Investors sentiment on the US economy shifted its direction as soon as the Fed took to the airwaves last Wednesday. The policymakers have talked about the taper to move slowly where the Fed was asked to explain the definition of the transition after yields fell. Among S&P 500 companies, nearly 450 organizations have released earnings reports where 80.7% of companies beat earnings expectations.
On the other hand, the US Dollar index moved to the record level last week, but the market sentiment changed after the Non-Farm Payroll release. The US economy added 531K new jobs in October, beating the 455K forecast. Moreover, the unemployment report moved lower by 4.6% against the 4.7% last. Although the US job report showed 7th months in a row of better earnings, the market sentiment changed after the NFP release. This earnings report supports the Fed as they decided to taper the bond-buying program at $15 billion per month.
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Forex Technical Outlook for 08 November 2021 to 12 November 2021
After the Non-Farm Payroll report, investors await how the US CPI and PPI indicate about the US economy. Currently, the CPI is expected to move higher from 0.4% to 0.5%, while the PPI may rise higher by 0.1%. Among other releases, there are the AUD employment report and the UK GDP report.
In the US Dollar index daily chart, the price is trading below the 94.50 key resistance level, where the most recent rejection after the NFP has changed the market sentiment. Before that, the daily chart remained bullish after the rejection from the 93.50 event level, but bulls failed to take the price above the 94.50 level. For this week, the overall market sentiment would remain bearish, followed by last Friday’s rejection. However, any break above the 94.50 level with the support from the US CPI release would change the market sentiment.
As per last week’s projection, EUR/USD continued the bearish pressure towards the 1.1524 swings low and formed a daily candle with a bullish sentiment. The most interesting fact about EURUSD is that the earlier bullish rejection on 13 October successfully broke the near-term high of 1.1666. The break of bullish structure is a sign of a strong buyers presence at 1.1524 area that became more reliable after last week’s bullish rejection.
The above image shows how the price closed last Friday with a regular divergence while the dynamic 20 EMA remained corrective. Although the price is below the dynamic 20 EMA, this week’s possible momentum would be bullish towards the 1.1800 area. However, the bullish sentiment is valid as long as the price is trading above the 1.1524 level. A break below this level with a bearish candle may insist bears test the 1.1400 area.
GBP/USD moved lower with an aggressive bearish pressure and reached the 1.3410 key support level. However, bulls became active from 1.3460 to 1.3410 zone and closed the week with a bullish rejection candle. Meanwhile, the massive bearish pressure created a gap with the dynamic 20 EMA, which is another reason for the possible bullish correction as a mean reversion.
As per the above image, the MACD Histogram is still bearish with no sign of divergence. Therefore, based on the current chart, a bullish correction is pending in this pair that may influence bulls to take the price towards the 1.3650 level. However, investors should remain cautious about the recent impulsive bearish pressure where a better US CPI report may invalidate the current setup.
AUD/USD passed the week with a strong bearish pressure where bulls failed to hold the momentum above the 0.7472 key resistance level. Moreover, the price moved below the dynamic 20 EMA after a month and closed the week below. Therefore, as long as the price is below the dynamic 20 EMA, we may expect the bearish pressure to extend in the coming days.
The above image shows how the price is trading at the 0.7400 event level, becoming indecisive. Therefore, a small bullish correction is pending where any bearish intraday rejection from 0.7410 to 0.7460 would be a good selling opportunity. Meanwhile, the MACD Histogram is bearish and aiming lower, another sign of possible bearish pressure.
USD/JPY became volatile after moving above the 113.22 level, where the price failed to reach the 115.00 key resistance level. Moreover, the price reached dynamic support at the end of last week, where investors should monitor how the price reacts from the dynamic level. If we draw the Fibonacci line from September swing low to October Swing high, we would see that the price has a possibility of correcting lower towards the 50% or 61.8% retracement level.
The above image shows that the price is trading above the 113.22 level, where the dynamic 20 EMA is below the price. Therefore, any bearish daily close below the 113.22 level would increase the selling possibility towards 112.00 level. On the other hand, any bullish rejection with a daily candle above the dynamic 20 EMA might open rooms for 115.00 area.
XAU/USD bulls became aggressive as soon as the price moved above the dynamic 20 EMA with a bullish daily close. Therefore, bulls became aggressive and made a new swing high at the 1818.17 level. The near-term resistance level is at 1831.60 level from where a bearish pressure may come.
The above image shows the MACD Histogram formed PNP formation where the price is above the dynamic 20 EMA. Therefore, any rejection from the 1831.61 level would be the primary selling opportunity for this pair. On the other hand, any immediate bearish pressure with a bullish rejection from the dynamic support would be a potential buying opportunity.
The BTC/USD is heading towards a new all-time high where the current price is carried by the dynamic 20 EMA, which is a sign of a pre-breakout market structure. Therefore, as long as bulls hold a strong ground above the 58,287 support level, it is more likely to test the psychological 70,000 level in the coming days.
The above image shows that bulls hold the price with a strong momentum even if the MACD Histogram is bearish. Therefore, any bullish daily candle above the 63,500 intraday level would be a good buying opportunity in this pair. On the other hand, a break below the 58,287 with a bearish daily candle may change the direction from bullish to bearish.
Overall, a clear direction about the US economy may come from the CPI and PPI release this week, and investors should match it with the latest NFP report to find the ultimate trend.