Forex Signals Brief for January 10: USD Decline Stalling Ahead of Powell

Yesterday’s Market Wrap

After the last round of interest rate hikes from major central banks by the middle of December, the USD retreat stalled and traders were uncertain if central banks would stop soon or continue with more hikes. Comments by central bank members have been mixed which has added to the uncertainty, but the USD selloff returned again on Friday after the ISM services report showed that this sector plunged in contraction last month.

Yesterday the USD decline resumed, with the Buck losing more than 100 pips and everything else going up as sentiment remained positive. The Eurozone Sentix consumer confidence improved more than expected which is another positive signal. Stock markets opened with a bullish gap and continued higher, although we saw a reversal late in the US session.

Today’s Market Expectations

So, the USD decline stopped as we approach the speech by FED chairman Jerome Powell later today. markets are uncertain which way he will lean, but expectations are for another slowdown in consumer inflation on Wednesday, so I’m beating he we’ll be slightly on the soft side, although leave it on the market. Bank of Canada governor Macklem and BOJ Gov Kuroda will also speak, so there might be some volatility in respective currencies later today. 

Yesterday the volatility continued and we saw a similar price action that we saw in Friday in most assets, so the trade wasn’t too difficult. We went short on the USD, against the JPY and Gold and ended up with three winning forex signals out for four trading signals in total.

Remaining Heavy Bearish on USD/JPY

Yesterday we decided to remain bearish on USD/JPY as it was retracing higher after opening with a bearish gap on Monday morning after Friday’s strong bearish move. We opened three sell forex signals on this pair, one of which closed in loss while the other two hit the take profit target.

USD/JPY – 240 minute chart

Buying the Dips in GOLD 

We have seen many retraces lower in Gold but the lows keep getting higher, which means that buyers continue to remain in charge, as they continue to push higher. Last week we saw another retreat as the USD turned bullish in the first few days of the year but XAU/USD resumed the bullish trend again and pushed to $1,870.

XAU/USD – 240 minute chart 

Cryptocurrency Update

Cryptocurrencies made a jump higher on Sunday and they continued the bullish momentum yesterday as well, showing some buying momentum at last, which goes in line with the bearish move in the US Dollar. Although they started retreating lower in the US session, but the sentiment remains positive overall.

Let’s See If MAs Will Support BITCOIN on the H1 Chart

After falling to $16,440 at the end of December, Bitcoin reversed higher and was climbing until yesterday in the US session, reaching a high of $17,390, as the USD kept slipping lower. But we saw a reversal late in the session and BTC headed for $17,000 again, although let’s see if moving averages will hold as support on the H1 chart.

BTC/USD – 60 minute chart

 The 20 SMA Keeping ETHEREUM Bullish

Ethereum crashed lower by the middle of December as the sentiment turned positive after the last central bank rate hikes back then, but has been bullish for more than a week. Moving averages are providing support during retraces lower with the 20 SMA (gray) holding on the H4 chart. Now Ethereum seems to be heading for $1,300.

ETH/USD – 240 minute chart