The current geopolitical uncertainty from the Ukraine- Russia war skyrocketed commodity prices, especially to energy-related instruments. Oil and gas reached the multi-year high while safe-haven Gold remained steady above the 1900.00 level. In the Russian domestic economy, the local share market remained off throughout the week while the Ruble plunged to a record low against the US Dollar. In March 2022, USDRUB extended its value from 83.63 to 124.90 with more than 50% price change, which is very significant.
On the other hand, the inflationary tension is back in the spotlight. Worldwide central bankers have noted that the current geopolitical uncertainty would increase the inflationary pressure among major countries. The ECB has exposed its accounts showing a belief from scaling back the monetary policy accommodation by its members. On the other hand, the Federal Reserve testifies the Semi-Annual Monetary policy report with a possibility of a 25 bps rate hike in the March meeting. In that case, the current surge in raw materials and commodity prices might influence central banks to react immediately with rate hikes.
The February ISM PMIs showed a better than expected result in the US while the service sector dropped to 56.50 level. In the latest non-farm payroll report, there are 678K new jobs added to the US economy while the unemployment rate is 3.90%. The better than expected US job report pushed the US dollar to regain a bullish momentum against other currencies at the closing part of the week. On the other hand, Germany showed the preliminary CPI of February that jumped to 5.10% YoY in the Eurozone while the EU inflation reached the sample level with no sign of recovery.
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Forex Technical Outlook for 07 March 2022 to 11 March 2022
The week will start with less implication from fundamental releases where RBA Gov Lowe will speak on Wednesday before the UK Annual Budget Release. Later on, volatility is expected from the ECB meeting, where the current expectation is to keep the interest rate unchanged at 0.0%. Besides, the US will release its inflation report expected to print at 7.8% YoY.
In the US Dollar index, bulls became strong and took the price above the 97.79 resistance level with a daily close. Therefore, the extreme buying pressure with a bullish weekly close increased the possibility of testing the 100.48 resistance level in the coming days. On the other hand, the buying pressure took the price higher, making a gap with dynamic levels. In that case, any buying opportunity from 96.60 to 97.20 has a higher possibility of providing a reliable buying pressure on the US Dollar. On the other hand, the bearish target towards the 95.15 level is solid in case of a bearish daily close below the 96.60 static level.
The war-driven market sentiment failed to extend the bullish correction in the EUR/USD daily chart and made a sharp bearish breakout from the rectangle pattern. However, the bearish pressure is supported by the broader market trend where the weekly support is at the 1.0778 level.
This technical analysis shows the price made a solid bearish impulsive pressure where the MACD Histogram continued to push lower below the neutral zone. On the other hand, the current price is still above the weekly support of 1.0778 weekly support from where a buying pressure may come.
Based on the current price structure, investors may experience buying pressure due to the mean reversion to the dynamic 20 EMA towards the 1.1182 resistance level. However, investors should closely monitor how the ECB talks about the Eurozone economy during the ECB press conference where a hawkish tone regarding the inflationary pressure might increase the buying pressure towards the 1.1500 area.
After the successful breakout from the symmetrical triangle, GBP/USD bears made another bearish pressure after consolidation at the 1.3358 area. However, the long-selling pressure from the 1.3620 level might find ground at the 1.3169 key demand area.
This technical analysis shows the selling pressure from the symmetrical triangle was strong, pointing out a strong sellers presence. Moreover, the MACD Histogram supported bears by making new lows below the zero level. In that case, buying pressures from 1.32220 to 1.3170 demand zone would be a solid investment opportunity in the GBPUSD.
Based on the current market context, the price is likely to correct higher towards the 1.3400 area in the coming days. However, a break below the 1.3170 level with a bearish daily candle might alter the current market structure and initiate a bearish movement towards the 1.2850 area.
AUD/USD benefited from the Ukraine-Russia war, where investor sentiment shifted to the Asian economy. Moreover, the post-Covid recovery in Australia pushed bulls to overcome the 0.7300 key resistance level.
The above technical analysis shows that bulls are aggressive as the MACD Histogram made new highs, following the PNP formation. Moreover, the solid bullish recovery from the dynamic 20 EMA and a daily close above the 0.7300 level increased the possibility of testing the 0.7471 resistance level.
Based on the current price behavior, a minor correction and bullish rejection from 0.7300 to 0.7260 is more likely to show a buying sign in this pair. On the other hand, further bullish extension and bearish rejection from 0.7470 to 0.7500 would be a reliable bearish opportunity in this pair.
The US Dollar maintained a bullish momentum from the Ukraine-Russia war while the Japanese Yen demanded a safe-haven currency. As a result, the higher economic activity in this pair increased the volatility with no solid direction.
The above technical analysis shows the price is heading upwards within an ascending triangle where the current price is near the triangle support. Moreover, the MACD Histogram is bearish with a corrective momentum in the indicator window while the dynamic 20 EMA remained closer to the price.
In this week, any bullish opportunity from 114.80 to 114.20 is more likely to take the price up towards the 117.00 level. On the other hand, any bearish daily close below the 114.20 level may increase selling pressure towards the 113.00 area.
The Ukraine-Russia war increased the demand for gold as a safe-haven currency, where the XAU/USD price tested the multi-year high. Considering the war situation, the buying pressure in the XAUUSD is solid where the near-term target level is the 2000.00 psychological number.
The above technical analysis shows how the trading volume shook higher with an intense buying pressure in the price. In the Indicator window, the MACD Histogram remained bullish Indicator window while the MACD line had no sign of divergence.
In that case, the buying pressure in XAUUSD is backed by a substantial volume that may influence bulls to test the 2000.00 psychological level in the coming days. However, a minor bullish correction is pending towards the dynamic 20 EMA from where the buying pressure may resume from the technical perspective.
After a 23% weekly loss, the BTC/USD price found a bottom at the 34,337.00 level. According to IntoTheBlock’s Global In/Out of the Money (GIOM) model, 2,19 million Bitcoin addresses with $1.50 million value were bought from the $44K level, which are running with a loss.
On the other hand, Bitcoin has experienced the first bullish month after three consecutive selling months from November, which is a reason to rely on the possible buying pressure. A similar price pattern was seen in the Bitcoin chart in December 2011, June 2015, and February 2019.
The above technical analysis shows buyers' presence from the bullish MACD Histogram although the daily candle appeared below the dynamic 20 EMA. In that case, the buying possibility is now questionable where the price is likely to test the 36,347.88 support level.
On the other hand, buyers should find a solid bullish rejection from 37,800.00 to 36,000.00 with a bullish daily candle above the dynamic 20 EMA to rely on the buying pressure. The primary target for bulls should be towards the 52,000 swing high, while the break below the 36,000.00 level would lower the price towards the 30,000.00 area.
Overall, investors should closely monitor how the geopolitical uncertainty from Ukraine-Russia is heading where further negative news would increase the volatility in the forex market. In that case, Asian currencies might work as a reliable alternative way to invest and make money.