Yesterday’s market wrap
Sentiment turned slightly bullish for the USD after Wednesday night’s FOMC minutes, as they did not include any hawkish commentary, raising the odds of a rate hike by 0.50%. The Fed’s Bullard even commented on another 75 basis point hike yesterday. The day started with Australian employment reports, which showed a 0.1% drop in the unemployment rate, although the number of jobs fell.
Eurozone CPI (consumer price index) inflation was unchanged at 8.9%, while the Philadelphia manufacturing index recovered and rose 6 points. This came after the Empire State’s manufacturing index showed another contraction earlier this week, giving mixed signals about the US economy. On top of that, the FED is happy to get a bonus as prices start to calm down, but they’re not running away, like the comments from George from the FED, who said the inflation figure for the last month is encouraging but not the time for a round victory. Thus, the markets remained mixed.
The data agenda today
Today started with the UK’s GfK Consumer Confidence which showed the UK consumer remains in a difficult position as wages are rising at a slower pace than inflation, which has jumped above 10% last month. UK retail sales also remained negative in July. Later in the afternoon we also have Canadian retail sales on the agenda.
The positive performance of our forex signals continued yesterday after four trading signals opened, all of which closed in profit. We opened three forex signals and one gold trading signal, mostly buying the USD against these assets, as the USD had a slight advantage over the previous days following the FOMC minutes.
GOLD – Sell signal
We sold gold as the price remained bearish for most of this week and yesterday we decided to open another gold sell signal. The price retraced higher to the 50 SMA (yellow) on the daily chart which acted as resistance, and after the reversed hammer candlestick, we decided to open a sell signal, which eventually closed in profit when the decline resumed.
Gold XAU – 60 Minute Chart
The situation is similar on the AUD/USD, with the 50 SMA (yellow) moving from support to resistance on the H1 chart. This pair pushed below the 0.70 level on Wednesday, and yesterday we decided to open a sell signal at the 50 SMA on the H1 chart, after the upper retracement.
AUD/USD – Chart S1
Cryptocurrencies remained bullish over the past week as they continued to push higher highs. Ethereum surged above $2,000 while Bitcoin surged above $25,000. In recent days we have seen a small pullback, but it seems small and we are about to buy cryptocurrencies again,
Bitcoin Removal of the 100 SMA
Bitcoin has been bullish since mid-June as sentiment continues to improve in the crypto market. The uptrend has been in waves and we are currently on a pullback wave after the price was rejected by the 100 SMA (green). We are already long on BTC/USD and hope the retreat ends at the bottom of the ascending channel.
BTC/USD chart – H4
Will the 20 SMA hold for ETHERUM?
Ethereum remains one of the most bullish cryptocurrencies, despite the occasional pullback on the downside. Ethereum bulls pushed the price above $2,000 last week, although we saw some pullback over the weekend. We are following the price action to see where we can buy this digital coin, either at the 50 SMA (yellow) or the 100 SMA (green).
ETH/USD – Daily Chart