Category: US/Midday Session Brief

Forex Signals US Session Brief, May 29 – Risk Off Sentiment Continues to Dominate the Market

Posted on by Skerdian Meta

Recently, market sentiment has taken a hit. Most forex majors were on a strong bullish trend until a few weeks ago, but now everything has turned upside down. The investor sentiment continues to deteriorate. Today it hit rock bottom. EUR/USD and GBP/USD have lost more than 100 pips from top to bottom.

The political situation in Italy is weighing heavily on the Euro and on the risk currencies. Safe haven currencies are making the most of it, but I don’t think the Bank of Japan and the Swiss officials are liking what they are seeing. The risk is that Italy might decide to abandon the Euro in favor of the Italian Lira. The Cinque Stelle leader Di Maio denied that this morning, but that’s the impression in the market now.

 

The European Session

  • China Will Narrow Trade Gap with the US – Chinese officials agreed to import more US products today, specifically poultry and coal. That’s great for the US economy since Chinese energy imports from the US account for only 1% of total energy imports. On the other hand, that will likely damage the Australian economy, or the Indonesian economy, perhaps both of them.
  • New Italian PM Candidate – Cottarelli is presenting his cabinet of ministers to the Italian president today. Chances are his cabinet will go through since Cottarelli is a technocrat and so is the president. However, the political scene doesn’t like that very much, so new elections are around the corner according to analysts.
  • MIB Falls, Italian Yields Surge – The fallout in stocks continues and it is not just limited to the Italian index MIB 40. DAX, CAC, Nikkei, S&P etc have lost considerable ground in the last several days and the fall has accelerated today. Italian yields, on the other hand, have been surging. The 2-year bonds saw a 100 basis points increase today, from 0.90% yesterday to above 1.90% earlier today. 10-year yields are trading near 3% now, coming from below 1.90%.
  • Moody’s might Downgrade Italy – Moody’s warned of downgrading its rating for Italy. This morning they said that it has nothing to do with politics, but with Italy’s high debt. If Italy is downgraded, that’s another reason for the yields to continue rising.
  • No Rate Hikes from the ECB – Economists were predicting that the European Central Bank would raise interest rates 3-4 times in 2019. Today, those bets are for just one rate hike of a mere 10 basis points (bps) for next year. One more reason to be dovish on the Euro.
  • Risk Currencies Are Getting Hammered, Safe Havens Are Getting Bid – All forex majors continue to get hammered today, apart from the three musketeers, the JPY, the CHF and the USD. Safe havens love times of panic.

 

The US Session

  • US Consumer Confidence – Today we had a round of consumer confidence reports from Europe. They were a bit on the soft side but nothing to move the markets. The US consumer confidence is somewhat more important and might improve the sentiment a bit. It is expected to come at around 128 points. I expect the consumer sentiment to remain upbeat in the US after Donald Trump’s measures to revive the “sleeping bear” that is supposed to be the US economy. If the sentiment report is better than expected that might be another reason to buy the USD.
  • Financial Stability Report from the RBNZ – The Royal Bank of New Zealand is publishing the financial stability report in the evening. I’m afraid it will be a bad report for the NZD. The sentiment is horrible in financial markets now and the New Zealand economy will likely get hurt from the new China-US relations.
  • Forex Pairs Retracing Now – Forex majors have been really bearish all day, but it seems like a pullback is underway now. I don’t think that this pullback will last too long. If you are out of a trade, I suggest you follow the market in the coming hours and get ready to sell EUR/USD and USD/JPY.

 

Trades in Sight

Bearish GBP/USD

  • The trend is extremely bearish
  • The bearish trend has picked up the pace
  • The pullback is complete on the 30-minute chart
  • The 50 SMA is providing resistance

 

Stochastic is overbought, so the pullback is complete on this time frame chart

We sold GBP/USD a while ago as it was pulling back up. The price reversed down and we missed our take profit target by a mere pip. The retrace higher continued and stretched higher up. The price has now run into the 50 SMA on the 30-minute chart. The 50 SMA is also standing just above, so it seems as BP/USD will reverse lower again now.

In Conclusion

The US consumer confidence will be released soon. It may make things even better for the US Dollar. Although, I don’t expect this report to change the sentiment much in the markets, apart from the USD of course. The moves are still wild, so it will be another tough day at the office for forex traders today.

Forex Signals US Session Brief, May 25 – The UK GDP and Oil Tumble. US Retail Sales and Central Bankers on the Way

Posted on by Skerdian Meta

It was interesting to see the UK GDP report today, especially after the great retail sales yesterday. It was a bad GDP report but no real surprise there. The US durable goods orders are due to be published today and they will have a bigger impact on the USD. The US consumer sentiment is due at 3 pm GMT, but before that we have BOE Carney and FED Chairman Powell speaking, so it is going to be a lively session to trade.

