Yesterday’s shopping package
Yesterday was one of those summer days, liquidity is thin and volatility is very low. It was a quiet day overall, with the economic calendar fairly light, except for preliminary unit labor costs for Q2, which were very high. We’ve seen some bearish action on crude oil as uncertainty surrounding Iran’s exports and the shutdown of the southern oil pipeline from Russia to Eastern Europe has closed.
Most other markets were trading cautiously as we approach today’s US CPI (Consumer Price Index) inflation report. Consequently, stock markets retreated slightly, while major forex pairs traded in a narrow range.
Today’s information agenda
Today’s economic cycle begins with inflation in China and Japan. While PPI (Producer Price Index) is high, CPI inflation is still under control in that part of the world. We’ll have a big US CPI inflation report later, which is expected to show some coolness, which will be negative for the USD as it means slower rate hikes from the FED.
Uncertainty continued yesterday ahead of US CPI inflation measures and most assets continued to fluctuate as traders positioned themselves. We opened a total of six signals, closed the day with three winning and three losing signals, but two of the winning forex signals were long trades, tipping the balance on the positive side.
USD/JPY – Buy a signal
USD/JPY has been extremely bullish since March this year, although in mid-July the pair began to reverse downwards and the pair fell to 9 cents. However, the pullback ended earlier this month and USD/JPY has been bullish again since then. Yesterday we opened a buy forex signal on the 50 SMA as it held the price.
USD/JPY – 60 minute chart
WTI Oil – sales signs
We opened two sell signals in crude oil yesterday as the underlying trend is still very weak and the global economy is headed for recession. We continue to open sell oil signals as they move to higher moving averages. Yesterday we sold WTI Oil at the 100 SMA (green), took profits at the 50 SMA (yellow) and repeated the trade as buyers were below the 200 SMA (purple).
WTI Crude Oil – 60 minute chart
Crypto currency update
Cryptocurrencies have been on a bullish trend for about two months, but yesterday we saw a sudden bearish reversal which sent Bitcoin (BTC) down $1,600, as it fell below $23,000. The reason for that is the looming US inflation report, which sent risk assets such as tech stocks and cryptocurrencies slightly lower.
Buy the recovery in ETHEREUM
Ethereum pushed above the main support and resistance level at $ 1,700, which was a strong bullish sign, beyond the fact that this cryptocurrency has doubled in price since mid-June. But yesterday we saw a reversal which is a good opportunity to go long, so we opened a buy Ethereum signal above the moving averages as the decline stopped.
ETH/USD – Daily Chart
to buy [[THORChain]]Rune after the break of the 100 SMA
THORChain went through a good crash earlier this year, but in March we saw an equally good crash. The bear momentum continued and the RUNE coin dropped to $2.40. Although it is pushing higher and after recent corrections and break of 100 SMA we decided to open buy.
RUNE/USD – Daily chart