Yesterday’s shopping package
The US dollar has been showing weakness recently as central banks begin to cut rates and risk sentiment improves, using riskier assets. Although the US dollar bounced back ahead of the US CPI (Consumer Price Index) report yesterday in the European session, shaking markets.
Traders enter the inflation report with a binary “one or the other” mentality. If the numbers are strong, the US dollar will rise because the FED will be dovish, while stocks and commodities will fall. But the CPI number was weaker than expected at 7.7% compared to the expected 8.0%, down from 8.2% previously. So the US dollar fell, as expected, while all other assets rose.
Today’s market expectations
Today, the United Kingdom’s GDP report was released earlier in September, showing another month of contraction, indicating that the UK economy is heading into recession after a contraction in August. Q3 GDP numbers have also come in negative, confirming the recessionary scenario. Later, EU economic forecasts will be seen in the US session ahead of UoM consumer sentiment is also expected to cool.
Yesterday was a tough day for traders as the USD CPI saw a sudden rise in most assets, while the US dollar fell. We opened two buy signals as the US dollar advanced during the European session, but quickly reversed and fell lower, so we ended the day with two winners and three losers.
200 SMA turns into resistance. USD/JPY
USD/JPY is in its strongest bullish trend this year as the Fed continues to raise interest rates sharply and the Bank of Japan keeps everything on hold to keep inflation under control. However, after the BOJ intervention, we have been seeing higher prices decline and yesterday we saw a major risk that sent the pair from 146.60 to 140.20, which is our long-term buy signal with a stop loss.
USD/JPY – 240 minute chart
Holding the spike Gold one more time
Last week, gold turned higher on Thursday and rose to $1,680 on Friday, but buyers were hesitant to find support earlier. Gold rose above $1,700 despite seeing a big rally on Friday. After a slight pullback and profit booking yesterday after the US CPI report, we decided to open a long-term buy signal.
XAU/USD – 15 minute chart
Crypto currency update
A good bullish run in the crypto market ended in a crash and FTX was forced to sell. FTX stopped cashing and was sold to Binance, FTX token FTT fell below $2. After the crash stopped, we decided to open a buy signal on Ethereum on Tuesday night, but yesterday it continued again, so cryptocurrencies remain weak.
ETHEREUM Trying to make a quick change?
After Elon Musk bought Twitter, sentiment in the crypto market remained positive, making higher lows and pushing above $1,660. Although the 200 SMA (purple) held as resistance and yesterday we saw a sudden reversal, which initially stopped at $1,430, but then resumed and pushed ETH/UD to $1,070. Yesterday though, we saw a reversal that pushed ETH above $1,300.
ETH/USD – Daily Chart
can Bitcoin Did you beat the 20 SMA?
Bitcoin was trading furiously above and below $20,000 for a few months but the range was broken as buyers took over but the FTX event sent cryptos crashing and Bitcoin fell to $15,500. Although it got around $2,000 yesterday, it is facing the 20 SMA (gray) on the H4 chart.