Forex Signals Brief November 6: A Quiet Week on the Economic Front

Last week there was a lot of volatility due to some heavy economic releases, and three major central bank meetings taking place. But this week the economic calendar is light, so traders will focus elsewhere for direction. Last week’s data will continue to drive the sentiment for now, while politics will also affect markets this week.

This week represented a calendar and market turning point. Bond rates fell after the US 10-year Treasury yields peaked above 5% the week before, and the dollar fell with them. Meanwhile, stocks had their best week in a year. We got some weak economic data from the US this week as well, which weighed further on the USD toward the end of the week. Non-farm payrolls and ISM services were both poor, which aided the trend’s extension, resulting in one-month highs in EUR/USD , GBP/USD and commodity dollars.

The USD started slow, but the decline was subsequently extended as revisions to the data and other information prompted the market to price in 100 basis points in Fed cutbacks next year and found itself around 200 pips lower at the end of the week. USD/JPY plummeted below 150.00 once again after surging close to last year’s high following the Bank of Japan meeting and proceeded to 149 lows, concluding around the lows, indicating that momentum was a factor.

The Canadian dollar also benefited from the retreat in the US dollar despite Canadian employment and Oil prices falling. For the first time, Hezbollah commanders stepped out, indicating that there would be no second front in the battle, removing the geopolitical risk premium for Oil from an expansion of the conflict.

This Week’s Market Expectations

After the central bank meetings last week, this week is calmer regarding the economic calendar, with the market more likely to trade on last week’s events. Today starts with a speech from the BOJ Governor Ueda, followed by the German Factory Orders which are expected to decline in October and the Eurozone final services PMI which are expected to remain unchanged for October. Later we have the Construction PMI from the UK and the Canadian Ivey PMI.

Here’s a summary of the economic events scheduled for each day of the week:

Monday:

• Bank of Japan (BoJ) Meeting Minutes.

Tuesday:

• Reserve Bank of Australia (RBA) Policy Decision.
• Switzerland Unemployment Rate.
• Eurozone Producer Price Index (PPI).

Wednesday:

• Eurozone Retail Sales.

Thursday:

• Chinese Inflation data.
• US Jobless Claims.

Friday:

• UK Gross Domestic Product (GDP) Q3 Preliminary.
• University of Michigan Consumer Sentiment.

Last week markets were volatile and we saw a few reversals. The USD started the week bullish initially but then turned bearish toward the end of the week. We have been long on the USD in the last several months, which proved to be a good strategy early in the week, but then we reversed trade as the USD started retreating and continued to book profit on our forex signals. We opened 14 trading signals in total, ending the week with 10 winning forex signals and four losing ones.

 GOLD Retreats From Above $2,000 Again

Gold has been positive since early October when financial market sentiment became negative and safe havens gained from the Gaza crisis. Late last month, XAU/USD broke over $2,000, with moving averages acting as excellent support signs. However, the price has retreated as the turmoil in the Middle East has not expanded further, yet MAs are still working as support, therefore 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 the Dip in [[USD/CHF]]

USD/CHF close to 0.90 early last week, but it began to rise again as moving averages maintained as support. Core consumer inflation CPI increased, and Swiss National Bank chairmam Jordan made some hawkish statements, but traders didn’t take them too seriously and the bullish momentum continued until Friday when the soft economic data from the US was released. But the 50 SMA (yellow) held as support on the daily chart.

USD/CHF – Daily chart

Cryptocurrency Update

BITCOIN Consolidates at $35,000

Bitcoin has also benefited from improving mood, particularly in the cryptocurrency industry after the SEC approved a spot ETF for Bitcoin. This cryptocurrency rocketed higher late last month for this reason, breaking beyond $35,000 but failing to maintain gains and reversing lower. Although it did not lose much ground, buyers have reclaimed control, driving the price close to $36,000. Now BTC is consolidating around $35,000.

BTC/USD – 60 minute chart

ETHEREUM Finally Peaking Above $1,900

Last month, after the SEC allowed Bitcoin spot ETFs, Ethereum benefitted from improving mood in the crypto market and climbed beyond $1,800, earning more than $300. The zone around $1,700 turned into support, and it now appears that the 50 SMA (yellow) has turned into support, which is great. Over the weekend, ETH/USD peaked above $1,900 so the price is approaching our TP target.

Ethereum – Daily Chart

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