After weeks of turmoil, there were signs of market stabilization this last week. Although consumers appear unaffected, there is an anticipation that stricter credit conditions in the future will impede growth. Moreover, the persistently high rate of inflation strengthens the case for a 25 basis point rate hike in May.
New data from the New York Fed's credit access survey support the notion that obtaining credit is becoming more difficult for consumers. Consumer demand for credit decreased by 4.8% between October 2022 and February 2023, which is the third-largest decrease recorded since 2013.
The Eurozone shows pressure from higher inflation. Core inflation, which excludes volatile components such as food and energy, has continued to rise and remains stubbornly high despite the decline in headline CPI inflation from its peak.
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Forex Technical Outlook for 03 April 2023 to 07 April 2023
The week will start with the Swiss Consumer Price Index data, where the current anticipation is a lower-than-expected report. Later on, the RBA would grab investors' attention, but the week will end with a solid direction from the Non-farm payroll.
Let’s see important releases for this week:
- CHF CPI m/m on Monday
- ISM Manufacturing PMI on Monday
- RBA Cash Rate Rate Statement on Tuesday
- JOLTS Job Openings on Tuesday
- RBNZ Cash Rate Rate Statement on Wednesday
- ADP Non-Farm Employment Change on Wednesday
- ISM Services PMI on Wednesday
- CAD Unemployment rate on Thursday
- US Non-farm Payroll on Friday
Now move to the weekly price forecast:
As per the previous EUR/USD weekly outlook, bulls regained momentum and provided more than 150 pips of gains. However, the price went sideways after reaching the 4 April 2023 high from where a bearish daily close appeared.
This technical analysis of EUR/USD shows a sharp bullish monthly close on Friday, eliminating all losses of January 2023. Moreover, the monthly bullish flip in MACD Histogram with an existing bullish trend indicates a bullish trend continuation possibility.
Although the higher timeframe price action is bullish, the daily price shows selling pressure from the 1.0929 resistance level with a bearish two-bar reversal.
The bullish pressure from 15 March completed the upward wave by recovering the imbalance on the 3 February daily candle. It is a sign that the buying pressure has completed its momentum; more orders are needed to be built before forming an impulse.
The highest trading volume from February 2023 is at 1.0719, which is below the current price. The MACD Histogram is bullish in the indicator window with no sign of divergence.
Based on the daily price outlook in EURUSD, the downside possibility is solid as long as the price trades below the 1.0929 resistance level. In that case, the primary target area would be 1.0719 level, 200 pips below the current price.
On the other hand, any bullish recovery with a stable daily candle above the March 2023 monthly closing price could increase the price toward the 1.1100 level.
As per the previous GBP/USD outlook, the price went sideways by extending the accumulation at the daily supply zone. It is a sign that bears are preparing for a strong drop, depending on the future price action.
The monthly chart showed a decent bullish recovery, but a failure to break above the 1.2445 level for three consecutive months indicates sellers’ accumulation.
In the daily chart, a weaker bullish recovery is seen from the rising wedge pattern formation in the daily chart. However, the sideways price action at the daily supply zone with a mean reversion possibility from the dynamic 20-day EMA is a sign of a bearish recovery.
Based on the visible range volume indicator, the highest trading volume level since January 2023 is below the current price.
The indicator window shows a downside momentum from the MACD Histogram with no sign of divergence.
Based on this outlook, investors might experience selling pressure after a valid rising wedge pattern breakout; the primary target of the short position would be towards the 1.2030 high volume level. However, a bullish break with a daily candle above the 1.2445 level could open room for reaching the 1.2600 area.
The range extension after a long bearish leg shows a downside possibility in the AUD/USD price. In that case, the primary trading idea for this instrument is to look for a buy-side liquidity sweep before opening a sell trade.
This technical analysis shows a strong bearish possibility on the monthly candle as the price action from March 2023 failed to close the month above the February close.
In the daily chart, the strong resistance level is at 0.67578, which is working as a major barrier for bulls. In the internal structure, the bullish liquidity grab and rebound from the 0.6717 swing high shows a primary indication of possible downside momentum.
The highest trading volume level since January 2023 is just below the current price, while the current MACD Histogram is bearish, below the neutral level.
Based on this outlook, a bearish trend line breakout with a daily candle close could offer a short opportunity in the AUDUSD pair, targeting the 0.6521 level.
In the USD/JPY weekly outlook, last week’s price showed a bullish recovery, which validated the daily demand zone. As a result, a strong bullish trend continuation opportunity is present if a corrective downside correction comes.
This technical analysis indicates the daily price of USD/JPY, where a bullish minor break of structure at the 132.99 level validated the 131.58 to 129.62 demand zone.
Moreover, a bullish daily comes above the dynamic 20 EMA with a stable recovery in the mACD Histogram.
Based on this outlook, investors should monitor the intraday price action from 132.25 to 131.50 daily imbalance area. Any bullish liquidity sweep and a bullish signal could offer a long opportunity, targeting the 134.50 level.
However, breaking below the 130.00 level could lower the price towards the 127.22 area.
In the XAU/USD daily price, a corrective price action was seen in the previous week. Although the monthly candle is strongly bullish, downside momentum is expected for the coming days.
This technical analysis shows the bearish momentum in the XAU/USD from last week’s pierce projection. A bearish daily candle below the psychological 2000.00 level sent the price 350 pips down before going sideways.
A symmetrical triangle formation is seen in the daily price, backed by a strong bullish trend. Moreover, the high volume level from January 2023 is below the current price, while the dynamic 20-day EMA is supporting.
In the indicator window, MACD EMA’s are showing a bearish possibility from the bearish crossover at the top, while the current Histogram is at the neutral zone.
Based on the current price outlook, a bearish daily candle below the triangle support could lower the price toward the 1933.00 level in the coming days. On the other hand, a bullish recovery with a daily close above the 1987.00 level could resume the existing trend toward the 2020.00 level.
At the end of the first quarter of 2023, Bitcoin's price outlook is noteworthy. Throughout the year, BTC has demonstrated strength and generated returns of approximately 70% for investors.
The current quarterly return for BTC is approximately 68%, which is the second-best performance since 2021.
If Bitcoin's Q1 returns are low, its price tends to increase in the subsequent quarter. However, if Q1 returns exceed 20%, a pullback or correction may occur in the subsequent quarter. Investors should therefore exercise caution.
Using data from 2014, it is evident that while the average return for BTC in the first quarter of 2023 was 5.91%, the average return for the second quarter was 32%. This year, however, the narrative has shifted as a result of deteriorating macroeconomic conditions and numerous bank runs.
This technical analysis indicates the bearish possibility in the BTC/USD price, where a bullish liquidity sweep at the 28,830.78 level shows the primary sign of selling pressure. However, a sell-side pressure below the 26,531.00 level would validate the high probable short opportunity from the 29196.10 to 27764.27 supply zone.
In the indicator window, the bearish possibility is potent from the MACD EMA crossover, while the current Histogram turned bearish below the neutral zone.
Investors should closely monitor the lower timeframe price action to find the best area to join the selling pressure. However, a bullish break with a daily candle above the 28,830.00 level with a bullish daily candle could increase the price toward the 30,000.00 psychological level.
Last week’s PCE inflation date provided a sign that the Fed could limit the rate hike. However, more clues are needed- particularly from this week’s Non-farm payroll before anticipating a clear direction.