Forex Signals Brief September 1: NFP Employment to Continue Slowing Trend

Posted Friday, September 1, 2023 by
Skerdian Meta • 4 min read

The US labour market is not slowing

Yesterday’s Market Wrap

Yesterday started with French inflation numbers, which came in hotter than expected, but ECB executive board member Schnabel’s indecisive remarks did not help with trader confidence ahead of the September meeting. Odds of a 25 bps rate hike fell below 50% after his remarks. Later on, the Eurozone inflation report was released, showing that core inflation fell by two points in August as expected, reflecting a slowdown to 5.3% in August compared to 5.5% in July.

That was enough for traders to turn bearish on the Euro and bets for another ECB rate hike were trimmed to around 28% at the end of the day, despite the headline CPI number remaining unchanged at 5.3% against a slowdown to 5.1%. EUR/USD was hovering around 1.0920 in the early European session but fell to the 1.0840 level.

Later in the US session, the attention turned to the economic data from the US, which leaned on the positive side. The Core PCE did tick higher to 4.2% as expected, while the headline PCE inflation increased by 3 points to 3.3% from 3.0% previously. Claims were expected to come at 235K ahead of tomorrow’s non-farm payrolls (NFP) report, although they came slightly lower at 228K, which gave the USD a bid, sending it higher after retreating all week.

Today’s Market Expectations

Today we have some more inflation figures from the Eurozone and the US which are expected to show some mixed figures, although it starts with data from China first. The manufacturing PMI is expected to fall deeper in recession which is a negative factor for risk sentiment, while services PMI is also expected to soften further, but hold above water.

The French CPI will be released ahead of the Eurozone CPI for August and it is expected to show an increase this month, in line with Spanish CPI inflation numbers yesterday. Although, the Eurozone CPI (consumer price index0 is expected to show a slowdown, with the headline CPI expected to fall 2 pits to 5.1% from 5.3% previously, while core CPI is expected to fall to 5.3% from 5.5% in July.

In the US session we have another employment report, with the Unemployment Claims which are expected to remain steady. That would be a positive factor for the USD, although we have the Core PCE Price Index report which is expected to show a slight increase from 4.15% to 4.2%, which would also support the USD.

Forex Signals Update

Yesterday the price action picked up, following a number of economic releases during the three trading sessions. We tried to play both sides since the USD was retreating early in the day, but then reversed in late European session. The positive data gave a lift to the dollar and we ended the day with four winning Forex signals.

Will MAs Continue to Keep GOLD Supported?

Gold made a reversal higher last week after dipping below $1,900 and displayed some bullish sentiment as uncertainty increased following further weakening in the global and US economies. This alteration in market sentiment triggered a reversal in the upward direction. Buyers came back and sent the price close to $1,950 here a resistance zone seems to have formed. yesterday we decided to open a sell Gold signal after the PCE price index report, although we’ll see if moving averages (MAs) will hold as support.

XAU/USD – 60 minute chart

Sell Gold Signal
Entry Price: $1,945.69
Stop Loss: $1,959.69
Take Profit: $1,937.69

EUR/USD Trading Between 2 MAs

Yesterday the EUR/USD pair continued to gain momentum and advanced to reach its highest level in two weeks, approaching 1.0945 after the USD went through another wave of selling on Wednesday, following the miss in the ADP employment and the revision lower for the Q2 GDP. However, the Eurozone economy is in an even worse position as it heads into a recession, which has forced the ECB to turn less hawkish. Yesterday the Eurozone core CPI posted a 2-point decline, which reversed the price here after buyers failed to push above the 100 daily SMA (green).

EUR/USD – Daily chart

Cryptocurrency Update

BITCOIN Retracing Toward $27,000 After the Jump

Bitcoin has been facing selling pressure after reaching its new yearly highs and subsequently dropping below the $30,000 mark. The decline picked up speed recently as the entire cryptocurrency market experienced another decrease in value. This drop was driven by rumors suggesting that SpaceX had sold off its entire Bitcoin holdings.

BTC/USD fell below its 200-day Simple Moving Average (SMA) which turned into resistance and has been capping attempts to reverse the price higher. Yesterday Grayscale won the lawsuit against the SEC, with the D.C. court ruling that the SEC improperly rejected the Bitcoin spot ETF. The court ordered the petition for review be granted and the commission’s order be vacated. BTC, rallied $2,000 higher, but buyers met the 200 SMA again which stopped the rally.

BTC/USD – H4 chart

We’ve decided to open another buy Bitcoin signal yesterday after the pullback, going in long just above the 100 MS Aon the H4 chart above.

BTC Buy Signal
Entry Price: $27,157.1
Stop Loss: $25,113
Take Profit: $29,113

ETHEREUM Moves Above $1,700 Again

Ethereum has demonstrated a higher level of resilience when compared to Bitcoin. Although it was not unaffected by the recent crypto market crash and the ETH/USD pair dropped below $1,600, there’s a significant observation on the weekly chart. The 200-day Simple Moving Average (SMA), represented by the purple line, functioned as a support level during this tumultuous period.

Taking into account this observed support and Ethereum’s historical behavior, we have now taken a long position on Ethereum once again. It’s important to acknowledge that the cryptocurrency market can be exceptionally volatile. Conducting thorough research and prioritizing risk management are essential factors prior to making any trading decisions.