Services are not improving in Europe

Forex Signals Brief September 22: Manufacturing and Services to Close A Volatile Week

Posted Friday, September 22, 2023 by
Skerdian Meta • 3 min read

Yesterday’s Market Wrap

The economic calendar this week has been loaded with important events, such as the FOMC meeting which produced no rate hike but left the USD bullish after all, on the higher-for-longer scenario. Yesterday the Swiss National Bank and the Bank of England played out the same scenario but the Swiss Franc and the British Pound ended up lower in contrast.

The Swiss National Bank (SNB) believed they could afford to take a further step back and leave interest rates on hold at 1.75% because inflation in Switzerland wasn’t as severe there as it was elsewhere. USD/CHF surged from 0.8990 to 0.9077 before retreating lower. This was a decisive bullish move for this pair, pushing the price above the major level of 0.90.

The GBP had the same fate, after the Bank of England held interest rates unchanged at 5.25%, against many analysts expecting a last rate hike fro them of 25 basis points, which would take rates to 5.50%. They’re happy with inflation coming down, after Wednesday’s lower UK CPI, despite mentioning that there’s still a lot of way to go. The GBP didn’t benefit like the USD did and GBP/USD fell below 1.23.

Stock markets also lost on scentral banks holding steady instead of tightening the policy further, while the USD retreated lower after Wednesday’s gains. So in the end, everything ended up going down but there was only one major winner and that was the JPY, which attracted attention all of a sudden.

Today’s Market Expectations

Today started with the Bank of Japan meeting, which was held early in the morning and as expected produced no change in interest rates or the monetary policy. But, recent comments from BoJ governor Kazuo Ueda that the bank may stop its negative interest rate policy by the end of the year were keeping traders on the lookout for any additional post-decision commentary, attracting the attention of the investors.

The European services and manufacturing PMI reports have already started to be released, showing not much change, as both sectors remain in contraction below 50 points, which is keeping the ECB and the BOE dovish, thus the Euro and the GBP remain bearish. US manufacturing activity is a bit better albeit in contraction too, while services activity is expected to expand again this month.

Forex Signals Update

Yesterday markets turned volatile once again, with the USD initially continuing the bullish momentum from the previous day, while reversing later on. We opened sveral forex signals once again, with four trading signals reching the targets. We closed the day with two losing and two winning trading signals.

GOLD Retests the 200 SMA Again

Gold has been finding solid support around the 200 SMA  on the daily chart, which keeps rejecting it and we have seen two bonces previously off this moving average. Although Gold continues the pattern of lower highs, after the failure at the 100 SMA (green) again on Wednesday following the FOMC meeting. Now we’re back at the  200 SMA so let’s see if this moving average will be broken the third time.

XAU/USD – Daily chart 
  • Gold Sell Signal
  • Entry Price: $1,930
  • Stop Loss: $1,950
  • Take Profit: $1,903

Remaining Lon on USD/CHF

Yesterday the Swiss National Bank (SNB) was expected to raise interest rates by 25 basis points (bps). But they opted to leave interest rates on hold, sending the CHF down. Following the SNB announcement, USD/CHF surged from 0.8990 to 0.9075 before retreating lower. So, this was a decisive bullish move for this pair, pushing the price above the major level of 0.90 and the 200 SMA (purple) on the daily chart and we decided to open a buy signal in this pair.

USD/CHF – H4 chart
  • USD/CHF Buy Signal
  • Entry Price: 0.903
  • Stop Loss: 0.899
  • Take Profit: 0.906

Cryptocurrency Update

 BITCOIN Rejected by the 200 Daily SMA

The cryptocurrency market has been shifting in mood during the last two weeks, with Bitocin going through a bullish rebound off $25,000 early last week following a period of decline previously. We saw a strong recovery above $27,000 but buyers failed to break above the 200 SMA and after a doji on Wednesday which is ai bearish reversing signal we saw a bearish candlestick yesterday.

BTC/USD – Daily chart

We are looking to open another buy Bitcoin signal yesterday after the pullback, going in long just above the 20 SMA on the daily chart above.

ETHEREUM Returning 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. However this week buyers had another go at this moving average and pushed the price above it for some time, but it has retreated back below $1,600 now.

ETH/USD – Daily chart
  • ETH Buy Signal
  • Entry Price: $1,671.79
  • Stop Loss: $1,371
  • Take Profit: $1,971
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