Forex Signals Brief September 12: Markets Digesting BOJ Ueda “Stealth Exit” Remarks
Yesterday’s Market Wrap
Yesterday the economic data was very light. We had the Chinese New Loans, which jumped to 1,360 billion Yuan, showing that the efforts from the Chinese government and PBOC to help revive the economy by making it easier to borrow are having a positive impact which will likely help the real estate sector of the economy. This helped improve the sentiment in financial markets, hence the 50 pip climb in this pair.
But, the main event was the comment from the Bank of Japan governor Ueda, who mentioned a “stealth exit” from the current monetary policy which is extremely accommodative. We saw a 200 pip decline, as the price opened with a 100 pip bearish gap and then continued further to the downside. This pair experienced a retreat of more than 1% in total, sending the price below the 146 level.
However, despite the talk of a “stealth exit,” actual policy actions have been lacking or unclear. The BOJ has frequently used forward guidance and hints about future policy direction, but until concrete steps are taken, the market may remain skeptical. Industrial production also showed a decline in Italy, confirming the difficult situation in the Eerozone economy.
Today’s Market Expectations
Today starts with the employment report from the UK, which is the main event for the day as well. The Unemployment Rate is expected to tick higher from 4.2% to 4.3%. However, what may garner more attention from the market is the wages data. It’s anticipated that Average Earnings excluding bonuses will remain at 7.8%, while Average Earnings including bonuses will also remain at 8.2%.
The reason for the market’s heightened interest in the wages data is that it provides insight into the state of income and purchasing power for the UK population. Stable or increasing wage levels can indicate a healthy economy and may influence consumer spending. The market has already priced in a rate hike in this month’s meeting, so, this report may provide clues about the direction of monetary policy beyond September.
The Eurozone and the German ZEW Economic Sentiment will be released in a while, both of which are expected to show another decline as sentiment falls deeper into negative territory. This further confirms the problems with the Eurozone economy.
Forex Signals Update
Yesterday there was some volatility in the forex market, although most pairs traded in a range, apart from USD/JPY which experienced a 200 pip move. We opened several trading signals, but only three reached targets, with two forex signals hitting the take profit target, while the Bitcoin signal hit the SL target after another dive in the crypto market, with Solanaa leading the way down after rumours circulating about a potential bankruptcy hearing related to FTX.
GOLD Buyers Failing at $1,930
Gold had been on a bearish trend for over a month, experiencing a decent retreat. However, in the past two weeks, there has been a noticeable reversal, with the price of Gold rising above $1,950 per ounce. But the bullish momentum ended at the 100 daily SMA (green) and after a few doji candlesticks, Gold reversed lower last week. Yesterday buyers retested the upside, but they failed to push the price above $1,930, so the price returned to the 200 SMA (purple).
XAU/USD – Daily chart
- Gold Sell Signal
- Entry Price: $1,923
- Stop Loss: $1,937
- Take Profit: $1,915
Booking Profit in [[EUR/USD]]
EUR/USD has been really bearish, falling below 1.07 last week. However this currency pair exhibited a considerable recovery which sent the price to 1.0760 mark, following a dip to 1.0697 early in the day. This recuperation can be attributed to the declining strength of the US Dollar, with the US Dollar Index (DXY) going through a slight pullback, settling at 104.60. My colleague Arslan opened a buy fore signal at the 100 SMA (green) yesterday, which closed in profit as buyers pushed the price hgiher.
USD/CAD – 240 minute chart
Cryptocurrency Update
BITCOIN Falling to $25,000
Cryptocurrencies continue to display signs of weakness, as the market remains bearish, with the price making lower lows. There was some notable optimism in most digicoins following a recent legal victory by Grayscale against the U.S. Securities and Exchange Commission (SEC). However, the rally was short-lived and the bearish momentum has returned. Yesterday we saw a dive to $25,000 in BTC which hit our SL target for the buy BTC signal. However, let’s see if this major support and resistance level will hold or whether the decline will continue further to the downside.
BTC/USD – Daily chart
We 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 Breaks Below $1,600
The price of Ethereum jumped higher last month indicating that there was a level of buying interest and demand for Ethereum at the sone around $1,600. Buyers have stepped in on several occasions at the area above this level but the 20 SMA (gray) has been acting as resistance on the daily chart. It has been pushing the highs lower which was a strong bearish signal, and yesterday sellers finally pushed ETH/USD below the support zone.
ETH/USD – Daily chart
- ETH Buy Signal
- Entry Price: $1,671.79
- Stop Loss: $1,371
- Take Profit: $1,971
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