Forex Signals Brief July 5: RBA offers another 50 bps rate hike
Yesterday’s market wrap
It was a holiday weekend in the United States, which meant that the US markets were closed yesterday, so it was pretty quiet. Most of the major currency pairs ended up back where they started after jumping up and reversing down. Commodities such as Gold, Silver and Crude Oil made decent gains, although the main trend is still bearish.
The most important data release yesterday was Swiss CPI (consumer price index) inflation which jumped to 3.4% on an annualized basis, the highest in almost 30 years. PPI (Producer Price Index) inflation cooled down a bit last month in the euro zone, but the Sentix investor confidence indicator deteriorated further, which is another negative point for the euro zone. ‘euro.
The data agenda today
Overnight we had Australian retail sales and the AIG Construction index which was the last data before the RBA (Reserve Bank of Australia) decided to raise the cash rate by 50 basis points (bps ) at 1.35%. Initial figures from Italian and Spanish utilities show a further slowdown, meaning the ECB will struggle to fight inflation on the one hand and keep the economy afloat on the other. Later we will have the minutes of the last meeting of the BOE (Bank of England) which will be followed by a speech by Bailey from the BOE.
Last Friday we had mixed results with our forex signals, but we started this week pretty well, having several winning signals yesterday. We have been sticking to forex trading outside of the Cardano trade which we have been open for almost a week. We hope to have a good week as we progress.
EUR/JPY – Buy signal
The euro had problems as the ECB waited until later this month to raise rates, but the yen is in a more difficult position as the BOJ is not thinking about it at the moment. My colleague went against the grain this time and took a nice position as the 50 SMA turned into support for this pair.
EUR/JPY – 240 minute chart
AUD/CAD – Buy signal
AUD/CAD has been bearish since early April as the AUD is more affected by the contraction we have seen in China due to lockdowns in Shanghai. Nonetheless, my colleague picked another trade against the trend here as the buyers pushed above the 20 SMA (grey).
AUD/CAD – 60 minute chart
Cryptocurrencies have been trading sideways in a range for about two weeks, but have started to show bullish momentum over the past two days. Bitcoin climbed above $20,000 again, which could be the start of a bullish reversal. But let’s see.
ETHERUM Survive the $1,000 level
Ethereum fell below the major level at $1,000 in the middle of last month, but this time the big level acted as support. The sellers retested it at the end of last week, but the price started reversing higher and yesterday it made a decisive move, mostly pushing the moving averages with the 200 SMA (purple) turning into support .
ETH/USD – 60 minute chart
ADA/USD Signal – Formation of the support zone at $0.43-0.45
Cardano continues to remain bearish since last September’s reversal, with the highs falling. Although a support zone formed from $0.43 to $0.45, it held. The moving averages continue to provide resistance at the top and the range is getting really tight, so we are expecting a breakout and aiming higher.
ADA/USD daily chart