Forex Signals Brief November 28: Thin Liquidity for Thanksgiving
yesterday we saw a 1 cent retreat in the USD, while today it is expected to be quiet due to Thanksgiving, but don't rule out a spike.
Yesterday we saw a 1 cent retreat in the USD, while today it is expected to be quiet due to Thanksgiving, but don’t rule out the occasional spike as liquidity will be thin.
The US dollar is trading lower across all major currency pairs today, with the dollar index down 1%. This comes despite confirmation of rising inflation in the October US PCE figures. As expected, the Federal Reserve’s preferred inflation gauge showed a monthly increase of 0.2% for the headline and 0.3% for the core. Year-over-year figures stood at 2.3% and 2.8%, respectively, confirming inflation remains elevated and has risen since September.
Personal income surpassed expectations, growing by 0.6% compared to the forecasted 0.3%, while personal spending also beat projections, rising by 0.4% versus an anticipated 0.3%. Initial unemployment claims came in lower than expected at 213,000 (forecast: 216,000). However, continuing claims and their four-week moving average reached the highest levels since November 2021, signaling potential softening in the labor market.
The second estimate of US GDP growth for Q3 was revised to 2.8%, slightly below the initial 3.7% estimate, with consumption contributing 3.5%. Meanwhile, the Atlanta Fed’s GDPNow estimate for Q4 remains strong at 2.7%, up from an earlier estimate of 2.6%, highlighting continued resilience in the economy.
Today’s Market Expectations
The Bank of Korea (BoK) is expected to pause its monetary easing after cutting rates in its October meeting. At that meeting, the central bank reduced its base rate by 25 basis points to 3.25%, a widely anticipated move. However, the decision was not unanimous, as board member Chang Yong-Sung dissented. Additionally, the BoK lowered the policy interest rate for special lending programs. The central bank emphasized the importance of carefully balancing inflation, economic growth, and financial stability. It noted that South Korea’s economy is expected to maintain moderate growth, with the pace of future rate cuts to be assessed cautiously. Following the decision, BoK Governor Rhee explained that five board members believed maintaining the policy rate at 3.25% would be appropriate over the next three months. Meanwhile, one board member indicated openness to another rate cut within that timeframe. Rhee also acknowledged that the recent decision might be interpreted as a “hawkish cut,” reflecting a measured approach to monetary policy easing.
Today we also have the German prelim CPI (consumer price index) report for November, which is a forerunner of the Eurozone CPI inflation later on. Consumer inflation is expected to fall by -0.2%, which will put more pressure on the ECB to continue cutting interest rates.
Yesterday markets experienced some heightened volatility once again, as the USD retreated, sent risk currencies higher but stock markets ended lower. We opened 7 trading signals, ending the day with five closed trades, of which four were winning forex signals and just one losing trade.
Gold Bounce Fails
Gold experienced a sharp $100 drop during Middle East peace talks yesterday but has since stabilized above $2,600. The metal’s volatility reflects lingering uncertainty, further heightened by Donald Trump’s announcement of potential tariffs on imports from Canada, China, and Mexico. Strong U.S. economic data helped gold consolidate its position, though traders remain cautious about the broader implications of recent trade developments.
XAU/USD – Daily Chart
GBP/USD Facing the 200 Daily SMA
In the forex market, GBP/USD opened the week with a 60-pip gap higher, briefly exceeding 1.26. However, shifting risk sentiment caused the pair to slide to lows near 1.05. Today, renewed bullish momentum pushed the price over a penny higher to almost 1.27. Buyers, however, met resistance at the 200-day simple moving average (SMA), causing the rally to pause.
GBP/USD – Daily Chart
Cryptocurrency Update
Bitcoin Heads to 100K Again
Bitcoin faced significant profit-taking last week, narrowly missing the $100,000 milestone before retreating below $95,000, marking a 5% loss. The selling pressure continued yesterday, with the cryptocurrency dipping as low as $91,500 before rebounding by nearly $8,000. Despite this, Bitcoin remains significantly above its level from a year ago, when it traded around $25,000.
BTC/USD – Daily chart
Ethereum Climbs Above $3,500
Ethereum mirrored Bitcoin’s volatility, briefly falling to $3,000 before surging to $3,500. Bitcoin’s recovery above its 50-day SMA highlights its underlying technical strength, signaling resilience in the face of volatility after a $400 jump yesterday. These movements suggest growing investor confidence in the digital asset market, pointing to a more optimistic outlook for cryptocurrencies despite their inherent price swings.
ETH/USD – Daily chart
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Save