 

 

The European Session

  • Terrible UK GDP Report – The UK GDP report came out as expected at 0.1% month/month, while the yearly GDP figure came at 1.2%. This is a bad number considering that the monthly GDP was at around 0.4% back in February. Although, not as bad as the details inside the report. Exports fell by 0.5% while imports decreased by 0.6%. Now, that’s really bad and the GBP is feeling the weight.
  • Oil Falls on OPEC – Oil has been losing ground fast today in the back of comments from OPEC and non-OPEC oil producers. It just broke below $69, coming down from $70.70 this morning, so that is a $2 decline almost. Comments have been flowing from OPEC countries today, suggesting that they will increase Oil output and that is likely to be decided in June when they meet in Vienna. Saudis said that they will readjust the output policy in June.
  • USD/CAD Breaks Resistance – USD/CAD has been finding it very difficult to break above the major resistance level at 1.2920. The break finally came today though as Oil prices tumble lower with the CAD following it into the abyss.
  • Spanish Stocks Dive on Political Trouble – Spanish opposition is calling for a vote of non-confidence against PM Rajoy and the main party is backing that up. This is another political trouble in Europe and Spanish stock index IBEX has lost more than 2% so far.

 

The US Session

  • US Durable Goods Orders – The US durable goods orders report is about to be released soon. Goods orders are expected to decline by 1.3%. We are coming from two very strong readings in the last two months. Goods orders grew by 3.1% in March and 2.6% in April, so a decline this time is tolerable. The surprise will be on the upside though. If the number comes up positive, then I expect another round of USD buying.
  • BOE’S Mark Carney Speaks – The BOE Governor Mark Carney is to speak in Stockholm later today. It will be interesting to hear what he has to say about the horrible UK GDP report today, if he decides to touch the subject. He’s been trying to keep his head up despite deteriorating economic data. So, if he decides to acknowledge the weakening economy, the GBP will likely take another hit.
  • FED’s Jerome Powell Speaks – The big guys are meeting in Stockholm today for a conference called “The future of central banking”. We don’t know whether Powell will comment on FED’s monetary policy path or if he will just stick to the main topic. But we will follow it closely.
  • US UoM Consumer Sentiment and Inflation Expectations – The University of Michigan will release its consumer sentiment inflation expectations reports. I don’t expect the consumer sentiment figures to move the market much, unless they deviate a lot from expectation. The inflation expectations are more important at this moment in time since inflation and wages are what the FED is most interested at right now. Last month, expectations came at 2.8%.

 

 

Trades in Sight

Bearish GBP/USD

 

  • The trend is still bearish
  • The bounces look anemic
  • Bad fundamentals from the UK

 

The 100 SMA is a great place to sell

GBP/USD is looking increasingly bearish. It tried to put up a reverse this morning, but the sellers returned, sending it lower. We missed the chance to sell but will do so if we see another attempt to retrace higher. The GDP report killed any hopes that the bulls had for this pair, so the situation looks gloomy.

 

In Conclusion

The US durable goods orders report was just released now. At -1.3% the headline number was bad, but the core orders which strip out transportation, air and defense orders, grew by 0.9% against 0.5% expected. That’s a good reading and it has saved the USD form the negative headline number.

 

Forex Signals US Session Brief, May 24 – Inside Trading in GBP Once Again

Posted on by Skerdian Meta

The ECB monetary policy meeting minutes is the most important forex event today. However, because ECB officials have been very vocal in the last few days, we already know what they think. The strangest thing happened in GBP pairs today. This currency spiked before the news release. This spike looked like insider trading to me.

 

Someone Is Making Big Money at the UK ONS

 

If you followed the price action before the UK retrial sales report was released, you should have noticed the 60-70 pip jump in GBP pairs. GBP/USD jumped off the 20 SMA on the H1 chart, claiming around 60 pips in a short period, reaching the 100 SMA.

That doesn’t look like normal price action. Usually, there is not much action before the major economic news is being released. The times when there is a quick correction or a quick positioning of forex traders before such news are very rare. Even when that happened, it doesn’t usually look like this. The price doesn’t usually surge in one direction if there is action before the economic news. It usually is more of a scattered price action with quick up and down moves because of the panic.

This move was not like that. The GBP surged without looking back as if it knew that the retail sales were going to be great this time around. Last month’s UK retail sales were really horrible as they declined by more than 1%. So, if there was a last minute panic move before today’s numbers were released, it should have been on the downside, considering the terrible retail sales last month. But, the move happened on the upside.

So, this sort of price action in GBP points to one thing, INSIDE TRADING. Inside trading happens when someone who is aware of the economic numbers tries to benefit from it by opening large positions in the direction that the data shows. The UK retail sales report today was really great and a total turnaround from last month’s terrible reading.

