The USD turned bearish after the FED meeting on Wednesday evening and yesterday it continued to fall during the Asian and European sessions. But, the decline stopped in the US session and we saw some sort of comeback, despite the strong pullback in the treasury market. It ultimately halted once the USD/JPY broke through 150.00 and several stops were hit. EUR/USD reached a high of 1.0670 before sliding 50 pips.

The bond market was the cause, as a strong case of FOMO pushed long-term rates down by 13 to 18 basis points. At 4.66%, US 10-year notes are suddenly a long way from 5%, as money that has been parked on the sidelines starts entering the bond market on the assumption that the FED is done and that US deficits are not growing.

Stock markets were on fire, with main indexes opening with a bullish gap and continuing higher. The highly shorted stocks, leveraged stocks, and regional banks were at the top of the list. USD/CAD was particularly weak as it slipped down to 1.37 lows, with crude Oil showing some resiliency after bouncing more than $2 from above $80.

The Bank of England held its meeting yesterday and Bailey sounded similar to the previous meeting, with a hawkish inclination but a wait-and-see attitude. GBP/USD  surged to 1.2227 but later pulled 50 pips down.

Today’s Market Expectations

Today starts with the Caixin services PMI from China, which is expected to remain stable, but with the unexpected fall in contraction in Caixin manufacturing earlier this week, commodity dollar longs fear a weak number.  The NFP report will be released in the US session and is predicted to reveal 172K new jobs, down from 336K in the previous month, and the unemployment rate to remain constant at 3.8%. The Y/Y average hourly earnings are predicted to fall to 4.0% from 4.2% previously, while the M/M number is expected to fall to 0.3% from 0.2% previously.

The Canadian labor market data is predicted to show a net gain of 20K jobs, up from 63.8K in the previous month, and an increase in the unemployment rate to 5.6%, up from 5.5% before. The attention will also be on wages, as the Bank of Canada has emphasized its emphasis on wage growth.

The US ISM Services PMI is predicted to fall to 53.0 points in October from 53.6 in November. The most recent S&P Global Services PMI exceeded expectations, with the Services index returning to growth. The good news is that pricing pressures are still easing.

Yesterday the USD continued the decline which started after the FED meeting, as they hesitated to signal another rate hike in December and repeated the same rhetoric as in the previous meeting. We were long on EUR/USD and that forex signal closed in profit, although markets reversed later in the US session, so we closed the day with just one winning forex signal.

Holding Long in GOLD as It Consolidates Above $1,980

Gold has been bullish since early October as the sentiment turned negative in financial markets and safe havens benefited from the conflict in Gaza. XAU/USD broke above $2,000 late last month, with moving averages doing a great job as support indicators. But, the price retreated as the conflict hasn’t spread further in the Middle East so far, although MAs are still acting as support, so we are long on Gold with another buy Gold signal.

XAU/USD – 60 minute chart

• Gold Buy Signal
• Entry Price: $1,984.26
• Stop Loss: $1,970.26
• Take Profit: $1,992.26

Buying Every Dip in USD/JPY

USD/JPY has been one of the most bullish pairs this year, starting increasing since January and moving above the major level of 150. Moving averages have been acting as support, doing a great job on the H4 chart, with smaller ones doing most of the job which shows that the trend is strong but the larger ones have also helped during deeper pullbacks. Yesterday we decided to open a buy USD/JPY signal after the retreat to 150, as the 50 SMA (yellow) held as support.

USD/JPY – 240 minute chart

Cryptocurrency Update

BITCOIN Remains Supported by MAs

Bitcoin has also been benefiting from the improved sentiment, especially in the cryptocurrency market after SEC approved spot ETF for Bitcoin. This cryptocurrency surged higher late last month for this reason and managed to pierce above $35,000 but failed to hold gains and retreated lower. Although it didn’t lose too much and buyers have gained control again, pushing the price close to $36,000.

BTC/USD – 60 minute chart

ETHEREUM Can’t Hold the Gains

Ethereum also benefited from the improved sentiment in the crypto market last month, after the SEC approved the Bitcoin spot ETFs, and surged above $1,800, gaining more than $300 in the process. The zone around the $1,700 level turned into support and now it seems like the 50 SMA (yellow) has turned into support, which is positive, but Ethereum can’t seem to hold the gains as it keeps reversing lower.

Ethereum – Daily Chart

• ETH Buy Signal
• Entry Price: $1,671.79
• Stop Loss: $1,371
• Take Profit: $1,971