Forex Signals Brief May 27: US Q1 GDP Revised Down, Oil Remains Bullish

Yesterday’s market wrap

European markets were closed for a bank holiday weekend yesterday, while in the US session the preliminary US GDP report for the first quarter was released. It was expected to show a slight increase from -1.4% to -1.3%, but was revised down to -1.5%. Considering Q2 will be another tough quarter with the possibility of another contraction, that would mean an official US recession.

Despite this, crude oil remained bullish, after OPEC+ decided to keep production unchanged. They enjoy higher prices, especially in Russia, and that’s what it was all about. So the West is paying for it. WE WTI jumped over $3, heading towards $115, showing that oil sentiment remains bullish after all the headwinds, even with Chinese lockdowns.

The data agenda today

The USD’s recent pullback seems to have stalled and the market is unsure what to do now, as rate hikes are not helping to reduce inflation. However, the direction in which the market closes for the weekend will show which way the market is leaning.

Today in the Asian session we have Tokyo CPI core inflation expected at 2.0%, while Australian retail sales are expected to remain positive for March, albeit in April and may the pain come. In the US, we have the PCE core price index, while later US personal income is expected to remain flat, while personal spending is expected to calm down in April.

We had a series of winning signals for several days, despite the reversal of the USD, with trades in different markets. Yesterday we opened four forex signals, two of which reached a stop loss as the markets remained irrational. Although we will come back to it today and make amends for those losses.

S&P500 – Buy signal

EUR/GBP rose last week, as the Euro started to rise more than the GBP, but eventually the buying pressure ended and this pair was slowly pulling back. We decided to open a sell signal after the price formed a doji candlestick on the H1 chart at the 50 SMA (yellow), which acted as support for a while. We saw a bounce off this moving average and price approached our TP target, but this pair suddenly reversed lower, although the 200 SMA (purple) held support.

S&p500 – Daily Chart

USD/JPY – Sell signal

USD/JPY has been bullish for two years, but in the last two months it has picked up an incredible pace as it surged above 131. Although earlier this month this pair started to pull back when the USD started to weaken and the moving averages turned into resistance. We decided to open a sell signal at the 20 SMA after forming a doji candlestick, but buyers eventually pushed above this moving average.

Gold XAU – Daily Chart

Cryptocurrency update

Cryptocurrencies have been bearish for the past few weeks, but over the past two weeks the crypto market has been consolidating, trading sideways. Bitcoin traded around the $30,000 level for most of the week while ETHERUM consolidated around $2,000. Neither sellers nor buyers have the courage to take the situation into their own hands, so we are just monitoring for now.

Will last summer’s low hold FTM/USD?

The Fantom crypto was showing strong bullish pressure until mid-January, when it retested previous highs below $3.50. But ultimately, the negative sentiment in the crypto market and the Wonderland controversy brought this cryptocurrency down.

Then two of the most prominent staff left the ghost team like Andre Cronje who is a prolific developer and Anton Nell a senior solutions architect weighed down FTM/USD sending it below $1 first, then at $0.25. Although Cronje may return to Fantom after some rumors we’ve heard, it would be great news for FTM. The daily 20 SMA (grey) rejected price on Monday, but we see if last summer’s support at around $0.15 will hold.

FTM/USD – Daily Chart

Buy Thorchain RUNE here?

The Thorchain RUNE token hit lower highs since May last year, when it peaked above $20, while the second high in November last year was $17.60. The third high came after recent upgrades from Thorchain, which sent RUNE/USD above $13.

We missed this great opportunity, especially after the pullback below $3, although now the price is back above this support level. So we are considering buying this cryptocurrency. TradingView Chart

The area around $3 is a great place to buy Thorchain RUNE

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