The first trading day of the new year will start with bank holidays, where the liquidity is expected to remain lower. However, after some muted trading days, some significant events like FOMC and NFP inject liquidity in the financial market.
The economy will face a full-on week where the ISM manufacturing data will work as the first price moving event on Tuesday that may come at 60.2 from 61.1 in December. Moreover, the JOLT Job opening and ADP private payrolls will be exposed on Wednesday and hint to the Non-Farm Payroll on Friday. Finally, all eyes will be towards the NFP figures as the previous report missed the estimation due to the swelling COVID-19 cases. The current forecast is to increase the NFP to 400K with a lower unemployment rate of 4.1%.
On the other hand, the Fed will publish its December meeting minutes where the first hint of a rate hike may come. Another important event for this week is the OPEC+ meeting on Tuesday, where the alliance may stick to the existing plan of adding 400K bpd each month. However, investors should closely monitor how the Omicron infection rate is coming. Any surge in the number of cases will affect the Crude Oil price by intervening in the travel.
Besides, there is no major data in AUD and NZD, but China’s Caixin manufacturing PMI might make a move to commodity-linked currencies.
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Forex Technical Outlook for 03 January 2022 to 07 January 2022
After a long day, the forex market may regain liquidity this week. More specifically, the US, Canada, and Eurozone will be key market movers this week. However, it is just a birth period of the new year and month where attention to trade management is important.
The US Dollar index showed a strong bearish rejection from the potential double top formation in the 96.92 level with a bearish breakout below the dynamic 20 EMA. Therefore, as long as bears hold the price below the 96.92 level, it will likely move lower towards the 94.57 event level.
EUR/USD price remained within an indecisive momentum as the recent price squeezes to a point in the symmetrical triangle. However, the recent breakout from the triangle with a bullish daily candle above the triangle resistance signifies that bulls won from the battle within the triangle.
The above image shows how the MACD Histogram remained stable above the neutral zone, where a bullish breakout from the dynamic 20 EMA formed. However, the bullish candle of last Friday failed to show a strong position above the 1.1375 horizontal resistance level. Therefore, a bearish correction and further rejection from triangle resistance may initiate the breakout of the 1.1375 level and take the price towards the 1.1600 resistance area. On the other hand, a stable bearish daily close below the dynamic 20 EMA would open rooms for testing the 1.1200 key support level.
GBP/USD completed the accumulation phase from 1.3267 to 1.3173 zone and showed a strong bullish breakout from the bearish channel. Moreover, the price showed amazing buying pressure from the dynamic 20 EMA.
The above image shows how the MACD Histogram turned bullish and held a strong position above the neutral level. However, the solid impulsive bullish trend from 1.3172 to 1.3523 came without any significant correction. Therefore, a bearish correction towards the dynamic 20 EMA may happen from where a buying opportunity may come. On the other hand, a break below the 1.3400 level with an aggressive bearish daily candle may alter the current market structure and lower the price towards the 1.3277 level.
AUD/USD remained bullish throughout the week, where the price was stable above the dynamic 20 EMA. Moreover, several attempts with a bearish wicked candle formation failed to catch sellers’ attention. In that case, the buying possibility towards the 0.7412 is intact until the price breaks below the dynamic 20 EMA with a bearish daily candle.
The above image shows that the MACD Histogram remained corrective with a PNP formation with no sign of divergence. In this context, a bearish correction may come towards the 0.7175 horizontal support level. However, a break below the 0.7175 level with a bearish daily close may extend the selling pressure towards the 0.7000 area.
USD/JPY bears become potent as the price reached 115.09 to 115.60 key supply area with a corrective momentum. Therefore, investors should find selling opportunities from this zone with the intraday bearish break of structure and a correction. In that case, the primary target would be 114.00 psychological level.
The above image shows that the price reached 115.09 to 115.50 supply zone and showed an impulsive bearish pressure. Moreover, the previous selling pressure came with a divergence with MACD lines where the current bullish corrective momentum towards the same zone would attract sellers.
Based on the daily context, USDJPY may show a bearish pressure this week if the price shows any bearish rejection from the current supply zone. In that case, the primary target would be 112.72 level with the invalidation level above 115.60 area.
XAU/USD showed an amazing buying pressure this week as the recent Omicron sentiment, and US inflation tension influenced investors to consider gold as an inflation hedge. Moreover, the recent buying sentiment above the dynamic 20 EMA is stable, another sign of a possible buying pressure in the coming days.
The above image shows how the MACD Histogram turned bullish with a PNP formation where the recent Histogram continued higher. In that case, the buying possibility in this pair is valid as long as the price trades above the dynamic 20 EMA with a bullish daily close. On the other hand, the price is currently facing a static resistance from where any bearish rejection might increase the selling possibility.
The market scenario in the BTC/USD price is different from other years. The most recent price moved above the dynamic 20 EMA with a candle close but failed to hold the momentum. As a result, the recent bearish breakout below the dynamic level is a sign that bears are interested in taking the price lower in the coming days.
The above image shows that the BTCUSD is trading above the 45,550.00 support level with a corrective momentum. Therefore, any bearish pressure with a daily candle close below this level is more likely to lower the price towards the 37,129.00 area. On the other hand, investors should closely monitor how the price trades at the 45,550.00 level, where any bullish rejection with a stable price above the dynamic 20 EMA would be a potential buying opportunity in this pair.
Overall, the US and Canadian markets may provide a major price change this week due to important releases. On the other hand, the Asian market meat remains less volatile due to bank Holidays and the absence of economic events. A close attention to trade management is required as it is just the beginning of the new year.