Forex Signals Brief for November 24: USD Resumes Decline on Softer US Services/Manufacturing

Yesterday’s market turn

The USD started to turn bullish late last week after experiencing several weeks of retreat and Monday saw a continuation of bullish momentum for the USD as China pushed for further coronavirus restrictions and lockdowns over the weekend, hurting risk sentiment on the financial markets. On Tuesday, however, sentiment began to improve again and the USD retreated lower as the only safe haven left.

Yesterday, the decline continued, especially after softer services and manufacturing, both of which are now contracting. Eurozone and UK services and manufacturing data were above expectations earlier in the European session, but both sectors continue to contract. Even earlier in the Asian session, the Reserve Bank of New Zealand raised interest rates by 75 bps, leaving the Kiwi bullish yesterday, as did most risky assets. Later in the evening, the FOMC minutes from the last FED meeting gave the USD another push downward as they implied a slowdown in the pace of rate hikes.

Market expectations today

Today the economic calendar is quite light with only the German Ifo business climate as the main indicator during the day as the US is off Thanksgiving so it’s going to be a short week. The bills from the ECB’s monetary policy meeting will be released later, but will not have much impact on the euro. Retail sales for Q3 will be released later tonight from New Zealand, which should show a positive turnaround after the decline in Q1 and Q2.

Update Forex signals

Yesterday, the USD continued its decline from the previous day, although USD buyers tried the positive during the Asian session, so our sell signals in Gold and Oil closed in gains. We ended the day with six trade signals, four winning and two losing.

WTI Rejected by the 100 SMA

Crude oil plunged $5 lower on Monday on news of an OPEC production hike, but bounced back after the Saudis’ rejection and continued to creep higher. But the 100 SMA (green) rejected price twice. We decided to open a long-term oil sell signal after the second rejection and profited as the decline resumed.

WTI Oil – H1 Chart

Booking profit GOLD For the reversal

Gold turned really bullish earlier this month as the USD fell lower. Although the climb stalled and gold retreated lower since late last week, the 20 SMA (grey) turned into resistance on the H4 chart. We opened a sell signal for gold at this moving average yesterday as it rejected price and took gains during the peak lower before the bullish reversal turned higher.

XAU/USD – H4 chart

Cryptocurrency update

Cryptocurrencies turned bullish in October as risk sentiment improved, but the bullish momentum has ended. They have turned bearish on the FTX news and after the bearish move earlier this month, we saw another drop last week, sending them to the lows from early November. But they’re showing some buying pressure this week, so let’s see if they can turn the tide.

[[Bitcoin] Buyers test the 50 SMA

Bitcoin tested the lows again on Monday after turning bearish earlier this month when it fell from $22,000 to around $15,600 following the FTX Exchange bankruptcy. The price consolidated for a few weeks, but the decline resumed as the 50 SMA (yellow) overtook the price on the H4 chart and on Monday, sellers tested the previous low, which held. We saw a bounce on Tuesday and yesterday buyers tested the 50 SMA (yellow) and halted the climb.

BTC/USD – H4 chart

ETHEREUUM Return to $1,200?

The FTX bankruptcy caused Ethereum to crash lower and despite attempts to turn bullish, sellers are still in control. There was also some consolidation here for a few weeks, but the 200 SMA (purple) overtook the H1 chart and pushed the price down. On Monday, ETH/USD fell back below $1,100, but we saw a reversal yesterday, so buyers are still alive.

ETH/USD – H4 chart

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