Forex Forecast & Forex Technical Outlook for 06 November 2023 to 10 November 2023

Many economic indicators were released in the previous week, providing an early look into the operational dynamics of the fourth quarter. In brief, the remarkable prowess observed during the third quarter seems to diminish as the calendar year nears its conclusion. The labor market was the focal point of attention after an unexpected surge in September. Moreover, the Nonfarm payrolls increased more modestly in October, adding 150,000 net new positions for the month.

Among Asian economies, the Bank of Japan implemented an additional monetary policy adjustment. The policy rate was maintained at -0.10%, and the 10-year yield target was maintained at 0.00%. However, the upper bound of 1.00% for 10-year yields was redefined as a "reference" rather than a strict limit, as it had been previously stated.

The Federal Open Market Committee (FOMC) refrained from increasing its target range for the federal funds rate, a third instance in the previous four policy meetings. According to the September data from its Survey of Consumer, inflation expectations exhibited a comparatively stable trend throughout the month. However, there was a marginal decline in households' perceptions and outlook concerning credit conditions.

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Forex Technical Outlook for 06 November 2023 to 10 November 2023

Let’s see the list of events to look at this week:

• BOJ Gov Ueda Speaks on Monday
• RBA Cash Rate & Rate Statement on Tuesday
• NZD Inflation Expectations q/q on Wednesday
• BOE Gov Bailey Speaks on Wednesday
• Fed Chair Powell Speaks on Wednesday
• Fed Chair Powell Speaks on Friday
• The UK GDP m/m on Friday
• Prelim UoM Consumer Sentiment on Friday

Let’s see the market outlook from the weekly forecast:

EUR/USD

The EUR/USD price struggled to find a clear direction in the previous week, led by several central banks’ announcements. However, the price found a directional bias on Friday, followed by the downbeat US Nonfarm payroll data, which pushed the price beyond the 1.0700 psychological level.

In the weekly chart of EUR/USD, the price held the downside momentum below the 1.0500 level for the fourth consecutive week. However, the price moved above the 100-day SMA level for the first time since August 2023. Still, moving averages showed a downward slope, while the 20-day EMA is at the 1.0800 psychological level.

In the daily technical chart, the bulls showed interest as the recent price trades above the 20-day SMA, while the Momentum Indicator maintained the upward pressure. Moreover, the Relative Strength Index (RSI) showed a positive momentum, extending the bullish possibility of the 1.0800 level.

On the bearish side, the 1.0640 level would work as an immediate support level above the 1.0520 level. However, a bullish recovery with a stable market above the 1.0740 level could increase the possibility of reaching the 1.0800 level. 

GBP/USD

The policy update from the Federal Reserve and the Bank of England was a blessing to GBP/USD bulls, as the recent price recovered from the three-week low.

The Bank of England showed a more hawkish tone than the Fed, creating a fundamental divergence, which extended the bullish pressure for the GBP/USD price for the coming days.

In the short-term GBP/USD technical analysis, the buying pressure has become potent as the 14-day Relative Strength Index (RSI) moved above the 60.00 level, followed by a bullish symmetrical triangle breakout. 

Moreover, an upward pressure is seen above the 50-day SMA level, reflecting the initiation of a bullish momentum.

Based on this outlook, the buying possibility is valid as long as the price trades above the 1.2300 static level or the 50-day SMA. In that case, the next resistance level is the 200-day SMA or 1.2430 level. 

On the bearish side, the near-term support level is the 1.2190 level, which is the immediate barrier to bulls. In that case, a bearish pressure with a D1 close could lower the price towards the 1.2037 level.

AUD/USD

Based on the previous AUD/USD outlook, bulls took control of the price and formed an impulsive trend. Moreover, the latest downbeat data from the Nonfarm payroll could work as an additional bullish factor for the AUD/USD price in the coming days.

In the daily AUD/USD price, a falling wedge pattern is visible, with a daily candle above the wedge resistance validating the trend reversal. Moreover, the stable market pressure is visible above the dynamic 20-day EMA, which might be an additional bullish factor for this pair.

Besides the latest pattern breakout, the Relative Strength Index (RSI) changed its position and moved to the 67.00 level.

