Yesterday’s Market Wrap
Yesterday was pretty quiet, with markets remaining closed for Boxing Day, which means that volatility was very low. The liquidity is low and will continue to be like this until Tuesday next week as the holiday period is underway, although there is always the possibility of a large spike, particularly in the crypto market in case of a decent-sized transaction. That didn’t happen yesterday but the risk is there and we have all our trading signals set with stop loss and take profit targets.
Today’s Market Expectations
Today is expected to be slow again, as the economic calendar remains light and some countries such as the UK and Canada are still on a bank holiday weekend. Earlier this morning we had the retail sales from Japan, showing a slight slowdown on an annualized basis from last month, while core consumer inflation CPI (consumer price index) ticked higher to 3.8% and has been slowly increasing since the assassination of the last Japanese prime minister Shinzo Abe. In the US session, we have some light data on the calendar, such as US Prelim Wholesale Inventories and HPI house inflation, but nothing to move the markets.
Yesterday markets continued to be very quiet, which kept most forex pairs and other assets trading in a tight range. We have several trading signals open, two of which we opened yesterday despite the lack of price action in the financial markets, although the activity might pick up today to some degree.
Buying EUR/USD
EUR/USD stopped declining at the end of Septembe after intervention from different financial authorities around the globe and in October it turned bullish. Moving averages have been acting as support on the daily chart, particularly the 20 SMA (greay) and we decided to open a buy EUR/USD signal yesterday despite being pretty quiet.
EUR/USD – Daily chart
MAs Still Holding GOLD Bullish
The USD turned bullish yesterday after the GDP report, which is a rare market move for the reading on the GDP. The idea is that higher GDP figures raise the odds that the Fed will follow through on rate hikes and raise the terminal top rate.
Gold fell below $1,800 again, after making a swift reversal down from $1,820 where it was trading before the US GDP report. We were thinking about buying Gold at $1,800 after the recent surge, but we waited until it reached the 100 SMA (green) lower, which has acted as support before on the H4 chart, as shown in the image above.
XAU/USD – Daily minute chart
Cryptocurrency Update
Cryptocurrencies stopped declining earlier this week after turning bearish last week as the risk sentiment turned negative in financial markets. But, the decline resumed after the US GDP revision yesterday so at the moment they remain bearish.
BITCOIN Remains Below the 200 SMA
Bitcoin has resumed the decline after climbing above $18,300 early last week, following the soft US consumer inflation report but reversed back down later after rate hikes from central banks and fell to $16,000 lows until Tuesday evening. We saw a quick reversal after that but buyers failed to push the price above the 200 SMA (purple) early yesterday, which rejected the price.
BTC/USD – 60 minute chart
The 200 SMA Rejects ETHEREUM
Ethereum had formed a resistance zone around $1,300 for about a month until earlier last week when buyers gave a decisive push, sending the price above that area. But, sellers returned again as the sentiment turned negative in financial markets and pushed ETH/USD below moving averages. Now the 200 SMA (purple) has turned into resistance for Ethereum.
