Forex Signals Brief December 26: BOJ Core CPI Inflation Release on Boxing Day

Last week started with another deterioration in the German Ifo business climate indicator, although EUR/USD remained bullish during most of the week, however, it was the USD weakness that was keeping this pair bullish. The USD continued the decline from the previous week and EUR/USD closed the first week above 1.10 since July. But, it stayed pretty close to this major level until the end of the week, showing that buyers are still reluctant to push the price too far above.

CPI inflation remained unchanged in Canada during November, which kept the CAD bullish, ending the week as the strongest currency. The Japanese Yen was poised to be the weakest of major currencies after the Bank of Japan left everything unchanged on Monday’s meeting, and didn’t signal any policy change to come.

The US Dollar ended up being the weakest currency after inflation reports showed another slowdown. The GDP price index for Q3 was revised 3 points lower from 3.6% to 3.3% on Thursday, while the Core PCE price index also slowed down in November, which kept the USD slipping lower. However retail sales bounced back up in November.

Last Week’s Market Expectations

This week markets are expected to be very quiet, as we are in the Christmas period, before New Year’s Day. Most markets are closed again today for Boxing Day, although we have the data from Japan to be released, with the Unemployment Rate expected to remain unchanged at 2.5% this month. The Bank of Japan Core CPI annualized inflation will also be relased, and it is also expected to remain unchanged at 3.0%.

The economic data for the rest of the week will be light as well. Tomorrow we have the BOJ Summary of Opinions in the Asian session and later the Richmond Manufacturing Index in the US session. On Thursday the Unemployment claims will be released from the US, which are expected to keep the trend at 211K while Pending Home Sales are expected to show a 1.1% increase. The week will end with the Spanish Flash CPI which is expected to remain unchanged at 3.2% and the Chicago PMI. 

BTC/USD has been one of the top-performing assets this year, although it is in a consolidation period now, after a 160% growth. Despite difficult economic conditions, Bitcoin’s value has risen above $44 and is anticipated to outperform traditional assets. It started close to $40,000 earlier this month, but buyers are quite active, keeping the price bullish overall.

BTC/USD – Daily Chart 

 ETHEREUM Remains Bullish on the Daily Chart 

ETH/USD reached $2,400 earlier this month, but has since returned significantly lower. However, the overall trend remains, with moving averages acting as support during pullbacks. On the daily chart, we had a rally off the 20 SMA (gray) last week, but the price reversed back down this week, despite the fact that the 50 SMA (yellow) is now acting as support.

Ethereum – Daily Chart

• ETH Buy Signal
• Entry Price: $1,947.38
• Stop Loss: $1,490
• Take Profit: $2,500