The recent Non-farm payroll report showed how US employers continued adding jobs in October. It is a sign that the labor market remained tight, and the next Fed meeting could come with additional rate hikes. However, the upcoming policy decisions need more clues from the incoming data as the October payroll does not move the needle much for the 75 bps rate hike.
On the other hand, the Bank of England (BoE) increased the cash rate aggressively last week during the monetary policy decision by 75 bps to 3.00%. Although the decision came in line with the expectation it may signal weaker growth for the economy.
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Forex Technical Outlook for 07 November 2022 to 11 November 2022
After the Non-farm payroll, all eyes will be on the US Consumer price index data, where weaker data is highly expected.
Let’s see the important events from this week:
- RBA Gov Lowe Speaks on Tuesday
- The US Congressional Elections on Tuesday
- The US Consumer Price Index on Thursday
- The UK GDP on Friday
- The US Prelim UoM Consumer Sentiment on Friday
Let’s proceed with the DXY outlook:
Last Friday, a strong bearish daily candle formed in the US Dollar index, which closed down with a 2% loss. Meanwhile, the daily candle managed to close below the 20-day Exponential Moving Average level, which is currently working as a resistance level.
The US Dollar index has a higher possibility of extending the selling pressure in the coming days, where breaking below the 109.58 level, would validate the bearish trend.
As per the previous price prediction, EUR/USD formed a bearish two-bar reversal, followed by an RSI divergence that provided bears a descend 217 pips of gains.
However, after the Non-farm payroll release, the situation has changed as the US dollar weakness was visible.
This technical analysis shows how the bearish trend has become corrective before forming a bullish symmetrical triangle breakout. In this path, the bulls made a new swing high at the 1.0090 level, which increased the possibility of a trend reversal.
The interesting fact about this pair is the change in visible range high volume level, which was changed to 0.9707 level. It is a sign that the bullish rejection from the 0.9760 to 0.9703 demand zone has a strong institutional traders' involvement.
Besides the bullish rejection from the demand zone, strong buying pressure has come from the 20 DMA rejections. Moreover, the Relative Strength Index (RSI) shows buyers' presence in the market as the current level is above the 50% area, aimed at the 70% area.
As of the current findings, EUR/USD bulls have a higher possibility of taking control of the price. In that case, any intraday bullish signal could increase the price toward the 1.0365 level. However, the 1.0090 resistance would be the main barrier in this path. Therefore, a bearish rejection from the 1.0090 level or an immediate daily candle close below the 0.9703 level would continue the bearish trend.
- EUR/USD support levels to look at: 0.9703
- EUR/USD resistance levels to look at: 1.0090.
After reaching the significant demand zone, sellers took control of the GBP/USD price and made a free fall to the 1.1153 level with 413 pips of loss. However, the strong bearish candle on Thursday and rebound on Friday indicate that bulls are still active in the market from the 1.1307 to 1.1058 demand zone.
This technical analysis shows a corrective price behavior, where investors should find signs before going long in this pair. The fixed range high volume indicator from September high to October low is unchanged at the 1.1311 level, acting as a barrier to bulls.
Moreover, the latest post-NFP buying sentiment closed with an inside bar formation, where the dynamic 20-day Exponential Moving Average is above the price. Although the Relative Strength Index (RSI) showed buying pressure, it is still below the 50% neutral level.
GBP/USD could pass a corrective day in the coming trading days, but the bears' territory is below the 1.1058 level. In that case, any bearish daily candle below the 1.1050 level could trigger the short opportunity, targeting the 1.0539 level.
On the other hand, a bullish daily candle above the dynamic 20 DMA could increase the bullish possibility, where the main aim is to test the 1.1800 psychological number.
- GBP/USD support levels to look at: 1.1058
- GBP/USD resistance levels to look at: 1.1743.
Last week, AUD/USD failed to hold the buying pressure above the dynamic 20 EMA and showed an immediate rebound to the 0.6274 key support level.
