Is the US consumer running out of savings?

Forex Signals Brief September 26: Consumer Confidence, Home Sales on the Agenda

Posted Tuesday, September 26, 2023 by
Skerdian Meta • 3 min read

Yesterday’s Market Wrap

Yesterday there were many remarks from central bankers yesterday, including those from the European Central Bank’s Villeroy, de Cos, and Kazaks. Lagarde stated that recent signs hint at more weakening for the eurozone economy in the third quarter, while Bank of Japan Governor Ueda and Deputy Governor Uchida both made headlines. Ueda and Uchida made statements geared at bolstering the JPY, stating that foreign exchange markets must be properly monitored. They were joined in their endeavor by Japanese Prime Minister Kishida but USD/JPY ignored their comments and continued to rise to 149.

Goolsbee of the FED  also popped up saying “The next question will be, how long are we going to hold at these levels?” and answered that we appear to be holding rates at elevated levels for a longer period of time than the markets anticipated.

The flow of economic data was relatively modest. We did receive the September update for the German Ifo and Belgian business environment indicators, which still remain quite low. Rising rates drove equity indices down once more. Following a slight increase in Asia, US equities indices fell dramatically during the European morning while the USD benefited from all this and gained ground, particularly versus the EUR, GBP, and JPY.

Today’s Market Expectations

Today the economic calendar is light again during the Asian and European session, while in the US session, we have the S&P/CS Composite-20 HPI YoY house price index which is expected to turn positive and show a 0.2% increase after declining for several months.

New home sales came above expectations last month but are expected to fall below 700k this month. The US Consumer Confidence Index is predicted to fall further to 105.6 from 106.1 before. The prior data witnessed a massive miss, and when combined with the massive miss in US Job Openings, it suggested a significant slowdown in the labor market. In fact, unlike the University of Michigan Consumer Sentiment survey, which focuses on how consumers see their own finances, the Consumer Confidence study focuses on how people perceive the labor market.

Forex Signals Update

This week started quietly, with little direction in the Adian and early European sessions, but then the volatility picked up as risk sentiment turned negative, sending stock markets tumbling lower, while the USD resumed making gains across the board. We had several trading signals open from last week, with four of them reaching the targets. 3 forex signals which we were long on the USD closed in profit while the S&P signal closed in loss.

GOLD Retesting the 200 SMA

Gold has found sturdy support at the 200 SMA on the daily chart, despite the fact that the price keeps returning to this moving average, which has continuously rejected the price, and we have already seen two bounces off of it. Considering the fact that Gold continues to make lower highs, it failed at the 100 SMA (green) on Wednesday after the FOMC meeting. Gold returned to the 200 SMA and the price remains stuck to it.

XAU/USD – Daily chart 
  • Gold Sell Signal
  • Entry Price: $1,928.68
  • Stop Loss: $1,942.68
  • Take Profit: $1,920.68

Booking Profit in EUR/USD

EUR/USD has slipped more than 6 cents lower since the top more than two months ago and there are no signs of stopping. Moving averages have turned into resistance indicators on the H4 chart, taking turns in sending the price lower and keeping the trend bearish. We remain bearish on this pair, selling retraces higher. We already had a sell EUR/USD signal from last week, which closed in profit yesterday as the price fell below 1.06.

EUR/USD – H4 chart

Cryptocurrency Update

 BITCOIN Buyers Starting to Come Back?

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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