Someone knew about that without a doubt. Who would be that person? Well, someone who works at the Office for National Statistics obviously, or their families. Remember that the wife of the SNB (Swiss National Bank) chairman was investigated for inside trading a few years ago. The Swiss and the SNB have a reputation for being very strict and water tight when it comes to such things, but even so, the wife of SNB Chairman couldn’t keep her hands away from some easy money.

This sort of thing happens quite often with data releases from the ONS in the UK. By often I mean a few times a year, those guys are not stupid. Inside trading is punishable by law. But, some big shot there thinks they are above the law. These are not just my words by the way; this thing has resurfaced time after time in the last few years in the UK.

 

 

ECB Meeting Minutes

The ECB meeting minutes were the major forex event today, but I wasn’t expecting much action in the markets. That’s because we have heard so many ECB members speak recently, so the element of surprise which is the main market mover in forex has been killed. Everyone knows what the ECB (European Central Bank) is going to do short-term. Anyway, here are a few pointers for the ECB meeting minutes:

  • The ECB thought inflation was getting back to the 2% target but those expectations have diminished lately – The latest inflation report from the Eurozone showed no signs of picking up. It is stuck at 1.3%
  • The slowdown of economic expansion has been broad based – Yesterday’s soft manufacturing and services data made that very clear to everyone
  • The risks of protectionism have become more evident – Speaking to Trump but we know he doesn’t listen
  • An increase in wages has been comforting – at least some positive comments but where has it happened, we haven’t seen wages run away, not in Europe and not anywhere else (a message to my boss)

We knew all this. Only today we had a number of ECB and EU officials speaking out. EU’s Katainen said that the US raising the tariffs on imported cars goes against the World trade organization rules. The German car industry will be hit badly by that. So, many uncertainties for the Eurozone and the rest of the world.

 

 

Trades in Sight

Bearish NZD/USD

 

  • The bigger trend is still bearish
  • The 100 SMA is providing resistance

 

We went short on NZD/USD yesterday at current levels. The price moved lower during the night but it has retraced back up. Although, this pullback move higher seems exhausted now and the 100 SMA is not letting the buyers push any higher. So, it looks like the retrace up is complete. Let’s hope the downtrend resumes soon.

 

In Conclusion

Later on today we will have the US home sales and the BOE Chairman Carney speaking. Let’s see what he has to say about the great retail sales report. He might claim victory once again but the data won’t let him enjoy it. I’m sure there will be more disappointing economic data coming from the UK; as the saying goes, spring/summer doesn’t come with only a flower.

Forex Signals US Session Brief, May 23 – Financial Markets Are in the Middle of a Panic Period, Hence the Snowball Up and Down

Posted on by Skerdian Meta

The markets have been behaving really strange in the last two days. On Monday the risk appetite improved and it was really strong yesterday. The commodity currencies gained around 100 pips. Today, everything has turned upside-down and the cash is flowing out of risk assets and into safe haven currencies. What is going on?

 

The Markets Are Under the Snowball Effect  This Week

Yesterday, everyone was feeling like taking a risk or two. Risk assets such as commodity currencies and Oil were surging. Oil climbed around $1.60 but the reverse back down was just as quick. Now, oil prices are more than a dollar lower.

Commodity currencies are about a dollar lower too, with the CAD which is 150 pips lower, meaning that USD/CAD is 150 pips higher from the lows yesterday. The first thing that you spot when you see the USD/CAD chart is the quick fall in the first few session of the week and the quick jump since yesterday afternoon. There were no bumps in the way so this pair hasn’t taken any prisoners, both on the way down and on the way up. This sort of price action shows how hectic the markets have been behaving this week.

The risk sentiment was on yesterday and the commodity dollars surged. Today, the risk sentiment has deteriorated and the safe haven assets are in demand.  EUR/CHF has taken another deep dive, losing nearly 200 pips since midday yesterday. USD/JPY lost around 150 pips today and today’s candlestick could be the biggest bearish daily candlestick in more than a year.

That shows the state the market is in right now and how bad the sentiment is in all financial markets. Yes sure, the economic data from the Eurozone has been softer than expected but the European economy is holding up well. The UK inflation declined again, but it is still above 2%. The meeting between Donald Trump and the North Korean leader has been put on hold, but that’s nothing new, we are used to this now.

So, to me it is just the market snowballing.

The market starts to reverse up and everyone jumps on one side of the trade. Then, the reverse begins to reverse again and everyone jumps on the other side of the boat, thus the decline picks up steam as financial instruments roll lower.

 

European Session Highlights

There have been quite a lot of events today related to forex. We have seen central bankers, politicians and a considerable amount of economic data being released. Let’s just start from the latest.

