Forex Signals Brief Sept 23: Services and Manufacturing to Remain in Contraction – FX Leaders
Yesterday’s Market Wrap
The past 24 hours or so have been loaded with events and to some degree with price action. It started with the FOMC meeting on Wednesday evening, which hiked rates by 0.75%, with the dot plot showing further strong hikes in the coming meetings.
So, yesterday the USD started the day on a bullish foot. Although we saw a strong decline in USD/JPY in the morning as the Bank of Japan decided to intervene in the forex market, sending the JPY higher. USD/JPY fell more than 5 cents but then started to reverse higher again, since one intervention alone won’t do much, unless there is a constant threat of intervention.
The Swiss National Bank delivered a 75 bps rate hike, bringing rates into positive territory, but the statement offered a dovish surprise which sent the CHF 2 cents lower. The Bank of England raised rates by 50 bps vs 75 bps expected. The GBP has popped 150 pips higher ahead of the meeting, but then reversed back down and gave back all the gains after the 7th rate hike.
Today’s Market Expectations
Today the attention shifts back to the economic data from central banks. Earlier this morning we had the European manufacturing and services figures being released, which showed that this sector remains in contraction in September as prices keep surging. UK Services also remained in contraction while services were expected to fall there this month. Later we have the retail sales numbers from Canada, as well as US services and manufacturing PMI reports, before Jerome Powell speaks in the evening.
Yesterday we started on the wrong foot after some large moves following the FOMC meeting on Wednesday evening. But, the performance improved as the day progressed and after two losing signals we had four winning trading signals. Almost all our forex signals were in forex, apart from one in crude Oil.
AUD/USD turned bearish last week, falling below moving averages, which have turned into resistance at the top. The price has been trading mostly sideways since then, although with a bearish bias as highs kept getting lower.
After the FED rate hike on Wednesday evening, we saw another bearish move, which was followed by a retrace yesterday. We decided to open a sell forex signal here after the rejection by the 50 SMA (yellow), so that signal closed in profit.
AUD/USD – H1 chart
Selling WTI Oil
Crude Oil resumed the bearish trend this week, heading toward $80, although we are seeing buying pressure down at the area above $80 once again. Yesterday we saw a jump that sent the WTI price from 82.50 to $86, but the 200 SMA acted as resistance once again and rejected it. We decided to open a sell signal as the price was declining, booking profit lower.
US WTI Oil – 60 minute chart
Cryptocurrencies turned lower again on Wednesday evening and Thursday morning, after the FED rate decision turned the risk sentiment negative in financial markets. Cryptocurrencies dived again, but yesterday they reversed higher, so there is still buying pressure.
Buying BITCOIN Below $19,000
Bitcoin has continued to make lower highs since reversing from around $22,500 last week. This week, we saw another bearish reversal after the rejection at the 200 SMA (purple), following the FED rate hike and the price fell to $18,200. Although we decided to buy and eventually BTC/USD reversed back up, but the 200 SMA was still holding as resistance last night.
BTC/USD – H1 chart
Ripple Facing the 200 Daily SMA As It Pushes Toward $0.50
XRP/USD has been one of the most bearish cryptocurrencies since the legal battle with the SEC (Securities and Exchange Commission) started nearly two years ago and the zone around $0.40 turned into resistance since June. In the last three days, we have seen a reversal as both Ripple Labs and SEC are pushing for a quick ruling over the case, which traders thought might go in favour of Ripple, hence the bullish momentum. On Monday we saw a reversal lower after buyers failed to push above $0.40, but the buying resumed and yesterday XRP was trying to overcome the 200 daily SMA (purple) as it approached $0.50.
XRP/USD – Daily chart
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