Market review last week
Last week we had the CPI (Consumer Price Index) inflation reports from the UK and Canada, which showed another increase for May. Rising inflation is hurting the consumer, which has been confirmed by the slowdown in services around the world, as seen in last week’s services reports. The USD lost ground as Fed Chairman Jerome Powell refused to confirm further strong gains, such as the 75 basis points we saw in the last meeting.
This improved risk sentiment in financial markets, sending stock markets higher towards the end of the week. Crude Oil continued its second leg last week towards $100, after the minor crash at the end of the previous week, but closed the week with a higher bounce.
The data agenda this week
This week begins with US Durable Goods Orders and CB Consumer Confidence expected to show a slowdown. CPI inflation figures will be released by various European countries ahead of the release of the Eurozone inflation report. Although a number of speeches are on the agenda of different central bankers when they meet in Lisbon this week, which will decide the risk sentiment in the markets.
This week we had a good run in the first half, despite the fairly slow market. We had some difficulties in the middle of the week as volatility accelerated and uncertainty increased. But, we managed to close the week with several winning signals on Friday, so last week was another successful week for us.
GOLD – Selling retraces higher
Gold has been on a downtrend since March. The downtrend has slowed down, but XAU/USD continues to make lower highs which is a bearish signal and we tried to sell higher retracements. We opened several sell signals on gold, most of which closed in profit with the sellers still in control.
XAU/USD chart – H4
USD/JPY – We keep a bullish bias
The JPY remains bearish as the Bank of Japan holds interest rates steady as CPI inflation there remains under control. The FED accelerated the pace of rate hikes, which kept this pair very bullish. We have been long USD/JPY most of the time, and will most likely remain bullish this week as well.
USD/JPY – 240 minute chart
Cryptocurrencies continued to recover slowly last week after the previous week’s crash, although the pace remains quite slow. Nonetheless, buyers remain in the driver’s seat for nearly 10 days, but uncertainty remains elevated as the war on crypto continues.
ETHERUM Push above the MAs
Ethereum had been showing strong selling pressure since last November, as shown on the H4 chart below, falling below $1,000 at the start of the month. On Sunday after the crash, ETH made a strong comeback, but buying pressure since then has been weak, although buyers continue to push slowly. Now, ETH/USD has climbed above the moving averages, which is promising, but buyers would need to push above the 200 SMA (purple) for the trend to be considered bullish.
ETH/USD H4 chart
Axie Infinity at a watershed moment
AXS/USD had a great performance from July last year to November when sentiment turned bearish in the crypto market. Since then, the 50 SMA (yellow) has been the ultimate resistance on the daily chart. The price hit a low of $12.50 but has been slowly recovering since then and now buyers are faced with the 50 SMA again. if they fail to break above it, it is likely that the downtrend will continue.
AXS/USD – Daily Chart