Yesterday’s market wrap
Risk aversion sentiment captured traders’ attention yesterday as most risk assets plunged while the USD and JPY made sizable gains. Risky currencies such as commodity dollars plunged. Commodities, with the exception of crude oil which rebounded from the $100 area, also fell as fears of a recession in China continue to weigh. Cryptocurrencies continued to decline, with BTC trading below $30,000 and Ethereum below $2,000. Terra LUNA leads the decline, falling below $1 and heading towards $0.
CPI consumer inflation also jumped in China, although at 2.1% it remains at normal levels, while PPI producer inflation remains very high. In the US, CPI (Consumer Price Index) inflation figures beat expectations, showing an increase of 8.3% on an annual basis, which further helped the USD. UK data is mostly negative, weighing on the GBP.
The data agenda today
This morning, the final French CPI inflation figures for April will be an indication of Eurozone inflation to be released later in the month. In the US, the University of Michigan consumer sentiment report is expected to hold steady, which is a good thing with prices hitting record highs. But, risk sentiment will again be the main factor today, deciding that most markets will close before the weekend.
Forex Signals Update
Yesterday we continued the great run from the day before with 3 winning forex signals, as well as 2 signals in GOLD and MONEY which also closed in profit. Yesterday we opened 5 signals in total and all hit the profit target, giving up 150 pips of profit. We are therefore continuing the rebound, after the setback on cryptocurrencies during the crash at the start of the week.
Gold XAU – Sell Signal
Gold continues to tumble, despite negative risk sentiment in financial markets, driving down risky assets such as stock markets and cryptocurrencies. Gold should have been bullish as a safe haven but remains bearish and yesterday we decided to sell XAU/USD after the upper retracement faded to the 20 SMA (grey), which closed in profit.
Gold – 240 min chart
NZD/USD – Sell Signal
We continue to be seriously short of USD/USD which has been bearish for over a month and attempted reversals to the upside have all resulted in a reversal and a new low. Yesterday there was no back up as the Commodity Dollars continued to fall and we decided to sell this pair as the 20 SMA turned into resistance, taking profits lately .
NZD/USD – 60 minute chart
Cryptocurrencies also continue to remain heavily bearish, picking up selling pressure again this week. Terra LUNA leads the decline after crashing to $0.0020, while its stablecoin UST fell below $0.30 again yesterday. Panic continues in the crypto market, maintaining downward pressure.
Bitcoin forms a Doji
BTC/USD has been bearish since hitting a new all-time high last November and now the decline has resumed after several months of consolidation. The latest attempt to turn bullish ended at the 200 daily SMA (purple) in March and BTC fell below $30,000 after selling pressure escalated last week. Bitcoin broke below $30,000 but closed as a doji yesterday, which is a bullish signal. So let’s see if there will be a higher reversal.
Will the last support hold for Bitcoin?
Will Ethereum stop at the $1700 support?
ETHERUM also turned bearish in November and in the last attempt to turn bullish again in March, buyers failed at the 200 SMA (purple) on the daily chart. This month we’ve seen ETH/USD fall, but last year’s support at around $1,700 may hold, let’s see. If so, then we could be on Ethereum for a long time there.
ETH/USD – Daily Chart