Forex Signals Brief May 28: Back to Trading After A Long Weekend

Despite Memorial Day in the US and the Spring Bank Holiday in the UK, market activity persisted, albeit at a slower pace. The declining trend of the US dollar continued, contributing to a positive market sentiment. The pound sterling and commodity-linked currencies benefited the most from the risk-on environment.

US and UK traders are back to work today
US and UK traders are back to work today

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Forex Signals Brief May 27: Quiet Day Ahead with UK, US On Bank Holiday

Last week started slow, with most of Europe and Canada on a bank holiday weekend on Monday, however, we had a plethora of FED speakers, most of whom seemed uncertain about the start of the monetary easing process, which is bullish for the USD/ The USD made some gains during the week, however on Friday the buck retreated lower again on lower inflation expectations by the UoM, despite positive economic data, such as stronger durable goods orders, Services PMI and Manufacturing PMI which came out of recession in April.

The volatility is expected to be very low today
The volatility is expected to be very low today

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Silver and Gold Price Down as Commodities Retreat

Commodities have turned bearish in the last two days, with Copper, Silver and Gold price experiencing some heavy losses. Commodities have had gone through one of the strongest rallies in the last several months, with Copper and Gold prices making record highs every week, but the pullback in the last to days has been quite severe as well. Continue reading “Silver and Gold Price Down as Commodities Retreat”

Forex Signals Brief May 24: Durable Goods Orders Close the Week

Yesterday began with New Zealand’s Retail Sales report for Q1, which showed a significant increase, keeping the NZD well supported throughout the day. In the European session, PMI numbers were released for the UK and the euro area. The Eurozone figures were positive, with slightly improved readings in Germany offsetting slower readings in France. This led to the [[EUR/USD]] pair closing the day at a low of 1.08.

The demand for durable goods orders expected to fall by 0.9% in April
The demand for durable goods orders expected to fall by 0.9% in April

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Silver Prices Surge to $32.49 Per Ounce: Highest Level Since 2012

Silver Price Chart - Source: Tradingview
Silver Price Chart 

Silver prices have soared to $32.49 per ounce, the highest since 2012, driven by robust demand and positive futures market sentiment. This year, it has rallied over 28%, with a 15% increase in the past three weeks alone.

Futures Market Boost

Between February and April, an accumulation of profitable long bets in the futures market spurred this recent rally. Investors have been increasing their silver holdings, further driving up demand.

Electric Vehicles and Renewable Energy

The electric vehicle (EV) sector significantly contributes to silver’s rising demand. EV production, which relies heavily on silver due to its superior electrical conductivity, is expected to consume nearly half of all silver on the global market. As the shift towards renewable energy continues, it’s role in manufacturing solar panels also boosts its demand.

China’s Role in Silver Demand

China’s rapid advancements in producing solar panels and electric vehicles are pivotal in supporting rising silver prices. The country’s growing capabilities in these industries underpin the increasing global demand for silver.

Recent Market Movements

On Wednesday, the precious metal prices closed down 3.8%, pressured by a strong USD Index and rising global bond yields. A decline in US home sales in April and hawkish Federal Open Market Committee (FOMC) meeting minutes also weighed on silver prices. However, in today’s trading, it stabilized above $30 per ounce as investors reassessed the Federal Reserve’s monetary policy outlook.

Industrial Applications and Supply Deficits

Despite high interest rates reducing the appeal of non-bearing assets, silver remains supported by its critical industrial applications. The metal is heading for a fourth consecutive year of supply deficit, with stocks tracked by the London Bullion Market Association hitting a record low in April and trading volumes in New York and Shanghai remaining low.

Technical Analysis

From a technical standpoint, XAGUSD’s decline from the $32.49 peak is part of a correction within the bullish trend established since September 2022. The next support level is at $29.77, with potential further corrections testing the $29.24 and $28.48 levels. A significant trend change would only occur if prices drop below the $25.99 support.

Overall, despite recent declines, silver’s price movement remains bullish. Breaking above the recent peak of $32.49 could trigger further upward momentum.

Silver’s strong performance, driven by increasing demand from the EV and renewable energy sectors, along with supply constraints, suggests that the bullish trend in silver prices is likely to continue. Investors should watch key support and resistance levels for potential market movements.

Oil Prices Below the 100 SMA as EIA Crude Inventory Builds

The crude market is currently experiencing a downward trend, with Oil prices falling to $77.50, influenced by a combination of factors such as potential oversupply and demand concerns. Today’s EIA inventory report showed a buildup in crude stocks, which weighs further on Oil prices, and the overall sentiment remains negative.

EIA inventories showed a buildup today
EIA inventories showed a buildup today

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Forex Signals Brief May 22: RBNZ, UK CPI and FOMC Minutes

For the second day in a row, there were no significant economic data releases during the Asian and European sessions. However, the Canadian Consumer Price Index (CPI) report for April indicated a slowdown, resulting in the Canadian dollar (CAD) dropping by 50 pips across the board. The influence of comments from Federal Reserve officials remained fundamental, yet their statements were largely consistent with previous remarks from other Fed officials.

The Reserve Bank of New Zealand
The Reserve Bank of New Zealand

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Forex Signals Brief May 21: Further Slowdown in Canada Inflation

There were no economic releases yesterday with Europe and Canada being on bank holiday. The US dollar strengthened as US Treasury rates rose. However, several Federal Reserve officials spoke, and the overall narrative is that the Fed is currently on hold. The April CPI report was encouraging, but it represented only one data point.

