Initially, investors favored a rate hike by the Fed at its upcoming May meeting, but disappointing US data throughout the last week has cast doubt on the best course of action.
The ISM manufacturing and non-manufacturing PMI surveys revealed disappointment in employment and price levels. The outlook for the labor market also deteriorated, as the number of job openings in February fell to its lowest level in nearly two years. Also, the private sector added fewer jobs than anticipated in March.
As a result, market participants are divided over whether the Fed should implement one final 25bps raise in May or wait. Moreover, a series of reductions in the summer could come, with interest rates ending in 2023 at approximately 4.2%.
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Forex Technical Outlook for 10 April 2023 to 14 April 2023
Due to Easter Monday, most monitored economies begin the following week on a low note. However, the calendar will become livelier with each passing day, with the March US CPI figures, the latest FOMC meeting minutes, and the BoC decision.
The US data may shed additional light on whether the Fed should implement a rate hike in May, while the Bank of Canada's decision may determine whether it will be the first major central bank to reduce rates.
Let’s see important releases for this week:
- The US Consumer Price Index (CPI) on Wednesday
- BOE Gov Bailey Speaks on Wednesday
- BOC Overnight Rate & Rate Statement on Wednesday
- FOMC Meeting Minutes on Wednesday
- AUD Employment Change on Thursday
- The UK GDP m/m on Thursday
- The US PPI on Thursday
- The US Retail Sales m/m on Friday
- Prelim UoM Consumer Sentiment on Friday
Now move to the weekly price forecast:
The mixed US Job report created downside pressure on the EUR/USD daily chart, but a stable bullish week is seen with a close above the 1.0900 key psychological level.
This technical analysis shows a stable bullish recovery in the daily chart. In the internal structure, 1.0788 and 1.0872 levels came as a strong bullish trend continuation opportunity. Price came down, followed by the potential double top pattern at the 1.0929 level but failed to hold the momentum.
Moreover, the fixed range high volume level indicator from the latest swing shows a stable momentum below the current price. It is a sign that bulls are active in the market, and any intraday buying setup could work as a potential trading opportunity.
The long-term bullish outlook is visible from the stable market above the 100-day SMA support level. Moreover, the dynamic 20 Day EMA is above the 100 SMA, signaling that short-term bulls are still active in the market.
A stable bullish pressure is also visible in the MACD Histogram as it holds the momentum above the neutral line.
Based on the current weekly outlook, the bullish continuation opportunity is present in the EUR/USD pair, targeting the 1.1200 level. However, breaking below the 1.0788 level would lower the price towards the 1.0500 level.
GBP/USD market trend turned bullish after breaking above the 1.2446 significant high with a bullish daily close. However, a minor downside correction is pending, and investors should keep a close eye on the intraday chart to open a long trade.
A strong bullish monthly candle supports bulls, where the current price trades above March 2023 high.
In the current tradable range, the latest sell-side liquidity sweep and a bullish reversal are seen from the 1.2275 level, which will be a valid bottom. On the upside, no significant downside pressure is seen, which is a sign that bulls have an open space to take the price above the January 2023 high.
The dynamic 20-Day Exponential Moving Average is the immediate support level besides the 1.2275 static area. The indicator window shows the same story, where the current MACD histogram squeezes to the neutral level.
Based on the weekly outlook of GBP/USD, the downside pressure may extend as a correction to the broader bullish swing. A break below the 1.2350 psychological level could lower the price towards 1.2275 in the coming days.
However, an immediate recovery with a bullish daily close about the 1.2456 level could resume the existing trend towards the 1.2600 area.
AUD/USD shows a different story than EUR/USD and GBP/USD, where last week’s bearish possibility is still valid.
The week started with a daily candle close above the 0.6758 swing high, creating a bullish opportunity. However, bulls have failed to hold the price above the latest swing high and showed an immediate bearish recovery. It is a sign of a bullish liquidity sweep, which is a strong reason for considering a bearish possibility this week.
