The rate hike party continues where last week’s winner was the European central banks. Although the Fed raised a 75 bps rate hike, it failed to hold the gain for the US Dollar. On the next day of the FOMC, the US quarterly GDP report showed a weaker-than-expected report, opening a possibility of a recession. Moreover, the dovish tone regarding the rate cut in 2023 increased uncertainty among investors regarding the higher inflation. As inflation is at its peak, investors wait for a clear sign that the recovery has appeared.
In the Eurozone economy, strong growth appeared in Q2, pushing the EUR/USD price higher. Furthermore, there was a 50 bps rate hike in July by the ECB from zero rates, indicating that the economy should take action to fight the higher inflation. Moreover, the ECB stated a further 25 bps hike in the September quarter, where the main aim of the central bank is to keep the inflation rate to its 2% target.
Forex Technical Outlook for 01 August 2022 to 05 August 2022
This week, investors will see the Nonfarm payroll release, expected to come on Friday, where the current projection is weaker than the previous report. Before that, the AUD rate decision will grab investors' attention where a 50 bps rate hike is expected. Besides, the New Zealand unemployment rate will come on Wednesday, followed by the CHF Consumer price index.
The US Dollar Index (DXY) represented bears’ presence in the price, where the latest bearish D1 candle below the 20 EMA might extend the downside pressure. As a result, the selling pressure may extend until investors see the Non-farm payroll release. The current aim for the price is to test the 103.84 support level from where bullish pressure may appear.
The rate hike party extended the volatility in the EUR/USD price throughout the week, but in the end, Euro was the winner from the upbeat Q2 GDP report. In the weekly chart, two consecutive bullish candles appeared where near-term weekly resistance is at the 1.0600 level, 375 pips above the current price.
This technical analysis represents the daily price of EUR/USD, which is consolidating at the dynamic 20 EMA. As a result, it might grab more buy orders before forming a bullish breakout. In addition, the Relative Strength Index tested oversold 30 levels and moved up in the indicator window.
In the EUR/USD weekly outlook, investors should wait for the price to break above the 1.0273 resistance level before aiming higher toward the 1.0445 level. The alternative trading approach is to wait for a strong bearish daily candle below the immediate swing low of 1.0100 level, which may extend towards the 0.9953 level.
GBP/USD showed a better position for bulls than EUR/USD, where the price remained stable above the 20-day moving average. Moreover, the weekly chart shows two consecutive bullish weekly candles appearing while the broader market direction is still bearish.
This technical analysis represents the daily price of GBPUSD, trading within an ascending channel. In this chart, the 20-day MA is below the price, working as an immediate dynamic support level.
On the indicator window, the Relative Strength Index (RSI) is above the 50.00 level, where the current aim is to test the overbought 70 level. In that case, a minor bullish correction is expected before continuing the broader bearish trend.
In the GBP/USD weekly price analysis, the buying possibility towards the 1.2400 level is solid as long as it trades above the dynamic 20 EMA. On the other hand, the break below the channel support with a strong bearish daily candle could provide a sell signal where the main aim is to test the 1.1762 swing low.
AUD/USD bulls maintained a strong position above the dynamic 20 EMA support level throughout the week, indicating that bears are not interested in taking the price up even if the US Dollar benefited from the rate hike.
This technical analysis shows how the Relative Strenght Index remains above the 50% level with an opportunity to reach the 70% area. Moreover, the price remained stable above the 0.6909 key support level from where bullish exhaustion appeared last Friday. The price still trades within an ascending channel where the current approach is to test the channel resistance with buying pressure.
Based on the daily price action, the upside pressure towards the 0.7134 level is potent as it closed a trading week by keeping the price above the 20-day moving average. Therefore, the alternative approach is to wait for the price to move below the 0.6900 psychological level and wait for further selling pressure towards the 0.6679 support level.
The USD/JPY showed massive buying pressure in recent trading weeks that was hardly beaten by the last two weeks' bearish momentum. In the last two weeks, USDJPY lost 2.95% of its value, where the strong counter-impulsive momentum opens further bearish opportunities.
This technical analysis shows how the daily USD/JPY price closed last week, where the gap between the price and the 20-day moving average was extended to 292 pips. in the indicator window. The Relative Strength Index (RSI) is yet to reach the 30 , over sold evel, indicating further downside pressure in the price.
Based on the current daily chart, investors can experience a minor bullish correction in the USDJPY price towards the 135.57 resistance level from where the bearish pressure may resume. On the other hand, the alternative approach is to consider it a bullish opportunity if the price shows strong buying pressure from the 131.48 support level.
XAU/USD showed a strong buying pressure last week, followed by a descending channel breakout. As a result, investors have experienced a fresh 500 pips gain towards the buyer's side.
This technical analysis shows how the daily candle of Gold closed above the 1745.26 key level with a bullish close, indicating strong bullish momentum. Moreover, the dynamic 20 EMA has become the immediate support level from which the buying pressure may extend.
Based on the current daily chart, investors may expect a minor bearish correction during the weekly birth period. However, any buying pressure from the 1855.00 to 1840.00 area could provide a bullish opportunity in this pair where the main aim is to reach the 1815.00 level. The alternative approach for bears is to wait for the price to move below the 1740.00 level and form a bearish daily candle before moving to the 1700.00 area.
The Block’s Global In/Out of the money (GIOM) Model a unique ton chain index to show the next cluster of underwater investors that extended from 24100.00 to 31400.00. In this zone, more than 1.97 million addresses are present to buy more than 1.16 million Bitcoin at the average price of $29259.00. The extreme investor activity from this zone might work as a buying factor where the current aim is to see an 18% gain in the BTC price.
This technical analysis of the BTC/USD daily chart shows how the current price trades within a bullish channel. Moreover, the dynamic 20-day moving average is below the price, indicating strong buying pressure. On the indicator window, the relative Strength Index also shows buying pressure by taking the level above the 50% zone.
Based on the current bitcoin price action, a minor bearish correction would grab buyers' attention to take the price higher towards the 26342.00 resistance level. On the other hand, the break below the 20876.00 level could drop the price towards the 17663.00 level.
Investors will have a monthly transition period where a counter-trening momentum may appear from all major pairs. However, a strong movement may come after the NFP, where investors should keep a close eye to find a trading opportunity.