The US Dollar responded to the Non-farm payroll. The Labour report showed a better-than-expected employment report to 223K jobs, but it remained below investors' expectation in line with other indicators.
The 223K result is also lower than last month’s 256K, which is a sign of moderation. Moreover, the wage growth came below the expectation to 4.6% year over year, which would be a strong sign of relief to the Federal Reserve.
Overall, the US Dollar weakness could extend this week but closer attention to other economic releases is needed.
Forex Technical Outlook for 09 January 2023 to 13 January 2023
It would be a significant week for investors as the US Consumer price index will provide a clue about whether the US economy is weakening or not.
Moreover, the Bank of Canada governor will speak, where a positive for the CAD may come as last week’s employment report came with strong momentum.
Before proceeding further, let’s see important releases for this week:
- BOC Gov Macklem Speaks on Tuesday
- Fed Chair Powell Speaks on Tuesday
- AUD CPI y/y on Wednesday
- The US CPI y/y on Thursday
- The US GDP m/m on Friday
- Prelim UoM Consumer Sentiment on Friday
Let’s proceed with the weekly outlook with the DXY outlook:
A strong bearish daily candle appeared in the US Dollar index daily price. However, the broader outlook is still bullish as it trades above the 103.41 level.
Investors should closely monitor how the price reacts to the 103.40 level this week. Any struggle to hold the price above this level could grab sellers' attention in the market, with a target to reach the price towards the 102.00 level.
The bullish trend continuation pattern is clearly visible in the EUR/USD price as shown in the previous weekly outlook. However, close attention to the near-term price action is needed to join the bullish rally after a considerable correction.
This technical analysis of EUR/USD shows a buying momentum in the daily timeframe. The price is heading to the north and it does not need rocket science to say that the current momentum is bullish. However, it is important to know that buying an instrument from the swing top needs additional attention.
Based on the Current Bollinger Bands trend trading method, the bullish pressure is moving within a squeeze, which is a sign of a possible correction. The Upper and Lower Bands are coming closer while the middle Bands are almost flat.
In the indicator window, the ADX rebounded on the downside after reaching the peak. It is a sign that the buying momentum needs to cool down but can rebound at any time.
Based on the current price behavior, the buying momentum is valid in this pair but a stable bullish daily candle above the 1.0632 high volume level would offer a conservative bullish signal.
On the other hand, a sharp rebound with a breakdown below the 1.0479 level would make the current momentum invalid and open room for reaching the 1.0227 area.
In the previous week, the US Dollar weakness was extended but strong volatility was seen in the GBP/USD price. However, the bullish possibility is still potent as there is no sign of strong sellers’ presence.
This technical analysis shows a bearish correction in the GBP/USD daily price with several reasons to rely on the possible buying pressure.
The first one is the recent correction and bullish daily candle from the lower Bollinger Bands. Moreover, the weekly price closed above the high volume level from November to December 2022 peak.
In the indicator window, the ADX showed a strong rebound but still remained below the 20% level. The structure of the Bollinger Bands is supportive of bulls as the current price is trading at the discounted level from 1.2448 to 1.1844 peak.
Based on the daily price outlook, a bullish daily candle above the middle Bollinger Bands will validate the buying possibility where the ultimate target is to reach the 1.2448 resistance level.
On the downside, the bearish pressure needs a stable selling momentum from the 1.1840 level, which will increase the possibility of reaching the 1.1140 area.
The buying pressure from the last week’s bottom already provided more than 200 pips gains to bulls. Moreover, the recent price action is solid for bulls and it can move even higher with a bullish trend continuation opportunity.
This technical analysis shows a flat Bollinger Bands formation, which is a sign of a correction backed by a strong bullish trend. Moreover, the latest fixed range high volume level is below the price, while the ADX is below the 20% level.
Even if the price passed a corrective week the tradable range was above the middle Bollinger Bands level. It is a sign that bears failed to show significant pressure in the previous week.
After the non-farm payroll releases the upside pressure has become solid even if the ADX is still below the 20% area.
Based on this outlook a bullish trend continuation is likely to happen in the AUD/USD price, which is valid as long as the price remains above the middle BB.
The alternative trading approach is to wait for the price to come below the 0.6697 high volume level, which can initiate a consolidation.
As per the previous USD/JPY weekly outlook, sellers started dominating the market and provided a massive bearish daily candle after the NFP.
This technical analysis shows how the trend trading opportunity is potent in the USD/JPy price.
The daily candle showed a strong bearish rejection from the 134.49 event level with a bullish liquidity grab. It is a sign that short-term buyers are out of the market and bears are ready to grab the week for the coming days.
In the Bollinger Bands Indicator, the upper Bands and Lower Bands started moving down while the price remained stable below the middle range. The ADX showed a downside pressure but remained above the 20% area.
Based on the current daily outlook, a bearish trend trading possibility is potent in the USDJPY price, as long as it trades below the 134.49 key resistance level.
The buying pressure in the XAU/USD is overextended but still, there is no sign that bulls are done with the price.
As per the previous outlook, the buying pressure extended to the targeted area, and investors have enjoyed a fresh 400 pips gain from that movement.
This technical analysis of the XAU/USD shows that the price is overextended from the Bollinger Bands resistance, while the near-term resistance level is at the 1878.60 level. Therefore, a minor bearish correction is pending in this pair but investors need to monitor how the price trades at the 1878.60 area.
The upper bands and the lower bands remained on the buyers’ side in the daily price, while the latest high volume level is below it.
Based on the XAU/USD outlook, the bullish possibility in the XAU/USD price is potent as long as it trades above the high volume level of 1818.28 level. However, a corrective bearish pressure is expected for this week, if there is a solid bearish rejection from the 1878.60 resistance level.
Bitcoin has a strong negative correlation with the Non-farm payroll release. The BTC/USD price dropped when the actual NFP came with a better-than-expected report. However, the only expectation was seen in August and December 2022, where selling pressure came even if the NFP was weaker.
Last week’s NFP release was another exception, where the report came above the 200K expectation but buying pressure appeared in the BTCUSD price. The main reason behind this sentiment would be the weaker US Dollar with a less possibility of a rate hike in 2023.
This technical analysis shows a strong correction in the BTC/USD daily chart as the current Bollinger Bands levels are almost flat. Moreover, the ADX is below the 20.00 level, indicating that the current market trend is extremely corrective.
Based on the BTC/USD bullish outlook, a strong buying pressure with a daily close above the 17,059.90 level would validate the buying trend towards the 20,000.00 area.
However, the broader market context is still bearish, where further downside momentum with a D1 candle below the lower Bollinger Bands could eliminate the bullish structure and lower the price in the coming days, toward the 15,000.00 level.
The regular important economic releases and trending movements are signs of stable market momentum in recent days. As the Non-farm payroll showed a primary sign of a weaker US economy, the broader outlook for this week will be against the USD.