The increase in January employment data substantially impacted how the US economy was seen. This shift in perspective has the greatest influence on bond yields on the market, but equities markets continue to anticipate only modest rate hikes.
Before, it was believed that rate cuts would occur before the end of the year; however, there is now speculation of a pause in rate hikes in the following months. If February's job growth resembles that of January, this week's employment data could lend credence to this theory.
However, it is unlikely that the 517k figure will be repeated, and there may be substantial changes. Even if the number is close to 200,000, this would still suggest a vibrant job market in the United States.
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Forex Technical Outlook for 06 March 2023 to 10 March 2023
The coming trading days will be eventful, particularly from Asia, as BoJ and RBA will meet with their rake hike possibilities. However, the major currency might find a stable direction after the Non-farm Payroll release on Friday.
Let’s see important releases for this week:
- CHF CPI on Monday
- RBA Cash rate and rate statement on Monday
- Fed Chair Powell Testifies on Tuesday
- RBA Gov Lowe Speaks on Tuesday
- ADP Non-Farm Employment Change on Wednesday
- BOC cash rate & Rate Statement on Wednesday
- JOLTS Job Openings on Wednesday
- BoJ Monetary Policy Statement on Friday
- The UK GDP m/m on Friday
- CAD Unemployment Rate on Friday
- The US Non-farm Payroll report on Friday
- The US Average Hourly Earnings m/m on Friday
Now move to the weekly price forecast:
EUR/USD passed a corrective week, but an upside correction after a bearish swing could offer further downside possibilities for this instrument.
As per the weekly price action of EUR/USD, sellers need to input more strength before considering it a strong trend. The weekly price found a dynamic 20 EMA as a support, while the momentum indicator indicates a weak trend. Moreover, the 50% Fibonacci Retracement support from the 2022 swing also works as a confluence support to the 20 EMA.
The daily chart shows the bearish possibility as the price moved below the high volume level of 1.0627. The Dynamic 20 DMA is decreasing, but the price exceeds 100 SMA support. In this setup, the new swing high at the 1.0690 level would be crucial from where the latest selling pressure has come with institutional traders' interest.
The indicator window shows a correction in the market as the ADX has reached the 20.00 barrier. In that case, investors should monitor how the price reacts to the near-term support level.
A solid break below the 1.0515 level would extend the bearish trend towards the target of the 1.0280 level. On the other hand, a stable price above 1.0690 is needed to consider a bullish upcoming price direction targeting the 1.0800 area.
GBP/USD passed a corrective week within the four-week-old trading range, with minor upside pressure from the 200 DMA support level at the 1.1920 area.
On the weekly price chart, an extreme correction is seen while the current price trades below the 20-day support level. Moreover, the 100 SMA support is above the 1.2449 critical resistance level, signifying strong downside pressure.
The high volume level from September to February is just above the current at 1.2087 level. Therefore, the primary trading idea of this instrument is to look for short opportunities as long as the price trades below the 1.2087 level.
In the daily chart, a descending channel is emerging while the dynamic 100 SMA and 20 EMA have formed a bearish crossover above the latest high volume level. The ADX remained below the 20.00 level, which is a sign that bears need to wait before finding a stable trend.
Based on the GBP/USD weekly outlook, a bearish range extension could lower the price towards the 1.1708 support level. On the other hand, a stable break above the 1.2100 level is needed before aiming for the 1.2449 resistance level.
Like the EUR/USD and GBP/USD, AUD/USD pushed down in recent days, but it passed an extreme corrective trading session. In that case, a rectangle pattern formation is seen from where a trend continuation opportunity could be a decent trading opportunity.
In the weekly chart, a minor bullish correction came after a stable bearish pressure, which signaled that the broader outlook is still bearish. The 100 SMA is way above the current setup, while the 20 EMA is working as the immediate resistance.
The daily chart shows a bearish crossover from the 20 EMA and 100 SMA, indicating that short-term traders are becoming more bearish. The high volume level is also above the current price at 0.6910, below the 0.6920 static resistance level.
However, the current price trades within a correction, as shown by the ADX indicator. A bullish break above the 20.00 level would indicate the primary phase of a possible trending environment for the price chart.
Based on the current outlook, bearish pressure from the current box pattern with the ADX above the 20.00 level could offer a short opportunity towards the 0.6578 support level.
On the other hand, a bullish pressure above the 0.6790 level with a daily candle could increase the price towards the 0.6920 area.
USD/JPY maintained a stable price action above the 20 DMA support that helped bulls to pass a trading week with an inside bar formation. Although some downside correction is still pending, the buying possibility is still solid.
On the weekly USD/JPY chart, the bullish candle above the 20 EMA with an inside bar formation indicates that bulls are still strong in this market. Moreover, the 100 SMA is below the price and indicates a long-term buyers’ interest in this instrument.
A corrective price action is seen on the daily price, but the price is emerging within an ascending channel. The dynamic 20 DMA is below the current price, indicating short-term buyers' activity in the market.
Based on the daily outlook, the buying opportunity may come from the 135.00 to 134.08 area, where the main aim is to test the 139.91 resistance level. However, the break below the 133.40 level could lower the price towards the 131.00 area.
The increased possibility of rate hike by the Fed shifted the market sentiment from safe haven Gold to US Dollar. The sentiment is expected to remain unchanged throughout the week, and the US Dollar could dominate the market until a surprise comes from central banks.
The price of gold has risen above 1830.00, which is the Fibonacci 38.2% retracement level of its recent uptrend of the 2022 swing.
If XAU/USD can maintain its position above the 20 EMA level of 1840.00, it may rise further to the 1865.00 and 1880.00 area.
On the downside, a drop below the 1830.00 level and closing there for the day could trigger an extensive selling opportunity, targeting the 1810.00 dynamic support level.
For now, sellers are advised to hold off since the Relative Strength Index (RSI) indicator on the daily chart is on the verge of crossing above 50.
Both the price of Bitcoin and the stock market are affected by the cost of money and the value of the U.S. dollar, which are determined by the Federal Reserve's monetary policies. The current BTC sell-off caused a disparity between BTC and stock prices, which is not typical.
Traders are recommended to proceed cautiously during the current BTC price decrease and to thoroughly assess the situation before entering the market. Often, the market needs some time to stabilize after a big action before disclosing its next move.
The daily price of BTC/USD showed downside pressure with a daily close below the 20 DMA level. Moreover, the breach of the high volume level is seen with a solid fundamental background that can offer an additional downside possibility.
If BTC can retain the 21625.00 support level or its bullish structure, investors may anticipate a price increase for BTC.
Yet, overcoming the 23740.00 level of resistance will be challenging. If successful, investors can anticipate buy-side liquidity above the set equal highs of 25211.00.
A weekly timeframe reversal of this level would contradict the negative outlook and may cause a price surge towards the psychological 30000.00 level.
Investors have passed a corrective trading week due to monthly profit-taking. However, a minor correction with no counter momentum could resume the existing trend.