Yesterday the economic calendar was light, with only the Conference Board Leading Economic Index showed -0.8% instead of the predicted -0.7%. This dip was the 19th monthly fall in a row. Even with that run of luck, the economy is still not in a recession. About 2.0% is the Atlanta Fed’s GDPNow estimate for 4Q growth. That is still safely above recession, but down from the 3.9% increase in the third quarter.
The US Treasury yields declined across the curve, with 10-year notes closing the day at 4.40%. The US Treasury held a $16 billion bond auction which had a -1.0 bps tail despite the fact that domestic demand was very mild, which was another factor in pushing bond yields down for the day.
US stock markets had another great day, opening with a bullish gap and pushing higher until the close. Following Microsoft’s hire of important artificial intelligence executives, such as Greg Brockman, another cofounder of OpenAI, and Sam Altman, the major indexes in the US stock market remained bullish.
Today’s Market Expectations
Today we have the minutes from the last meetings of three major central banks, starting with the Reserve Bank of Australia which is expected to be mild, followed by a speech from the RBA governor Bullock. The Monetary Policy Report Hearings from the Bank of England will be released later, although there’s not expected to have much impact on the markets. The FED minutes will be released in the evening, which might have some positive impact n the USD, since traders are expecting them to be dovish, considering the last meeting.
The consumer inflation report from Canada will be released in the US session. While the MoM CPI (consumer price index) reading is expected to show an increase to 0.1% vs. -0.1% prior, the Canadian CPI YoY is predicted to decline to 3.2% from 3.8% prior. The Common, Median, and Trimmed Mean inflation measures which fell short of all predictions the previous month, are the BoC’s primary emphasis, but a minor beat is unlikely to have any impact on the BoC given the deterioration of the labor market.
Yesterday we saw a continuation of last week’s price action, with the USD retreat continuing, so we remained short on the US Dollar, while buying other assets such as Gold and the GBP. Once again, that strategy proved to be successful, and we closed three forex signals in profit yesterday, while only having one losing signal.
Is GOLD Getting Ready for the Next Move to $2,000?
Following a fall since July, Gold prices turned bullish last month and had significant increases as a result of the Gaza hostilities, surpassing the significant $2,000. Early this month, Gold saw a decline as geopolitical unrest in the Middle East abated. But following last week’s disappointing US inflation data, consumers are once again in charge and the sentiment has changed. Although buyers still seem to hesitate close to the $2,000 level, but we might see another attempt at that level after the retreat lower.
XAU/USD – Daily chart
- Gold Buy Signal
- Entry Price: $1,963.12
- Stop Loss: $1,949.12
- Take Profit: $1,971.12
USD/CAD Trading Between MAs
After inverting at 1.31 and breaking over the resistance zone at 1.38 early this month, USD/CAD has been rising to higher highs since July. Although we have been seeing lower highs this month with the trading range getting narrower, which shows uncertainty, the price was heading toward the next resistance zone, close to 1.39, on the daily chart, and it breached slightly over 1.3903. This indicated that the decline in crude oil and the disappointing employment data from Canada in October were factors that kept this pair bullish. Although we are seeing a consolidation as the trading range gets narrower.
USD/CAD – Daily chart
The 20 SMA Keeping BITCOIN Supported
The cryptocurrency market continued to be volatile last week, with Bitcoin nearly hitting $35,000 following a decline and then rising to nearly $38,000 following a rise. We’re still waiting on an announcement on an ETF. A more positive cryptocurrency climate has continued to favor Bitcoin since the Securities and Exchange Commission approved a Bitcoin spot ETF. Because of this, late last month, this cryptocurrency increased and reached $35,000 before declining and weakening. Buyers took the initiative and drove the price up to more than $36,000, even though they did not lose much ground. With buyers pausing just below last month’s high of $38,000 and retreating lower, BTC is experiencing another bullish wave.
BTC/USD – Daily chart
ETHEREUM Reversing at the 20 Daily SMA
After a few encouraging developments for the digital market, Ethereum gained more than $300 and surged above $1,800 thanks to the bullish sentiment in the cryptocurrency market. It’s great that the zone around $1,700 turned into support, and it appears that the 50 SMA (yellow) has done the same. Earlier this month, the price of ETH/USD broke above $2,000, signaling that buyers are in control and that we should have taken profits on our prior Ethereum signal. However, given that the 20 SMA is serving as support, we choose to open another ETH signal following the lower retreat of last week.
Ethereum – Daily minute Chart
- ETH Buy Signal
- Entry Price: $1,947.38
- Stop Loss: $1,490
- Take Profit: $2,500