Market review last week
We had negative signs early last week as business sentiment in Europe and consumer confidence in the United States continued to weaken, according to reports on Monday and Tuesday. Wednesday morning’s CPI report showed Australian inflation at a multi-decade high, although the day was dedicated to the Fed meeting and the decision to raise interest rates. interest of 0.75% as expected.
The USD remained weak, especially after Fed Chairman Jerome Powell eased his language on such severe monetary tightening as we have seen in recent months. The drop in US GDP in the second quarter, which is pushing the United States into a recession, also weighed on the USD, while risk assets generated mixed feelings, with stock markets rising, as the chances that the FED proceeds with further sharp rate hikes have fallen. Eurozone CPI inflation and the US PCE price index also showed further increases on Friday.
The data agenda this week
Today is all about manufacturing, with the Caixin Chinese manufacturing report released early this morning, followed by final Eurozone manufacturing figures for July and US ISM manufacturing later in the month. afternoon, which were/will be weaker than before, as this sector and services enter into contraction.
The Reserve Bank of Australia (RBA) is expected to raise interest rates by 50 basis points to 1.85% on Tuesday, as is the Bank of England (BOE) which is expected to raise rates to 1. 75% Thursday. On Friday, we end with the employment and income reports from the United States and Canada.
It was a tough week for forex as most pairs traded sideways with no clear trend, although sentiment was slightly positive for risk assets. We had 26 trading signals across Forex, Commodities, Cryptocurrencies and Indices, of which 19 closed in profit, while 7 closed in loss, giving us a win-loss ratio of 73/ 27.
AUD/USD Buy Signals
This pair was in a downtrend from early June to mid-July, with the 50 SMA (yellow) acting as resistance at the top on the H4 chart. But the trend reversed in the middle of last month and buyers have since taken control.
Now the moving averages have become support especially the 20 SMA (grey) which is showing decent buying pressure so we bought AUD/USD and most of our forex signals here closed the week in profit last.
AUD/USD – 60 minute chart
GOLD – Signals
Gold continued to fall until the ECB meeting, with the 20 SMA (grey) acting as resistance, meaning the decline was quite steep at the start of last month. But the situation changed after this meeting and the FED meeting, as well as the recession in the United States last week, gave more reasons for gold to rise. We opened many gold signals last week, most of which closed in profit.
XAU/USD chart – H4
Cryptocurrencies have continued to hold a slight bullish momentum for over a month now, since the last crash ended in mid-June. Most of the cryptocurrencies have broken above the low moving averages, which means buyers are still in charge although they have formed a downtrend over the past few days, so let’s see how this week plays out.
ETHERUM Failure at the 100 SMA above the $1,700 resistance
Ethereum made a decent upside attempt for over a month, rising from under $900 at one point to over $1,700 last week, although the PoS merger was delayed for several weeks, likely until in September. Although buyers are currently facing the 100 SMA (green) on the daily chart. So if we see a retracement lower, we will try to open a buy signal here.
ETH/USD – Daily Chart
Bitcoin Approaching $25,000
Bitcoin fell below $20,000 in June, but there has been no follow-up since, showing that the support zone is holding. BTC has been making higher highs and lows since then which is a bullish signal and last week buyers pushed above the resistance zone again reaching $24,700 so we will try to buy BTC drops.
BTC/USD – Daily Chart