The US employment report showed more than half a million jobs in July, slashing the argument that the US economy is heading into a recession. However, other measures besides the Non-farm Payroll showed a sign of slowing where the July Job report could put additional pressure on the Fed to control inflation.
In the US counterparts, the Bank of England stepped back from its tightening policies by increasing the interest rate by 50 bps to 1.75%. Moreover, the bank announced selling the government bond holdings after September 2022. In Asian countries, the Reserve Bank of Australia (RBA) was seen to raise the rate by 50 bps but showed a flexible approach based on data. As per the report from some prominent analysts, the RBA could revert the 25 bps increment from September. In other countries, Brazil’s Central Bank also raised the rate by 50 bps this week, where a further rate hike of 25 bps to 14.00% is possible in the next monetary policy meeting.
Forex Technical Outlook for 08 August 2022 to 12 August 2022
This week, the immediate attention will be on the US consumer price index data, which will be released on Wednesday. Besides, the UK quarterly growth report will appear the following day, where the current projection shows a 1.2% decline from last quarter’s 0.5% improvement.
The US Dollar Index (DXY) continued pushing higher, although the price remained below the dynamic 20-day moving average. The corrective selling pressure found a bottom at the 105.00 support level from where a strong bullish candle appeared on the NFP day. Therefore, an intense buying pressure above the 106.97 immediate resistance level could extend the bullish trend towards the 108.70 level.
Despite several high-impact news, EUR/USD trades within a rectangle pattern where a solid breakout is needed to find a stable trend. In the broader picture, the price is still below the 100-day SMA, indicating a strong bearish trend, while the highest trading volume in the last year’s price action is 1.1297. Although the market trend is bearish, we may find it obsolete due to not having near-term solid volumes.
This technical analysis shows how far the dynamic 100 SMA is from the current price. Moreover, the immediate price behavior is corrective, as demonstrated from the 20-day MA, where multiple violations are visible. On the indicator window, the Relative Strength Index (RSI) shows a different story where the current RSI level is at a 50% neutral level.
In the EURUSD outlook, the primary aim for bears is to wait for a bearish daily close below the 1.0100 level to open a bearish position towards the target of 0.9800 level. On the other hand, the bullish correction might extend towards the 1.0445 level if a strong D1 candle appears above the rectangle resistance of 1.0273.
As shown in the previous weekly commentary, GBP/USD extended the bullish channel extension but reached the key supply zone from where selling pressure appeared. Moreover, the price formed a bearish Quasimodo pattern from the demand zone and moved below the dynamic 20 EMA level.
This technical analysis represents the long-term bearish trend of GBP/USD, where the 100 SMA is way above the current price. Moreover, the strongest trading volume since December 2022 was recorded at the 1.3541 level, which also has a strong gap. The RSI rebounded below the 50 level without testing the 70 level, indicating upcoming selling pressure.
Based on the GBP/USD price analysis, the bearish possibility is solid as long as it is trading below the 1.2399 to 1.2216 supply zone, where the main aim is to test the 1.1762 level. The alternative approach is to wait for the price to break above the 1.2399 level before approaching the 1.2600 key psychological level.
AUD/USD buying pressure is initiated from the 0.6679 bottom, from where a bullish V-shape recovery appeared. Moreover, the price remained above the 0.6920 to 0.6850 demand zone for a considerable time, which opens further bulling possibilities.
This technical analysis indicates a corrective bullish pressure in the AUD/USD daily chart where the dynamic 20 EMA is at the current price level. Moreover, the 100 SMA is above the current price, aiming lower, while the strongest volume level is at 0.7191 level. The RSI is also at a neutral 50 level after testing the oversold 30 level.
The daily AUD/USD structure would provide a bullish opportunity in the coming days if the price moves higher from the current demand zone. In that case, the main aim is to test the 0.7070 resistance level from where a bearish correction may happen. On the other hand, the break below the 0.6850 level might drag the price towards the 0.6879 level.
Although USD/JPY bears had a massive 800 pips movement from the swing high of 139.37 level, there was no significant change in trading volumes. As a result, any bullish recovery from the near-term resistance level could eliminate the selling pressure and resume the existing bullish trend.
This technical analysis shows a strong uptrend in USD/JPY daily chart, where the 100 SMA is below the 126.31 support level with an upward direction. However, the price spent more than five trading days below the 20 EMAbut formed a V-shape recovery with a liquidity grab from the 131.48 level.
As per the USDJPY daily chart, the current RSI level supports bulls as it rebounded higher from the 30 oversold level. However, the daily candle is still below the 135.57 resistance level from where a bearish correction may appear. This week, investors should monitor how the price trades at the 135.57 level, from where a bullish recovery with a candle close above the 136.00 level could extend the trend towards the 139.37 level.
XAU/USD continued moving higher, as shown in the previous weekly market outlook. However, the buying pressure showed a bearish rejection from the strongest trading volume in the last 1- year duration.
This technical indicates a short-term buying pressure in XAU/USD from the 20-day moving average where the 100 SMA is above the price. Moreover, based on the visible range trading volume indicator, the price reached an active zone, while the RSI is bullish above the 50.00 level.
As per the current XAU/USD weekly analysis, any strong bullish recovery with a daily candle above the 1796.00 level could extend the buying pressure towards the 1847.00 level. On the other hand, the bearish possibility is valid if the price breaks below the 1750.00 support level.
Strong fundamental development for Bitcoin price is the entry of BlackRock, a prominent asset manager in the world, into the crypto market with a partnership with Coinbase, a US-based cryptocurrency exchange. The result is clearly visible from the Coinbase stock that already gained more than 50% from the monthly opening. However, the broader crypto market is still corrective, where the crypto market cap is hovering at $1.06 trillion.
This technical analysis shows how the BTC/USD price trades within a bullish ascending channel where the current price reached the 50% level after testing the channel resistance. The dynamic 20 EMA is working as immediate support, while the strongest trading volume since March 2022 is at the 20,911.00 level. In the indicator window, the RSI is corrective at the 50% level from where an upside pressure may come.
Bitcoin daily price shows a possible buying pressure from the dynamic 20 EMA support that may extend towards the 26,558.00 level. On the other hand, a strong break below the 18,900.00 level with a bearish daily candle could resume the broader bearish trend towards the 16,000.00 level.
After the positive non-farm payroll report, investors' sentiment will be positive for USD bulls, where a downside pressure in the CPI report could ease the market volatility.