Based on the weekly AUD/USD price prediction, a downside correction is possible towards the 0.6391 static level, where a valid bullish rejection may resume the existing trend. In that case, the upside pressure could extend toward the 0.6894 resistance level.

On the other hand, an immediate bearish pressure with a stable price below the 20 EMA could lower the price towards the 0.6100 level.

USD/JPY

A strong bullish candle appeared above the 150.00 psychological level with a strong bullish candlestick. However, the sentiment was changed immediately, followed by the weaker Nonfarm payroll report. As a result, the upside pressure has become limited, and investment might expect bearish extension depending on the upcoming price action.

In the weekly USD/JPY price, a bearish outside bar appeared, eliminating buyers with immediate bullish pressure and reversal. Moreover, the recent weekly candles show a corrective upside pressure, a primary sign of a trend reversal.

In the daily chart, a new high volume level is formed from the August 2023 low, which is at the 149.61 level. Therefore, if the current price trades below this high volume level, we may expect the bearish pressure to extend.

As a result of the bearish reversal in the previous week, a violation of the dynamic 20 EMA support is seen. Moreover, the  Relative Strength Index (RSI) rebounded from the 70.00 line and moved below the 50.00 level.

Based on this structure, a bearish pressure below the 148.75 level could be a bearish opportunity, targeting the 144.50 equilibrium point. However, the upside possibility is valid as long as the price trades above the 150.00 level, where the next resistance level is at the 154.00 area.

XAU/USD 

XAU/USD price continued pushing higher at the 2000.00 psychological level, lacking the momentum to break higher. The risk remained intact due to the limited upward pressure in the US treasury yields. 

However, the US economy is still stronger than other major economies, while the greenback could limit the loss at any time.

In the latest price action, the Gold price lost the bullish momentum by limiting the upward pressure above the 2000.00 psychological level. 

Based on the weekly chart, a downside pressure below the 1980.00 level could initiate a deeper correction in the 20-week SMA, which is at the 1930.00 level. On the other hand, an upward continuation could extend the momentum toward the 2025.00 level.

In the daily chart, Gold is trading between 2005.00 to 1980.00 area. Therefore, as long as the price trades within this range, we may expect bullish pressure in the coming days. The Relative Strength Index (RSI) reached the overbought 70.00 area, a sign of an upcoming consolidation.

BTC/USD

Concern has surrounded the authorization of a Bitcoin spot Exchange-Traded Fund (ETF) for several years. Nonetheless, recent ETF-related developments have garnered momentum. The US Securities and Exchange Commission (SEC), which has the authority to approve or disapprove ETF products, has encountered obstacles in the form of several lawsuits about cryptocurrencies.

The primary catalyst for the initial increase in Bitcoin's value, which commenced in mid-October, was the SEC's defeat in Grayscale's lawsuit. The lawsuit sought to convert the GBTC product into a spot ETF offering, among other developments about ETFs. At present, in the absence of any updates, the price of Bitcoin has exhibited a sideways movement.

However, it is anticipated that the speculative enthusiasm surrounding Bitcoin trading will peak in January 2024, as that month signifies the upcoming substantial deadline for the ETF decision. This occurrence has the potential to impact the cryptocurrency industry significantly. 

An analogous pessimistic outlook is evident in the Whale Transaction metric, which has experienced a significant increase since October 23. This index, which monitors transfers of $100,000 or more, rises in value; this indicates that substantial investors, or "whales," may be relocating their holdings to secure profits.

Utilizing the 30-day Market Value to Realized Value (MVRV) metric, investors who have acquired Bitcoin within the previous month can determine the average profit or loss. At present, the MVRV is approximately 10%, which represents a decline from 16% on October 23. At this threshold, the mean return for investors who purchased Bitcoin within the previous month is 10%.

In the BTC/USD daily chart, strong volatility is seen above the 35,266.21 resistance level/ Moreover, the bearish pressure is potent as the recent price formed a gap with the dynamic 20-day EMA.

In that case, a bearish pressure with a daily close below the 34,043.43 level could lower the price towards the 31,169.91 level in the coming days. However, a bullish trend extension needs a strong recovery above the 36,000.00 level before reaching the 40,000.00 level.

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