Last week's economic data released in the United States demonstrated strength across various sectors. Claims for unemployment insurance decreased, the housing market continued to outperform expectations, and there were encouraging signs of increased business equipment expenditure.
After a significant decline during the pandemic, immigration levels have rebounded in the United States. In 2022, immigration flows as a proportion of annual population growth exceeded the pre-pandemic 10-year average, contributing to a rise in both the population and labor force.
The most recent data indicate a gradual recovery in global inflation trends, though the rate may be slower than desired. In the Eurozone, CPI growth slowed to 5.5% year-over-year, while core inflation increased to 5.4%. The headline CPI for Canada in May slowed to 3.4%, while the headline CPI for Australia slowed to 5.6%, although the decline in core inflation was less pronounced in both countries.
Recent policy actions and statements by central bank officials have persuaded market participants that interest rates will rise and remain elevated for a longer period of time than was previously anticipated.
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Forex Technical Outlook for 03 July 2023 to 07 July 2023
Let’s see the list of events to look at this week:
- CHF CPI on Monday
- ISM Manufacturing PMI on Monday
- RBA Cash Rate & Rate Statement on Tuesday
- FOMC Meeting Minutes on Wednesday
- ADP Non-Farm Employment Change on Thursday
- ISM Services PMI on Thursday
- CAD Unemployment Rate on Friday
- US Non-farm Payroll on Friday
- US Average Hourly Earnings on Friday
- US Unemployment Rate on Friday12
Let’s see the market outlook from the weekly forecast:
The overall structure for the USD/USD price remained bullish, where a minor downside pressure was seen in the previous week. The bullish possibility is intact as long as the dynamic level remains below the price.
This technical analysis of EUR/USD shows a corrective momentum without a clear range. The weekly price shows a mixed direction but remains steady above the 20-week Simple Moving Average line. Despise the indecisive momentum, the existing market trend is bullish, and a bullish Weekly candle above the 1.1000 level could resume the existing momentum.
This week, the 1.0900 psychological would be crucial as a bearish break below this level could extend the range-bound momentum toward the 1.0515 level. However, the upcoming sessions will be less volatile, with a lower trading volume on US holidays.
On the daily price of EUR/USD, bears failed to close the daily candle below the 20-day Exponential Moving Average level. It is a sign of a range extension, with the upper limit at the 1.1091 level.
The current Relative Strength Index (RSI) is indecisive at the 50.00 line, which also signals a corrective market momentum.
On the bearish side, the immediate recovery with a D1 candle below the 1.0837 swing low could increase the selling possibility toward the 1.0780 level.
GBP/USD completed the downside correction, while the macro outlook is bullish. This week, a corrective price action may come from the monthly shift but bulls has a higher possibility of winning the battle.
GBP/USD's bullish pressure recaptured the momentum and took the price above the 20-day Exponential Moving Average line.
In the weekly candlestick pattern, the current candle close represents a bullish trend continuation momentum. The primary indication of the bullish trend continuation could come from the daily candle close above the 1.2750 critical level. Above this critical price area, the next resistance level is at 1.2850 level, from where the price showed two reversals in the last fortnight.
If the bullish momentum sustains, Pound Sterling could extend its price to the 1.2900 level against the US Dollar.
In the daily chart, the 14-period Relative Strength Index (RSI) moved above the neutral 50.00 level.
If bears join the market, traders may see the price test at the 1.2640 dynamic support level. Furthermore, a downside pressure below this level could increase the possibility of testing the 1.2548 level.
AUD/USD pushed down towards the critical demand zone and found some buyers' interest. This week, the buying momentum may come after breaking the near-term resistance.
The AUD/USD pair extended the downside pressure and reached the critical demand zone at 0.6642- 0.6571. Moreover, the price formed a bullish rejection from this zone, ending the week with minor buying pressure.
In the main chart window, the 100-day Simple Moving Average is above the current price, while a bearish crossover of 20 EMA with the 100 DMA is seen. It is a signal that short-term sellers are joining the market, whereas long-0term traders are still bearish.
