Forex Signals Brief December 5: Powell Watching ISM Services and Jolts Jobs Closely Today
The emphasis yesterday was risk aversion, after several weeks of positive sentiment in financial markets, which probably came after the pump-and-dump in Gold. Everything that was making gains last month reversed, including stock markets. XAU/USD skyrocketed to around $2,145 before stalling and plummeting more than $120 from the top.
Bond yields also reversed and US 10-year Treasuries gained around 10 points which aided the USD, as the market gave a reconsideration of the aggressive FED easing for next year which has already been priced in. EUR/USD resumed the decline from last week and reached 1.08 lows.
USD/JPY also continued to fall to an eight-week low, as risk sentiment remained negative, but then rebounded higher in turbulent activity. AUD/USD declined nearly 90 pips as commodity dollars lost all of their Friday gains, owing in part to an intensifying trade battle between the United States and China. Regarding the economic data, inflation continued to slow in Switzerland, while US facoru=y orders posted a decent decline, although that should be undone in the coming months.
Today’s Market Expectations
Today started with the CPI (consumer price index) inflation report from Japan, which showed a cool-off from 2.7% to 2.3%, beating expectations of 2.4%, which was also bigger than the jump the previous month. The Reserve Bank of Australia came next, which was anticipated to keep rates unchanged at 4.35% after raising it by 25bos last month. The RBA has sounded hawkish recently but they kept rates on hold this time with the economic data weighing toward weakness, with PMIs falling further into contraction.
Later we will have some important employment reports from the US, with the ISM Services predicted to rise to 52.0 points from 51.8 points in the previous meeting. The Services PMI exceeded expectations last week, but companies reduced their workforce for the first time since June 2020, affecting both service providers and goods producers, so we’ll see how the ISM numbers come out.
The JOLTS job opening will also be released today, with the number of job openings predicted to soften to 9.350 million from 9.553 in November million in October. The labor market has been softening recently, and despite the volatility in Job Openings, the trend seems to be down. This will be the first significant US labor market report of the week, which might induce some volatility.
Yesterday the forex market made some decent moves, but it was a one-way traffic as all currencies fell against the USD, so it was easy for us to gues the direction and pick some nice trades in FX majors. We ended up with four winning forex signals, although we had two losing Gold signals, as we tried to buy XAU during the retreat after the surge, with the idea that the bullish momentum would resume asit has done many times in the last two months.
GOLD Breaking the All-Time Highs
Gold rose to a new record high around $21,45 early yesterday, aided by Powell’s remarks on Friday, which traders perceived as setting the way for a rate decrease, prompting a drop in the US dollar and Treasury yields. However, Gold prices fell from their new highs yesterday, indicating that the market’s aggressive pricing of US Federal Reserve rate cuts may have gone too far. but the decline stopped right at the 200 SMA (purple) and started a slow rebound, although it doesn’t look too promising.
XAU/USD – 240 minute chart
- Gold Buy Signal
- Entry Price: $2,022.33
- Stop Loss: $2,008.33
- Take Profit: $2,040.33
MAs Keeping USD/CAD Bearish
USD/JPY was bullish for several months. The JPY fell as the Bank of Japan held interest rates steady while other major central banks increased them, but it reversed last month as the FED went softer. The Japanese yen (JPY) continued to rise against the US dollar (USD), aided by rising expectations of a policy shift from the Bank of Japan (BoJ), but yesterday we saw a reversal and this pair gained around 120 pips from the bottom. But the climb stopped at the 20 SMA (gray), where we decided to open a long term sell USD/JPY signals, following two short term sell signals which closed in profit yesterday.
USD/JPY – 240 minute chart
Cryptocurrency Update
BITCOIN Breaks Above the $42,000 Level
The crypto market and bitcoin are becoming increasingly popular as risk trades increase and interest rates are expected to fall. The sector appears to have cleaned itself up following the Binance fines and the FTX catastrophe. Bitcoin rose more last week, reaching $39,577. The development of a US ETF, which looks to be a foregone conclusion, is the primary driver for bitcoin bulls. All indications are that it will be permitted, with the only stumbling block being the timing, which might come as early as the first week of January. Buyers returned over the weekend, bringing the price past $42,000.
BTC/USD – 240 minute chart
ETHEREUM Continues to Make Higher Highs
Ethereum – 240 minute chart
- ETH Buy Signal
- Entry Price: $1,947.38
- Stop Loss: $1,490
- Take Profit: $2,500
Broker | Website | |
---|---|---|
🥇 | ![]() | Visit Broker |
🥈 | ![]() | Visit Broker |
🥉 | ![]() | Visit Broker |
4 | ![]() | Visit Broker |
5 | ![]() | Visit Broker |
6 | ![]() | Visit Broker |
7 | ![]() | Visit Broker |
![](https://d1nsb2kebuy3pr.cloudfront.net/wp-content/themes/fxmlnew/assets/images/subscribe-icon.png)