This technical analysis shows how the current monthly candle shows a downside pressure with a bullish wick formation. A clearer picture is visible in the daily chart, where a strong bullish daily candle is completely recovered with 4 consecutive bearish days. Also, the price found a stable downside pressure below the 20-day Exponential Moving Average.
In the broader outlook, the 100-day SMA is above the current swing high, which is signaling a strong downside pressure. The indicator window shows the same story, where the current MACD histogram is at the neutral area.
Based on the current market outlook, AUD/USD will more likely extend the bearish pressure in the coming days. The primary target level of the bearish pressure is to test the 0.6550 level to eliminate the inefficiency in November 2022. The alternative outlook is to look for another bullish recovery with a daily candle above the 0.6750 level before aiming for the 0.6839 level.
USD/JPY passed a corrective week, where the broader outlook is still bearish. The recent higher high at 133.74 level validates the 129.64 level as a valid bottom. However, the bullish reversal needs at least another higher high above the 133.74 level before looking for long trades.
This technical analysis shows the daily price of USD/JPY, where the current price aims higher by forming an internal swing low at the 130.63 level.
The upside pressure reaches the dynamic 20-day EMA resistance whereas the 100 SMA works as a confluence resistance at the static 133.74 level.
The indicator window shows a corrective price action as the Histogram is at the neutral level with no sign of divergence.
Based on this price behavior, the broader outlook is bearish until the 133.74 level is taken out. Potential downside possibilities are available at the 132.91 to 133.74 area, which can lower the price towards the 130.00 area.
As per the last XAU/USD weekly analysis, a downside pressure came below the triangle pattern from where the bullish continuation appeared. As the price is aiming higher with a trendline liquidity grab, the bullish possibility is still potent this week.
This technical analysis shows the daily chart of XAU/USD, where the current price shows a strong bullish trend continuation opportunity.
The tradable range for the current trading zone starts from the 2031.48 high to the 1950.32 low. As the current prices are at the premium zone of this trading area, a downside correction is pending before forming another bullish leg.
The fixed range high volume level shows the most active level since March 2023 low is at the 1980.64 level. Therefore, the primary trading idea is to look for long opportunities as long as the price trades above the 1980.6 level.
In the primary chart, the dynamic 20 EMA crossed over the static 1950.30 static level, while the 100 Day Simple Moving Average shows a bullish trend.
Based on the current weekly outlook, XAU/USD could extend the bullish momentum toward the 2060.00 resistance level in the coming days. However, breaking below the 1950.32 level could lower the price to the 1900.00 level.
The cryptocurrency market experienced a 0.5% loss to $1.8 trillion within 24 hours. There has been a pause and consolidation, but no escape has yet occurred.
Conversely, Bitcoin has only lost 0.4% over the past three weeks and holds the $28,000.00 level as strong support. However, its rally has stalled at the level that provided significant support in May and June of the previous year. A stable market above this level would be a significant step in restoring the confidence of long-term investors. But, a deeper decline to $27.0K or even $25.5K may be required to thoroughly correct the rise from the lows in early March and pave the way for a successful uptrend.
March's transaction volume on centralized cryptocurrency exchanges was the highest since September 2022, according to CCData. According to a study by Coinbase, cryptocurrencies could reduce remittance transaction fees by 97%. When sending money abroad, Americans pay over $12 billion per year in fees.
This technical analysis shows a strong bearish possibility in the BTC/USD daily price as the current price is trading sideways at the resistance level.
A potential divergence is visible with MACD EMA’s with several swing violations, which is a strong sign of possible bearish pressure.
A bearish daily close below the 27,200.00 level could validate the bearish possibility towards the 26,000.00 level, while a bullish break above the 29,174.00 level is needed to reach the 30,000.00 level.
Investors will face a volatile week where the US CPI will be the main attention to gauge what the fed might do with the inflation.