Last week’s shopping package
Last week was supposed to be quiet, after the last major events for 2022 took place in the previous two weeks, with the US consumer inflation report and rate hikes from several central banks, which ultimately left markets uncertain. However, we were wrong as the volatility seems to continue until the end of 2022, which has changed the markets, but ultimately, everything is still uncertain.
It started with the Bank of Japan keeping interest rates unchanged, but the JPY rose 7 cents after announcing a surprise shift in yield curve control policy and bond purchases to 9 trillion yen per month from 7.3 trillion yen. On Thursday, the US final Q3 GDP number improved from 2.9% to 3.2%, which lifted the US dollar on the idea that the Fed will continue to raise rates in 2023. A price index that has shown a downward trend.
Today’s market expectations
This week should be slow as we’re in between Christmas and New Years, but something might happen after last week. Liquidity will definitely be low, meaning small events can make big moves, so be careful. Monday and Tuesday are mostly off, although Asian markets are open, we have US home sales pending on Wednesday, while unemployment questions are on schedule for Thursday, and the Chicago PMI 2022 closes on Friday.
Sentiment in financial markets this week was uncertain with lower price action. We have had to adapt to market conditions so we have changed direction several times in forex, but we have stayed long in gold even though it has retreated below $1,800. GBP on the other hand turned bearish, so we went short on this pair.
Turnign Bearish on GBP/USD
GBP/USD has improved since late September when the Bank of England’s intervention in financial markets improved and the pair has risen more than 30 cents since then. Although the sentiment turned negative for this pair as the UK economy went into recession, we moved bearish and found two GBP/USD signals last week.
GBP/USD – 240 minute chart
The rest of the bullying Gold
Gold has also been bearish in recent months as sentiment has turned positive. Moving averages such as the 100 SMA (green) have turned into support and are holding a retracement period to push higher lows. We have been buying reversals against moving averages and currently hold a buy gold signal.
XAU/USD – 240 minute chart
Crypto currency update
Uncertainty in the financial markets continued last week as evidenced by the slow price action in the crypto market. Cryptocurrencies have been trading in a very tight range, although we are heading towards the end of the year and volatility has decreased, so this week is expected to be quieter.
Bitcoin It moves to the side.
Bitcoin halted last week’s decline above $18,300 following a rate hike by central banks last week. The price traded in a narrow range last week as uncertainty continued and the risk sentiment was on and off. We have an open BTC/USD signal so we will be a bit aggressive.
BTC/USD – 240 minute chart
ETHEREUM Over $1,200 withdrawal
Earlier this month, Ethereum rose above $1,300, but as Bitcoin has moved, it has fallen to $1,100. It managed to break above $1200 again but the 200 SMA (purple) remains as resistance above. So until buyers push the price above it, ETH/USD will remain weak.
