Forex Signals Brief August 10: Waiting for CPI to Get Markets Going
Yesterday’s Market Wrap
Yesterday markets continued the same theme as in the first two days of this week, waiting for the US consumer inflation figures to decide what to do. The US Dollar continued to crawl higher, as it did on Tuesday after turning bearish last Friday on softer NFP figures, on Friday evening we saw a slight retreat in the USD but yesterday the U.S. dollar resumed the bullish momentum and was gaining strength against other currencies, while Gold continued to slip lower, breaking below $1,920 and reaching $1.920 in late US session.
Stock markets continued to remain bearish overall, but the situation was more balanced yesterday, as we saw some attempts from buyers as well. During the European and US sessions, the economic data was light, although we did see some inflation figures in the Asian session.
Prices continued to fall in China during June, with consumer inflation turning negative too. PPI (producer price inflation) came at -4.4% against -4.0% expected, while CPI (consumer price index) fell by 0.3% last month from 0.0% in June. That left commodity Dollars in defense, while the higher inflation expectations from the RBNZ didn’t help the Kiwi much. Crude Oil continued the rally higher, despite a 150 pip retreat following the buildup in the EIA crude inventories.
Today’s Market Expectations
Today the economic data is very light during the Asian and European session, although the first inflation report for the day which came from Japan showed a cool-off in producer inflation PPI in July from 4.1% in June. The real data starts later, with unemployment claims expected slightly higher at 231K from 227K previously.
The inflation report will steal the show though, with most traders looking at the figures to see where the FED will head in September. Headline and core CPI MoM are both expected to remain unchanged at 0.2%, but the headline CPI YoY is expected to show a 3-point jump from 3.0% to 3.3% in June, which would reignite fears of another inflation bubble and would likely gise some further support to the USD. Core CPI YoY is expected to remain unchanged at 4.8%.
Forex Signals Update
Yesterday the volatility declined again after picking up somewhat on Friday, due to softer data from China and a downgrade of US banks. There was a slight momentum in favour of the US in certain assets, but the action was limited, apart from crude Oil which saw some decent moves both ways. We closed three trading signals in total, two reached the take profit target and one closed in loss.
For more detailed updates, please refer to the section below.
Keeping Short in GOLD As Sellers Remain in Control
The price of Gold has been bearish since the middle of July, although it experienced a period of strength after a positive response to the soft Non-Farm Payrolls (NFP) report on Friday which didn’t last long. Despite the initial surge, Gd was the first to reverse lower and it continues to make lower highs as sellers remain in control. Yesterday we opened another sell Gold signal which closed in profit as Gold fell to $1,915.
XAU/USD – 240 minute chart
Considering the current market conditions, we are providing a trading signal as follows:
- Gold Sell Signal
- Entry Price: $1,925-30
- Stop Loss: $1,941
- Take Profit: $1,910
Buying the Dips in USD/CAD Despite the Surge in Oil
USD/CAD continues to remain bullish, s risk sentiment remains subdued, while markets are expecting the Bank of Canada to have stopped with rate hikes, so the CAD has two reasons to be bearish, whatever happens in the USD. moving averages gave been acting as support on the H1 chart, holding during pullbacks and we have been trying to buy this pair. Yesterday we opened a buy signal at the 50 SMA (yellow) which closed in profit.
USD/CAD – 60 minute chart
Cryptocurrency Update
BITCOIN Jumping Above $30,00 but Pulling Back Down
Bitcoin has been showing some weakness as it has been retreating gradually ever since it fell below the critical support level of $30,000 and it slipped below $29,000. Although sellers have been pretty weak too, since they haven’t shown any willingness to make any decent move. On Monday, buyers returnd and pushed the price above the moving averages, due to the downgrade in the US banks, which brought back uncertainties regarding the US banking system. The price bounced off the 100 daily SMA (green), but the 50 SMA (yellow) turned into resistance above $30,000, so the price retreated back below that round level.
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