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Forex Signals Brief October 9: Inflation Week After Solid US Employment

Last Week’s Market Wrap

Last week all eyes were on the jobs figures from the US. However, the week started with Caixin Manufacturing and Services, which showed another slowdown, with activity approaching recession. That kept risk assets on retreat as before, although we saw some sort of recovery in the last two days of the week, despite strong jobs figures from the US.

The employment figures began with the JOLTS job vacancies, which reported a solid jump in September back above 9 million, coming in at 9.61M and above estimates of 8.81M after the August slowdown, which were also revised higher. On Wednesday, there were some dismal ADP statistics, but traders overlooked those numbers, so the USD continued higher.

On Thursday, Unemployment Claims remained close to 200K, topping forecasts, while the Non-Farm Employment Change (NFP) came above predictions again, climbing to 336K. Last month’s figures were also revised much higher, suggesting that employment is still in strong health in the US. Although the USD retreated in the last two days, so let’s see how the situation will evolve early this week. The Bank of Japan decided to intervene by the way, as USD/JPY pushed to 150 which sent this pair nearly 300 pips down, but the main trend remains bullish and the price is above 149 again.

This Week’s Market Expectations

This week the economic calendar is lighter than last week, although there are some important releases such as the UK GDP figures, as well as the US consumer and producer inflation. It starts slowly with Japan and North America being on a bank holiday weekend for Thanksgiving Day, so today the price action is expected to be pretty quiet.

On Wednesday we have the PPI (producer price index) from the US which is expected to show a slowdown in September, followed by the FOMC minutes in the evening, which might induce some volatility. The UK August GDP figures will be released on Thursday, which are expected to show a 0.2% expansion after a 0.5% contraction in July. The US CPI (consumer price index) report will be next and although there are still no anticipations for it, we might see an increase as Oil prices moved higher last month.

Forex Signals Update

Last week markets continued to favour the USD as they have been doing for more than two months. We have been long during the last 2-3 months and made some decent gains in the first half of the week, as the USD was advancing. Then the USD reversed and we endured some losses. Overall we opened 26 trading signals, with 10 signals reaching SL and the rest closing in profit.

GOLD Bouncing Above Support

Gold has been making lower highs since May, but the downturn accelerated two weeks ago, when it began tumbling lower, losing about $140 pips from late September highs. However Gold was trading in a range that we were using with multiple Gold signals last week with a low above $1,910. On Friday though, we saw a bounce in Gold above the support zone of $1,900.

XAU/USD – Daily chart 
  • Gold Sell Signal
  • Entry Price: $1,835
  • Stop Loss: $1,850
  • Take Profit: $1,815

Short on GBP/USD  

GBP/USD has been fairly negative since July, dropping more than 10 cents as it reversed from over 1.30 more than two months ago to reach 1.20 early last week as US employment numbers were coming in positive. The US Dollar’s strong bullish momentum has been a substantial drag on the GBP/USD dynamics. This pair approached 1.20 on Wednesday, but reversed from there and climbed around 100 pips higher, although we decided to take a short position here as the H4 chart seems overbought while the 100 SMA is acting as resistance.

GBP/USD – 240 minute chart

Cryptocurrency Update

 BITCOIN Still Knocking at MAs

Bitcoin has been steadily rising since it bottomed out just below $25,000, and the crypto market just experienced another uptick. On the daily chart, buyers failed to break above moving averages such as the 100 SMA (green) and the 200 SMA (purple), and we saw a bearish candlestick. But buyers are coming, and the price is reverting to the moving averages, so we should see a break above shortly.

BTC/USD – Daily chart
  • BTC Buy Signal
  • Entry Price: $26,248.2
  • Stop Loss: $24,500
  • Take Profit: $28,000

ETHEREUM Continues to Slip Lower

Late last month, the price of Ethereum started increasing from the support, showing that there was a degree of purchasing interest and demand for Ethereum at roughly $1,600. Buyers have entered the region above this level on multiple times, but the 100 SMA (green) has been functioning as resistance on the daily chart. After Sunday’s surge, we saw a reversal at this moving average and yesterday erased all of Sunday’s gains.

ETH/USD – Daily chart
  • ETH Buy Signal
  • Entry Price: $1,671.79
  • Stop Loss: $1,371
  • Take Profit: $1,971
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Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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