Traders around the world need a clear direction about US inflation. Any sign of accelerating inflation above 4% may influence the Fed to tighten the monetary policy. Moreover, any taper of the bank bond-buying scheme would create a positive impact on the US Dollar.
On the other hand, investors will see how the UK Consumer Price Index data come for June. In May 2021, the inflation moved upside in June from 1.8% to 2.1% YoY, and the current dovishness of BOE may keep the inflation rate unfavorable.
Overall, the price may remain volatile this week due to several vital releases where US CPI would be the key price driver.
Forex Technical Outlook for 12 July 2021 to 16 July 2021
The US CPI is expected to release on Tuesday, besides other important releases from BoC, RBNZD, and RBA. As per the current expectation, the Australian Employment rate may drop to 20.3K from 115.2K, while BoC could show a dovish tone with no change in rates.
So, considering the overall market context, let’s see what might happen in the coming days:
Last week, EUR/USD bears failed to hold the momentum below the 1.1831 support level as the selling pressure was very corrective. As a result, the price moved up above this level with a bullish daily close. Moreover, the regular divergence in MACD signifies that the upcoming price direction would be bullish.
In the daily chart of EURUSD, we can see that the 200 SMA is below the price following a regular divergence. As a result, as long as the price is trading above the 1.977 support level, it has a higher possibility of continuing the bullish pressure this week towards the 1.1977 level. Moreover, a stable daily close above the dynamic 20 EMA may increase the buying pressure. Conversely, a bullish rejection from 1.1977 with a solid bearish daily close may initiate a bearish correction.
Investors should see how the US CPI came where a weaker than expected result with a stable price below 1.1831 might create a selling pressure towards the 1.1712 level.
GBP/USD rejected the 1.3800 level with a regular divergence with MACD, where the Histogram turned positive. As a result, the upcoming price direction might be bullish as long as it trades above the 1.3800 level.
This week, GBPUSD may remain volatile during the US CPI, Retail Sales and BOC Rate statement where a violation of price levels are expected. Currently, both of these currencies have many reasons to change the current sentiment, but technically the outlook is bullish.
The price is currently facing a minor resistance from the dynamic 20 EMA that may create a bearish correction during the weekly birth period. However, any stable price above the dynamic 20 EMA with a bullish daily close may take the price higher towards the 1.4114 resistance level. Besides, the price is stable above the 200 SMA while the MACD signal line started to move higher.
However, any rejection from the 1.400 key resistance level may take the price lower towards the 1.3680 level.
AUD/USD passed a volatile week as the price tried to move above 0.7580 but failed. Later on, the price came down below the 0.8477 support level but was unable to hold the momentum. Now investors should see how the unemployment rate comes. As the current prediction is weaker than the previous result, AUDUSD may show a selling pressure from the dynamic 20 EMA.
In the AUD/USD daily chart, we can see that the price made a bullish daily close on Friday, above the 0.7477 level. But, the dynamic 20 EMA is above the price and pushing a downside pressure. Moreover, the current bullish pressure is followed by a Hidden divergence with MACD, which is a sign of bearish trend continuation after a correction.
In this price context, any bullish rejection from the dynamic 20 EMA may take the price lower where a strong bearish daily close below the 0.7477 level may initiate a stable decline in the price.
USD/JPY broke below the trendline support with an impulsive bearish pressure that took the price lower below the dynamic 20 EMA. Later on, the price corrected higher, and investors should see how the correction ends.
This week, the price has a higher possibility of moving up towards dynamic 20 EMA. Later on, any bullish rejection with a bearish daily close below 110.40 level may take the price lower towards 108.47 support level. On the other hand, MACD is bearish, and Histograms are making lows, providing more support to the possible selling pressure.
However, a stable bullish daily close above the 110.40 level may indicate a false break from the trendline support that may resume the bullish trend towards the 111.72 level.
Last week, Gold failed to hold the bearish pressure below the 1765.00 support level that took the price higher at the dynamic resistance. However, the current price is below the 1814.72 resistance level, where many direction-changing events are pending.
This week, investors should closely focus on where the US Inflation is heading. Any sign of an increase in CPI may take the Gold higher towards the 1970.60 resistance level. In that case, a strong bullish daily close above the 1814.72 level with an intraday correction would be a buying opportunity. On the other hand, a bearish daily close below the 20 EMA may take the price lower towards the 1765.00 support area.
Bitcoin is in a critical situation where the price is trading above the 30,000 support level for more than a month. Moreover, the 200 SMA is moving with the price and providing dynamic support. However, the current price is very corrective and investors should see a breakout after opening a position.
In MACD, Histograms are positive but failed to make a new high. Moreover, the 20 EMA squeezes to the price where a strong bullish breakout above the 20 EMA and a stable price above 40,000 may eliminate the bearish possibility below the 30,000 level.
Conversely, the price squeezes above the 30,000 level, where a strong bearish daily close below the 30,000 level may initiate an impulsive bearish pressure towards 20,000 area.
Overall, this week is expected to remain volatile due to several trend-changing events. Therefore, investors should remain cautious about these releases where strong money management is applicable.
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