Forex Signals Brief November 23: EU, UK Manufacturing and Services PMIs

Today’s Market Expectations

Today will be a low-liquidity day due to the Thanksgiving holiday in the United States. Nonetheless, the Eurozone and UK manufacturing and services PMI figures will be released, which will likely set the tone for the day. The Retail Sales report from New Zealand which will remain negative again in Q3 will close the day.

Manufacturing is predicted to stay in contraction in the Eurozone, with the PMI reading of 43.5 points up from 43.1 points previously and Services at 48.0 points up from 47.8 in October, while the Composite is expected at 46.7 points. The forward-looking indicators for November provide some hope that the economic situation might begin to improve soon. However, a solid rebound is unlikely to occur until the faltering German economy regains pace.

The Services headline number for November Flash Services in the United Kingdom is predicted to be 49.7 points, up from 49.5 points previously, Manufacturing is expected to be 45.0 points (previously 44.8), and the Composite was previously 48.7 points. The latter went below the neutral line of 50 for the first time since January in September and remained there in October. The services sector was blamed for the decline, while the manufacturing PMI has been persistently in recession for more than a year, falling below 50 points since August 2022.

Yesterday the USD  continued to regain some territory during most of the day and we remained short on the USD with short term signals while being long on long term signals. We booked profit on the two long term commodity signals. But we got caught on the wrong side with the short term forex signals, so we ended the day with some good profit nonetheless.

GOLD Remains Supported by the 20 SMA

Gold prices went bullish last month and surged dramatically as a result of the Gaza conflict, surpassing the critical $2,000 mark, but today it is economic uncertainty that is keeping Gold in demand. Gold dropped earlier this month as geopolitical tensions in the Middle East eased. However, following last week’s bad US inflation statistics, gold purchasers have regained control, and sentiment has shifted. Buyers appear to be wary near the $2,000 level, following yet another retreat yesterday following the break of this level. Although the 20 SMA is holding as support so we decided to open a buy Gold signal yesterday at this moving average.

XAU/USD – 240 minute chart

• Gold Buy Signal
• Entry Price: $1,990.71
• Stop Loss: $1,976.71
• Take Profit: $1,998.71

Selling WTI Oil Again This Week

Crude oil prices have been falling, and despite the recent optimistic attempt, sellers remain in charge. WTI crude slipped below $80 this month as tensions in the Middle East did not appear to be spreading further, limiting output. WTI Oil has given up all of its gains from the Israel-Hamas war, signaling that, barring more escalation with Iran, the market has settled and is now focusing on economic data. The news of the OPEC meeting being postponed pushed WTI down $4. Investors are anxious about OPEC+’s ability to reduce output quotas now that their scheduled meeting has been moved from November 26 to November 30.

Crude Oil – 60 minurte chart

• Oil Sell Signal
• Entry Price: $1,990.71
• Stop Loss: $1,976.71
• Take Profit: $1,998.71

Cryptocurrency Update

BITCOIN Keeps Bouncing Higher

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. Buyers paused just below last month’s high of $38,000 and retreated lower, but buyers came in right at the 50 SMA (yellow), so the trend remains bullish.

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