Forex Signals Brief August 4: Attention on US and Canadian Jobs Numbers
Yesterday the US unemployment claims kept the hopes up for a decent NFP number today, so chances are for a positive surprise
Yesterday’s Market Wrap
The focus yesterday was on the GBP pairs, as Bank of England (BOE) took center stage and announced a 25 basis points (bps) rate hike, in line with market expectations, Although some analysts were expecting a more aggressive 50 bps hike. The odds for a 50 bps rate hike coming into the decision were at roughly 32%, which sent the GBP slightly lower after the announcement of the 25 bps increase. However, the BOE’s decision to keep the door open for a potential rate hike in September did not significantly shift rate pricing.
After the announcement, GBP/USD initially fell from 1.2660 to 1.2625 but later recovered to trade above 1.27 levels. BOE Governor Andrew Bailey mentioned that there was no case for a 50 bps rate hike which was bearish for the Pound.
Later the attention shifted to the data from the US, as the North American trading session got underway, with US unemployment claims remaining little changed which shows that employment is doing alright. Although the Prelim Unit Labor Costs and ISM Services PMI showed a slowdown, so the economy is still giving mixed signals.
Today’s Market Expectations
Today started with the RBA Monetary Policy Statement after holding interest rates unchnaged for the second time, so this statement didn’t offer much else, which is keeping the Aussie bearish. German Factory Orders posted a decent decline in June, but that comes after a strong surge by 6.4% in May.
The heavyweight data comes in the US session though, with the employment figures from Canada, which are expected to slow, while the unemployment rate is expected to tick higher to 5.5%. Although markets are looking at the Non-Farm Employment (NFP) Change from the US, which are expected to remain steady, while other employment reports have been showing a tightening in this sector. The unemployment rate is expected to remain unchanged at 3.6% although Average Hourly Earnings are expected to show a slowdown to 0.3% from 0.4% previously.
Forex Signals Update
Yesterday the volatility slowed despite the Bank of England rate hike and the slowdown in the US ISM services. We opened several signals, although only two closed, one in profit and the other in loss, although the winning signal was a long term trade in crude Oil. The other signals continued into today.
For more detailed updates, please refer to the section below.
Remaining Short on GOLD Below the 200 SMA
Gold turned bearish by the middle of last month, and it has been breaking moving averages on the H4 chart, as it keeps making lower highs since then. Last week the 200 SMA (purple) turned into support and we saw a couple of bounces higher, although the price kept reversing lower and this moving average was broken this week. We keep selling most bounces in Gold, and after some winning trades in a row here, we are still short with another sell Gold signal which you will find below.
XAU/USD – 240 minute chart
Considering the current market conditions, we are providing a trading signal as follows:
- Gold Sell Signal
- Entry Price: $1,937.36
- Stop Loss: $1,951.36
- Take Profit: $1,929.36
The 200 SMA Holding As Support on USD/JPY
Our current position in the market involves being short on the Japanese Yen (JPY) and long on the USD/JPY currency pair. We have been attempting to capitalize on buying opportunities whenever the USD/JPY pair experiences temporary declines. Yesterday, there was a retreat in the USD/JPY pair’s price, which caught our attention. Upon analyzing the situation on the H4 chart, we observed that the 200-day Simple Moving Average (SMA) in purple acted as a support level, preventing the price from falling further below 142.
Additionally, the stochastic indicator, which helps measure the momentum of a price trend, was showing that the market was oversold. This oversold condition often suggests that the selling pressure may have been excessive and that a potential rebound or upward movement could be likely. Taking these factors into account, we decided it was a good opportunity to open a “buy” signal on the USD/JPY pair.
USD/JPY – H4 chart
Considering the current market conditions, we are providing a trading signal as follows:
- USD/JPY Sell Signal
- Entry Price: 142.48
- Stop Loss: 141.08
- Take Profit: 143.28
Cryptocurrency Update
MAs Keeping BITCOIN Subdued
Bitcoin’s price has been gradually decreasing ever since it dropped below the critical support level of $30,000. This level had previously acted as a strong support, but now it seems to be acting as a resistance, with the moving averages providing additional resistance. Specifically, the 50-day Simple Moving Average (SMA) has become a barrier as sellers continue to push the price lower.
Recently, the price dipped to $28,616, but it managed to find strong buying support in that area, causing the price to bounce back above $29,300. This indicates that there is significant buying pressure around the $28,600 level, which makes it an attractive point for potential buyers. Given this analysis, there are plans to open a buy signal for Bitcoin if the price dips back to around $28,600 soon, as it presents a promising opportunity with strong buying support in that region.
BTC/USD – Daily chart
We’re looking 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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