar is light, with only the CB Consumer Confidence to be released in the afternoon, which is expected to show another improvement, as the about market tightens up in the US. The Richmond Manufacturing Index is expected to decline further, although we might get a surprise after yesterday’s manufacturing PMI, although this report is not that important. From Europe, we have the German Ifo Business Climate, which is expected to show another deterioration from 88.5 points to 88 points, which shows that the situation is getting more difficult for businesses. Although, the Belgian NBB Business Climate is expected to show a slight improvement.
Forex Signals Update
Last week markets were volatile and we saw many reversals, which continued yesterday as well. We stuck to short term signals, as markets seem reluctant to keep a position for too long and opened six trading signals in total. Today we don’t expect much volatility as the economic data is not that important.
For more detailed updates, please refer to the section below.
GOLD Breaking the Uptrend
Gold made a bearish reversal last week reversal after being bullish for the first three weeks of this year as the USD turned bullish, while risk assets such as stock markets also remained bullish. The 50 SMA (yellow) held as support on the H4 chart, but the 20 SMA (gray) turned into resistance and sellers came back. The USD gained some momentum, which sent Gold prices lower and the 50 SMA was broken. After that, the price fell to $1,953.60, triggering the stop loss of our signal.
XAU/USD – 240 minute chart
Considering the current market conditions, we are providing a trading signal as follows:
- Gold Sell Signal
- Entry Price: $1,960-62
- Stop Loss: $1,972
- Take Profit: $1,942
GBP/USD Continuing the Decline
USD/JPY – H4 chart
Cryptocurrency Update
BITCOIN Breaking the Support
Bitcoin came from below $25,000 in June, as the sentiment in the crypto market improved considerably, with economic uncertainties becoming more evident on a global scale. Bitcoin surged above $30,000 and it even overtook the $31,000 level. At a point it approached $32,000, but buyers couldn’t hold the price too long above the range and the reversal back down came. The support around $30,000 held for about a week, but yesterday sellers finally broke it, which triggered the SL of our buy signal which we had opened above the support.
BTC/USD – Daily chart
We decided to open another buy Bitcoin signal on Monday, playing the range again, buying BTC/USD just above $30,000:
- Entry Price: $28,000 or $28,500
- Stop Loss: $26.500
- Take Profit: $31,300
Can MAs Hold As Support for ETHEREUM?
Ethereum made a strong bounce and moved above $2,000 earlier this month as buyers remained in charge. We have had quite a few long term buy Ethereum signals since the trend has been bearish since the beginning of 2023, with the lows getting lower. Although since then the pressure has been to the downside, but Ethereum has still shown more resilience than Bitcoin. So, we decided to open a buy ETH signal on Monday after the retreat, so we’re betting on moving averages to act as support and hold the retreat.
ETH/USD – Daily chart
- Entry Price: $1,860
- Stop Loss: $1,740
- Take Profit: $2,020
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