 

  • Trump is up and tweeting already saying that the trade deal between the US and China is “moving along nicely”. Albeit, it is hard to follow through with this sort of deal and see its effects. We will have a larger article about this issue.
  • The Economy Minster of Turkey said earlier that the decline in the Turkish Lira is speculative. He said that the monetary policy should be able to manage it, but the Lira has lost around 20% of the value this month. If they could do something they would have by now, wouldn’t they?
  • The French and German services declined today as well as the services and the manufacturing sectors across the Eurozone.
  • The UK YoY inflation slipped lower again this month, from 2.5% previously to 2.4%. Core inflation also dropped to 2.1% from 2.3%. Yet, inflation remains above 2%.
  • The RB Governor Lowe said earlier in the press conference that the biggest risk for the Australian economy is China. But, things are moving in the right direction. Don’t be too sure about that mate, you know Trump. He might reap the deal off and the deal is not finished yet.
  • The Italians have agreed on Conte for the position of the Prime Minister. From my point of view, he’s a stable guy, so I don’t think he will be much trouble for the UE and the European project

So, there was a lot of talk for the markets to chew on today and some major economic data. Although, the market sentiment is responsible for the moves today, so beware the snowball effect.

 

 

Trades in Sight

Bullish USD/JPY

 

  • The bigger trend is still bullish
  • The pullback is complete on the H4 chart
  • A pin/doji has formed in the previous candlestick
  • The 100 SMA is providing support

 

 

We opened a buy forex signal a few hours ago when the price was at the 100 SMA (green). USD/JPY dived to 109.50s, but it has reversed back up now and the chart looks like it is forming a bullish reversal now. The previous H4 candlestick formed a doji which is a reversing signal and the 100 is still in play. We are about 20 pips in profit now, so this forex trade looks good.

 

In Conclusion

The markets have been hectic today, but they have calmed somewhat in the last few hours. The US traders have already started trading, but I don’t expect a lot of price action this afternoon until the evening when the FED releases the FOMC minutes from their last meeting.

 

Forex Signals US Session Brief, May 22 – The BOE Turns Dovish, Same As Ethereum 

Posted on by Skerdian Meta

The USD made a turnaround yesterday after last week’s strong uptrend which stretched yesterday in the morning too. That turnaround turned out to be a violent pullback for the Buck and it is continuing today as well. The BOE tried to steal the show this morning with the testimony on inflation and economic projections, but the market is closely focused on the USD at the moment.

The BOE Turns Cautiously Dovish

The Bank of England (BOE) Chairman Mark Carney and the rest of the members were testifying in front of the Treasury Committee today on inflation which also includes economic projections. Many forex traders were expecting to hear some clear ideas about the interest rate path and about the British economy in general.

But, the comments on monetary policy were cautious. Many analysts took this report as wait-and-see, although, my opinion is that the comments today from the BOE were dovish. BOE members Ramsden and Saunders said that they are not fond of a “detailed rate hike path”. If anyone was hoping for an exact time of the next rate hike from the BOE, they won’t get it. The BOE refuses to say anything and we know what that means. It means that we must forget about rate hikes now.

The other BOE member Vlieghe aid that the rate hikes will be very gradual in the coming years, but, only if Brexit risk wears off and the economy improves. Well, the UK economy has turned sour recently and Brexit will remain a headache for the British economy and financial markets for years and Vlieghe knows that (or does he), so there goes another dovish signal. Vlieghe also said that “a rate hike would have weakened the economy considerably”. Ok, this was a stronger signal so forget about ínterest rate hikes anytime soon.

The main man Mark Carney accepted that the economy has softened, which goes in opposite direction with the BOE forecasts in February. The BOE sounded surprisingly hawkish in February, but now it is turning dovish, so the February meeting was a disaster. This, as well as other failures to forecast and affect the economy, might be the reasons why Carney has decided to leave his job as the BOE Chairman in June 2019. Andrew Bailey and Ben Broadbent are the favorites of the bookies in London for Carney’s job.

 

 

Ethereum Traders Are Putting Their trust on Moving Averages

In yesterday’s midday brief, I covered the weekly Bitcoin chart. That chart was heading down with stochastic turning bearish a couple of weeks ago, but the weekly candlestick from last week closed as a pin. The pin is a reversing signal, which means that Bitcoin looked like it was going to turn bullish, according to the candlestick trading strategies.

But, the bearish price action is continuing today too. Bitcoin is slipping lower today, albeit slowly. The rest of the cryptocurrency market is following suit and Ethereum has been moving lower too. Ethereum has lost around $20 so far today which means losing around 3% of its value.

If you are an Ethereum trader, don’t be disheartened just yet. As you can see from the H4 chart below, there is hope at the two moving averages below. These moving averages are the 100 smooth MA (red) and 200 smooth MA (purple).

These two indicators have been holding Ethereum up for quite some time. The chart shows the picture of the last 2-3 weeks, but these two MAs have been providing support for longer than that if you scroll your chart back. The 100 SMA is already providing support and the 200 SMA is waiting below just in case. The week is still young, so we might see a reversal in the coming days. Although, the price must not break below last week’s low, otherwise, the reversal chart setup as indicated by last week’s candlestick will be ruined.

