Investors moved their sentiment toward the US Dollar, pushing US government bonds to weight at the beginning of the week. However, the 2-year yield moved higher than the 10-year yield, providing a sign to market participants of an economic setback.
In the latest FOMC Minutes, the Federal Reserve agreed that the higher inflation had become a problem that needs another rate hike by 75-100 bps in the coming quarter. However, the minutes came without any hint about the possible recession, which did not mean the risk was not there. The growth forecast was downgraded in the minutes, which could be a great sign of a recession.
On the other hand, the European Central Bank released its June Meeting Accounts, where some members agreed that the bank should keep the door open for another rate hike in the July meeting.
Due to these economic uncertainties and upcoming inflation reports, investors might experience further volatility in the intraday price action on significant forex pairs. Let’s see the future price action from the forex technical outlook for 11 July 2022 to 15 July 2022.
Forex Technical Outlook for 11 July 2022 to 15 July 2022
This week would be critical for major pairs, as the US will release the June inflation report where the CPI might move higher towards the 8.7% level from 8.6% in May. Moreover, it will release retail sales that may show a recovery from last month’s dip. Besides, Germany will release the July ZEW survey and the estimate of June inflation that might work as an additional price driving factor for Euro-related pairs.
The US Dollar Index (DXY) formed a bearish hammer from the 107.77 level, increasing the bearish possibility towards the dynamic 20 EMA. However, the long-term trend is still bullish, where any bullish opportunity is valid as long as it trades above the 105.15 level.
After several attempts, EUR/USD bears finally took the price below the critical 1.0361 swing low with a strong bearish daily candle. As a result, the price visited a level that had not been tested since 2003. The multi-year low price in EUR/USD shows investors are frightened of the possible recession. Moreover, the break below the 1.0361 level did not appear with a test and rebound. Instead, it formed a strong bearish weekly candle below it.
This technical analysis represents the daily price of EURUSD, where a solid bearish daily candle below the 1.0361 level is visible. The bearish break of structure made the 1.0614 to 1.0550 zone a good supply area from where another selling pressure may come. On the other hand, the indicator window shows a primary sign of a bullish correction from the divergence between the price and RSI line. Moreover, the dynamic 20 daily moving average is 220 pips above last Friday’s closing price, leading to a bullish possibility.
Based on the EUR/USD weekly forecast, a minor bullish correction toward the 20 EMA would open a bullish opportunity in this pair, where the 1.0361 level would be the target level.
GBP/USD weekly candle closed with a spike below the 13 June low, where the last three weekly candlestick show bullish rejections every time. However, the weekly RSI is still below the oversold 30 level that needs to show a rebound before considering it a buy.
This technical analysis shows how the latest daily candle of GBPUSD closed bullish after making a new swing low at the 1.1877 level. The extreme volatile bearish momentum from May 2022 high already showed a major reversal in this pair. However, the current price is still below the trendline resistance started from the 8 June high. In that case, the bullish pressure from the 1.1877 level should come with a bullish breakout above the trendline resistance to consider the trend reversal valid.
As per the GBP/USD weekly analysis, the price is more likely to move up in the coming days. Moreover, the bullish daily candle above the dynamic 20 EMA would boost the bullish momentum towards the 1.2325 level.
AUD/USD selling pressure has become corrective since 16 June, where the recent squeeze within the falling wedge increased the bullish reversal possibility. Although the existing trend remains bearish, investors should closely monitor how the price trades at the wedge resistance. The dynamic 20 moving average is also above the wedge resistance that should be recovered before considering buying it in buy.
This technical analysis shows a strong buying pressure from the 0.6761 level from where a bullish Quasimido pattern formed. Therefore, the 0.6761 level appeared as a strong bottom, increasing the possibility of a bullish breakout. Moreover, the RSI formed a divergence with the price, increasing the possibility of bullish momentum.
Based on the current price behavior, AUDUSD bulls may extend the momentum if a bullish daily candle forms above the dynamic 20 EMA. In that case, the main aim is to test the 0.7070 swing high in the coming days. On the other hand, the 0.6761 level would be the final barrier, where a bearish daily candle below this level would extend the selling pressure towards the 0.6700 level.
Choppy price action was seen in the USD/JPY pair for the last few trading days, where no possibility of a reversal was found. In that case, we may expect the current to extend until bearish exhaustion appears with a daily candle below the 134.55 level.
This technical analysis represents the correctness of the USDJPY daily chart, where the existing bullish pressure is stable above the dynamic 20 EMA and static 134.55 level. In that case, the daily price is more likely to extend the momentum toward the 138.00 psychological level in the coming days.
Based on the current price behavior, the corrective bullish pressure in the USDJPY price may extend towards the 138.00 level this week. On the other hand, extreme volatility with multiple violations of near-term swing lows would increase the bearish possibility.
Last week, XAU/USD bulls failed to take the price above the dynamic 20 EMA and trendline resistance. As a result, a solid bearish daily candle appeared below the 1786.46 level, which incurred a major trend change.
This technical analysis represents the daily price structure of XAU/USD where the consecutive two daily bearish candles appeared below the 1786.48 level with a 627 pips movement. In that case, the impulsive selling pressure, backed by the major bearish trend, might increase the bearish pressure in this pair in the coming days.
Based on the daily chart, a minor bullish correction is pending in the XAUUSD pair towards the dynamic 20 EMA or static 1786.46 level. However, the major trend might remain bearish as long as it trades below the 1800.00 psychological level.
The recent price action of BTC/USD is impressive for bulls, although it is not enough to consider a trend change.
The volatility in the Bitcoin price came from Mt Gox, the attorney Nobuaki Kobayashi who revealed the processing of payments to its customers. Although this plan was initiated in 2018, in 2021, it confirmed that 150,000 BTC would be returned to affected customers rather than 850,000. After the distribution, if investors decide to sell their holdings, it might create massive selling pressure on the BTC price.
This technical analysis shows how Bitcoin rallied 27% from the $17,605.00 bottom with bullish rebounds in major altcoins. Moreover, the BTCUSD price provided a further 4% gain before closing the price near the daily opening. Now, this week's bullish close appeared as a bullish engulfing candle from the 200-week Simple Moving Average support.
According to some Bitcoin enthusiasts, the bullish recovery in the BTC price increased the possibility of testing the 25,000.00 psychological level in the coming days. However, the major market trend is still bearish for this pair which may resume momentum at any time.
The Non-farm payroll release provided a temporary benefit to USD counterparties. However, the clear market sentiment would come after the US inflation report, where the current projection is not supportive for the US Dollar.