US Economy showed signs of weakness yesterday

Forex Signals Brief September 27: First Round of US Data Misses

Posted Wednesday, September 27, 2023 by
Skerdian Meta • 3 min read

Yesterday’s Market Wrap

Yesterday markets were pretty quiet during the first two sessions once again, as the economic data was pretty light, with only the BOJ Core CPI remaining unchanged at 3.3% against expectations of it ticking lower to 3.2%. But, inflation is at normal levels in Japan, although that kept the JPY from making further losses against the UD, which advanced against most other major currencies.

Later on, we had the US New Home Sales which missed expectations, falling below 700k again. The real estate industry is concerned, after the fast tightening policy by the FED, as well as a drop in consumer confidence. Sales of new single-family homes fell 8.7% in August to a seasonally adjusted annual rate of 675,000, according to statistics released simultaneously on Tuesday by the US Census Bureau and the Department of Housing and Urban Development. This estimate came in below the market assumption of a small fall to an annual pace of 700,000 and after a 4.4% increase in July. But, that didn’t deter the US Dollar from pushing higher while stock markets kept declining.

Today’s Market Expectations

Today the economic calendar started with the CPI (Consumer Price Index) report from Australia, which was expected to show an increase from 45% to 5.2% on an annualized basis. This is mostly due to increasing energy costs, which the RBA anticipates will occur in Q3. Rising energy prices and increased mortgage payments are expected to reduce consumption and slow economic development.

The German GfK Consumer Climate is expected to show furthr deterioration, falling to -25.8 points, as the Eurozone economy heads towards a recession. Later in the US we have the durable good orders report, sith the headline number expected to remain negative in August after the major -5.4% decline we saw in July, althouogh core sales continue to grow.   

Forex Signals Update

Yesterday the price action was slow, although it was consistent, with the USD grinding higher and several of our trading signals closed in profit since we continue to remain long on the USD. We had five winning signals in total, with two Gold signals and two long term signals in commoditiesand in forex.

GOLD Breaks the 200 Daily SMA

Despite the fact that Gold has found support at the 200 SMA (purple) on the daily chart, which has consistently rejected the price, and we have already seen two bounces off of it, the price keeps returning to this moving average, which is now broken. Given that gold continues to make lower highs, it failed at the 100 SMA (green)last week and reversed lower. This was the third attempt to break the 200 SMA which was succesful and now Gold is back at $1,900.

XAU/USD – Daily chart 
  • Gold Sell Signal
  • Entry Price: $1,915
  • Stop Loss: $1,900
  • Take Profit: $1,925

Looking to Buy USD/JPY

USD/JPY has been fairly bullish for months, and it hit 149 yesterday. The hawkish FOMC meeting last week offered the USD further support, fueling the pair’s advance even further. As we approached the Bank of Japan meeting on Friday, this pair retreated to the 147.30s, but it failed to meet market expectations after comments from Bank of Japan Governor Kazuo Ueda, who said that the central bank may abandon its negative interest rate plan. MAs are helping keep this pair bullish too, so we will try to buy pullback lower.

USD/JPY – 60 minute 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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