Forex Signals Brief November 2: Will the GBP Dive After the BOE Meeting?
Yesterday the European and Asian sessions were quiet, as traders were waiting for the data from the US and the FOMC meeting later in the day. We did have the Chinese Caixin and the UK PMI manufacturing reports for October, which showed that the activity in this sector is falling deeper in contraction, but the action was slow.
The US session was quite busy with economic data and the FED decision. Overall, Powell did not attempt to increase the chances of a December rate hike. The outcomes was bumpy for markets, but the US currency eventually dropped despite two positive jobs reports, Treasury yields fell to 4.70 lows, and shares rose. The Australian dollar was a significant winner as it sensed a move away from global tightening, as well as new easing and expenditure in China.
The Euro and the GBP were eventually turbulent as European rates declined. Both currencies turned bearish but had been saved by widespread USD selling after the soft ISM reading which showed that this sector fell deeper in contraction. The Yen also reversed part of yesterday’s massive surge, with the USD/JPY losing around 100 pips from the top. The biggest changes were in equities and bonds, indicating that some respite is on the way.
Today’s Market Wrap
The Swiss CPI YoY inflation will be the first major event for the day and it is projected to be 1.8%, up from 1.7% previously, while the MoM reading is forecast to be 0.1%, up from -0.1% before. For quite some time, Switzerland’s inflation has been under the SNB’s 0-2% goal on both the headline and core measurements.
The Bank of England will hold its meeting later on and is projected to hold the bank rate at 5.25%. According to Governor Bailey, this decision will be “tight” since the hawks may not like the latest CPI report, while the doves may see the labor market slack as a rationale to hold rates stable.
US Jobless Claims fell short of forecasts last week, with Continuing Claims now exhibiting a clear increasing trend, suggesting that people are finding it more difficult to find employment after being laid off. Although yesterday we saw some good numbers from the JOLTS jobs opening and the ADP employment. Initial Claims are predicted to be 210K this week, up from 210K the previous week, while Continuing Claims are expected to be 1795K, up from 1790K the previous week.
Forex Signals Update
Yesterday markets were quiet until the US session, but then the volatility returned, and we witnessed some good moves across all markets, with the USD making some gains and reversing them again as bond yields fell. We opened four forex signals, with three of them reaching the take profit target one one closing in loss.
GOLD Finding Resistance at MAs Now
Gold continued the retreat yesterday after falling $30 on Tuesday after breaking over the $2,000 mark at the start of the US session as US bond rates began to rise again. The ongoing conflict in Gaza has increased demand for safe-haven assets, bolstering the precious metal. However, traders are treading gingerly, refraining from taking huge bullish bets as crucial central bank meetings take place this week. But as bond yields fell, Gold also retreated to $1,970 and now moving averages have turned into resistance at the top. 
XAU/USD – 60 minute chart
- Gold Buy Signal
- Entry Price: $1,977
- Stop Loss: $1983
- Take Profit: $2,005
NZD/USD Reversing Higher
The New Zealand dollar began to fall in July as risk assets such as commodity currencies declined versus the US dollar, and it has continued to fall for more than three months. Despite the fact that the NZD has been trading in a range since early September, with a support zone below 0.59. The Chinese economy’s decline was weighing on risk assets, but we’ve just recently seen some improvement and yesterday commodity currencies benefited from the improved sentiment.
AUD/USD – 240 minute chart
Cryptocurrency Update
BITCOIN Making New Highs
The Bitcoin market had two price increases last week, the greatest of which happened this week. The first was when Coin Telegraph announced that the SEC had approved a spot ETF, causing Bitcoin to skyrocket to $30,000. However, the price fell below $28,000 for a few days before rising again later in the week. Bitcoin closed the week at $34,500, continuing to rise and yesterday, Bitcoin reached our take profit target as the price approached $35,000.
- BTC Buy Signal
- Entry Price: $33,621.7
- Stop Loss: $32,621.69
- Take Profit: $34,821.71
ETHEREUM Remains Supported by the 50 SMA
ETH/USD rose yesterday as well, albeit the rise was less. Late last month, the price of Ethereum began to rise above its support level, indicating that there was some buying interest and demand for Ethereum at around $1,600. Buyers have entered the zone above this level on a regular basis, but the daily chart’s 100 SMA (green) has functioned as resistance. Following the recent advance, the price surged above the 200 daily SMA (purple), but the rice has since returned and is now finishing the day at this moving average.
ETH/USD – Daily chart
- ETH Buy Signal
- Entry Price: $1,671.79
- Stop Loss: $1,371
- Take Profit: $1,971
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