 

 

 

 

Trades in Sight

Bullish USD/JPY

 

  • The trend is massively bullish
  • The pullback is overdone in h H1 chart
  • The retrace is complete on the H4 chart
  • The 100 SMA is providing support

 

We already have a buy forex signal in this pair. It hasn’t been a good trade because the of the strong USD pullback since midday yesterday. But, the h1 chart s severely oversold and the H4 chart just became oversold. The 100 SMA (green) is also providing support, so it seems like USD/JPY might reverse back up now, fingers crossed.

 

In Conclusion

The BOE testimony is over now and it seems like GBP/USD is turning bearish. So, our sell signal in this looks good at the moment. We are getting back on track with forex signal, but still have a lot to cover and make up for. Let’s post this midday forex brief quickly and concentrate on signals now.

Forex Signals US Session Brief, May 21 – USD and Cryptocurrencies Climb As Risk Sentiment Improves

Posted on by Skerdian Meta

The market sentiment has improved today and the commodity currencies are feeling some love at last. Another sign that the market is feeling better now, is the slide in safe haven assets such as the JPY and Gold which have accelerated the downtrend this morning. Bitcoin and other major cryptocurrencies made a reversal last Friday, ending the downtrend of last week, so they are on a bullish run now.

The Sentiment Looks Positive Today

By the end of last week and over the weekend, the global political situation improved somewhat. The trade tensions between the US and China have relaxed a bit. There were comments over the weekend that the US and China are making progress on trade talks. China accepted to buy more US goods and let the domestic consumption increase, which would shrink the US trade balance deficit with China.

The Chinese Foreign Minister Lu Kang said earlier this morning that China doesn’t want trade tensions with the US and hopes that trade frictions between the two giants don’t resurface.

On the other side of the Pacific Ocean, Donald Trump was up early tweeting about the issue. He said that China has agreed to buy more agricultural products and the tariffs and barriers on China will come down soon for the first time ever. But, Trump also said that fair trade with China will happen. That last tweet is not very encouraging, it sounds more like a threat, again. He does tweet a lot, doesn’t he? That’s how Donald Trump is running the US Cabinet. So, the market sentiment has improved, but all it takes is another negative/aggressive tweet from Trump towards China and the market sentiment will flip just like that, reversing the forex market back down.

The Italian politics seem to be on the right path at last. Italian politics are the most unstable across Europe. Finally though, the two leaders of the Cinque Stelle (Five Star) and Legga Nord (Northern League) agreed on a coalition last week and today they went to get their blessing from the Italian President. This is a positive development on one hand, but the political agenda of this coalition looked negative for the Euro and probably the EU until several weeks ago since they were indications in their plans to leave the Euro and adopt the Italian Lira back. Although, they said that they won’t mess with such a sensitive case, particularly after Brexit. But, you never know what might come up next, so we will have to keep an eye/ear on Italian politics as well now, I know the ECB is.

Bitcoin Forms A Bullish Reversal Candlestick Pattern

Bitcoin and other major cryptos have been on a bearish run in the last two weeks. Bitcoin jumped off the 50 SMA (yellow) on the weekly chart in the beginning of April and it traded on a bullish trend during the entire month.

But, the price reversed back down at the 20 SMA, as you can see. It just touched that moving average and began to reverse after forming a doji/spinning top right below it. These candlesticks are very helpful when trading. They indicate a reverse, particularly when the price is at a certain level or indicator such as the 20 SMA.

Bitcoin broke below $8,000 and reached $7,900 so by the middle of last week I was thought that it was heading for the 50 SMA again. That would be the second try in a short period of time, so it would be a red flag for cryptocurrency buyers. Perhaps, the 50 SMA would be broken this time.

But, the buyers started getting active by the end of the week. Bitcoin climbed back above the $8,000 level. The bullish signal here is the weekly candlestick again. Three weeks ago, Bitocin formed a doji and started reversing lower. This time, it has formed a pin which is a stronger reversing signal. Will we see Bitcoin move higher this week and resume the uptrend of April? Well, the reverse is already underway. So, it remains to be seen if the uptrend will resume. We are long on Bitcoin with a buy forex signal which we are keeping, hoping to make a nice profit here.

Trades in Sight

Bearish GBP/UD

  • The trend is massively bearish
  • The downtrend picked up pace overnight
  • The pullback up seems to be over soon

We had a long term sell forex signal in this pair but closed it last week at 1.3530 as GBP/USD was retracing higher. Well, the downtrend resumed again and today the sellers broke below the support at 13450s, reaching 1.3390. It has been retracing higher in the last two hours. But it seems as if the retrace might be over soon since stochastic is almost overbought. So, it seems a good idea to go with the trend here and sell GBP/USD. Although, I might wait until a bit longer, until the 20 SMA catches up with the price.