The current RSI shows bullish pressure in the indicator window but remains below the 50.00 line.
Based on the current structure, AUD/USD sellers may regain momentum, where the ultimate target is the 0.6458 level.
On the upside, immediate recovery and a D1 candle above the 0.6717 level could limit the loss and open the possibility of testing the 0.6800 level.
As per the previous outlook, USD/JPY reached the price inefficiency zone from where downside pressure came. Now, investors may expect a downside correction towards the dynamic level before forming a stable trend.
USD/JPY reached the long-awaited price inefficiency zone, left untested on 10 November 2022. As the price fills up the order, investors might experience a correction in the coming days.
On last Friday, bears showed their presence with a red daily candle after 7 trading days. Moreover, the sellers' interest came from a critical imbalance zone where a new trend may form.
In the main chart window, the dynamic 100-day Simple Moving Average remained below the 20 Day SMA, while both lines are below the current price. However, a gap between the price and the 20 EMA is seen, which is a sign of a bearish correction.
The upcoming trading days will be crucial for USD/JPY as the price might form a new trend after the Non-farm payroll.
As per the current findings, a downside correction is pending, where the main aim is to test the 142.00 psychological level. However, an immediate bullish recovery with a D1 candle above the 145.60 level could extend the bullish momentum toward the 147.77 level.
As per the previous commentary, XAU/USD completed the bearish correction and found buyers' interest from the channel support. As it is the first week of July, investors might find a stable trend once the monthly birth period is over.
XAU/USD price showed a decent bullish recovery on Thursday and Friday, while the 14-period RSI remains below the 50.00 level on the daily chart.
Moreover, the latest dynamic level shows downside pressure as the 20-day SMA level formed a bearish crossover with the 100-day SMA level.
The volatile price action on the last two trading days came from the channel support, which is insufficient to consider the price as a bullish recovery. As a result, bears could remain stronger in the coming days, where the main target level is to test the 1900.00 psychological level.
Any strong downside pressure and a bearish D1 candle below the 1900.00 level could extend the loss toward the 1860.00 level, which is the 200-day SMA.
On the other hand, the price already formed a rejection from the channel support, while there is a strong gap with the 20-day Dynamic Exponential Resistance. An immediate bullish correction is pending, but the channel breakout is needed before aiming for a long-term bullish trend.
Fidelity joined Blackstone, Invesco, and WisdomTree, among other financial titans, in filing spot Bitcoin exchange-traded fund (ETF) applications with the Securities and Exchange Commission (SEC). These actions have increased investor confidence and pushed up cryptocurrency prices.
Despite regulatory ambiguity and setbacks such as FTX, the digital asset industry continue to recover. BlackRock's recent Bitcoin ETF application exemplifies the rising institutional demand and intensifying global competition in the nascent industry, as evidenced by BlackRock's recent Bitcoin ETF application. Ethereum, the second-largest , held steady at $1,844, whereas other significant cryptocurrencies experienced gains, with Solana's token (SOL) increasing by over 14%.
In a conference speech, Federal Reserve Chair Jerome Powell acknowledged the central bank's ambiguity regarding inflationary measures. Powell emphasized that reducing inflation and its impact will take time, although the effects of monetary tightening are already visible in interest-rate-sensitive sectors such as housing and investments.
Akash Mahendra, director at Haven1 Foundation and portfolio manager at Yield App, commented on the recent bitcoin ETF frenzy and emphasized the significance of innovation to the industry's success. Positive institutional endorsements notwithstanding, blockchain's true potential rests in its ability to provide innovative solutions beyond traditional finance.
BTC/USD price remained steady above the 30,000.00 level, with a bullish fundamental outlook. It is a primary sign that bulls are interested in this instrument, which can increase the price toward the 34.000.00 psychological resistance level.
However, any bearish break and a daily candle below the 20 DMA could lower the price toward the 26181.00 support level before forming a bullish trend.
A lighter volume is expected in the coming days due to the shift of a new month and a yearly close. Investors should wait for how the Non-farm payroll comes, which may work as a leader in setting the market trend.