The ISM Services Index exceeded consensus expectations in August, reaching 54.5, the highest level since February. This monthly increase demonstrates the sustained strength of the service sector and the resiliency of the U.S. economy as a whole despite rising interest rates. In addition, the rise in the prices paid component of the ISM services index and last week's increase in oil prices serve as reminders of the difficulties that lie ahead in containing inflation.
Recent data indicate that China's economic slowdown continues, with no obvious bottom in sight. China's Caixin PMI indices for August revealed a more pronounced service sector slowdown than anticipated. This slowdown is attributable to Chinese households' reluctance to spend and their predilection for saving, a trend that the removal of Zero-COVID policies has not been able to alter.
The Federal Reserve published its September Beige Book last week, which covers the nation's economic conditions in July and August. The rate of economic expansion remained stable and essentially unchanged from the previous reporting period.
Attendees of the U.S. Open have flocked to Queens, New York, in preparation for the tournament. Consumers appear more willing to pay a premium to attend this event, although resale ticket prices are at an all-time high.
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Forex Technical Outlook for 11 September 2023 to 15 September 2023
Let’s see the list of events to look at this week:
- GBP Claimant Count Change on Tuesday
- The US CPI and Core CPI on Wednesday
- AUD Employment Change on Thursday
- The US Retail Sales on Thursday
- US Producer Price Index on Thursday
- Prelim UoM Consumer Sentiment
Let’s see the market outlook from the weekly forecast:
The European Central Bank maintained an open door for another rate hike, which will be the main attention this week. Also, inflation is easing in the Eurozone, but not as fast as in the US.
The EUR/USD price closed bearish for the eighth consecutive week, which opened the possibility of a bullish correction this week. However, it might not invalidate the broader downtrend, and a bullish correction toward the 1.0950 level might keep the downside possibility intact.
In the weekly chart, the price is trading below the 100 SMA, while two bearish weeks came below the 20-week EMA. Meanwhile, the Momentum indicator moved down but was still in the neutral zone. The Relative Strength Index (RSI) remained at the 42.00 level, which is a sign of an active bearish pressure.
In the EUR/USD daily chart, the current price is developing a downside side, while the 20 EMA is the immediate resistance. Meanwhile, the 100-day SMA is bearish, far above the price, which signals a bullish mean reversion possibility.
In the latest bearish swing, the high volume level is above the 50% Fibonacci Retracement level, while the current price reached the critical demand zone. Therefore, investors should monitor how the price reacts on the remand zone as a bearish D1 candle below the 1.0630 level could lower the price towards the 1.0500 area.
On the other hand, an immediate bullish recovery is possible, which may come with a strong buying pressure from the demand zone, targeting the 1.0950 level.
As per the previous weekly outlook, GBP/USD closed below the 1.2550 critical level which opened a new era for this pair. However, the bullish possibility is still potent, which may come as an insignificant correction.
The GBP/USD price has remained bearish since late August, which indicates a strong possibility of consolidation. However, there is no sign of a reversal, while the recent price keeps pushing down below important support levels.
In the weekly chart, the current price is trading within an ascending channel, where the latest weekly candle came below the channel support. The dynamic 20 EMA and 100-day SMA are supportive of bears, while the current RSI is just above the 30.00 level.
The high volume level from the July 2023 high is above the 1.2700 key resistance level, which would be a strong barrier for GBP/USD bulls.
On the bearish side, a bullish correction and a rejection from the 20 EMA could lower the price below the 1.2300 key level. However, the price approaches the 161.8% Fibonacci Extension level from the 1.2557/ 1.2748 swing, from where a bullish correction may appear.
Based on the weekly outlook, AUD/USD extended the bearish pressure, grabbing more liquidity from the high volume level. Still, the downside possibility is potent, with no sign of a reversal.
After a bullish correction in the Weekly timeframe, AUD/USD kept pushing down by forming the classic impulse-correction-impulse formation. The 20-week EMA is above the 0.6523 resistance level with a bearish slope, which suggests a downside continuation.
In the daily timeframe, a strong bearish daily candle came at the beginning of the week, and four consecutive indecision candles formed after that. It is a sign that the downward possibility is strong until the violation of the current trade appears.
Based on this structure, the downside momentum can lower the price towards the 0.6300 psychological level this week. On the other hand, the downside momentum is supported by a bearish slope in the 20 EMA, where a bullish break above 0.6523 could violate the current sentiment at any time.
The bullish re-accumulation in the high volume level pushed the USD/JPY price higher last week. However, there is no sign of a downside recovery, and the current momentum can extend for a long time.
In the weekly price of USD/JPY, the current price has been trading sideways at the 2023 high for some days but closed the latest weekly candle as bullish.
The downside momentum last Friday tapped the 10-day EMA and left a long tail on the daily candle before closing higher. Also, a bullish weekly candle came after indecision, which is a classic bullish trend continuation pattern based on the candlestick analysis.
The latest high volume level in the daily price is at 145.50, which is a sign of a bullish re-accumulation before the trend continues. The overbought condition on the daily chart indicates a downside correction possibility before hitting the 148.00 psychological level.
However, the monetary policy between the US and Japan came with a strong divergence, and it is time to see how the Fed keeps the borrowing cost high for an extended time. In that case, any fundamental development towards the JPY could create an exhaustion.
Gold failed to hold the buying pressure above the 1950.00 level and moved down by more than 200+ with a new high volume level formation.
In the weekly timeframe of the XAU/USD pair, the current downside momentum comes with a buyer’s failure to hold the momentum above the 1950.00 level. Moreover, the long-term ascending channel worked as a trend continuation possibility as the recent price formed a bearish rejection from the channel resistance.
In the daily price, the 1916.00 level would be crucial as it is the strongest volume level since the July 2023 peak. As the current corrective price action is above this crucial level, investors should wait for a valid bearish breakout before anticipating a stable trend.
Based on the current XAU/USD outlook, the downside possibility is potent, where the daily price is more likely to follow weekly and monthly directions. However, a bullish recovery with a D1 close above the 1950.00 level could be the first sign of an upcoming bullish trend.
The Bitcoin market has experienced an extended period of low volatility and limited trading. Despite the absence of a distinct trend direction, investors continue to engage in active trading.
Wednesday's publication of the August CPI is expected to be a significant macroeconomic event that could influence Bitcoin's directionality.
The NFP report exceeded expectations in terms of macroeconomic indicators, with 187,000 positions added compared to the predicted 170,000. In addition, the Core PCE Index increased from 3% in June to 3.3% in July year-over-year. According to these indicators, the Fed is less likely to hike the rate again this month.
Nonetheless, an outlier in the August CPI data that exceeds expectations could prompt the Federal Reserve to contemplate a rate hike, potentially resulting in increased market volatility.
BTC/USDT price is trading above the trendline liquidity, which signals a strong downside possibility to grab selling orders.
As of now, a bearish daily candle below the 24,800.00 level could open a bearish possibility, targeting the 24,000.00 level. However, the buying pressure should come with a D1 candle formation above the 27,000.00 level, targeting the 30K level.
Overall, the monthly shift is over and investors might see a decent market movement after the Consumer Price Index release this week.