In Conclusion

The commodity currencies are getting some nice bids while the safe havens are getting battered. So, the market sentiment looks positive today. But, don’t bet your house on it because everything might reverse in a heartbeat. Keep an eye on the political and forex news because there is not much on the economic calendar today.

Forex Signals US Session Brief, May 18 – Canadian Inflation the Highlight of the Day

Posted on by Skerdian Meta

The CPI inflation from Canada is the highlight of the day today. The Canadian Dollar has been going up and down this week in anticipation of the inflation report today, so this report will likely give USD/CAD the direction for today and probably next week. The protection in the daily chart in cryptocurrencies has now gone, but there is one more line of support further below. Let’s see where the next support comes for Bitcoin.

 

 

Canadian CPI Report

The Canadian inflation report and the retail sales will be released soon. Inflation has been a headache for all major central banks, but in the previous two months we saw some decent inflation numbers from Canada. The monthly CPI (consumer price index) was at around 0.6%-0.7% in February and March, but in April inflation was slashed in half.

The retail sales report in May was even worse. In March, retail sales came at 0.9% and were revised higher to 1.0%, but in April they took a dive and fell flat at 0%. So, there is increased interest for both, retail sales and CPI inflation reports.

Oil prices have been on the rise this week as global political tensions increase. Oil and the CAD are heavily correlated, but as I highlighted in one of our forex updates yesterday, that correlation weakened as the week progressed.

I associate that with the approaching schedule for the CPI and retail sales report. After the terrible numbers we saw last month for both sectors, the market is worried that we see another horrible round of data which would be the beginning of a trend. That would scare CAD traders and push USD/CAD higher, probably to 1.29 and above.

 

One Defence Line Gone in Bitcoin, One Last One Remaining

On Wednesday, I highlighted the last defence line in Bitocin. That defence line was provided by the 50 SMA (yellow) on the daily chart. The picture was similar in most major cryptocurrencies, whether be it the 50 MA or the 100 SMA:

The price had a go at that moving average at the beginning of the week but it resisted well and reversed the price higher. The sellers had another go at it on Wednesday though. They pierced it briefly but the daily candlestick closed above it, so that was a promising sign for buyers like us.

If you remember, we have a long term buy signal here which we opened earlier this week. We opened it right above the 50 SMA. Well, yesterday the price finally broke below the 50 SMA and the daily candlestick closed there. That was a bit of a blow for us, but we are still confident in this trade.

The price is back above the $8,000 level now and the daily candlestick looks like a doji which is a reversing signal. There’s still a lot of time until the day closes, but just in case the sellers keep pushing lower, we have another line of protection further below.

As you can see form the weekly chart, the 50 SMA has been the line in the sand for Bitcoin. It has held the uptrend in previous years and it held the steep declines this year. Right now, it seems like the price is heading towards it, so let’s see if the sellers will remain in charge or whether the buyers will reverse the price back up before reaching the 50 SMA.

 

 

Trades in Sight

Bullish GBP/USD

 

  • The bearish move looks exhausted
  • Stochastic is oversold
  • The previous candlestick closed as a doji
  • A support area has formed in the 1.3450-60 region

GBP/USD turned bearish a few hours ago, but the support area at 1.3450-60 held once again. This is a sign that there might be a reversal taking place from down there. Stochastic is oversold, so the bearish move seems exhausted. Besides, the reverse on the H1 chart has started already as the current H1 candlestick suggests.

 

 

In Conclusion

 

Our EUR/GBP signal that we opened yesterday is going in the right direction, albeit pretty slowly. The Canadian inflation report and retail sales are to be published soon, so let’s see what’s in the store for the CAD today. Donald Trump is on again mumbling and threatening everyone, so be careful out there.

Forex Signals US Session Brief, May 16 – European Inflation and Euro are Stuck

Posted on by Skerdian Meta

The European CPI (consumer price index) inflation report was the main event in today’s forex calendar. Expectations predicted an unchanged inflation. Although traders were all hoping to see a slight pickup, the inflation remained stagnant. Inflation doesn’t seem to be going anywhere in Europe and neither is the Euro.

 

Euro on the Slide After Inflation Remains Unchanged

The Global economy had improved considerably in the last year or so. Over the last couple of months, however, the rate of improvement has slowed. Everyone was hoping for a peak in inflation and wages during this period, but it didn’t happen.

We saw some promising signs in the US a couple of months ago as wages and inflation ticked up marginally. But, that proved to be unsustainable. This was shown in the soft wages report from Australia this morning, covered by my colleague Rowan.

The main inflation number came at 1.2% year-on-year, as expected. It is the same number as last month. Core inflation (core CPI), which is even more important, remained unchanged at 0.7%.

No surprises here. Inflation is not going up in Europe and the Euro isn’t going anywhere either. The Italians are forming a government soon it seems, but that is not helping the Euro either.

