In the taper fever, the Fed may be unnoticed for the next few days because the ECB, BOC, and RBA will hold their monetary policy meetings. Based on the current sentiment, ECB and BOC may provide a hawkish tone while the Reserve Bank of Australia may lean in the opposite direction.
There are some significant releases this week, like the USD PPI and CAD unemployment. However, the data front is not expected to show any significant market movement. Instead, the tapering timeline of each central bank may dominate the market sentiment till the end of September. The US Dollar has lost its momentum from the early taper ease, and investors should see what other central banks are doing to get the ultimate market direction.
Forex Technical Outlook for 06 September 2021 to 10 September 2021
The NFP week is over where the US Dollar lost its momentum after showing a lower-than-expected Non-Farm Payroll release. However, the unemployment rate was steady at 5.2%, and the Average Hourly Earnings were up by 0.6%, beating the expectation of 0.3%.
The US Dollar Index showed a steady downside pressure from the 93.72 high and closed the week to the 92.11 level. However, bears failed to take the price below the 91.81 support level from where a rebound may occur. However, a corrective movement is possible for this week as bears should perform profit-taking while investors will focus on other central banks.
Overall, this week, a corrective momentum for the US Dollar is expected with a new move in other currencies, depending on Central Banks movement.
In the EUR/USD price, buyers could take the price higher and test the 1.1900 key resistance level, as expected. However, the current bull run from 1.1660 low to 1.1900 high needs to be corrected before moving higher. However, the current bullish trend failed to breach the 1.1900 level and closed with a long wicked candle. Moreover, a mean reversion is expected as the price made a gap from the dynamic level.
The above image shows that the EURUSD maintained a bullish momentum above the 1.1794 level and closed with a daily candle below the 1.1900 level. However, the MACD Histogram remained highly bullish. Therefore, slow growth in MACD Histogram with a bearish correction may relieve sellers a bit.
Investors should monitor how the ECB monetary policy comes with the decision of tapering. Any hawkish decision regarding the economy and a bullish daily close above the 1.1900 level would bring a significant bullish possibility towards the 1.200 level.
GBP/USD successfully closed a daily candle above the dynamic 20 EMA and closed the week with a bullish sentiment. The most recent bullish trend started from 1.3600 Demand zone is more potent to move higher in the coming days. The primary target for the current bullish trend may grab the liquidity from the 1.3986 zones, and above this level, the 1.4128 would be the supply level.
GBP/USD moved higher with a daily candle above the 20 EMA and closed the week with a bullish sentiment. Moreover, the MACD Histogram turned bullish and made some new highs.
Considering the bullish sentiment the price may move higher until it is coming down below the dynamic 20 EMA. Conversely, a bearish movement below the dynamic level may initiate a bearish correction towards the 1.3650 area.
AUDUSD showed a massive bearish and bullish pressure where the multi-week lows and highs are broken with impulsive force. The most recent bullish trend started from the 0.7100 bottoms that breached the 0.7439 resistance level with a bullish daily close. However, the recent bull run was very aggressive, and it should show a correction before aiming higher.
This week, investors should monitor how the tapering decision comes from the RBA. Considering the recent economic releases and market behavior, a dovish tone with a bearish daily close below 0.7439 would attract sellers.
USD/JPY maintained its volatility by showing too many indecision candles with the violation of a dynamic level of 20 EMA. However, bears closed last Friday’s candle below the dynamic level, pointing out more bearishness in the coming days.
In the above image, we can see that the price remained corrective around the 110.00 area followed by the MACD Histogram at a neutral level.
In this context, investors should find a solid breakout to find a stable rally. However, the bullish rebound from the 109.09 level would be a substantial barrier for bears. Any daily close below the 109.00 level may alter the current bullish pressure and take the price lower towards the 107.70 level.
XAUUSD showed an impressive bullish pressure as the price was above the dynamic 20 EMA and supported to test the 1833.37 resistance level. For this week, a bearish correction may happen, but the ultimate trading approach of XAUUSD should grab the sell liquidity above the 1833.37 level.
The above image shows that bulls were able to take the price above the near-term static and dynamic levels. Moreover, the current uncertainty and Central Banks’ taper race may make the XAUUSD precious.
Therefore, the bullish market sentiment towards the 1850.00 level is valid as long as the price trades above the dynamic 20 EMA. Conversely, any bearish pressure in the daily chart below the dynamic 20 EMA may discount the price towards the 1770.93 level.
BTC/USD bulls are active in the price since the breach of the 40,000.00 level. Therefore, the price moved higher above the 50,000.00 level with a bullish daily close and support from dynamic 20 EMA. Moreover, the new high above the most recent swing of 50,503.40 level increased the buying pressure towards 59,506.43 level.
The above image shows that the dynamic 20 EMA worked as decent support to the price at the 46,591.46 static level. Therefore, the bullish sentiment has a higher possibility of working out until the price is breaking below the 46,591.46 level.
On other hand, bears should wait for a daily candle below the dynamic support level to catch the correction towards the 42,000.00 level.
Overall, this week’s main investors’ focus will be the central Banks meeting, where the RBA is expected to show a dovish tone. Moreover, the market sentiment on the taper race should provide an ultimate direction to the market trend.