Forex Signals Brief August 17: Is Employment Tightening in Australia and US?
Yesterday’s Market Wrap
Yesterday the risk-off mode continued in financial markets, particularly in forex, keeping risk currencies such as commodity dollars on the defense. The Reserve Bank of New Zealand opened the day with the meeting, and they left interest rates unchanged, keeping a neutral bias, likely to shift into dovish next year as inflation slows.
The USD was in retreat during early Aian session, but then it reversed higher as the sentiment turned negative and made advancements against all currencies throughout the day. USD/JPY pushed above 106, while EUR/USD slipped below 1.09.
In early European session, the UK consumer inflation report was released, which showed another decline in the headline number as expected but the core reading remains relatively stubborn sticking to 6.9%, which shows that everyday prices continue to increase. traders are now pricing in a 25 bps rate hike by the Bank of England next month, so the GBP saw some gains on the day against the dollar while all other major currencies ended up lower.
In the evening the FOMC meeting minutes were released, showing that most members thought inflation risks could require additional rate hikes . That leaves everything open for another rate hike, because no one thinks there can be more than that, so the USD kept the bullish bias until the end of the day.
Today’s Market Expectations
Today the employment figures from Australia and the US are the most important events in the forex calendar, which started with the producer inflation PPI numbers from New Zealand, showing a slight pick up in Q2. New jobs were expected to be slashed in half with the unemployment rate ticking higher at 3.6% in Australia.
The EU Economic Forecasts will be released later in the day, although recent data has shown that the near future is not looking bright. The Unemployment Claims are expected to slow a bit at 240K in the US, while the Philly Fed Manufacturing Index is expected to improve slightly but remain negative.
Forex Signals Update
The volatility was satisfying, with the price action going in favour of the USD, so we continued to remain long on the US Dollar, which proved to be a good strategy once again. We opened five trading signals, in forex, Gold and crude Oil, with the Oil signal closing in loss while the other signals closed in profit.
For more detailed updates, please refer to the section below.
GOLD Falling Below $1,900
Gold contiunes to display weakness as the price slips below the big round level of $1,900. Sellers are in charge as they keep keep making new lows, while buyers seem quite weak. Moving averages are acting as resistance during attempts from buyers to revese the situation, so we have been selling Gold at MAs, whcih has resulted to be a very profitable strategy. Although we decided to open a buy Gold signal against the $1,900 level yesterday which had been acting as support for some time.
XAU/USD – 60 minute chart
Buying GBP/USD Against the 200 SMA
GBP/UD has been under pressure since it reversed at around 1.3150 by the middle of July, falling to 1.26 lows, which means losing more than 500 pips. Although sellers found solid support at the 100 SMA on the daily chart and the price formed a doji candlestick above it, which is a bearish reversing signal. The price showed some bullish signs yesterday and today looks like it will close bullish, with the price trading t 1.2750. Yesterday this pair was up by around helped by the UK consumer inflation numbers which were released in the morning. We decided to open a buy GBP/USD signal against the 200 SMA which turned into support on the H1 chart.
GBP/USD – 60 minute chart
- GBP/USD Buy Signal
- Entry Price: 1.2735
- Stop Loss: 1.2695
- Take Profit: 1.2765
Cryptocurrency Update
The 200 SMA Turns Into Resistance Again for BITCOIN
The pressure has been to the downside for Bitcoin, following the bearish reversal and the decline below $30,000. The value of Bitcoin experienced a decline beneath $28,000, though there have been recent indications of buyers coming back. This was highlighted by a couple of upward movements above $30,000, leading to a breach of moving averages on the H4 (4-hour) chart. It’s worth noting that these attempts at an upward movement eventually lost momentum, resulting in a reversal below the $30,000 mark for BTC/USD. Yesterday we saw another attempt from buyers, but the 200 SM A(purple) held as support n the H4 chart and the price ca,e back down. We continue to remain long on BTC though.
BTC/USD – H4 chart
We opened another buy Bitcoin signal on Monday, playing the range again, buying BTC/USD below $30,000:
- BTC Buy Signal
- Entry Price: $29,421.68
- Stop Loss: $27,400
- Take Profit: $32,400
ETHEREUM Trading Between MAs
Earlier this month, Ethereum showed a decent rebound, sending it above the $2,000 threshold as buying activity remained dominant. Despite the prevailing bearish trend that has persisted since the beginning of 2023, characterized by a series of progressively lower lows, Ethereum has exhibited a greater degree of resilience compared to Bitcoin.
In light of this observation, a number of long-term “buy” signals for Ethereum have been generated. Despite the prevailing downward pressure, Ethereum has demonstrated a noteworthy ability to withstand these challenges. In response to a recent pullback, a decision was made to initiate a “buy” signal for Ethereum on Monday. This strategic move is based on the expectation that various moving averages will serve as supportive levels, potentially arresting the retreat. Notably, the 100-period Simple Moving Average (SMA), depicted in green, appears to be fulfilling this supportive role.
ETH/USD – Daily chart
- Entry Price: $1,860
- Stop Loss: $1,740
- Take Profit: $2,020
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