Softer US CPI might have ended the bullish trend for the USD

Forex Signals Brief September 28: Mind the European CPI ahead of US Data

Posted Thursday, September 28, 2023 by
Skerdian Meta • 3 min read

Yesterday’s Market Wrap

Yesterday markets remained slow as the economic data was pretty light during the first two trading sessions, although even after the release of the US durable goods orders which posted a positive surprise for August, markets failed to gain momentum. However, the demand for the USD remained stable and the dollar progressed higher across the board, with the Euro and the GBP being the weakest among major currencies.

Crude Oil continued the surge after Tuesday’s reversal and it rose $3.34, or 3.7%, to $93.80. The high price of $94.17 would put it beyond the 50% midpoint of the move down from the high of June 2022 at $93.78, before spinning downward into the close. Spot Gold tumbled around $25.24 lower to $1875.19. That is the lowest level since March 2023.

Durable Goods Orders in the United States turned positive this time, increasing by 0.2%, or $0.5 billion, to $284.7 billion in August, according to the US Census Bureau on Wednesday. This data follows a 5.6% drop (updated from 5.2%) in July and was better than the market’s projection of a 0.5% drop, while non-defense capital orders posted a decent 0.9% jump last month. That helped the USD further, together with FED’s Kashkari’s comments, saying that the data will tell the Fed if more hikes are needed and he expects FED to hold rates steady next year.

Today’s Market Expectations

Today the economic calendar started with the ANZ Business Confidence from New Zealand and Retail Sales from Australia. The German and Spanish Prelim CPI figures will follow in the European session, with German inflation expected to remain steady while in Spain inflation is expected to pick up in September.

In the US session, we have the Final GDP reading for Q2 which is expected to be revised a tick higher from 2.1% to 2.2%. The US Jobless Claims report will be released at the same time, which comes after the previous one beat expectations by a big margin last week. The labour market seems to be getting into better balance, but it still remains pretty tight. The consensus for this week sees Initial Claims at 217K vs. 201K prior and Continuing Claims at 1675K vs. 1662K prior. Pending Home Sales are expected to decline though, which comes after yesterday’s miss in New Home Sales.

Forex Signals Update

Yesterday the price action continued to remain slow, but once again it remained consistent with the USD grinding higher. We’re still keeping the strategy of being bullish on the USD is proving pretty great as winning trades keep accumulating. We opened five trading signals, with four of them closing in profit while one remains open today.

GOLD Tumbles Below August Lows

Gold was finding support on the daily chart around the 200 SMA (purple), which rejected the price twice in roughly a month, and we have already seen two bounces off of it, but the price keeps returning to this moving average, which is a negative indication. The 200 SMA has now been breached. Given that gold is continuing to make lower highs, it failed last week at the 100 SMA (green) and reversed downward. This was the third successful effort to breach the 200 SMA, and Gold is now back below $1,900.

XAU/USD – Daily chart 
  • Gold Sell Signal
  • Entry Price: $1,900
  • Stop Loss: $1,915
  • Take Profit: $1,980

Looking to Buy USD/JPY

Since early September, EUR/GBP has been bullish, rising above 0.8520 and reaching the 0.8705 level on Friday, which it retested early this week following a fall lower to the 20 SMA (gray) on the H4 chart. We purchased the dip, and the price rose again, maintaining the bullish momentum after briefly falling below the 20 SMA.

We performed the same thing yesterday, opening a buy EUR/GBP signal at the 50 SMA (yellow). Although the Euro (EUR) had its strongest trading week against the Pound Sterling (GBP) since early February, the new high this week was only a pip higher than the previous week’s high.

EUR/GBP – 240 minute chart
  • EUR/GBP Buy Signal
  • Entry Price: 0.866
  • Stop Loss: 0.862
  • Take Profit: 0.869

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
Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
Related Articles
0 0 vote
Article Rating
Notify of
Inline Feedbacks
View all comments