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Yesterday’s Market Wrap
Volatility resumed in financial markets yesterday after a two-day lull. Crude oil continued the decline and ended the second bearish leg by falling to $101.60 after consolidating below $110 for two days. However, this time we saw a quick bounce to $107.20, which was the support zone after last Friday’s crash. A drone attack on a Russian oil refinery could have been the catalyst for both sides, but in the end STI closed the day at around $104.
Yesterday, CPI inflation reports from the UK and Canada showed another rise for May, raising the Bank of Canada and Bank of England’s chances of increasing the pace of rate hikes, although this will do nothing, rather than slowing their respective economies and likely to send them into a recession. Fed Chair Jerome Powell confirmed yesterday that he has left the door open both ways by not pushing for more sharp rate hikes this year, sending the USD lower.
The data agenda today
Today, Fed Chair Jerome Powell will testify on Day 2 of the US Congress and we will hear if he has any further comments to clarify the future of Fed policy, particularly interest rates. His comments hurt the Fed yesterday and will likely decide the fate of the USD and set the risk tone in financial markets for the next few weeks.
The PMI service reports were released early this morning with the Australian and Japanese service numbers to continue with the UK and Eurozone and end with the US service reports. We’ll see if higher prices have hurt consumers of services around the globe, which would complicate the situation for central banks.
Yesterday we continued the positive run with trading signals after posting profits on multiple signals on Tuesday. Yesterday we had four winning signals in forexgold and cryptocurrencieswhile we were caught on the wrong side of NZD/USD after the jump following Powell’s comments.
GOLD – Buy signal
Gold has been in a downtrend since March, but yesterday we decided to try the uptrend after jumping on Powell’s comments. The risk in the financial markets is quite high, especially as the likelihood of a global recession has increased in the coming quarters due to central bank rate hikes and rising prices. But during yesterday’s jump, we decided to open a buy signal, which closed in profit rather quickly.
XAU/USD – H1 chart
USD/JPY – Buy signal
We have long been bullish on USD/JPY and remain so as sentiment remains dovish on the JPY, which is driving the pair higher. Earlier this week we saw new highs as the price approached 137 and yesterday we decided to open another buy signal which closed in profit as this pair bounced off the 50 SMA (yellow) on the H4 chart.
USD/JPY 60 minute chart
Cryptocurrencies turned higher on Sunday after crashing late last week, retesting the upside but without much success. The last two days closed as dojis in most major cryptocoins that are reversal signals and yesterday we saw a small bearish move. So maybe they will resume the decline again, but we will see in the coming days whether the bearish momentum will pick up or not.
booking profit ETHER Shorts
Ethereum has tumbled in recent months, falling below $1,000 last week, although we did see a quick reversal and move above this key level. But the continuation since Sunday has been weak and the 50 SMA (yellow) turned into Resistanceso my colleague Arslan opened a sell Ethereum signal there, which closed in profit when the price turned back down.
ETH/USD H4 chart
ETH/BTC approaches the TP target
ETH/BTC turned bearish in December of last year and was in a downtrend with moving averages acting as resistance on the H4 chart. The recent pullback ended higher below the 100 SMA (green) and we decided to open a sell signal as the sellers are still in control.
ETH/BTC daily chart
Source: Crypto News Deutsch