EUR/USD finally broke below 1.18 today for the first time since December of last year. There is an obstacle in the way at 1.1740-50 on the weekly chart, but we will take a better look at this forex pair in the next market update.

 

Bitcoin Tumbles But the 50 SMA Remains

On Monday, the Bitcoin chart looked bullish. The price had formed a doji on Saturday, which is a reversing signal, after retracing down for about a week. That reversing signal was followed by a big bullish candlestick on Sunday, so the chart formation looked quite bullish.

The trend has been bullish for about a month and the retrace lower was complete. The next logical move was up, which is wht we are seeing now.

On the other hand, Monday’s daily candlestick closed as a doji, a reversing signal. This time it was a bearish reversing signal since the price had climbed up in the previous couple of days. Bitcoin and other cryptocurrencies reversed back down yesterday and that sort of price action continued today as well.

Bitcoin fell to $8,070 according to my platform, piercing the 50 SMA (yellow), which had provided support since Sunday. That didn’t look good for buyers like us. Remember that we have a long-term buy forex signal we opened on Monday.

The sellers called it a day down there and the buyers returned again. Now the price has climbed back above the 50 SMA, a good sign for us. If the buyers manage to push Bitcoin another $100 higher, then the daily candlestick would close as a pin. That would be a really bullish sign, so let’s hope Bitcoin climbs higher. There’s still plenty of day left until midnight when the daily candlestick closes.

Buyers are getting ready for the next assault

Trades in Sight

Bearish AUD/USD

  • The retrace up seems complete
  • The main trend remains bearish
  • The 50 SMA is catching up

 

 

AUD/USD bulls are showing signs of exhaustion

 

Our sell forex signal, in this pair, yesterday quickly closed in profit as the downtrend resumed. Today, this pair has been retracing higher again, but it seems like the retrace might be over. The buyers don’t seem to be able to push higher and stochastic is severely overbought. We have an open signal in NZD/USD, but might take this opportunity as well, hang around.

 

In Conclusion

The European inflation report didn’t offer much to the Euro traders and the Euro is sliding. ECB (European Central Bank) chairman Mario Draghi is about to speak in less than an hour. Stay tuned to see what he has to say and how the Euro reacts to his comments.

Forex Signals US Session Brief, May 15 – USD Resumes Uptrend after Economic Data Disappointment

Posted on by Skerdian Meta

After three weeks of trending upward, the USD retraced lower for nearly a week. But, it seems that the USD pullback is over now. The recent economic data has been a bit disappointing, so that might have contributed to the end of the pullback as well.

 

Disappointing Economic Numbers

The global economy has improved considerably over the last year. The services, industrial production, employment, and even inflation have picked up during this time. This is one of the reasons why the Euro has rallied since the beginning of 2017.

However, over the last few months, the economic data has shown some signs of weakness across the globe. The economy can’t run full steam forever, there are times of economic boom and there are times of economic slowdown. It’s more or less like the uptrend in forex pairs, there are periods when the pair rallies strongly and there are the pullback periods.

Right now the global economy’s economic expansion is softening. The Chinese fixed asset investment missed expectations and fell to 7.0% from 7.5% previously. Retail sales came down to 9.4% from 10.1% in the previous month.

We didn’t have any economic numbers from Australia today, but the RBA (Reserve Bank of Australia) sounded dovish enough to send the AUD slipping lower this morning. AUD/USD is on a strong bearish move today and we just made some pips selling this pair.

That wasn’t all though; the economic numbers from Europe didn’t look very promising either. The German prelim GDP for Q1 2018 fell to 0.3%, which is half of last quarter’s figure. The Eurozone industrial production was expected at 0.4% but came at 0.5%. Last month’s number was revised lower as well, hence the soft tones from the ECB yesterday.

In the UK, the wages are not keeping up with inflation. Inflation is running pretty hot at nearly 3%, but wages came at 2.6% this month, 0.2% lower from 2.8% last month. So, it hasn’t been a good day for economic data.

 

The USD Is Taking Advantage

The US Dollar has been in retracement mode for nearly a week. After trending up pretty strongly for about three weeks, it was time for a trend refreshing, which took place during the last several days.

It seems as the refreshing is over. GBP/USD failed to stay above 1.36 yesterday and today it is slipping lower. We still hold the long-term sell signal in this pair, which is now more than 100 pips in profit. The downtrend is picking up the pace for GBP/USD, so we will hold it, hoping to make a nice profit.

EUR/USD failed to break above 1.20 yesterday and now we find it around 150 pips lower. The slide has accelerated in the last couple of hours.

The commodity currencies are losing ground fast as well. Earlier today we opened two sell forex signals in AUD/USD and NZD/USD. NZD/USD had been retracing higher on the hourly chart, but the 20 SMA was providing resistance. We decided to play both pairs at the same time and it proved to be a good decision since it resulted in two winning forex signals.

