Forex Signals Brief November 29: Attention on US Q3 GDP and European Inflation Today
The economic calendar was light yesterday again, with the US CB Consumer Confidence being the main event for the day. The numbers were mixed, with a big revision lower for last month and a decent jump this month. Oil was in the spotlight once again and it initially fell on comments saying that OPEC was struggling to find consensus and the meeting could be delayed again.
However, later in the US session, we saw a comeback and crude Oil finished the day more than $1.50 higher, reaching a high of $77, where we decided to open a sell Oil signal. We continue to await any real news around OPEC+ but the disputes seem to be centered around African production, which could hardly be a deal-breaker. CAD was boosted by the bullish reversal in Oil and the softer USD, and USD/CAD hit a 2-month high.
The USD was the weakest currency after resuming the decline following the comments by FED’s Chris Waller who is a hawk usually, stating there are “good arguments that if inflation continues to fall for several months, it would be feasible to lower the interest rate.” This was the first time a FED official has mentioned rate cuts. Treasury yields fell, dragging the USD down. while EUR/USD broke above 1.1000.
Today’s Market Expectations
Today starts with the Australian Monthly CPI is predicted to dip to 5.2% from 5.6% previously. Following higher-than-expected CPI figures, the RBA raised the cash rate by 25 basis points at its most recent meeting. The latest hardline RBA Meeting Minutes and statements from RBA Governor Bullock show that the central bank is losing patience in the face of persistent inflation. The RBA will not be pleased with a higher-than-expected release.
The RBNZ is widely likely to maintain the OCR at 5.50%, despite the fact that the central bank stated that, notwithstanding some near-term volatility in the statistics, inflation is expected to fall to the target zone by the second half of 2024. New Zealand’s economic statistics has been clearly dismal, with PMIs in contraction and the jobless rate continuously climbing.
Today we got the CPI (consumer price index) inflation reports for Spain and Germany for this month, with German consumer inflation projected to be lower, while Spanish CPI is expected to rise to 3.6% from 3.5% earlier. Later on, we have the second reading of the GDP report for Q3 from the US, which is expected to tick higher to 5.0% from 4.9%, although with little impact on the USD.
Yesterday the volatility picked up as the fovish comments from the FED accelerated the USD decline. Most risk assets pushed higher as sentiment improved, with commodity dollars making decent gains. We remained short on the USD, and opened 7 trading signals, including a long-term Bitcoin signal, four of which closed in profit, while the AUD/USD signals closed in loss.
GOLD Heading Toward the All-Time High
Gold prices climbed sharply last month as a result of the Gaza conflict, breaking through the crucial $2,000 barrier, but economic uncertainty is keeping gold in demand once more. Gold dipped earlier this month as geopolitical tensions in the Middle East lessened. However, following last week’s disappointing US inflation figures, gold purchasers took command and attitudes shifted. Buyers remain wary near the $2,000 level, as the barrier was breached again yesterday. Despite the fact that the 20 SMA remains a support level, we chose to open a buy Gold signal at this level yesterday.
XAU/USD – 240 minute chart
- Gold Buy Signal
- Entry Price: $2,030.71
- Stop Loss: $1,990.71
- Take Profit: $2.040.71
AUD/USD Breaks Above All MAs
The trend in AUD/USD appears to have shifted, as moving averages that were previously acting as support on the daily chart have now turned into resistance. The latest one to do so was the 100 SMA (green), and yesterday we saw a break over the 200 daily SMA (purple) as buyers pushed the price above the 0.60 level. We opened a buy AUD/USD signal yesterday after the 200 SMA was broken. We saw the Australian retail sales report earlier today, which was expected to show a drop from 0.9% in September to 0.1% in October.
AUD/USD – Daily chart
Cryptocurrency Update
BITCOIN Above $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 Bouncing Off the 20 SMA
Because of the bullish atmosphere in the cryptocurrency market, Ethereum gained more than $300 and went above $1,800 after a few encouraging news for the digital market. It’s fantastic that the $1,700 support zone has turned into resistance, and it appears that the 50 SMA (yellow) has done the same. ETH/USD broke above $2,000 earlier this month, showing that buyers are in charge and that we should have taken profits on our previous Ethereum signal. However, considering that the 20 SMA is acting as support, we decided to open another ETH signal following 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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