The November ISM Services PMI was released last week, showing a strong reading for the US economy. Moreover, some other metrics showed some clues about the cooling inflation, but not at the speed expected.
In other countries, the Bank of Canada raised the policy rate by 50 bps during last week’s meeting, while the RBA raised the policy rate by 25 bps.
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Forex Technical Outlook for 12 December 2022 to 16 December 2022
The upcoming trading days are going to be volatile as there are several important releases pending from major economies, starting with the UK GDP on Monday. Moreover, the US CPI will be the most important event for the week, a day before the FOMC.
Let’s see the important events from this week:
- The UK GDP m/m on Monday
- BOC Gov Macklem Speaks on Tuesday
- Claimant Count Change on Tuesday
- BOE Gov Bailey Speaks on Tuesday
- The US CPI m/m on Tuesday
- RBA Gov Lowe Speaks on Wednesday
- GBP CPI y/y on Wednesday
- FOMC Statement & Federal Funds Rate on Wednesday
- NZD GDP q/q on Thursday
- AUD Unemployment Rate on Thursday
- SNB Policy Rate & Monetary Policy Assessment on Thursday
- Euro Main Refinancing Rate & Monetary Policy Statement on Thursday
- The US Core Retail Sales m/m on Thursday
- French & German PMI’s on Friday
- The UK Flash services & manufacturing PMI on Friday
- The US Flash Services PMI on Friday.
Let’s proceed with the DXY outlook:
The broader market outlook for the US Dollar Index (DXY) is bearish as it is trading below the dynamic 20 EMA resistance. The current near-term resistance level for this instrument is 105.83 and the bearish pressure is potent as long as the price trades below this level.
As per the previous EUR/USD, weekly forecast bulls continued pushing the price higher but the recent price action showed weakness. As a result, bears may take control over the price but investors need to find confirmation by finding the price below near-term support levels.
This technical analysis indicates how buying pressure is fading in the daily chart, where the current price is moving up with corrective pressure. Moreover, there is an emerging ascending wedge formation, which could offer a short opportunity after a perfect breakdown.
The current price is trading above the fixed range high volume level, which is a sign that the daily price is still controllable by bulls. However, the MACD Histogram has become corrective to the neutral level, indicating a corrective momentum.
- EUR/USD bullish possibility: Based on the daily price outlook of EUR/USD, the current upside pressure is solid to extend the bullish momentum towards the 1.0700 level.
- EUR/USD bearish possibility: On the other hand, any strong bearish pressure from the 1.0670 to 1.0787 area could trigger the bearish possibility, where the main aim is to test the 1.0300 level.
Let’s see the price levels to look at taking positions in the EUR/USD:
- EUR/USD support levels to look at: 1.0393
- EUR/USD resistance levels to look at: 1.0612.
The bullish trend continuation opportunity is still present as bulls hold the price above the fixed range high volume level from November low to high.
This technical analysis indicates how bulls are active in the market, where the dynamic 20-day EMA is working as a support level. Moreover, the upside pressure has become potential as the price has taken out the August 2022 high, opening the opportunity to reach June 2022 high at 1.2668.
In the indicator window, the MACD Histogram is at the neutral level while the MACD EMA reaches the overbought area. It is a sign that the upside pressure is still extreme in the market.
- GBP/USD bullish possibility: Based on the current daily outlook, a minor bearish correction is pending but the upside possibility is solid as long as it trades above the 1.2107 support level. The target area for the upside pressure will be towards the 1.2668 level.
- GBP/USD bearish possibility: Sellers should find the price below the 1.2100 level with a daily candle close, which could increase the possibility of reaching the 1.1900 area.
Let’s see critical levels for GBP/USD this week:
- GBP/USD support levels to look at: 1.2107.
- GBP/USD resistance levels to look at: 1.2668.
AUD/USD continued pushing higher as bears failed to take the price below the near-term high volume level. In that case, any bullish possibility in this pair could provide a high probable long opportunity in the coming days.