Trades in Sight

Bearish AUD/USD

  • The retrace up is complete
  • The trend has turned bearish again
  • 2 bearish daily candlesticks

 The downtrend has resumed again in AUD/USD

As we said above, AUD/USD finished the pullback up yesterday and today it has turned bearish again. The candlesticks of the last two days look pretty bullish. They look like upside down hammers, which are reversing signals. Today they have been followed by a big bearish candlestick, a major bearish chart formation. This has convinced us to remain bearish on this pair. We booked profit on a sell forex signal but will sell again if AUD/USD retraces higher again.

 

In Conclusion

The US retail sales report was just released. It was a bit disappointing, just like the numbers we saw from Europe and China. Shain is covering the US retail sales now, but from the price action, I can see that the market is not really concerned about the US retail sales. The USD is picking up the pace, so we remain bullish on the Buck.

Forex Signals US Session Brief, May 14 – The Pullback Isn’t Over Yet for the USD

Posted on by Skerdian Meta

The US Dollar turned bullish a few weeks ago and it made quite the comeback. But last week, the time came for a decent pullback lower for the Buck. The retrace started on Wednesday and it continued until the end of the week. You might have thought that the USD bulls would return coming Monday, but the pullback is stretching further today.

The USD Is Still Retracing but It Might Be Over Soon

Last Wednesday, we saw major forex pairs make a doji candlestick on the daily chart. The US Dollar had been making some massive gains in previous weeks, but the doji signaled a possible reversal. That’s what these sorts of candlesticks do, they signal reversals.

There was a doji in EUR/USD, which we will look further below. There was also a doji in GBP/USD and AUD/USD. USD/CAD didn’t form a doji or other reversing candlesticks, but the situation has been a bit different on this pair since trump scrapped the Iran nuclear deal. Oil prices have been climbing higher after that and that has been the main reason for the reverse of this forex pair.

We can’t blame the reverse in other major pairs on other factors. It has been the USD retracing lower after a major bullish move in the previous weeks. AUD/USD has climbed around 150 pips during this time. The stochastic indicator is almost overbought and tomorrow it will surely be overbought when today’s candlestick closes.

The 20 SMA is also catching up with the price on the daily chart. Besides that, this pair is not making new highs today, so there is a chance that the pullback might be over, although it is not over until the old lady sings. The old lady sings when the USD starts reversing back up again. I have a feeling that the retrace will be over tomorrow. Most majors are almost overbought today and tomorrow they will surely be overbought on the daily chart, that’s why I expect a turnaround in the forex market soon.

Where Will EUR/USD Reverse, at 1.20, 1.21 or at 1.22?

As mentioned above, the Buck is retracing lower, which means that EUR/USD is making a pullback higher after a strong bearish move in the previous three weeks. But, this pullback might be coming to an end soon.

As you can see from the daily chart below, this forex pair made a doji on Wednesday last week and it started reversing higher at 1.1820s. Now, this pair is trading just below 1.20, which means a 180 pip climb over the past few days.

That would be enough for this retrace higher, but the stochastic indicator is not overbought yet. So, it will have to go on for a bit longer, according to the forex technical textbook. The problem with us as forex traders is to figure out where this pullback will end for EUR/USD.

We have three major levels winking at us from above. The first level comes at 1.20. This is a big round level and we are trading just below it at the moment. This could be the reversing level if we didn’t have the daily chart in front of us. But, the upside has some more room to run on the daily chart, so 1.20 might not be strong enough to reverse this pair back down.

Next comes 1.21. That level has provided resistance for this pair on the way up so it might do the same again now. By the time we get there if we do, stochastic will be overbought so a reverse up there makes sense.

Further up, we have a major support level at 1.22. This level was the bottom of the range which lasted for a few months so that’s the ultimate level for me. If EUR/USD climbs up there, I will definitely open a long term sell forex signal around there. But as we said, EUR/USD might make a turnaround lower, so we will follow the price action today and tomorrow.

The three amigos are ready for a fight

Trades in Sight

Bearish AUD/USD

  1. The bigger trend is still bearish
  2. The retrace up is complete
  3. Stochastic is almost overbought
  4. The 20 SMA has caught up now

The chart setup is looking increasingly bearish here

The retrace higher in AUD/USD seems almost complete. Stochastic is almost overbought and the 20 SMA (grey) has caught up with the price. Besides, the buyers don’t seem able to push higher today, so perhaps they are already exhausted. Therefore, this might be a good place to sell AUD/USD.

In Conclusion

The economic news of today are very light, so it is the market sentiment and the technicals which will drive the forex market around. In the evening, FED member Mester will be holding a speech and he might shake things up a bit for the Buck. That might be the event which actually ends the USD pullback, which my colleague Shain will cover, so stay tuned with us to see if he will move the markets.