Forex Signals Brief August 26: USD Bulls Hope on Durable Goods Orders

Last week the calendar was empty in the first half, apart from the CPI consumer inflation data from Canada, which showed a bigger slowdown than expected, sending the CAD lower. However, the CAD ended up higher against the USD by the end of the week as the Buck resumed the downtrend.

Will the demand for durable goods orders keep up in July?

Gold kept surging higher, reaching a new record high at $2,431 by Wednesday. But on Thursday it retreated below $2.500, as the USD found some bids after positive Home Sales data and stable Unemployment Claims, but that didn’t last long, with markets expecting a dovish Powell at the Jackson Hole Symposium.

Powell confirmed the start of the monetary easing process in September, which makes this the official dovish turn from the FED. Besides that, he didn’t reject the idea of a 50 bps rate cut, which the market saw as even more dovish, which sent the USD down the drain again, while everything else closed the week near the highs.

This Week’s Market Expectations

Monday:

  • PBoC MLF (People’s Bank of China Medium Lending Facility): Key interest rate decision impacting the Chinese financial system’s liquidity.
  • German IFO Business Climate Index: A leading indicator of economic health, reflecting business sentiment in Germany.
  • US Durable Goods Orders: A measure of new orders placed with manufacturers for durable goods, indicating the strength of manufacturing and economic outlook.

Tuesday:

  • US Consumer Confidence: A survey that measures the confidence of consumers in economic activity, which can signal spending and economic trends.

Wednesday:

  • Australia Monthly CPI: An indicator of inflation in Australia, showing changes in the price level of a basket of consumer goods and services.
  • Nvidia Earnings: A significant event for the technology sector and markets, reflecting the performance of a key player in the semiconductor industry.

Thursday:

  • US Q2 GDP 2nd Estimate: A revised estimate of the economic growth in the US for the second quarter, providing insights into the pace of the economy.
  • US Jobless Claims: Weekly data on the number of individuals filing for unemployment benefits, indicating labor market conditions.

Friday:

  • Tokyo CPI: An inflation measure for Japan’s capital, often used as a leading indicator for nationwide trends.
  • Eurozone Flash CPI and Unemployment Rate: Early estimates of inflation and unemployment in the Eurozone, providing insights into the economic environment.
  • Canada GDP: A monthly report on the economic output of Canada, showing the growth rate of the economy.
  • US PCE (Personal Consumption Expenditures): The Federal Reserve’s preferred inflation measure, indicating changes in the prices of goods and services consumed by households.

Last week markets were slow in the first half, but the USD weakness persisted, so we remained short on the USD, and long on Gold which proved to be a good trading strategy. The volatility increased toward the end of the week, but we kept the same performance, ending the week with 23 closed trading signals, 16 of which were winning forex signals, while 7 ended up in loss, giving us a great win/loss ratio.

Gold Holds Above $2,500

Early in the week, gold reached a new high of $2,531, but by Thursday, it had sharply dropped $60 to $2,470. This decline followed positive US economic data, including better-than-expected home sales that halted the previous month’s downward trend and a Services PMI that rose by more than 55 points, signaling strong growth in the services sector. Despite these data points, Fed Chair Jerome Powell’s dovish stance pushed gold back above $2,500.

XAU/USD – Daily chart

GBP/USD Closes the Day With A Doji

The GBP/USD pair has shown significant resilience, rebounding off the moving averages on the daily chart. After strong UK Services and Manufacturing PMI readings, the pair rose to 1.3130 early in the week. However, it later dropped below 1.31, finding support at the 50-day SMA (yellow). Another surge on Friday saw the pair close the week above 1.32.Chart GBPUSD, D1, 2024.08.25 15:48 UTC, MetaQuotes Ltd., MetaTrader 5, Demo

GBP/USD – Daily Chart

Cryptocurrency Update

Bitcoin Holds Above $60k but the 50 SMA Keeps It Down

Bitcoin has bounced back from its early August slump, with buyers gradually pushing the price up to $62,000 and, more recently, closer to $65,000. However, BTC buyers are currently facing resistance from two key moving averages: the 100-day and 200-day SMAs. These moving averages are acting as the final resistance levels before Bitcoin can potentially reach the $70,000 mark.

BTC/USD – Daily chart

Ethereum Remains Subdued by the 20 Daily SMA

Since March, Ethereum has been in a downtrend, with lower highs suggesting the potential for further declines in August. In June, Ethereum briefly rallied above the 50-day SMA after falling from $3,830 to below $3,000, but renewed selling pressure led to another bearish reversal. The price fell through the 200-day SMA before recovering to above $2,600. Currently, buyers are testing the 20-day SMA (gray), which could trigger a battle between bulls and bears.

ETH/USD – Daily chart

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Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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