Forex Signals Brief November 30: The FED Observing the PCE Price Index Inflation Today
Yesterday started with CPI inflation figures from Australia, which declined more than expected, although they didn’t have much impact on the AUD, which increased as the USD continued to decline during the first two trading sessions. The market continues to price in more FED rate cuts in 2024, and is currently priced at 118 basis points (bps) until the end of the year, up from 100 bps on Tuesday.
Declining German CPI inflation, dovish Fed comments, and dovish Beige Book commentary continued to put pressure on the USD which slipped lower and risk assets higher. Traders are in favour of the prospect of a soft landing in which inflation returns to 2% and the FED starts the cutting cycle.
EUR/USD was showing some weakness and retreated below 1.10 after the softer German and Spanish CPI consumer inflation figures, while the NZD showed resilience once again after some hawkish remarks by the Reserve Bank of New Zealand, which left interest rates unchanged at 5.50%. The US prelim GDP reading for Q3 was revised higher to 5.2% which helped stop the USD retreat in the US session.
Today’s Market Expectations
Today starts with the manufacturing and services PMI reading from China. Anticipations are for an improvement in November, with services expected to move away from costagnation and anufacturing activity might leave behind contraction, which would be welcomed by risk assets such as stock indices and commodity currencies.
In the European session we have the Eurozone inflation report which is predicted to how another slowdown with expectatiuons for a tick lower to 2.8% from 2.9% previously for the headline number, while core inflation is expected to fall to 3.9% from 4.2% previously. The ECB has been trying to sound balanced, but traders know that even if the report exceeds expectations which is unlikely, it won’t spark a rate hike while the unemployment rate is expecteed to remain stable at 6.5%.
Later in the US session we have the US PCE price index which is predicted to dip to 3.1% YoY from 3.4% previously, while the MoM number is expected to slow to 0.1% from 0.4% before. The FED’s favourite inflation metric, Core PCE YoY, is forecast to dip to 3.5% from 3.7% before, while the MoM number is expected to decline to 0.2% from 0.3% previously. Unemployment claims are expected to show a 10k jump for last week, moving to 219k from 209K previousy but the market is unlikely to react significantly to this news.
Yesterday the volatility wasn’t as high, as the USD continued sliding lower slowly earlier in the day while making a slight comeback in the US session, although the trading range didn’t spread much. We opened many trading signals during the day, but only three forex signals closed, two were winning forex signals, one of which was a long term Oil signal.
GOLD Holding the Gains Well
Gold continues to remain in demand, with the price heading toward the all-time high. Geopolitical troubles and economic instability has kept XAU/USD in demand for two months now. Buyers are in total control again, after having broken the major level at $2,000 and are protecting the gains fiercly. Yesterday most other assets retreated somewhat against the USD, but Gold remained near the highs.
XAU/USD – 240 minute chart
- Gold Buy Signal
- Entry Price: $2,030.71
- Stop Loss: $1,990.71
- Take Profit: $2.040.71
EUR/USD Remains Supported by MAs
Recently EUR/USD has turned bullish. Buyers were battling to keep the bullish momentum going as we got close to the 1.10 zone, but they ultimately broke over that significant mark this week and are now in command. Yesterday we saw a pullback in this forex pair after the softer CPI inflation figures from German and Spain which are an indication for a softer Eurozone number today. Although moving averages are keeping EUR/USD bullish.
EUR/USD Daily Chart
Cryptocurrency Update
BITCOIN Trades in a Tight Range $38,000 Again
The cryptocurrency market remains volatile, although the pressure remains on the upside, with Bitcoin testing the recent highs after climbing above $38,000. Moving averages have turned into support, particularly the 20 SMA (gray) on the daily chart, which shows that the buying pressure remains low. We saw a retreat on Monday with the price falling below $37,000 where we decided to open a buy BTC signal and yesterday Bitcoin bounced more than $1,000 higher, so the price is approaching our take profit target.
BTC/USD – Daily chart
ETHEREUM Continues to Make Higher Lows
Because of the bullish sentiment in the cryptocurrency market, Ethereum surged more than $300 and surpassed $1,800 following some positive news for the digital market. It’s amazing that the $1,700 support zone has turned into resistance, and the 50 SMA (yellow) appears to have done the same. ETH/USD broke beyond $2,000 earlier this month, indicating that buyers are in control and that we should have profited on our previous Ethereum tip. However, because the 20 SMA is functioning as support, we decided to open another ETH signal in response to last week’s downward retreat.
Ethereum – Daily Chart
- ETH Buy Signal
- Entry Price: $1,947.38
- Stop Loss: $1,490
- Take Profit: $2,500
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