Forex Signals Brief November 7: RBA to Resume Raise Rates Again
Yesterday markets were relatively stable, with the USD starting to recover after the decline following FED’s meeting last week and the release of US employment data. Although FED member Cook expressed worry about property prices, stating that both residential and commercial property values are now high beyond historical levels associated with economic fundamentals.
The US dollar was the strongest of the major currencies while the NZD was the weakest. The dollar climbed, while Gold fell around $16.50 lower, or -1%. Stock markets declined in the European session while US indices remained in a tight range after opening with a bullish gap higher. Bond yields continued the climb after they reversed higher late on Friday, following the decline post data.
Today’s Market Expectations
Today the economic calendar starts with a heavy event such as the meeting by the Reserve Bank of Australia, but then all day it is quiet regarding data releases. The market’s expectation for a 25 bps rate hike from the RBA stands basically at 50%. The market was pricing a higher chance of a rate hike following the “hot” CPI report, but the odds were pared back once Governor Bullock noted that the data was a little higher than expected but about where they thought it would be.
Moreover, the latest jobs data disappointed once again as the labour market continues to weaken. All in all, the RBA is likely to pass and wait for another labour market report and the monthly CPI data before deciding whether another rate hike is needed.
Yesterday markets calmed down after being very volatile last week. The USD started recuperating some of the losses from the last two days of last week, after the soft economic data from the US, but the price action was slow. We opened a sell Oil signal, which closed in profit.
GOLD Slipping Below MAs
Since early October, when financial market sentiment became negative and safe havens benefited from the Gaza conflict, gold has been positive. XAU/USD broke through $2,000 late last month, with moving averages functioning as good support indicators. However, the price has retreated as the Middle Eastern upheaval has not spread further, but MAs are still acting as support, thus 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
is the Bullish Momentum in EUR/USD Over?
In July, the EUR/USD reversed at 1.1280s after forming three doji candlesticks at the top of the daily chart, suggesting a reversal following a positive trend. Moving averages have helped this downward trend by providing support on pullbacks, and the ascent appears to have paused at MAs once more. The stochastic indicator is also overbought, so the retrace higher might be complete and we should see a reversal soon.
EUR/USD – 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 – 240 minute chart
ETHEREUM Finally Peaking Above $1,900
Last month, after the SEC allowed Bitcoin spot ETFs, Ethereum benefitted from the 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 – 240 minute Chart
- ETH Buy Signal
- Entry Price: $1,671.79
- Stop Loss: $1,371
- Take Profit: $1,971
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