Forex Signals Brief November 28: Will Consumer Confidence Weaken Further in US?
Yesterday most of the markets were pretty quiet, apart from the bonds market, which saw a sharp bearish reversal for US treasury yields. Overall, the USD remained the weakest of the major currencies at the end of the day once again, while the JPY was the strongest of the major currencies. Lower yields aided the USD’s weakening yesterday. Looking at the yield curve, us 10-year Treasury yields fell below 4.40%.
The economic data was limited to New Home Sales in the United States. However, that data point revealed weakness, echoing the previous week’s existing house sales and adding further to the weak data we have seen recently. Year-on-Year (YoY), new-home sales units totaled 0.679 million, far less than the 0.723 million projections and far less than the 0.719 million from last month, which was also reduced considerably lower from 0.759M. Mortgage rates have dropped, which may lead to a rebound next month (rates were near 8% for much of the last month).
On top of the decline in home sales, the supply of properties increased, causing prices to fall. The supply of new homes increased to 7.8 million last month, up from 7.2 months in the previous month, but the median sales price fell to $409,300, a -17.6% decrease from the same period a year ago, which shows that buyers are not buying new homes for now as interest rates remain at record levels, despite falling prices.
Today’s Market Expectations
Today starts with the retail sales report from Australia, which is expected to show a 0.1% increase last month. That is quite a slowdown from the 0.9% increase we saw in September. About an hour after the retail sales figures are released, we have the governor of the Reserve Bank of Australia hold a speech in a panel discussion titled “Inflation, Financial Stability and Employment” at the Hong Kong Monetary Authority and Bank for International Settlements High-Level Conference, in Hong Kong.
Later on, we have the Consumer confidence from the United States which has been progressively declining in the last quarter as the labor market has begun to deteriorate. In fact, unlike the University of Michigan Consumer Sentiment, which focuses on how consumers see their personal finances, Consumer Confidence focuses on how consumers perceive the labor market. The indicator is expected to decline to 101 points in November, down from 102.6 points in October.
Yesterday the volatility was low, with the USD remaining in retreat for most of the day. We saw an attempt from buyers to come back but it ended and the USD retreated again toward the end of the US session, so most assets traded in a range. We remained short on the USD and opened several trading signals, although just one of them closed in profit.
GOLD Feeling Comfortable Above $2,000
Gold prices rose significantly last month as a result of the Gaza conflict, breaking through the important $2,000 barrier, but economic uncertainty is keeping Gold in demand once more. Earlier this month, gold fell as geopolitical tensions in the Middle East eased. However, after last week’s poor US inflation numbers, gold buyers took command and attitude shifted. Buyers are cautious near the $2,000 level, following yet another drop after the barrier was breached yesterday. Even though the 20 SMA is still a support level, we elected to open a buy Gold signal at this level yesterday.
XAU/USD – 240 minute chart
- Gold Buy Signal
- Entry Price: $1,990.71
- Stop Loss: $1,976.71
- Take Profit: $1,998.71
EUR/USD Remains Supported by MAs
The Eurozone economy has deteriorated rapidly this year, and the ECB has become more dovish, but EUR/USD remains bullish. The picture in financial markets is becoming more mixed in the US session, as the dollar starts to fight back, despite weaker October new home sales. Earlier in the day, EUR/USD was pushing higher, but it appears to be finding it increasingly difficult to do so as we approach the 1.10 zone.
EUR/GBP – Daily chart
Cryptocurrency Update
Waiting to Buy BITCOIN at the 20 SMA
Last week, the cryptocurrency market remained volatile, with Bitcoin nearly reaching $35,000 after a drop and then nearly reaching $38,000 after a spike. We’re still waiting for an ETF to be announced. A more bullish cryptocurrency climate has continued to favor Bitcoin since the Securities and Exchange Commission approved a Bitcoin spot ETF. As a result, late last month, this cryptocurrency reached $35,000 before dipping and weakening. Buyers took the initiative and drove the price up to more than $36,000, losing little ground in the process. Buyers paused just below the previous month’s high of $38,000 and retreated downward, but buyers arrived precisely at the 50 SMA (yellow), showing that the trend is bullish.
BTC/USD – Daily chart
ETHEREUM Reetreating Below $2,000 Again
After a few encouraging developments for the digital market, Ethereum gained more than $300 and surged above $1,800 thanks to the bullish sentiment in the cryptocurrency market. It’s great that the zone around $1,700 turned into support, and it appears that the 50 SMA (yellow) has done the same. Earlier this month, the price of ETH/USD broke above $2,000, signaling that buyers are in control and that we should have taken profits on our prior Ethereum signal. However, given that the 20 SMA is serving as support, we choose to open another ETH signal following the lower retreat of last week.
Ethereum – Daily minute Chart
- ETH Buy Signal
- Entry Price: $1,947.38
- Stop Loss: $1,490
- Take Profit: $2,500
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