Last week’s shopping package
Last week, central banks began to reduce the rate of interest, as in recent weeks. The US mid-term congressional elections took place, which helped to improve the mood, although still inconclusive. Chinese authorities have signaled the opposite as they closed down Guangzhou, commenting on the re-opening and bringing in and ending of the Covid-19 policy, although they should be fully reopened soon.
On the other hand, US consumer inflation CPI eased to 7.8% from 8.0% in September, further fueling optimism in financial markets and raising risk assets. On the other hand, the US dollar has broken down and remains weak, so we will see price action continue this week.
This week’s market expectations
The main theme this week will again be risk sentiment, which is negatively correlated with USD sentiment. The buck fell lower last week, so we’ll see the positive risk sentiment continue this week, which also has to do with China’s reopening. Although, we do have some inflation reports on schedule, starting with the US producer inflation PPI on Tuesday, which will be an indicator of consumer inflation CPI for the coming months, although a large part of the CPI is due to hikes by major multinational corporations. Prices. Then, the UK CPI report scheduled for Wednesday is expected to show a further increase to 10.5% in October, and Canadian inflation is scheduled for Thursday.
It’s been a tough week for traders, as volatility soared, the US dollar weakened, and risk assets including gold and the JPY rose. We have opened 2 trades in total, in forex, commodities like gold, as well as cryptocurrencies. We close this week at Breakeven with 11 wins and 11 losses; This makes it a very difficult week for us.
The 200 SMA determines the trend Euro/Dollar
EUR/USD has been weak for more than a year, falling below parity in August which was a major event. The 50 SMA (yellow) was doing a good job of providing resistance for this pair, but this average was broken and turned into support. Last week, the price closed exactly at the 200 daily SMA (purple), which will be a decisive factor in the main bearish trend.
EUR/USD – Daily Chart
Long retention. Gold
Gold rose to $1,771 from last week’s close of $1,615. The 100 SMA (green), which had been serving as resistance since June, was broken without much difficulty and immediately turned into support. The 100 SMA (green) has also been broken, but now buyers face the 200 daily SMA (purple) above.
XAU/USD – Daily Chart
Crypto currency update
Cryptocurrencies were enjoying a good bullish run but it ended in a crash and the FTX exchange was forced to sell, in what appears to be another attack from a financial institution on the crypto market. FTX sold to Binance, FTX token FTT falls below $2. That crash put us on the wrong side of being long on a few crypto coins, so hopefully we’ll make up for it this week, but we’ve had a bad week here.
Holding the 20 SMABitcoin Down
Bitcoin was finally showing pressure above $20,000 until the FTX dram hit markets, sending BTC crashing to around $15,600. We saw a reversal at the end of last week, but the 20 SMA (gray) turned into resistance and stopped climbing and is pushing BTC lower, so sellers are in control.
BTC/USD – H4 chart
The 200 SMA is still holding ETHEREUM Down
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. Although we saw a reversal yesterday that pushed ETH above $1,300, sellers are back and still pushing the price.