This technical analysis indicates a strong bullish momentum where the price is moving higher by creating new demand zones.
The fixed range high volume level from November high to low is at 0.6697 level, which is working as an immediate support level. Moreover, the dynamic 20 EMA is providing confluence support, where the MACD Histogram is at a neutral level.
- AUD/USD bullish possibility: In this price context, an upside possibility is solid towards the 0.7000 level as long as it trades above the dynamic 20 EMA support.
- AUD/USD bearish possibility: The downside possibility in this pair needs strong selling pressure and a daily close below the 0.6690 level. In that case, any bearish possibility would be potential towards the target of 0.6500 psychological level.
Let’s see the critical levels to look at for the AUD/USD:
- AUD/USD support levels to look at: 0.6643
- AUD/USD resistance levels to look at: 0.7000.
As per the previous USD/JPY outlook, bulls formed a solid bottom from where an upside pressure has come with more than 150 pips gains.
This technical analysis shows that the current trading range starts from the 137.85 high to the 133.63 low, from where a breakout is needed to form a solid trend.
The highest trading volume level from November high to low is at 139.50 level, which is 300+ pips above the current price. Moreover, the MACD line reached the oversold zone and formed a bullish crossover.
- USD/JPY bullish possibility: Investors should wait for the price to move above the dynamic 20 EMA and 137.85 resistance level before aiming for the 142.22 level.
- USD/JPY bearish possibility: any bearish rejection from the 137.80 to 138.20 area with a bearish daily candle would open a short opportunity, targeting the 130.37 level.
Let’s see important levels to look at for USD/JPY:
- USDJPY support areas to look at: 133.63
- USDJPY Resistance levels to focus: 137.85.
The upside possibility is still potent in the XAUUSD daily chart as the current price is still trading above the 1766.21 near-term support level.
This technical analysis shows how XAU/USD bulls breached the August 2022 high, providing a primary of a possible bullish trend toward the 1879.00 area.
The highest trading level from November high to low is at 1773.92 level, which could play as an important level for this week. Moreover, the dynamic 20 EMA is below the price, aiming higher while the MACD Histogram is bullish.
- XAU/USD bullish possibility: based on the current price behavior, a minor correction and bullish rejection from the 20 EMA could offer a trend trading opportunity towards the 1879.00 level.
- XAU/USD bearish possibility: The upside pressure in the XAU/USD price is limited if a bearish daily candle closes below the 1766.00 level. In that case, the bearish possibility could extend toward the 1727.85 level.
Let’s see important levels to look at for XAU/USD:
- XAU/USD support level to look at: 1766.21.
- XAU/USD resistance levels to look at: 1807.48.
The biggest risk for the BTC bull is the rising interest rate by the Federal reserve, where two factors could affect the market- the borrowing cost and US Dollar value.
The Bitcoin price is valued in the US Dollar, where any strength in the US Dollar has a negative impact on the BTC and vice versa if it falls. On the other hand, the borrowing cost has an effect on the cryptocurrency market as investors use loans and margins to buy cryptocurrencies.
This technical analysis of the BTC/USD price shows how bulls formed consecutive upside pressure by creating several demand zones from the 15,482.71 low. As the current price is hovering at the dynamic 20 EMA level, a range breakout is needed to form a stable trend.
- BTC/USD bullish possibility: based on the current price context, a bullish daily candle above the 17,410.00 level could open a long opportunity, targeting the 18,559.16 level.
- BTC/USD bearish possibility: Bears need a range-breakdown below the 16,667.05 level before aiming for the 15,482.71 level.
Let’s see important price levels that BTC/USD traders should look at:
- BTC/USD support level to look at: 16,667.05
- BTC/USD resistance level to look at: 18,559.16.
The key event to look at for this week is the FOMC meeting, from where a clear direction about the US Dollar could come. Any sign of coming back from the rate hike path could provide relief to other major currencies, against the US Dollar.