Markets bracing for softer Canada CPI numbers
Markets bracing for softer Canada CPI numbers

Inflation was notably weak in the first quarter of 2024. As a result, the Fed has adopted a wait-and-see approach, emphasizing the need to monitor incoming data before making further policy decisions. Discussions about reducing rates have diminished, and there is even some speculation that the Fed might still consider tightening if inflation does not show

Fed’s Bostic and Daly:

  • Both officials highlight the cautious approach the Fed is taking regarding inflation reaching the 2% target. They emphasize the need for patience and continuous monitoring of inflation trends before making any decisions on policy adjustments.
  • Daly specifically mentions shelter inflation, indicating expectations for gradual improvements in this component. This suggests that the Fed is closely watching various factors contributing to inflation dynamics.

Fed’s Jefferson:

  • Jefferson acknowledges the restrictive nature of the current policy rate, indicating that despite ongoing improvements in the labor market and moderate declines in inflation, the pace of progress is not as rapid as anticipated.
  • He underscores the importance of evaluating incoming economic data and the evolving economic outlook when determining appropriate policy rates, suggesting a data-dependent approach.

Fed’s Barr:

  • Barr characterizes Q1 inflation as “disappointing” and emphasizes the need for confidence in inflation trends before considering any relaxation of monetary policy.
  • He advocates for giving the current tight policy more time to effectively address inflation concerns, suggesting a patient approach to policy adjustments.
  • Barr highlights the Fed’s readiness to “hold steady” and maintain vigilance over the economy, indicating a preference for maintaining the status quo until there is more clarity on inflation dynamics and economic conditions.

Today’s Market Expectations

Today started with the minutes from the latest RBA meeting, which were released in the Asian session.

Later we have the highlight of the day. The CPI Y0Y is predicted to be tick down to 2.8% from the previous month’s 2.9%. While this indicates a modest decrease in the year-over-year inflation rate, it remains within the BoC’s target range of 1-3%. CPI MoM is expected to be 0.5%, down from the previous year’s 0.6%. Trimmed-Mean CPI YoY is predicted to be fall to 2.9%, down from the previous year’s 3.1%. The Median CPI YoY is expected to tick down to 2.7% from 2.8% the year before, which would be bearish for the CAD.

Forex Signals Update

Yesterday the volatility was low as the economic calendar was empty, so we didn’t open many forex signals. We went long on [[EUR/USD]] and shorted the Dow Jones index, but those trades didn’t close, so we only had one signals closed. The Bitcoin signal it the take profit target as BTC pushed to

Gold Prints Another Record High at $2,450 

Last week Gold (XAU/USD) closed above $2,400 for the first time in history, suggesting that a new high was imminent. The market’s reaction to weaker-than-expected CPI data triggered a flight to safe-haven assets, such as gold, pushing the XAU/USD pair back towards $2,400. The rebound from the $2,330 support level, which previously acted as resistance during April’s consolidation period, indicated bullish market sentiment, which pushed the price higher yesterday, touching the $2,450 level. This recovery, combined with the 20-period Simple Moving Average (SMA) on the H4 chart, reinforces Gold’s positive outlook.

XAU/USD – H4 chart

USD/JPY Continues the Upside Move

The [[AUD/USD]] pair experienced a notable increase last week, driven by a risk-on sentiment following disappointing US inflation data. This upward movement carried the pair above the 200-day Simple Moving Average (SMA), which is a significant technical milestone. Currently, the level near 1.2650, corresponding to the 200-day SMA, serves as crucial support for the pair, which means that it is a good place to look for AUD/USD longs during dips.

AUD/USD – Daily Chart

Cryptocurrency Update

Booking Profit in Bitcoin As Buyers Push To $70K Again

Since March, [[Bitcoin]] has demonstrated a pattern of lower highs, indicating a potential move into a downtrend or consolidation phase. However, this pattern appears to have been disrupted by last week’s uptrend. The recent decline in Bitcoin’s price to around $61,000 presented a buying opportunity for investors, as the 100-day Simple Moving Average (SMA) has turned into support, which aligns with our own position. Previously, technical indicators such as the 50-day and 20-day SMAs acted as resistance, hindering Bitcoin’s upward momentum. These levels have now been breached, suggesting that the 50-day moving average is likely to become a new support level on the daily chart and yesterday BTC touched $70,000 for the first time since early April, reaching our TP BTC target.

BTC/USD – Daily chart

A 20% Surge in Ethereum 

Ethereum (ETH) has experienced significant price volatility, frequently dipping below the $3,000 mark before recovering. This pattern of oscillations highlights Ethereum’s resilience, as it consistently rebounds above the $3,000 milestone. The repeated recovery indicates strong support levels below $3,000, which have been crucial in helping [[Ethereum]] bounce back from downturns. However, the 100-day Simple Moving Average (SMA), now acting as resistance, has capped Ethereum’s advances. Following another bounce off the support zone last week, ETH’s upward momentum was halted at the 100 SMA (green). However, yesterday Ethereum surged higher after the break of MAs.

ETH/USD – Daily chart

Copper Price Consolidates Above $5 in Demand for Commodities

Commodities remain in demand, as Copper soared to a new high above $5 last week, while today it is consolidating the gains above this major level. Nickel also showed great demand last week, as it surged nearly 10%, concluding a week of significant movements in industrial and precious metals markets as investors remain bullish.

Copper holds above $5 today
Copper holds above $5 today

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Forex Signals Brief May 20: FOMC Member Speeches on Agenda

Last week the attention was on the US CPI (Consumer Price Index) for April, with markets fearing a soft number mostly. Consumer inflation posted a slight slowdown from 0.4% to 0.3%, which was enough for markets to raise the odds of FED interest rate cuts, sending the USD tumbling lower.

Today we have FED members talking, a lot of them

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