This technical analysis indicates how the trendline liquidity formed in the AUD/USD daily chart, where the price is more likely to go up and grab those sell-side liquidates. On the other hand, the new high volume level formation at the 0.6274 support level, with a D1 candle above the 20 EMA, shows the bulls' presence in the price.
In the indicator window, the Relative Strength Index shifted its direction to the buyers’ side before reaching the 30% level. In that case, a stable RSI above the 50% area could work as a bullish signal for investors.
Based on this outlook, the bullish possibility is valid if the price moves above the trendline resistance, which could increase the price toward the 0.6749 resistance level. The alternative approach is to find another bullish opportunity from the 0.6320 to 0.6274 demand zone, but breaking below the 0.6250 could eliminate the buying possibility.
- AUD/USD support levels to look at: 0.6274
- AUD/USD resistance levels to look at: 0.6749.
The buying pressure in the USD/JPY has slowed in recent days, but it is not the time to consider it a trend change. The price is still above the critical support level, while the fixed range high volume level works as an important support level.
This technical analysis shows how the price trades above the 146.36 to 144.46 zone, from where a decent buying pressure was seen. In that case, investors should monitor how the price trades above this level, where further bullish rejection could offer a long opportunity.
Based on the current price prediction, investors should monitor how the price trades at the 146.36 to 144.46 zone. Further, US Dollar weakness after the Post-NFP sentiment with a bearish D1 candle below the 146.40 level could open a bearish opportunity, targeting the 140.40 key support level.
On the other hand, an immediate bullish pressure with a D1 candle above the 20 EMA might increase the price to the 151.90 decade-high level.
- USD/JPY support areas to look at: 146.36, 144.46
- USD/JPY Resistance levels to focus: 151.90.
As per the previous XAU/USD weekly price prediction, bears took control over the price and extended the selling pressure towards the 1615.14 key support level. However, bulls joined the market as soon as the price reached the support level and formed a bullish rejection candlestick.
This technical analysis shows a potential rectangle pattern formation in the XAU/USD daily price, which could offer a breakout trading opportunity.
The important fact about this instrument is that bulls have recovered the price above the fixed range high volume level from September high to October low. Although the recent buying pressure did not come with a new high-volume level formation, a stable price above the rectangle pattern resistance level could work as a strong bullish signal.
Therefore, a strong daily candle above the 1685.00 level could offer a long opportunity, where the ultimate target is to test the 1800.00 level. On the other hand, a bearish opportunity is available if the D1 close happens below the 1615.00 level.
- XAU/USD support level to look at: 1615.14
- XAU/USD resistance levels to look at: 1684.10.
The important metric for Bitcoin is the Global In/Out of the Money (GOM) model, which shows that 5.36 million BTC addresses with $2.65 million tokens were purchased from 26,100.00 to 40,000.00 zones. The average price of this purchase was 34,806.00, which could grab sellers' attention if the upcoming buying pressure comes with impulsive pressure.
In this market condition, special attention to the trading volume is needed to identify whales’ involvement in the market.
This technical analysis indicates buying pressure emerging in the BTC/USD daily price from the 20-day EMA support level. Moreover, the fixed range high volume level from September- October is below the price, providing support to bulls.
The Relative Strength Index (RSI) holds a strong position above the 50% level, and currently aiming for the 70% overbought zone.
In that case, the upside possibility of this instrument is solid, where the main aim is to test the 22,749.75 resistance level. On the other hand, an immediate selling pressure with a bearish price action below the 19,000.00 level is needed to consider it a sell, targeting the 17,573.40 untested level.
- BTC/USD support level to look at: 20,000.00
- BTC/USD resistance level to look at: 22,749.75.
The weaker US Dollar from the Non-farm payroll would be the main attention to traders for the coming days. The weaker-than-expected unemployment report could provide a clue to the Fed that they have done enough with the rate hike.