Forex Signals Brief for February 16: US Producer Prices to Resume Increase


Yesterday’s Market Wrap

Yesterday markets were focused on US retail sales, which would give a better view of the US economy for January, after the jump in ISM services and employment earlier this month, which reversed the USD after being bearish since October. Inflation has been slowing but in January the pace of the cool-off was minimal missing expectations, so the FED is looking at the data, and the numbers yesterday were great.

Headline retail sales jumped by 3% in January, while core sales increased by 2.3%, beating expectations. This is a strong sign that the US economy is bouncing back, so FED members have started to sound more hawkish right away. The USD resumed the bullish momentum and risk assets retreated lower, with FED rate odds pointing at 5% toward the yearend.

Today’s Market Expectations

Today started with the unemployment rate which remained stable at 3.5% in Australia, while new jobs turned positive in January after declining in December. Later we have the US producer price index (PPI) which is expected to show an increase last month after cooling off in December, while unemployment claims are expected at 200K. The Philadelphia FED manufacturing index is expected to improve this month, but remain negative.

Yesterday risk sentiment was slightly positive in the Asian session, with the USD on a slight retreat as we headed toward the retail sales release. Then the USD resumed the bullish momentum and all other assets declined. We remained long on the USD, openeing four trading signals, three of which closed in profit.

 GOLD Resumes Decline

Gold stalled on Tuesday after the inflation report showd mixed numbers, but resumed the decline after the retrace higher last week and the bearish momentum picked up paceon yesterday’s strong retail sales numbers. Moving averages have turned into resistance on the H1 chart, and the Gold signals which we opened closed in profit as the decline resumed.

XAU/USD – H4 chart 

AUD/USD Testing the 50 SMA Again

AUD/USD turned bearish after the US ISM services and employment numbers showed a strong jump in January. But, markets weren’t certain about a rebound in the US economy yet, so they have been waiting for more proof, and today’s retail sales report gave them further proof. AUD/USD reversed lower and sellers are testing the 50 SMA (yellow) on the daily chart now. If this moving average is broken, then the bullish trend is over for this pair.

EUR/USD – H4 chart

Cryptocurrency Update

Cryptocurrencies seem to have tuned bullish again after being in a retreating mode since last week, as risk sentiment started to turn sour. They made a strong bullish run in January, which came after a prolonged bearish period in the crypto market, so it was a strong signal that the bearish period might be over and now after yesterday’s surge, they’re looking increasingly bullish.

BITCOIN Surges Above $24,000 again

Bitcoin has turned bullish again after the bullish run in January which took BTC  above $24,000 stalled this month and we saw a retreat lower last week. We saw a retreat below the 200 SMA (purple) on the H4 chart, but buyers came back and the price surged above $24,000 yesterday.

BTC/USD – 240 minute chart

ETHEREUM Heading for $1,700

Ethereum was also showing buying pressure for most of January as the lows kept getting higher. But last week buyers gave up and sellers took over, pushing the price below $1,500. Although now buyers are back and the price is heading for $1,700.

ETH/USD – H4 chart 


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