Forex Signals Brief August 1: Another Soft US Employment Report Expected This Week
Yesterday we saw another soft JOLTS jobs report, while today the ADP employment is expected to decline considerably from last month
Yesterday’s Market Wrap
The Aussie (AUD) experienced a significant drop in value during late Asian and early European sessions as a result of the Reserve Bank of Australia’s (RBA) decision to maintain its cash rate at 4.10% for a second consecutive meeting. Market expectations were for a 25 basis point hike, but the majority of investors had already priced in the possibility of no change, with approximately 66% odds. Despite this, there was no indication from the RBA for more hikes, which led to a decline in the AUD during the trading session. AUD/USD started the day at around 60.6720, but it fell to the day’s lows just above 0.66, representing a 1.5% decline.
The Japanese yen (JPY) also performed poorly, with the USD/JPY pair rising above the 143.50 mark. Higher bond yields contributed to the Yen’s weakness. The US dollar (USD) held modest gains against the euro, pound, Swiss franc, and Canadian dollar, despite a soft JOLTS jobs report. The market sentiment appeared to be somewhat risk-averse, as equities showed a decline during the session, helped by the fall in contraction in the Chinese Caixin manufacturing indicator, which was another reason for the Aussie to remain bearish.
Today’s Market Expectations
Today the economic data is lighter, having started with the employment report from New Zealand, which was expected to show a tick higher to 3.5% in the unemployment rate in Q2, from 3.4% in Q1, while the increase in the employment change was expected to show a slowdown from 00.8% to 0.6% for the same period.
The Manufacturing PMI report from Switzerland was released a while ago, showing a slowdown in activity during July. later in the US session, we have the ADP employment report, which is expected to come down to 191K in July, although that comes from a strong jump by 497K in June. Nevertheless, if the actual number comes above 230k, then we will likely see another bullish move int he USD.
Forex Signals Update
Yesterday te volatility was low in most assets apart from the Aussie as traders wait for more economic data to come, while the US JOLTS jobs and ISM manufacturing didn’t bring much in terms of price action. We opened 4 trading signals yesterday, all of which closed in profit, with a long term winning signal in Gold.
For more detailed updates, please refer to the section below.
GOLD Back at the 200 SMA
Gold is repeating a bearish pattern as it makes lower highs during the last two weeks, showing that sellers have been in charge during this period. Last week the 200 SMA (purple) turned into support on the H4 chart and we saw a $30 bounce from there from $1,942 to $1,972, although the price reversed lower and yesterday we saw another crash to the previous low, where sellers met the 200 SMA again, which held the decline.
XAU/USD – 240 minute chart
AUD/USD Closes Above 1.10 After the Bearish Reversal
AUD/USD turned weaker after the RBA’s decision to keep rates unchanged at 4.10%, while the data from China has been showing increased weakness. This accelerated the decline in this pair and we decided to open a sell forex signal here, which eventually closed in profit as sellers remain in control until the end of the day. So, we have turned bearish on this pair and are thinking of selling retrafes higher.
AUD/USD – H4 chart
Considering the current market conditions, we are providing a trading signal as follows:
- AUD/USD Sell Signal
- Entry Price: 0.6630-40
- Stop Loss: 0.06670
- Take Profit: 0.6605-10
Cryptocurrency Update
BITCOIN Bounces Back up Above $29,000
Bitcoin’s price has been slipping lower since breaking below $30,000 level which was acting as strong support previously. Moving averages have turned into resistance for BTC as sellers keep pushing the highs lower. The 50 SMA (yellow) has taken up that position recently as the selling pressure accelerated and yesterday we saw a dip to $28,616 before buyers came back and sent he price above $29,300 agin, which shows that the buying pressure down there is strong, so we are planning on opening a buy BTC signal if the price dips there again soon.
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: $28,600
- Stop Loss: $27,000
- Take Profit: $31,300
The 100 Daily SMA Holds 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 and the 100 SMA (green) seems to be holding.
ETH/USD – Daily chart
- Entry Price: $1,860
- Stop Loss: $1,740
- Take Profit: $2,020
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